STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of March 13, 1998,
among The Imperial Home Decor Group Inc., a Delaware corporation (the
"Company"), Imperial Home Decor Group Holdings LLC, a Delaware limited liability
company and a stockholder of the Company (together with its transferees and the
transferees of such transferees, "Holdings"), Xxxxxx, Inc., a New Jersey
corporation ("Xxxxxx"), and BDH One, Inc. a Delaware corporation and an indirect
wholly owned subsidiary of Xxxxxx ("BDH One") (Xxxxxx, BDH One and their
respective Permitted Transferees, collectively, the "Xxxxxx Investors").
RECITALS:
A. The Company, BDPI Holdings Corporation, a Delaware corporation
("MergerCo") and Xxxxxx are parties to a Recapitalization Agreement, dated as of
October 14, 1997 (the "Recapitalization Agreement"), pursuant to which, among
other things, the Company was recapitalized (the "Recap") and the Company's name
was changed to "The Imperial Home Decor Group Inc.";
B. Immediately following the Recap, the Xxxxxx Investors collectively held
653,125 shares of Common Stock and Holdings held 5,284,375 shares of Common
Stock; and
C. The parties hereto wish to provide for certain matters relating to their
respective holdings of Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
I. INTRODUCTORY MATTERS
1.1. Defined Terms. In addition to the terms defined elsewhere herein, the
following terms have the following meanings when used herein with initial
capital letters:
"Affiliate" has the meaning given to that term in Rule 405 promulgated
under the Securities Act; provided, that officers, directors or employees
of the Company will not be deemed to be Affiliates of a stockholder of the
Company for purposes hereof solely by reason of being officers, directors
or employees of the Company.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Assumption Agreement" means a writing in substantially the form of
Exhibit A hereto.
"Board" means the Board of Directors of the Company.
"Business Day" means a day other than a Saturday, Sunday, federal or
New York State holiday or other day on which commercial banks in New York
City are authorized or required by law to close.
"Common Stock" means the shares of common stock, par value $.01 per
share, of the Company.
"IPO" means the completion of an initial Public Offering and the sale
to the public of Common Stock by the Company.
"Permitted Transferees" means any Person to whom shares of Common
Stock are Transferred in a Transfer in accordance with Sections 3.2 or 3.3
or otherwise not in violation of this Agreement and who is required to, and
does, enter into an Assumption Agreement, and includes any Person to whom a
Permitted Transferee of any Xxxxxx Investor (or a Permitted Transferee of a
Permitted Transferee) so further Transfers shares of Common Stock and who
is required to, and does, become bound by the terms of this Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other legal entity of
any nature whatsoever.
"Public Offering" means the sale of shares of any class of the Common
Stock to the public pursuant to an effective registration statement (other
than a registration statement on Form S-4 or S-8 or any similar or
successor form) filed under the Securities Act.
"Registrable Securities" means (i) any Common Stock held by the Xxxxxx
Investors immediately following the Recap, (ii) any Common Stock issued as
(or issuable upon the conversion or exercise of any warrant, right, option
or other convertible security which is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of,
such Common Stock, and (iii) any Common Stock issued by way of a stock
split of the Common Stock referred to in clauses (i), (ii) or (iii) above.
For purposes of this Agreement, any Registrable Securities will cease to be
Registrable Securities when (A) a registration statement covering such
Registrable Securities has been declared effective and such Registrable
Securities have been disposed of pursuant to such effective registration
statement, (B) all Registrable Securities may be offered and sold pursuant
to Rule 144 (or any similar provision then in effect) under the Securities
Act in a single transaction or series of transactions over a 90-day period,
(C) such Registrable Securities are sold by a person in a transaction in
which rights under the provisions of this Agreement are not assigned, or
(z) such Registrable Securities cease to be outstanding.
"Registration Expenses" means any and all expenses incident to the
performance by the Company of its obligations under Sections 4.1 or 4.2,
including without limitation
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(i) all SEC, stock exchange, National Association of Securities Dealers,
Inc. and other comparable regulatory agencies, registration and filing
fees, (ii) all fees and expenses of the Company in complying with
securities or blue sky laws (including fees and disbursements of counsel
for the underwriters in connection with blue sky qualifications), (iii) all
printing, messenger and delivery expenses of the Company, (iv) the fees and
disbursements of counsel for the Company and of its independent
accountants, including without limitation the expenses of any "cold
comfort" letters required by or incident to such performance and
compliance, and (v) fees and disbursements customarily paid by issuers or
sellers of securities (but not underwriters' or sales agents' discounts or
similar compensation).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as the same may be amended
from time to time.
"Stockholders" means each of the holders of Common Stock.
"Transfer" means a transfer, sale, assignment, pledge, hypothecation
or other disposition, whether directly or indirectly pursuant to the
creation of a derivative security, the grant of an option or other right,
the imposition of a restriction on disposition or voting or transfer by
operation of law. Notwithstanding the foregoing, Transfer shall not mean
any change of control of Xxxxxx or a successor of Xxxxxx.
1.2 Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rule
of strict construction will be applied against any party. Unless the context
otherwise requires: (a) "or" is disjunctive but not exclusive, (b) words in the
singular include the plural, and in the plural include the singular, and (c) the
words "hereof", "herein", and "hereunder" and words of similar import when used
in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to this Agreement unless
otherwise specified.
II. COMPOSITION OF THE BOARD OF DIRECTORS
2.1. Xxxxxx Board Representation. (a) Subject to Section 5.2, Holdings will
vote its shares of Common Stock at any regular or special meeting of the
stockholders of the Company called for the purpose of filling positions of the
Board, or in any written consent executed in lieu of such a meeting of
stockholders, and will take all actions necessary, to ensure that the Board
includes one individual selected by Xxxxxx (the "Xxxxxx Nominee"), provided,
however, that the foregoing covenant will not apply unless (a) if the Xxxxxx
nominee is an executive of Xxxxxx, the Xxxxxx Nominee has a level of seniority
of Executive Vice President or Senior Vice President or higher or (b) if the
Xxxxxx Nominee is not an executive of Xxxxxx, such Xxxxxx Nominee is reasonably
acceptable to Holdings, provided, however, that any executive of
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Kohlberg Kravis Xxxxxxx & Co. will be deemed to be acceptable to the Board for
purposes of this Section 2.2.
(b) Xxxxxx will at all times have the right to cause any person acting as
the Xxxxxx Nominee to be removed and replaced by another individual meeting the
requirements of Section 2.1(a), or if the individual acting as a Xxxxxx Nominee
resigns or is otherwise disabled from acting as a director, to name another
individual meeting the requirements of Section 2.1(a) to act as the Xxxxxx
Nominee. The right of Xxxxxx to designate the Xxxxxx Nominee and remove and
replace a Xxxxxx Nominee may be exercised only by delivering written notice of
such exercise to the Company and Holdings.
2.2. Xxxxxx Group Cooperation. Except to the extent inconsistent with its
rights to select, remove or replace the Xxxxxx Nominee under Section 2.1(a) or
(b), the Xxxxxx Group will take any and all actions requested of any of them in
writing by Holdings to elect to the Board such individuals as are designated by
Holdings and to remove or replace any individual so designated.
III. TRANSFERS
3.1. Limitations on Transfer. (a) No Xxxxxx Investor may Transfer any
shares of Common Stock other than (i) in connection with a Public Offering
effected in accordance with this Agreement or (ii) in accordance with Sections
3.2, 3.3, 3.4, or 3.5.
(b) In the event of any purported Transfer by any Xxxxxx Investor of any
shares of Common Stock in violation of the provisions of this Agreement, such
purported Transfer will be void and of no effect and the Company will not give
effect to such Transfer.
(c) Each certificate representing shares of Common Stock issued to any
Xxxxxx Investor will bear a legend on the face thereof substantially to the
following effect (with such additions thereto or changes therein as the Company
may be advised by counsel are required by law (the "Legend"):
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A STOCKHOLDERS' AGREEMENT AMONG THE COMPANY, IMPERIAL HOME DECOR GROUP
HOLDINGS LLC., XXXXXX, INC. AND BDH ONE, INC., A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
STOCKHOLDERS' AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
STOCKHOLDERS' AGREEMENT.
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY
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HAVE BEEN REGISTERED UNDER THAT ACT OR ANY OTHER APPLICABLE LAW OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
The Legend will be removed by the Company by the delivery of substitute
certificates without such Legend in the event of (i) a Transfer permitted by
this Agreement and in which the Transferee is not required to enter into an
Assumption Agreement or (ii) the termination of Article III pursuant to the
terms hereof, provided however, that the second paragraph of such Legend will
only be removed if at such time a legal opinion shall have been obtained to the
effect that such legend is no longer required for purposes of applicable
securities laws. In connection with the foregoing, the Company agrees that from
and after the consummation of an IPO if the Company is required to file reports
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for
so long as and to the extent necessary to permit any Xxxxxx Investor to sell the
shares of Common Stock pursuant to Rule 144, the Company shall use its
reasonable best efforts to file, on a timely basis, all reports required to be
filed with the SEC by it pursuant to Section 13 of the Exchange Act, so long as
it is subject to such requirement, furnish to the Xxxxxx Investors upon request
a written statement as to whether the Company has complied with such reporting
requirements during the 12 months preceding any proposed sale under Rule 144 and
otherwise use its reasonable efforts to permit such sales pursuant to Rule 144.
3.2. Right of First Offer. (a) Except in connection with a Transfer
pursuant to or as expressly permitted by Section 3.3, 3.4 or 3.5, during the
period from the date hereof until the earlier to occur of the completion of an
IPO and March 13, 2003 (the "ROFO Period"), prior to any Xxxxxx Investor
proposing to effect a Transfer of Common Stock to any Person not an Affiliate of
the Transferor (a "Third-Party Sale"), such Xxxxxx Investor (the "Offering
Stockholder") will deliver to Holdings a written Notice (an "Offer Notice")
specifying the aggregate amount of cash consideration (the "Offer Price") for
which the Offering Stockholder proposes to sell the Common Stock to be offered
in such Third-Party Sale (the "Offered Stock").
(b) Prior to negotiating with any third party (or committing to negotiate)
in respect of a possible Third-Party Sale of any Common Stock, the Offering
Stockholder will negotiate with Holdings in good faith concerning the possible
sale to Holdings of the Common Stock proposed or otherwise intended to be sold
in a Third Party Sale for a period of 30 calendar days following the date on
which Holdings receives the Offer Notice. If Holdings delivers to the Offering
Stockholder a written Notice (an "Acceptance Notice") within such 30 calendar
day period (such 30 calendar day period being referred to herein as the "ROFO
Acceptance Period") stating that Holdings is willing to purchase all of the
Offered Stock for the Offer Price and on the other terms set forth in the Offer
Notice, the Offering Stockholder will sell all of the Offered Stock to Holdings,
and Holdings will purchase such Offered Stock from the Offering Stockholder, on
the proposed terms and subject to the conditions set forth below.
(c) The consummation of any purchase of the Offered Stock by Holdings
pursuant to this Section 3.2 (the "ROFO Closing") will occur no more than 90
calendar days following the delivery of the Acceptance Notice (such 90 calendar
day period being referred to herein as the "ROFO Closing Period") at 10:00 a.m.
(Eastern Time) at the offices of Xxxxx, Day, Xxxxxx & Xxxxx at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other time of day and place as may
be mutually agreed upon by the Offering Stockholder and Holdings. At the ROFO
Closing, (i) Holdings will deliver to the Offering Stockholder by certified or
official bank
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check or wire transfer to an account designated by the Offering Stockholder an
amount in immediately available funds equal to the Offer Price, (ii) the
Offering Stockholder will deliver one or more certificates evidencing the
Offered Stock, together with such other duly executed instruments or documents
(executed by the Offering Stockholder) as may be reasonably requested by
Holdings to acquire the Offered Stock free and clear of any and all claims,
liens, pledges, charges, encumbrances, security interests, options, trusts,
commitments and other restrictions of any kind whatsoever (collectively,
"Encumbrances"), except for Encumbrances created by this Agreement, federal or
state securities laws or Holdings or as specified in the Offer Notice
("Permitted Encumbrances"), and (iii) the Offering Stockholder will be deemed to
represent and warrant to Holdings that, upon the ROFO Closing, the Offering
Stockholder will convey and Holdings will acquire the entire record and
beneficial ownership of, and good and valid title to, the Offered Stock, free
and clear of any and all Encumbrances, except for Permitted Encumbrances.
(d) If no Acceptance Notice relating to the proposed Third-Party Sale is
delivered to the Offering Stockholder prior to the expiration of the ROFO
Acceptance Period, or an Acceptance Notice is so delivered to the Offering
Stockholder but the ROFO Closing fails to occur prior to the expiration of the
ROFO Closing Period (unless Holdings was ready, willing and able prior to the
expiration of the ROFO Closing Period to consummate the transactions to be
consummated by Holdings at the ROFO Closing), the Offering Stockholder may
consummate the Third-Party Sale, but only (i) during the 90 calendar day period
immediately following the expiration of the ROFO Acceptance Period (in the event
that no Acceptance Notice was timely delivered to the Offering Stockholder) or
the 90 calendar day period immediately following the expiration of the ROFO
Closing Period (in the event that an Acceptance Notice was timely delivered to
the Offering Stockholder but the ROFO Closing failed timely to occur), (ii) at a
price at least equal to the Offer Price, (iii) upon other terms not materially
less favorable to the Offering Stockholder than those set forth in the Offer
Notice, if any, (iv) if the Transferee in the Third-Party Sale enters into an
Assumption Agreement, and (v) if the Third-Party Sale is not to or with a
Transferee engaged in the business of the development, production, marketing,
distribution or sale of vinyl and/or paper decorative surface products for
residential applications.
(e) For purposes of this Section 3.2, the value of any consideration other
than cash that is payable or receivable in the Third Party Sale will be as
determined by the Board in good faith.
3.3. Transfers to Affiliates. The Xxxxxx Investors may Transfer any or all
of the shares of Common Stock held by any of them to any of their respective
Affiliates controlled by the Transferor who duly executes and delivers an
Assumption Agreement, provided that in connection therewith the Company has been
furnished with an opinion in form and substance reasonably satisfactory to the
Company of counsel reasonably satisfactory to the Company that such Transfer is
exempt from or not subject to the registration requirements of Section 5 of the
Securities Act.
3.4. Tag-Along Rights. (a) So long as this Agreement remains in effect,
with respect to any proposed Transfer by Holdings, or any Person to whom
Holdings assigns its rights in accordance with Section 5.5, of shares of Common
Stock to any Person not an Affiliate of Holdings, other than in a Public
Offering, whether pursuant to a stock sale, a tender or exchange
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offer or a similar transaction (any such transaction, a "Holdings Sale"),
Holdings will have the obligation, and each Xxxxxx Investor will have the right,
to require the proposed Transferee or acquiring Person to purchase from each
Xxxxxx Investor who exercises its rights under Section 3.4(b) (a "Tagging
Stockholder") a number of shares of Common Stock up to the product (rounded up
to the nearest whole number) of (i) the quotient determined by dividing (A) the
aggregate number of shares of Common Stock owned by such Tagging Stockholder by
(B) the aggregate number of shares of Common Stock owned by Holdings, the
Tagging Stockholder and any other Stockholder entitled to participate in such
transaction, and (ii) the total number of shares of Common Stock proposed to be
directly or indirectly Transferred to the Transferee or acquiring Person in the
contemplated Holdings Sale (a "Proposed Transferee"), at the same price per
share of Common Stock and upon the same terms and conditions (including, without
limitation, time of payment and form of consideration) as to be paid and given
to Holdings; provided, that in order to be entitled to exercise its right to
sell shares of Common Stock to the Proposed Transferee pursuant to this Section
3.4, each Tagging Stockholder must agree to make to the Proposed Transferee
substantially the same representations, warranties, covenants, proportionate
indemnities and agreements as Holdings agrees to make in connection with the
proposed Holdings Sale, provided that such representations, warranties,
covenants, indemnities and agreements shall be made severally and not jointly by
each Tagging Stockholder. Each Tagging Stockholder will be responsible for its
proportionate share of the costs of the Holdings Sale to the extent not paid or
reimbursed by the Company or the Proposed Transferee, provided that such costs
shall exclude fees paid to Holdings and/or its affiliates.
(b) Holdings will give notice to each Tagging Stockholder of each proposed
Holdings Sale at least fifteen Business Days prior to the proposed consummation
of such Holdings Sale, setting forth the number of shares of Common Stock
proposed to be so Transferred, the name and address of the Proposed Transferee,
the proposed amount and form of consideration (and if such consideration
consists in part or in whole of property other than cash, Holdings will provide
such information, to the extent reasonably available to Holdings, relating to
such consideration as the Tagging Stockholder may reasonably request in order to
evaluate such non-cash consideration) and other terms and conditions of payment
offered by the Proposed Transferee, and a representation that the Proposed
Transferee has been informed of the tag-along rights provided for in this
Section 3.4. Holdings will deliver or cause to be delivered to each Tagging
Stockholder copies of all transaction documents relating to the proposed
Holdings Sale (including draft and final versions of such documents) as the same
become available. The tag-along rights provided by this Section 3.4 must be
exercised by each Tagging Stockholder within ten Business Days following receipt
of the notice required by the preceding sentence by delivery of a written notice
to Holdings indicating the desire of such Tagging Stockholder to exercise its or
his rights and specifying the number of shares of Common Stock it or he desires
to sell. The Tagging Stockholder will be entitled under this Section 3.4 to
Transfer to the Proposed Transferee the number of shares of Common Stock
calculated in accordance with Section 3.4(a).
(c) If any Tagging Stockholder exercises his or its rights under Section
3.4(a), the closing of the purchase of the Common Stock with respect to which
such rights have been exercised will take place concurrently with the closing of
the sale of Holdings's Common Stock to the Proposed Transferee.
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3.5. Drag-Along Rights. (a) So long as this Agreement remains in effect, if
Holdings receives an offer from a Person other than an Affiliate of Holdings (a
"Third Party") to purchase of a type referred to in the first sentence of
Section 3.4(a) at least a majority of the shares of Common Stock then
outstanding and such offer is accepted by Holdings, then each Xxxxxx Investor
hereby agrees that, if requested by Holdings, it will Transfer to such Third
Party on the terms of the offer so accepted by Holdings, including the same time
of payment, per share consideration and representations and warranties, the
number of shares of Common Stock equal to the number of shares of Common Stock
owned by such Xxxxxx Investor multiplied by the percentage of the then
outstanding shares of Common Stock to which the Third Party offer is applicable;
provided that such representations and warranties shall be made severally and
not jointly.
(b) Holdings will give notice (the "Drag-Along Notice") to each of the
Xxxxxx Investors of any proposed Transfer giving rise to the rights of Holdings
set forth in Section 3.5(a) as soon as practicable following Holdings's
acceptance of the offer referred to in Section 3.5(a). The Drag-Along Notice
will set forth the number of shares of Common Stock proposed to be so
Transferred, the name of the proposed Transferee or acquiring Person, the
proposed amount and form of consideration (and if such consideration consists in
part or in whole of property other than cash, Holdings will provide such
information, to the extent reasonably available to Holdings, relating to such
consideration as the Xxxxxx Investors may reasonably request in order to
evaluate such non-cash consideration), the number of shares of Common Stock
sought and the other terms and conditions of the offer. Holdings will notify the
Xxxxxx Investors at least ten Business Days in advance of entering into a
definitive agreement in connection with such offer. In any such agreement, the
Xxxxxx Investors will be required (i) to make or agree to the same
representations, warranties and proportionate indemnities as Holdings so long as
they are made severally and not jointly and (ii) to pay their proportionate
share of the costs of such Holdings Sale to the extent not paid or reimbursed by
the Company or the Transferee or acquiring Person, provided that in the case of
the foregoing clause (ii), such costs shall exclude fees paid to Holdings and/or
its Affiliates. If the Transfer referred to in the Drag-Along Notice is not
consummated within 180 days from the date of the Drag-Along Notice, Holdings
must deliver another Drag-Along Notice in order to exercise its rights under
this Section 3.5 with respect to such Transfer or any other Transfer.
(c) If there is more than one Xxxxxx Investor when the Company exercises
drag-along rights under this Section 3.5, each Xxxxxx Investor will participate
pro rata by reference to the number of shares of Common Stock owned by each such
Xxxxxx Investor.
IV. REGISTRATION RIGHTS
4.1. Piggyback Rights. (a) Each time the Company is planning to file a
registration statement under the Securities Act in connection with the sale of
Common Stock by (i) the Company (other than in connection with an IPO comprised
solely of the primary offer and sale of Common Stock by the Company or a
registration statement on Forms S-4 or S-8 or any similar or successor form) or
(ii) any Stockholder other than the Xxxxxx Investors (the Company or such
Stockholder in such case, the "Initiating Party"), the Company will give prompt
written notice thereof to each Xxxxxx Investor, at least 15 Business Days prior
to the anticipated filing
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date of such registration statement. Upon the written request of a majority in
interest of the Xxxxxx Investors made within 20 Business Days after the receipt
of any such notice from the Company, which request will specify the Registrable
Securities (the "Piggy-Back Shares") intended to be disposed of by such Xxxxxx
Investor in such offering, the Company will use reasonable best efforts to
effect the registration under the Securities Act of all Piggy-Back Shares which
the Company has been so requested to register by such Xxxxxx Investors to the
extent required to permit the disposition of the Piggy-Back Shares to be
registered; provided, that (i) if, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, any
Initiating Party determines for any reason not to proceed with the proposed
registration, the Company may at its election give written notice of such
determination to each holder of Piggy-Back Shares and thereupon will be relieved
of its obligation to register any Piggy-Back Shares in connection with such
registration, and (ii) if such registration involves an underwritten offering,
each Xxxxxx Investor requesting to be included in the Company's registration
must sell its shares to the underwriters on the same terms and conditions as
apply to the Initiating Parties.
(b) If a registration pursuant to this Section 4.1 involves an underwritten
offering and the managing underwriter or underwriters advise the Company in
writing that, in their opinion, (i) the number of Registrable Securities which
the Initiating Party intends to include in such registration, together with the
Piggy-Back Shares, exceeds the largest number of such securities which can be
sold in such offering without having an adverse effect on such offering
(including, but not limited to, the price at which the Registrable Securities
can be sold) or (ii) the inclusion of Registrable Securities owned by the Xxxxxx
Investors in such registration would have an adverse effect on such offering,
then the Company will include in such registration (A) first, 100% of the
securities, if any, that the Company proposes to sell for its own account, and
(B) second, to the extent that the number of securities which the Company
proposes to sell is less than the number of securities which the Company has
been advised can be sold in such offering without having the adverse effect
referred to above, the number of Registrable Securities of each Initiating Party
and/or Xxxxxx Investor determined on the basis of the relative percentage
relationships of (y) the number of Registrable Securities to be included by such
Initiating Party and/or Xxxxxx Investor and (z) the number of Registrable
Securities to be included by all other Stockholders.
4.2. Demand Registrations. (a) From and after 180 days following the
completion of the IPO, the Xxxxxx Investors holding at least a majority of the
Registrable Securities held by the Xxxxxx Investors may request in a written
notice (the "Request") that the Company effect the registration under the
Securities Act of all of the Registrable Securities owned by the Xxxxxx
Investors. Following the receipt of the Request, the Company will (i) within ten
days notify all other Stockholders having registration rights of such Request in
writing and (ii) thereupon, will as expeditiously as practicable, effect the
registration under the Securities Act of all Registrable Securities of such
Xxxxxx Investors and any Registrable Securities of any other Stockholder having
registration rights as are specified in a subsequent Request received by the
Company, within ten Business Days after the Company has given such notice, and
will cause such registration statement to remain effective for a period of not
less than 180 days; provided, however, that the Company will not be required to
effect more than one registration pursuant to this Section 4.2, unless the
Xxxxxx Investors are unable to sell all of the Registrable Securities requested
be included in such offering because of the participation by any other
Stockholder
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(other than the Xxxxxx Investors) in such offering, in which case the Xxxxxx
Investors will be entitled to have one additional demand effected.
(b) The Company and Xxxxxx will reasonably mutually agree on the managing
underwriter of any underwritten offering effected under Section 4.2(a).
(c) If a registration pursuant to this Section 4.2 involves an underwritten
offering and the managing underwriter or underwriters advise the Company in
writing that, in their opinion, the number of Registrable Securities which the
Xxxxxx Investors and any other Stockholders intend to include in such
registration exceeds the largest number of securities which can be sold in such
offering without having an adverse effect on such offering (including, but not
limited to, the price at which the securities can be sold), then the number of
Registrable Securities of each Xxxxxx Investor to be included in such offering
will be determined on the basis of the relative percentage relationships of (y)
the number of Registrable Securities to be included by such Xxxxxx Investor and
(z) the number of Registrable Securities to be included by all other
Stockholders.
4.3. Other Registration-Related Matters. (a)(i) If (A) the Company files or
proposes to file a registration statement (other than in connection with the
registration of securities issuable pursuant to a continuous "at the market
offering" pursuant to Rule 415(a)(4) under the Securities Act or an employee
stock option, stock purchase, dividend reinvestment plan or similar plan) with
respect to any securities of the Company, and (B) with reasonable prior notice
(an "Offering Delay Notice"), (1) the Company (in the case of a non-underwritten
offering pursuant to such registration statement) advises Xxxxxx (on behalf of
the Xxxxxx Investors) in writing that a sale or distribution of securities owned
by the Xxxxxx Investors would adversely affect such offering or (2) the managing
underwriter or underwriters (in the case of an underwritten offering) advise the
Company in writing (in which case the Company will notify Xxxxxx on behalf of
the Xxxxxx Investors), that in their opinion a sale or distribution of
securities owned by the Xxxxxx Investors would adversely affect such offering,
then the Company will not be obligated to effect the initial filing of a
registration statement pursuant to Section 4.2 during the period commencing on
the date that is 30 calendar days prior to the date the Company in good faith
estimates (as certified in writing by an officer of the Company to the Xxxxxx
Investors following a request for registration pursuant to Section 4.2) will be
the date of filing of, and ending on the date which is 90 calendar days
following the effective date of, such registration statement but in no event for
more than 120 consecutive days.
(ii) If the Board determines in its good faith judgment that the
registration and distribution of Registrable Securities (A) would impede, delay
or interfere with any pending financing, acquisition, corporate reorganization
or other significant transaction involving the Company or (B) would require
disclosure of non-public material information, the disclosure of which would
adversely affect the Company (collectively a "Valid Business Reason"), the
Company will promptly give Xxxxxx (on behalf of the Xxxxxx Investors) written
notice of such determination and will be entitled to postpone the filing or
effectiveness of a registration statement relating to a request for registration
under this Section IV for a reasonable period of time not to exceed the earlier
of (i) such time as a Valid Business Reason no longer exists and (ii) 180
calendar days (a "Section 4.3(a)(ii) Period"); provided, however, that in
connection therewith the Company will be required to deliver to the Xxxxxx
Investors (as identified at such time to the
10
Company) a statement (the "Statement of Delay"), signed by an officer of the
Company, describing in reasonable detail the reasons for such postponement or
restriction on use and an estimate of the anticipated delay. The Company will
promptly notify Xxxxxx (on behalf of the Xxxxxx Investors) of the expiration or
earlier termination of a Section 4.3(a)(ii) Period.
(iii) Notwithstanding the foregoing provisions of this subparagraph (a),
the Company shall be entitled to serve only one Offering Delay Notice or
Statement of Delay within any 180 day period.
(b) The Company may require any Person that is selling shares of Common
Stock in a Public Offering pursuant to Sections 4.1 or 4.2 to furnish to the
Company in writing such information regarding such Person and the distribution
of the shares of Common Stock which are included in a Public Offering as may
from time to time reasonably be requested in writing in order to comply with the
Securities Act.
(c) The Company will pay all Registration Expenses in connection with each
registration or proposed registration of Registrable Securities pursuant to
Sections 4.1 or 4.2. Notwithstanding the foregoing, (y) the fees or expenses of
counsel to any Xxxxxx Investor or of any other expert hired directly by any
Xxxxxx Investor will be the sole responsibility of such Xxxxxx Investor and (z)
each Xxxxxx Investor will be responsible for its pro rata share (determined by
reference to the number of shares included in the applicable registration) of
all underwriting discounts and commissions and transfer taxes.
(d) Before filing a registration statement or prospectus, or any amendments
or supplements thereto, in connection with any registration or proposed
registration of Registrable Securities pursuant to Sections 4.1 or 4.2, the
Company will furnish to Xxxxxx'x counsel copies of all documents proposed to be
filed and shall provide Xxxxxx with the opportunity to review such registration
statement or prospectus, or any amendments or supplements thereto.
(e) The Company will furnish to each seller of Registrable Securities such
number of copies of the applicable registration statement and of each amendment
or supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), and such other documents as such
seller may reasonably request, and will make available for inspection by each
Seller's counsel such financial and other information and books and records of
the Company, and cause the officers, directors, employees, counsel and
independent certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary, in the judgment of such seller's
counsel, to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act, in order to facilitate the disposition of Registrable
Securities by such seller.
(f) The Company will use reasonable best efforts to register or qualify
Registrable Securities covered by a registration statement under such other
securities or blue sky laws of such jurisdictions as each seller reasonably
requests, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller, except
that the Company will not for any such purpose be required to qualify generally
to do business as a foreign
11
corporation in any jurisdiction where, but for the requirements of this Section
4.3(f), it would not be obligated (i) to be so qualified, (ii) to subject itself
to taxation in any such jurisdiction, or (iii) to file a general consent to
service of process in any such jurisdiction.
(g) The Company will use reasonable best efforts to cause the Registrable
Securities covered by a registration statement to be registered with or approved
by each governmental agency or authority, whether federal, state or local, as
may be necessary to enable the seller thereof to effect registration or the
offering or sale in connection therewith or to consummate the disposition
thereof.
(h) The Company will promptly notify each seller of Registrable Securities
covered by a registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act within the
appropriate period of the Company's becoming aware that the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and at the request of any such
seller, promptly prepare and furnish to such seller a reasonable number of
copies of an amended or supplemental prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.
(i) The Company will enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions as sellers
of a majority of the number of shares of securities covered by a registration
statement or the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities.
(j) The Company will make available for inspection by any seller of
Registrable Securities covered by a registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement.
(k) The Company will obtain a "cold comfort" letter or letters from the
Company's independent public accountants in customary form and covering matters
of the type customarily covered by "cold comfort" letters as the sellers of a
majority of the outstanding shares of Registrable Securities covered by the
registration statement reasonably requests.
(l) Each Xxxxxx Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4.3(h)
such Xxxxxx Investor will forthwith discontinue disposition of securities
pursuant to the registration statement covering such Registrable Securities
until such Xxxxxx Investor's receipt of the copies of the amended or
supplemented prospectus contemplated by Section 4.3(h) and, if so directed by
the
12
Company, such Xxxxxx Investor will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Xxxxxx
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company gives
any such notice, the period for which the Company will be required to keep the
registration statement effective will be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 4.3(h) to and including the date when each seller of Registrable
Securities covered by such registration statement has received the copies of the
supplemented or amended prospectus contemplated by Section 4.3(h).
(m) Each Xxxxxx Investor will, in connection with an offering of the
Company's securities, upon the request of the Company or of the underwriters
managing any underwritten offering of the Company's securities, agree in writing
not to effect any sale, disposition or distribution of Registrable Securities
(other than those included in the registration) without the prior written
consent of the managing underwriter for such period of time (not to exceed (i)
180 days, in the case of an IPO, or (ii) 90 days, in the case of any other
offering of Company securities) from the effective date of such registration as
the Company or the underwriters may specify.
(n) Holdings will use its reasonable efforts (taking into account the
interests of the Company) to make available the executive officers of the
Company to participate in customary "road show" presentations that may be
reasonably requested by the holders of Registrable Securities and the managing
underwriter in any underwritten offering; provided that the participation of
such officers shall not interfere with the conduct of their duties to the
Company.
4.4. Indemnification. (a) Indemnification by the Company. In the event of
any registration of any securities of the Company under the Securities Act
pursuant to Sections 4.1 or 4.2, the Company hereby indemnifies and agrees to
hold harmless, to the extent permitted by law, each party hereto who is a holder
("Holder") of Registrable Securities covered by such registration statement, and
all current and future directors, officers, employees, general and limited
partners, members, Affiliates and assignees of such Holder and of any of the
foregoing, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
Holder or any such underwriter within the meaning of the Securities Act
(collectively, the "Indemnified Parties"), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses and disbursements of any kind (each, an
"Indemnified Liability") which may be imposed upon, incurred by or asserted
against each Indemnified Party in any manner relating to or arising out of (i)
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such securities were registered under
the Securities Act, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement thereto or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing, and the Company will reimburse such Indemnified
Party for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any Indemnified Liability; provided, that the
Company will not be liable to any Indemnified Party in any such case to the
extent that any such Indemnified Liability
13
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, in any such
preliminary, final or summary prospectus, or any amendment or supplement thereto
in reliance upon and in conformity with written information with respect to such
Indemnified Party furnished to the Company by such Indemnified Party for use in
the preparation thereof; and provided, further, that the Company will not be
liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, under the indemnity
agreement in this Section 4.4 with respect to any preliminary prospectus or the
final prospectus or the final prospectus as amended or supplemented, as the case
may be, to the extent that any such loss, claim, damage or liability of such
underwriter or controlling Person results from the fact that such underwriter
sold Registrable Securities to a Person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the final
prospectus or of the final prospectus as then amended or supplemented, whichever
is most recent, if the Company has previously furnished copies thereof to such
underwriter. Such indemnity will remain in full force and effect regardless of
any investigation made by or on behalf of such Holder or any Indemnified Party
and will survive the Transfer of such securities by such Holder.
(b) Indemnification by the Holders and Underwriters. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Sections 4.1 or 4.2, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holder of such Registrable Securities or any prospective underwriter to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 4.4(a)) the Company, all other Holders or any prospective
underwriter, as the case may be, and any of their respective current and future
directors, officers, employees, general and limited partners, members,
Affiliates and controlling Persons, with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
with respect to such Holder or underwriter furnished to the Company by such
Holder or underwriter expressly for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing. Such
indemnity will remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any of the Holders, or any of their
respective affiliates, directors, officers or controlling Persons and will
survive the Transfer of such securities by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
hereunder of written notice of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made pursuant to this
Section 4.4, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of the indemnified party
to give notice as provided herein will not relieve the indemnifying party of its
obligations under Section 4.4(a) or 4.4(b), except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
14
indemnifying party will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. If, in such
indemnified party's reasonable judgment, having common counsel would result in a
conflict of interest between the interests of such indemnified and indemnifying
parties, then such indemnified party may employ separate counsel reasonably
acceptable to the indemnifying party to represent or defend such indemnified
party in such action, it being understood, however, that the indemnifying party
will not be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties (and not
more than one separate firm of local counsel at any time for all such
indemnified parties) in such action. No indemnifying party will consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation.
(d) Other Indemnification. Indemnification similar to that specified in
this Section 4.4 (with appropriate modifications) will be given by the Company
and each Holder of Registrable Securities with respect to any required
registration or other qualification of securities under any federal or state law
or regulation or governmental authority other than the Securities Act.
(e) Contribution. If recovery is not available under the foregoing
indemnification provisions of this Section 4.4 for any reason other than as
expressly specified therein, the parties entitled to indemnification by the
terms thereof will be entitled to contribution to liabilities and expenses
except to the extent that contribution is not permitted under Section 11(f) of
the Securities Act. In determining the amount of contribution to which the
respective parties are entitled, consideration will be given to the relative
benefits received by each party from the offering of the Registrable Securities
(taking into account the portion of the proceeds realized by each), the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
misstatement or omission and any other equitable considerations appropriate
under the circumstances.
(f) Non-Exclusivity. The obligations of the parties under this Section 4.4
will be in addition to any liability which any party may otherwise have to any
other party.
V. MISCELLANEOUS.
5.1. Additional Securities Subject to Agreement. Each Xxxxxx Investor
agrees that any other securities of the Company which it hereafter acquires by
means of a stock split, stock dividend, distribution, exercise of options or
warrants or otherwise (other than pursuant to a Public Offering) will be subject
to the provisions of this Agreement to the same extent as if held on the date
hereof.
5.2 Indemnity. The Company agrees to indemnify and hold harmless each
Indemnified Party from and against any liabilities, obligations, losses,
damages, penalties,
15
actions, judgments, suits, claims, costs, attorneys' fees, expenses and
disbursements of any kind which may be imposed upon, incurred by or asserted
against any Indemnified Party in any manner relating to or arising out of (a)
any Indemnified Party's purchase and/or ownership of any shares of Common Stock,
(b) the operations of the Company or any current or future subsidiary of the
Company, or (c) any litigation to which any Indemnified Party is made a party in
its capacity as a shareholder or owner of securities (or a current or future
director, officer, employee, limited or general partner, Affiliate or assignee
of a shareholder or owner of securities) of the Company. Nothing in the
foregoing will in any way be deemed to contradict or diminish any Indemnified
Party's obligations under Section IV hereof or under the Recapitalization
Agreement or any agreement contemplated thereby and notwithstanding the
foregoing, no loss or diminution in value of any Indemnified Party's investment
in the Company will, in and of itself, be an indemnifiable loss under this
Agreement.
5.3. Termination. The provisions of this Agreement specified below will
terminate and be of no further force and effect (other than with respect to
prior breaches) as follows:
(a) with respect to Article II, upon the earlier to occur of (i)
following an IPO, the time at which the Xxxxxx Investors collectively
beneficially own less than 5% of the Common Stock and (ii) the Xxxxxx
Investors ceasing to beneficially own at least 75% of the 653,125 shares of
Common Stock issued to them pursuant to the Merger;
(b) with respect to Sections 3.1, 3.3, 3.4 and 3.5, upon completion of
an IPO;
(c) with respect to Section 3.2, upon the earlier to occur of (i) the
completion of an IPO and (ii) the fifth anniversary of the date of this
Agreement;
(d) as to any particular Xxxxxx Investor, with respect to Sections
4.1, 4.2 and 4.3, at such time as such Xxxxxx Investor no longer owns any
Registrable Securities;
(e) with respect to Section 4.4, upon the expiration of the applicable
statutes of limitations; and
(f) with respect to all other Sections of this Agreement, at such time
as all Sections of this Agreement other than such other Sections have
terminated.
5.4. Notices. All communications provided for hereunder must be in writing
and will be deemed to be given when delivered in person or by a nationally
recognized overnight courier, when faxed (receipt electronically confirmed by
sender's telecopy machine) or five calendar days after being deposited in the
United States mail, first-class, registered or certified, return receipt
requested, with postage paid and,
16
If to Holdings: c/o The Blackstone Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Senior Managing Director
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Xxxxxx: Xxxxxx Xxxxxxxx
Vice President,
Strategic Planning
Xxxxxx, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Fax: (000) 000-0000
With copies to: Xxxxxxx X. Xxxxx
Senior Vice President and
General Counsel
Xxxxxx, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Fax: (000) 000-0000
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to the Company: The Imperial Home Decor Group, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Controller
Fax: (000) 000-0000
17
With a copies to: Holdings, Xxxxxx, Xxxxxxx Xxxxxxx & Xxxxxxxx,
and Xxxxx, Day, Xxxxxx & Xxxxx at their
respective addresses set forth above.
or to such other addresses as any such party designates by written notice to the
other parties hereto.
5.5. Further Assurances. The parties hereto will sign such further
documents, cause such meetings to be held, resolutions passed, exercise their
votes and do and perform and cause to be done such further acts and things as
may be necessary in order to give full effect to this Agreement and every
provision hereof.
5.6. Non-Assignability; Majority Action. (a) This Agreement will inure to
the benefit of and be binding on the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by any
party hereto without the express prior written consent of the other parties, and
any attempted assignment, without such consents, will be null and void;
provided, however, that Holdings may assign or delegate its rights hereunder to
any Affiliate of Holdings provided such Affiliate executes and delivers to the
Company an Assumption Agreement and provided Holdings remains liable hereunder.
(b) Notwithstanding the foregoing, Holdings may assign its rights and
delegate its duties under Article III and/or IV, as the case may be, to a single
Transferee of at least a majority of the shares of Common Stock then owned by
Holdings, provided, however, that upon such an assignment Holdings' separate
rights under Article III and/or IV, as the case may be, will terminate, and
Holdings may in all events retain the right to exercise its rights under Article
III and/or IV, as the case may be, for the benefit of a Transferee in connection
with any Transfer by it of less than a majority of its holdings of Common Stock.
(c) Any action to be taken under this Agreement either by Holdings and any
permitted Transferee or assignee of Holdings (the "Holdings Group") or by the
Xxxxxx Investors hereunder will be by a majority in interest of the Holdings
Group or the Xxxxxx Investors, as the case may be.
(d) Notwithstanding any other provision hereof, any amendment hereto or
other agreement or action hereunder between Holdings and any other Stockholder
will be binding to the extent therein contemplated by the parties thereto
regardless of whether it is binding on any other parties.
5.7. Amendment; Waiver. This Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the Holdings Group
and the Xxxxxx Investors. No waiver by any party of any of the provisions hereof
will be effective unless explicitly set forth in writing and executed by the
party so waiving. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any covenants or agreements contained
herein. The waiver by any party hereto of a breach of any provision of this
Agreement will not operate or be construed as a waiver of any subsequent breach.
18
5.8. Third Parties. This Agreement does not create any rights, claims or
benefits inuring to any person that is not a party hereto nor create or
establish any third party beneficiary hereto.
5.9. Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflict of laws thereof.
5.10. Consent to Jurisdiction. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the United States District Court for
the Southern District of New York located in the borough of Manhattan in the
City of New York, or if such court does not have jurisdiction, the Supreme Court
of the State of New York, New York County, for the purposes of any suit, action
or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Each of the parties hereto further agrees that service of
any process, summons, notice or document by United States registered mail to
such party's respective address set forth in Section 5.3 will be effective
service of process for any action, suit or proceeding in New York with respect
to any matters to which it has submitted to jurisdiction as set forth above in
the immediately preceding sentence. Each of the parties hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (a) the United States District Court for the Southern District of New
York or (b) the Supreme Court of the State of New York, New York County, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
5.11. Specific Performance. Without limiting or waiving in any respect any
rights or remedies of the parties hereto under this Agreement now or hereinafter
existing at law or in equity or by statute, each of the parties hereto will be
entitled to seek specific performance of the obligations to be performed by the
other in accordance with the provisions of this Agreement.
5.12. Entire Agreement. This Agreement sets forth the entire understanding
of the parties hereto with respect to the subject matter hereof.
5.13. Titles and Headings. The section headings contained in this Agreement
are for reference purposes only and will not affect the meaning or
interpretation of this Agreement.
5.14. Severability. If any provision of this Agreement is declared by any
court of competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement will not be affected and will remain in full force
and effect.
5.15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
together will be deemed to be one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
19
THE IMPERIAL HOME DECOR GROUP, INC.
By: ________________________________
Name:
Title:
IMPERIAL HOME DECOR GROUP
HOLDINGS LLC
By: ________________________________
Name:
Title:
BDH ONE, INC.
By: ________________________________
Name:
Title:
XXXXXX, INC.
By: ________________________________
Name:
Title:
20
EXHIBIT A
---------
FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of __________ (this "Agreement"), by
__________ ("Transferee") in favor of Imperial Home Decor Group Holdings LLC
(together with its transferees and the transferees of such transferees,
"Holdings").
WHEREAS, The Imperial Home Decor Group, Inc. (the "Company"), Holdings,
Xxxxxx, Inc. ("Xxxxxx") and BDH One, Inc. ("BDH One") have entered into a
Stockholders' Agreement, dated as of March __, 1998, (the "Stockholders'
Agreement");
WHEREAS, capitalized terms used and not otherwise defined herein shall have
the meaning ascribed to them in the Stockholders' Agreement;
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1. Transferee hereby acknowledges receipt from [__________] ("Transferor")
of __________ shares of Common Stock pursuant to Section [3.2] [3.3] of the
Stockholders' Agreement, and shall, and hereby agrees to, become a party to, and
be bound by, to the same extent as Transferor, the terms of the Stockholders'
Agreement.
2. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to the principles of
conflict of laws hereto.
3. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
[TRANSFEREE]
By:_________________________________
Name:
Title:
[TRANSFEROR]
By:_________________________________
Name:
Title:
Agreed and Accepted:
IMPERIAL HOME DECOR
GROUP HOLDINGS LLC
By:________________________
Name:
Title:
