EXHIBIT 2
STOCKHOLDERS AGREEMENT
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This Stockholders Agreement is entered into as of the 2nd
day of June, 1989 by and between Xxxxx Xxxxxx Corporation, a Delaware
corporation (the "Company"), and HM Holdings, Inc., a Delaware
corporation ("Xxxxxx").
RECITALS
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WHEREAS, the Company and Xxxxxx desire to enter into this
Stockholders Agreement for the purpose of regulating certain aspects
of the Company's relationship with Xxxxxx as a common stockholder.
In consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the
parties to this Agreement mutually agree as follows:
ARTICLE I
Definitions
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"1933 Act" shall mean the Securities Act of 1933, as
amended.
"1934 Act" shall mean the Securities and Exchange Act of
1934, as amended.
"Adjusted Net Worth" shall have the meaning set forth in
Section 4.9(a) hereof.
"Affiliate" shall mean, with respect to a Person, any other
Person that, directly or indirectly through one ore more
intermediaries, controls, or is controlled by, or is under common
control with such Person. Neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of Xxxxxx.
"Associate" shall mean, when used to indicate a relationship
with any Person, (a) any corporation or organization of which such
Person is an officer or partner or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of equity
securities, (b) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a
trustee or in a similar fiduciary capacity and (c) any relative of
such Person who has the same home as such Person, is a parent, aunt or
uncle, sibling, spouse,
in-law, child, niece or nephew or grandchild of such Person, or the
spouse of any of them, or is a director or officer of the Person or
any Subsidiary of the Person. Neither the Company nor any of its
Subsidiaries shall be deemed an Associate of Xxxxxx.
"Capital Stock" shall mean any and all shares of other
equivalents (however designated) of corporate stock of the Company.
"Common Shares" shall mean shares of the Company's common
stock, par value $.01 per share.
"Final Balance Sheet" shall have the meaning set forth in
Section 4.9(b) hereof.
"Independent Accountant" shall have the meaning set forth in
Section 4.9(b) hereof.
"Management Stockholders" shall mean the participants in the
Company's Supplemental Performance Plan.
"Net Debt-to-Equity Percentage" shall have the meaning set
forth in Section 4.9(b) hereof.
"Offerings" shall have the meaning set forth in Section
4.9(a) hereof.
"Outstanding Common Stock" shall mean, at the time in
respect of which such term is used, the number of Common Shares which
are outstanding.
"Person" means an individual, corporation, partnership,
trust, or unincorporated organization, or a government or any agency
or political subdivision thereof.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Xxxxx Corona Singapore" shall mean Xxxxx-Xxxxxx Private
Limited, a Singapore company.
"Subsidiary" with respect to any corporation (the "Parent")
shall mean any corporation, firm, association or trust of which such
parent, at the time in respect of which such term is used, (i) owns
directly or indirectly more than fifty percent (50%) of the equity or
beneficial interest, on a consolidated basis, and (ii) owns directly
or controls with power to vote, indirectly through one or more
Subsidiaries, shares of capital
stock or beneficial interest having the power to cast at least a
majority of the votes entitled to be case for the election of
directors, trustees, managers or other officials having powers
analogous to those of directors of a corporation. Unless otherwise
specifically indicated, when used herein the term Subsidiary shall
refer to a direct or indirect Subsidiary of the Company.
ARTICLE II
Election of Directors
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2.1 Number of Directors.
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The Company agrees that during the term of this Agreement it
shall use its best efforts to cause the Company's Board of Directors
to consist of nine members. The Company further agrees that during
the term of this agreement, the Company will (i) use its best efforts
to cause the number of designees of Xxxxxx specified in Section 2.2
hereof (the "Xxxxxx Designees") to be nominated for election to the
Company's Board of Directors and (ii) use such efforts to elect the
Xxxxxx Designees to the Company's Board of Directors as are employed
by the Company with respect to the persons nominated by the Company
for election to its Board of Directors. In the event of the
resignation, death or other removal of any Designee during the term of
such Xxxxxx Designee, the Company shall cause the appointment of such
replacement Xxxxxx Designee or Designees, as the case may be, as shall
be requested by Xxxxxx.
2.2 Number of Xxxxxx Designees.
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During the term of this Agreement:
(a) For so long as Xxxxxx holds at least thirty-eight
percent (38%) of the Outstanding Common Stock the number of Xxxxxx
Designees shall be four.
(b) For so long as Xxxxxx holds at least twenty-seven
percent (27%) but less than thirty-eight percent (38%) of the
Outstanding Common Stock, the number of Xxxxxx Designees shall be
three.
(c) For so long as Xxxxxx holds at least sixteen
percent (16%) but less than twenty-seven percent (27%) of the
Outstanding Common Stock, the number of Xxxxxx Designees shall be two.
(d) For so long as Xxxxxx holds at least five percent
(5%) but less than sixteen percent (16%) of the Outstanding Common
Stock, the number of Xxxxxx Designees shall be one.
(e) If at any time Xxxxxx shall hold less than five
percent (5%) of the Outstanding Common Stock, the Company shall have
no obligation pursuant to Section 2.2 to use its best efforts to cause
any Xxxxxx Designee to be nominated to the Company's Board of
Directors.
(f) If at any time during the term of any Xxxxxx
Designee, the percentage of the Outstanding Common Stock owned by
Xxxxxx decreases in such an amount so as to reduce the number of
Xxxxxx Designees to which Xxxxxx is entitled below the number of
Xxxxxx Designees then serving as directors of the Company, within 30
days of such event, Xxxxxx shall cause the resignation of such number
of Xxxxxx Designees so that, following such resignation, the number of
Xxxxxx Designees then serving as directors is equal to the number of
Xxxxxx Designees to which Xxxxxx is then entitled.
ARTICLE III
Registration Rights
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3.1 General.
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For purposes of this Article III, the terms "register",
"registered" and "registration" refer to a registration effected by
preparing and filing a registration statement in compliance with the
1933 Act and the declaration or ordering of effectiveness of such
registration statement.
3.2 Demand Registration.
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(a) Subject to paragraph (b) hereof, if the Company shall
receive a written request (specifying that it is being made pursuant
to this Section 3.2) from Xxxxxx that the Company file a registration
statement under the 1933 Act, or a similar document pursuant to any
other statute then in effect corresponding to the 1933 Act, covering
the registration of Common Shares owned by Xxxxxx or its Affiliates or
Associates or the Management Stockholders constituting at least 10% of
the Outstanding Common Stock, then the Company shall use its best
efforts to cause all such Common Shares owned by Xxxxxx or its
Affiliates or Associates or the Management Stockholders that Xxxxxx
has requested be registered within 30 days of delivery of Xxxxxx'x
request to be registered under the 0000 Xxx. If the total amount of
Common Shares that Xxxxxx requests to be included in such offering
exceeds the amount of Common Shares that the underwriters reasonably
believe compatible with the success of the offering, then the Company
will include in such registration only the number of Common Shares
which, in the opinion of such underwriters, can be sold.
(b) Xxxxxx shall be entitled to request, and the Company
shall be obligated to effect, two registrations pursuant to this
Section 3.2, subject to the provisions of Sections 3.6 and 3.10
hereof.
3.3 Piggyback Registration.
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If at any time the Company determines to register any of its
securities for its own account under the 1933 Act in connection with
the underwritten public offering of such securities on a form that
would also permit the registration of any of the Common Shares, the
Company shall, at each such time, promptly give Xxxxxx written notice
of such determination. Upon the written request of Xxxxxx received by
the Company within thirty (30) days after the giving of any such
notice by the Company, the Company shall use its best efforts to cause
to be registered under the 1933 Act all of the Common Shares of Xxxxxx
or its Affiliates or Associates that Xxxxxx has requested or
registered. If the total amount of Common Shares that are to be
included by the Company for its own account and at the request of
Xxxxxx exceeds the amount of Common Shares that the underwriters
reasonably believe compatible with the success of the offering, then
the Company will include in such registration only the number of
Common Shares which in the opinion of such underwriters can be sold,
selected pro rata based on the number of Common Shares which each of
them requests to be included in such registration.
3.4 Obligations of the Company.
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Whenever required under Sections 3.2 or 3.3 hereof to use
its best efforts to effect the registration of any Common Shares, the
Company shall:
(a) prepare and file with the SEC a registration statement
with respect to such Common Shares and use its best efforts to
cause such registration statement to become and remain effective
until such Common Shares are sold;
(b) as expeditiously as reasonably possible, prepare and
file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with
the provisions of the 1933 Act with respect to the disposition of
all Common Shares covered by such registration statement;
(c) as expeditiously as reasonably possible furnish to
Xxxxxx such numbers of copies of a prospectus, including a
preliminary (which term shall herein include any pre-pricing or
pre-effective) prospectus, in conformity with the requirements of
the 1933 Act, as it may reasonably request;
(d) as expeditiously as reasonably possible use its best
efforts to register and quality the Common Shares covered by such
registration statement under such securities or Blue Sky laws of
such jurisdictions as shall be reasonably appropriate for the
distribution of the Common Shares covered by the registration
statement, provided that the Company shall not be required in
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connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in
any such jurisdiction, and further provided that (anything in
this Agreement to the contrary notwithstanding with respect to
the bearing of expenses) if any jurisdiction in which the
securities shall be qualified shall require that expenses
incurred in connection with the qualification of the securities
in that jurisdiction be borne by Xxxxxx, then such expenses shall
be payable by Xxxxxx, to the extent required by such
jurisdiction;
(e) furnish to each seller of Common Shares (x) a signed
copy of the opinion of counsel for the Company delivered to the
underwriters or other purchasers under the underwriting or like
agreement, and (y) a signed copy of the "comfort letter" signed
by the Company's independent public accountants delivered to the
underwriters. Each of the foregoing documents shall contain such
items as Xxxxxx may reasonably request and as shall be acceptable
to the underwriters.
(f) notify each seller of Common Shares covered by such
registration statement, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as
then in effect, includes an
untrue statement of a material fact regarding the Company or
omits to state any material fact regarding the Company 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 of Common Shares
a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Common Shares, such
prospectus shall not include such untrue statement of a material
fact or omit to state such material fact required to be stated
therein or necessary to make the statement therein not misleading
in the light of the circumstances under which they were made;
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months,
but not more than eighteen months, beginning with the first full
calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the 1933 Act;
(h) provide and cause to be maintained a transfer agent and
registrar for all Common Shares covered by such registration
statement from and after a date not later than the effective date
of such registration statement; and
(i) use its best efforts to list all Common Shares covered
by such registration statement on any securities exchange on
which any class of securities of the Company is then listed.
3.5 Furnish Information.
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(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Article III that Xxxxxx and
its Affiliates or Associates and the Management Stockholders, as the
case may be, shall furnish to the Company such information regarding
them, the Common Shares owned by them, and the intended method of
disposition of such Common Shares as the Company shall reasonably
request and as shall be required in connection with the action to be
taken by the Company, and shall otherwise use its or their best
efforts to comply with all applicable rules and regulations of the
SEC.
(b) In connection with the registration of any Common
Shares under this Article III, Xxxxxx and its Affiliates or Associates
and the Management Stockholders, as the case may be, shall notify the
Company at any time when a prospectus relating thereto is required to
be delivered under the 1933 Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included
in such registration statement, as then in effect, includes an untrue
statement of a material fact regarding Xxxxxx and its Affiliates or
Associates and the Management Stockholders or omits to state any
material fact regarding Xxxxxx and its Affiliates or Associates and
the Management Stockholders 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.
3.6 Expenses of Registration.
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All expenses incurred in connection with a registration
pursuant to Section 3.2 or 3.3 hereof (excluding underwriters'
discounts and commissions which shall be borne by the sellers),
including without limitation all registration and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for
the Company, and the reasonable fees and disbursements of one counsel
for Xxxxxx and its Affiliates or Associates shall be borne by the
Company and by Xxxxxx pro rata based on the number of shares being
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sold by the Company, on the one hand, and by Xxxxxx and its Affiliates
and Associates and the Management Stockholders, on the other hand;
provided, however, that Xxxxxx may withdraw any requests pursuant to
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Section 3.2 hereof, in which event so long as Xxxxxx agrees to pay all
expenses incurred by the Company and Xxxxxx in connection with such
requested registration such withdrawn request shall be deemed for all
purposes herein not to have been made.
3.7 Underwriting Requirements.
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Xxxxxx (together with its Affiliates or Associates) shall,
as a condition for inclusion of Common Shares in a registration of an
underwritten public offering under Section 3.2 or 3.3 hereof, execute
and deliver an underwriting agreement acceptable to the Company, in
the case of a registration pursuant to Section 3.3, or acceptable to
Xxxxxx, in the case of a registration pursuant to Section 3.2, and the
underwriters with respect to such registration. Such underwriter
shall be selected (i) by the Company, in the case of a registration
pursuant to Section 3.3, and (ii) by Xxxxxx, in the case of a
registration pursuant to Section 3.2.
3.8 Indemnification.
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(a) To the fullest extent permitted by law, the Company
will indemnify and hold harmless Xxxxxx and its Affiliates or
Associates and the Management Stockholders, each of their directors,
each of their officers who has signed the registration statement, each
person, if any, who controls, is controlled by or is under common
control with, Xxxxxx and its Affiliates or Associates and the
Management Stockholders, within the meaning of the 1933 Act, and each
agent and any underwriter (within the meaning of the 0000 Xxx) against
any losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, and the Company will
reimburse any legal or other expenses reasonably incurred by Xxxxxx or
any such Affiliate, Associate, Management Stockholder, director,
officer, controlling person, agent or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any
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such case to the extent that any such loss, claim, damage, liability
or action is based upon an "untrue" or alleged untrue statement or
omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements
thereto in reliance upon and in conformity with information furnished
expressly for use in connection with such registration statement by
Xxxxxx or such Affiliate, Associate, or Management Stockholder;
provided further, that the indemnity agreement contained in this
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Section 3.8(a) shall not apply to amounts paid in settlements effected
without the consent of the Company (which consent shall not be
unreasonably withheld). Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of Xxxxxx
or any such Affiliate, Associate, Management Stockholder, director,
officer, seller, underwriter or control person and shall survive the
transfer of such securities by Xxxxxx or such Affiliate, Associate or
Management Stockholder, as the case may be.
(b) To the fullest extent permitted by law, Xxxxxx and its
Affiliates and Associates and the Management Stockholders will
indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each
person, if any who controls, is controlled by or
is under common control with, the Company within the meaning of the
1933 Act, and each agent and any underwriter (within the meaning of
the 0000 Xxx) against any losses, claims, damages or liabilities to
which the Company or any such director, officer, control person, agent
or underwriter may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon an untrue or alleged
untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise
out of or are based upon the 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 each case to the
extent, but only to the extent, that it arises out of or is based upon
information furnished by Xxxxxx or such Affiliate, Associate or
Management Stockholder, as the case may be, expressly for use in
connection with such registration; and Xxxxxx or such Affiliate,
Associate or Management Stockholder, as the case may be, will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent or
underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
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indemnity agreement contained in this Section 3.8(b) shall not apply
to amounts paid in settlements effected without the consent of Xxxxxx
or such Affiliate, Associate or Management Stockholder, as the case
may be (which consent shall not be unreasonably withheld). Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such
director, officer, seller, underwriter or control. person and shall
survive the transfer of such Common Shares by Xxxxxx or such
Affiliate, Associate or Management Stockholder, as the case may be.
(c) Promptly after receipt by an indemnified party under
this Section 3.8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section, notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed to assume the defense thereof
with counsel mutually satisfactory to the parties. The failure to
notify an indemnifying party promptly of the commencement of any such
action, if prejudicial in any material respect to its ability to
defend such action, shall relieve such indemnifying party of its
liability to the indemnified party under this Section to the extent,
but only to the extent, that the indemnifying party was prejudiced by
the delay, but the omission so to notify the indemnifying party will
not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section.
(d) If for any reason the foregoing indemnification is
unavailable to any party or insufficient to hold it harmless as and to
the extent contemplated by the preceding paragraphs of this Section
3.8, then each indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party, on the one
hand, and the applicable indemnified party, as the case my be, on the
other hand, and also the relative fault of the indemnifying party and
any applicable indemnified party, as the case may be, as well as any
other relevant equitable considerations.
(e) Each of the parties acknowledges that, in connection
with registrations of Common Shares under this Article III, the
underwriters may require indemnification by one or more of such
parties, the terms of which will be negotiated.
3.9 Reports Under 1934 Act.
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With a view to making available to Xxxxxx and its Affiliates
or Associates the benefits of Rule 144 promulgated under the 1933 Act
and any other rule or regulation of the SEC that may at any time
permit the sale of Common Shares to the public without registration,
the Company agrees to use its best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 14, at all times subsequent
to ninety (90) days after the effective date of the first registration
statement covering an underwritten public offering filed by the
Company;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the 1933 Act and the
1934 Act; and
(c) furnish to Xxxxxx forthwith upon request a written
statement by the Company that it has complied with the 1933 Act and
1934 Act reporting requirements and has made and kept public
information available, as these terms are defined in Rule 144 (at
any time after ninety (90) days after the effective date of said first
registration statement filed by the Company), and of the 1933 Act and
the 1934 Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed
by the Company as may be reasonably requested in availing any holder
of the benefit of any rule or regulation of the SEC permitting the
selling of Common Shares without registration.
3.10 Timing Limitations.
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(a) No request shall be made with respect to any
registration pursuant to Section 3.2 hereof within (i) two hundred
seventy (270) days following the effective date of the initial
registration statement filed by or for the Company and (ii) ninety
(90) days immediately following the effective date of any registration
statement filed pursuant to this Article III.
(b) If the Company shall furnish to the sellers of Common
Shares requesting a registration pursuant to Section 3.2 hereof a
certificate signed by a majority of the Board of Directors of the
Company stating that in the good faith judgement of the Board of
Directors of the Company, it would be seriously detrimental to the
Company or its stockholders for such registration statement to be
filed in accordance with the request and it is therefore essential to
defer the filing of such registration statement, then the Company
shall have the right to defer the filing of the registration statement
for a period of not more than 150 days from the date of the request by
Xxxxxx, in which event it shall not be counted for purposes of
determining the number of registrations pursuant to Section 3.2
hereof.
ARTICLE IV
Miscellaneous
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4.1 Remedies.
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The parties of this Agreement acknowledge and agree that
breach of any of the covenants of the Company and Xxxxxx set forth in
this Agreement is not compensable by payment of money damages and,
therefore, that the covenants of the Company and Xxxxxx set forth in
this Agreement may be enforced in equity by a decree requiring
specific performance. Such remedies shall be cumulative and non-
exclusive and shall be in addition to any other rights and remedies
the parties may have under this Agreement.
4.2 Entire Agreement; Amendment.
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This Agreement sets forth the entire understanding of the
parties, and supersedes all prior agreements, arrangements and
communications, whether oral or written, with respect to the subject
matter hereof. Any other amendment, revision or termination of this
Agreement shall require the prior written consent of each of the
parties hereto.
4.3 Severability.
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The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if
the invalid or enforceable provision are omitted.
4.4 Notices.
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Unless otherwise specified herein, all notices, requests and
other communications hereunder shall be in writing and shall be deemed
to have been duly given when delivered by hand or one day after
sending by overnight delivery service, to the respective addresses of
the parties set forth below.
(a) for notices and communications to the Company:
Xxxxx Xxxxxx Corporation
00 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
Attn: G. Xxx Xxxxxxxx
(b) for notices and communications to Xxxxxx:
Xxxxxx Industries
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx, Esquire
By notice complying with the foregoing provisions of this Section 4.4,
each party shall have the right to change the mailing address for
future notices and communications to such party.
4.5 Assignment.
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The rights under this agreement may not be assigned except
as expressly provided herein. No such assignment shall relieve the
assignor of its obligations hereunder.
4.6 Termination.
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Except as is otherwise expressly stated herein, this
Agreement shall terminate on the tenth anniversary hereof.
4.7 Governing Law.
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This Agreement shall be governed by and construed under the
internal laws of the State of Delaware, without giving effect to
principles of conflicts of laws.
4.8 Recapitalizations, Exchanges, Etc.
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The provisions of this Agreement shall apply, to the full
extent set forth herein with respect to Common Shares, to any and all
shares of Capital Stock of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Common Shares, by reason of ta stock dividend,
stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or
otherwise. Upon the occurrence of any such events, amounts hereunder
shall be appropriately adjusted.
4.9 Funding Adjustment.
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(a) The Company acknowledges that it has declared a
dividend payable to Xxxxxx, which dividend shall be paid in part,
following the Offerings. Xxxxxx agrees that it will pay to the
Company, following the Offerings, such amount as may be required so
that upon the closing of the proposed underwritten initial public
offering and sale to the public of approximately 14,750,000 Common
Shares (the "Offerings") and the transactions effected by Xxxxxx and
its Affiliates and Associates in connection therewith, (x) the amount
of the adjusted net worth of the Company determined in accordance with
Section 4.9(b) hereof (the "Adjusted Net Worth") is equal to $50
million and (y) the Company's ratio of Net Debt-to-Equity Percentage
is no greater than 195%. In the event that Xxxxxx shall be obligated
to make payments pursuant to the prior sentence, Xxxxxx shall
promptly, but in no event later than five business days after the date
of the final determination thereof under Section 4.9(c) hereof, pay to
the Company by wire transfer an amount equal to the sum of (i) the
amount necessary to fund such shortfall plus (ii) interest thereon
from the date of the closing of the Offerings at the average interest
rate then charged to the Company under its bank indebtedness. The Net
Debt-to-Equity Percentage shall be
determines as: (i) the sum of indebtedness to banks plus notes
payable to Xxxxxx less invested cash and less invested cash
equivalents; divided by (ii) Adjusted Net Worth.
(b) The Adjusted Net Worth shall be determines as of the
date of the closing of the Offering on the basis of the audited
combined balance sheet of the Company (the "Final Balance Sheet").
The Final Balance Sheet shall be audited by Deloitte Xxxxxxx & Sells,
the Company's independent certified public accountants (the
"Independent Accountant"), in accordance with generally accepted
account principles consistently applied and consistent with the
principles applied in the financial statements included in the
registration statement used in connection with the Offering; provided,
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however, that the Final Balance Sheet shall give pro forma effect to
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the purchase of Xxxxx Xxxxxx Singapore by the Company; and provided
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further, that the Final Balance Sheet shall exclude any net proceeds
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to the Company, resulting from any exercise of the underwriters'
overallocation options in connection with the offering.
(c) The Company shall engage (and pay the fees of) the
Independent Accountant to audit the Final Balance Sheet and shall use
its best efforts to deliver to Xxxxxx the Final Balance Sheet within
forty-five (45) days after the closing of the Offering together with a
report of the Independent Accountant thereon (i) setting forth the
amount of Adjusted Net Worth reflected in the Final Balance Sheet,
(ii) stating the (a) the audit has ben made in accordance with
generally accepted auditing standards, and (b) that the Final Balance
Sheet has been prepared in conformity with generally accepted
accounting principles consistently applied, and (iii) setting forth
the amount of any required adjustments pursuant to this Section 4.9.
During such period from the closing of the Offering until the date of
delivery of the Final Balance Sheet, the Company and Xxxxxx shall give
the Independent Accountant such assistance and access to the assets
and books and records of the Company as the Independent Accountant
shall reasonably request during normal business hours in order to
enable it to audit the Final Balance Sheet. The Final Balance Sheet
and the related report of the Independent Accountant shall be final
and binding on the parties unless, within fifteen (15) days after
delivery to the parties, notice is given by the Company to Xxxxxx or
by Xxxxxx to the Company of its objection. If notice of objection is
given, the parties shall consult with each other with respect to the
objection. If the parties are unable t reach agreement within fifteen
(15) days after the notice of objection has been give, the dispute
shall be resolved by a firm of independent accountants of nationally
recognized standing selected by the parties (other than Xxxxxx
Xxxxxxxx &
Co., Ernst & Whinney and Price Waterhouse). The resolution of the
dispute by such firm shall be final and binding on the parties.
Xxxxxx and the Company shall share such accountants' fees.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
XXXXX CORONA CORPORATION
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HM HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx, III
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx, III
Title: Vice President
CONSENT AND AMENDMENT AGREEMENT
-------------------------------
Dated May 21, 1991
The parties to this Agreement are Xxxxx Xxxxxx Corporation
("Xxxxx Corona") and HM Holdings, Inc. ("HMH"). In connection with
the Stockholders Agreement dated as of June 2, 1989 (the "Stockholders
Agreement") between Xxxxx Xxxxxx and HMH, it is agreed as follows:
1. Xxxxx Corona hereby consents to the assignment by HMH of
HMH's rights under the Stockholders Agreement to Xxxxxx Natural
Resources Company, a Delaware general partnership ("HNR").
2. HMH hereby represents and warrants that HNR is wholly-
owned, indirectly, by Xxxxxx PLC and is an affiliate of HMH (as
defined in the Stockholders Agreement).
3. Upon written notification by HMH to Xxxxx Xxxxxx that
the assignment has been completed, the Stockholders Agreement is
hereby amended so that all references in the Stockholders Agreement to
HMH (which is referred to as "Xxxxxx" therein) shall constitute
references to HNR. The notification shall state the effective date of
the assignment, and the amendment provided for in this Section shall
be deemed effective as of such date.
4. Except as provided herein, the terms of the Stockholders
Agreement shall continue in full force and effect. This Agreement
shall not be deemed to release HMH from any continuing obligations
under the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first set forth above.
XXXXX XXXXXX CORPORATION
By: /s/ Xxx Xxxxxxxx
-----------------------------------
HM HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx, III
-----------------------------------
