EXHIBIT 6
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INVESTORS' AGREEMENT
by and among
Allied Digital Technologies Corp.
and
Its Stockholders
Named Therein
As of September 24, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
CERTAIN DEFINITIONS........................................................1
1.1 Defined Terms.....................................................1
ARTICLE II
TRANSFERS OF RESTRICTED SECURITIES........................................11
2.1 Transfer Restrictions Generally; Securities Act..................11
2.2 Legends..........................................................11
2.3 Limitations on Repurchases, Dividends, Etc.......................12
2.4 Transfers by Stockholders........................................12
2.5 Right of First Refusal...........................................13
2.6 Involuntary Transfers............................................15
2.7 Sale of the Company..............................................17
ARTICLE III
RIGHTS OF INCLUSION.......................................................18
3.1 Rights of Inclusion..............................................18
3.2 Article III Sales................................................19
ARTICLE IV
REPURCHASE OF RESTRICTED SECURITIES.......................................20
4.1 Sale Event.......................................................20
4.2 Purchase Price...................................................21
4.3 Closing..........................................................21
4.4 Postponement.....................................................22
ARTICLE V
CORPORATE GOVERNANCE......................................................23
5.1 Board of Directors...............................................23
5.2 Removal..........................................................24
5.3 Vacancies........................................................24
5.4 Special Approval Rights..........................................25
5.5 Committees of the Board; Subsidiary Boards.......................25
5.6 Observer's Rights................................................25
5.7 Action by Written Consent of Stockholders........................26
5.8 Designation of Proxy.............................................26
5.9 Regulatory Right.................................................26
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ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES..........................................27
6.1 Registration of Common Stock.....................................27
6.2 Management Stockholders; Additional Stockholders.................27
6.3 Stockholder List; Certain Notices................................27
6.4 Regulatory Compliance Cooperation................................28
6.5 Purchaser Representative.........................................29
ARTICLE VII
MISCELLANEOUS.............................................................29
7.1 Governing Law....................................................29
7.2 Entire Agreement; Amendments.....................................29
7.3 Term.............................................................30
7.4 Certain Actions..................................................30
7.5 Inspection.......................................................31
7.6 Recapitalization, Exchanges, Etc., Affecting Restricted
Securities......................................................31
7.7 Compliance with Regulations......................................31
7.8 Waiver...........................................................32
7.9 Successors and Assigns...........................................32
7.10 Remedies.........................................................32
7.12 Invalid Provisions...............................................33
7.13 Headings.........................................................33
7.14 Further Assurances...............................................33
7.15 Gender...........................................................33
7.16 Counterparts.....................................................33
7.17 Notices..........................................................33
7.18 Limited Preemptive Rights........................................33
Annex I - Equity Ownership Chart
Exhibit A - Joinder Agreement
Exhibit B - Board and Nominating Committee Composition
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INVESTORS' AGREEMENT (this "Agreement"), dated as of September 24, 1998, by
and among Allied Digital Technologies Corp., a Delaware corporation (the
"Company"), 399 Venture Partners, Inc., a Delaware corporation ("399"), Citicorp
Mezzanine Partners, L.P. ("CMP"), a Delaware limited partnership, Fleet
Corporate Finance, Inc. ("FCF"), a Massachusetts corporation, and each of the
individuals named on the signature pages hereto under the heading "Management
Members" (the "Management Members"). Capitalized terms used and not otherwise
defined herein have the respective meanings ascribed thereto in Article I.
RECITALS
WHEREAS, pursuant to the terms of the Merger Agreement (as defined below),
AAC, a Delaware corporation ("AAC"), will be merged with and into the Company,
with the Company as the surviving corporation (the "Merger");
WHEREAS, at the Effective Time (as defined in the Merger Agreement) the
parties hereto will hold new securities of the Company as set forth on Annex I;
WHEREAS, in connection with the Merger Agreement and pursuant to a certain
Warrant Agreement dated as of the date hereof, the Company will issue to CMP and
FCF Warrants (as defined herein), representing the right to purchase from the
Company up to 43,479 shares of the Company's Class B Common Stock (as adjusted
from time to time pursuant to the provisions of the Warrants) in the aggregate
on the terms and conditions set forth in the Warrants; and
WHEREAS, the parties hereto desire to enter into this Agreement to govern
certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Merger Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Defined Terms. (a) The following defined terms, when used in
this Agreement, have the respective meanings set forth below (such definitions
to be equally applicable to both singular and plural forms of the terms
defined):
"Additional Management Stockholder" means an Additional Stockholder who
is an employee, officer or director of the Company or any of its
Subsidiaries.
"Additional Stockholder" means any Person (other than any 399
Stockholder, CMP Stockholder or Management Stockholder), to whom the Company
issues Restricted Securities or Preferred (or to whom these have been
transferred in such transferee's capacity as a Company Designee under
Section 4.1) after the date hereof other than pursuant to a public offering
registered under the Securities Act, and who has executed a Joinder
Agreement as an Additional Stockholder pursuant to Section 6.2, and
Permitted Transferees of such Person, so long as any such Person or
Permitted Transferees of such Person shall hold Restricted Securities or
Preferred.
"Affiliate" means, with respect to any Person, any other Person that
controls, is controlled by or is under common control with such Person. For
the purposes of this definition, "controls" (including, with its correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of securities, by
contract or otherwise. For purposes of this Agreement, employees, officers
and directors of 399 and its Affiliates shall be "Affiliates" of 399.
"Affirmative Board Vote" means the affirmative vote of at least a
majority of the members of the Board (assuming no vacancies), which majority
shall include, unless the 399 Stockholders have elected in writing not to
designate 399 Directors, one director who is a 399 Director.
"Associate" means, with respect to any Person, (i) any corporation or
organization of which such Person is an officer or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
securities; (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee
or in a similar fiduciary capacity; and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such
Person.
"Board" means the Board of Directors of the Company.
"Cause" means, with respect to a Management Stockholder or an
Additional Management Stockholder, (i) a material breach by such Management
Stockholder or Additional Management Stockholder of this Agreement, any
management subscription agreement with the Company or any employment,
non-compete or confidentiality agreement with the Company or any of its
Subsidiaries to which such person is a party which such Management
Stockholder or Additional Management Stockholder fails to cure within a
thirty (30) day period following the giving of notice by the Company to such
Person or (ii) the commission by such person of a felony, a crime involving
moral turpitude or any other willful act causing material harm to the
business, financial condition, standing or reputation of the Company or any
of its Subsidiaries.
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"Charter" means the Restated Certificate of Incorporation of the
Company, as the same may be amended or restated from time to time.
"Class A Common" means the Company's Class A Common Stock, par value
$.01 per share, and any securities into which such Class A Common shall have
been changed or any securities resulting from any reclassification or
recapitalization of such Class A Common.
"Class B Common" means the Company's Class B Common Stock, par value
$.01 per share, and any securities into which such Class B Common shall have
been changed or any securities resulting from any reclassification or
recapitalization of such Class B Common.
"Closing Date" has the meaning ascribed thereto in the Merger
Agreement.
"Commission" means the Securities and Exchange Commission and any other
similar or successor agency of the federal government administering the
Securities Act or the Exchange Act.
"Common Stock" means the Class A Common, the Class B Common and all
other securities of any class or classes (however designated) of the
Company, the holders of which have the right, without limitation as to
amount, after payment on any securities entitled to a preference on
dividends or other distributions upon any dissolution, liquidation or
winding-up, either to all or to a share of the balance of payments upon such
dissolution, liquidation or winding-up.
"CMP Stockholders" means CMP, FCF and each of their respective
Permitted Transferees (other than any 399 Stockholder), so long as any such
Person shall hold Restricted Securities.
"399 Stockholders" means 399 and its Permitted Transferees (other than
any CMP Stockholder), so long as any such Person shall hold Restricted
Securities or Preferred.
"Diluted Basis" means, with respect to the calculation of the number of
shares of Common Stock, (i) all shares of Common Stock outstanding at the
time of determination and (ii) all shares of Common Stock issuable upon the
exercise, conversion or exchange or any Equity Equivalents; provided,
however, that with respect to any options, shares of Common Stock shall only
be included in the determination of Diluted Basis to the extent such options
are vested.
"Equity Equivalent" means any option, warrant or other security
exercisable, convertible or exchangeable for or into Common Stock,
including, without limitation, the Warrants.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the Commission
thereunder.
"Fair Market Value" means (i) with respect to the Preferred, the fair
value thereof, as determined by Affirmative Board Vote and (ii) with respect
to each share of Common Stock as of a particular date, the average of the
closing prices of such Common Stock (A) on the New York Stock Exchange, Inc.
on each of the 30 trading days next preceding such date or, (B) if such
Common Stock is not then listed or admitted to trading on such exchange, on
the principal national securities exchange on which such Common Stock is
listed or admitted to trading or, (C) if not listed or admitted to trading
on any national securities exchange, on the Nasdaq National Market, or (D)
if such Common Stock is not then listed or admitted to trading on a national
securities exchange or quoted on the Nasdaq National Market, the average of
the closing bid and asked prices in the over-the-counter market as furnished
by any New York Stock Exchange member firm selected by Affirmative Board
Vote or, (E) if no such prices are available, the fair market value per
share as determined in good faith by Affirmative Board Vote.
"Funded Debt" means, without duplication, with respect to any Person
(i) all indebtedness for borrowed money or for the deferred purchase price
of property, (ii) the face amount of all letters of credit, banker's
acceptances and other credit facilities issued for the account of such
Person and, without duplication, all drafts drawn thereunder, (iii) all
liabilities secured by any lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though
such Person has not assumed or become liable for the payment thereof, (iv)
lease obligations of such Person which, in accordance with generally
accepted accounting principles ("GAAP"), should be capitalized, (v)
obligations with respect to any conditional sale agreement or title
retention agreement and (vi) guarantees by such Person of the Funded Debt of
another Person; but excluding in each case trade and other accounts payable
in the ordinary course of business.
"Involuntary Transfer" means, with respect to Restricted Securities of
any Management Stockholder or Additional Stockholder, any involuntary
Transfer or Transfer by operation of law of such Restricted Securities
(other than to a Permitted Transferee of such Stockholder) by or in which
such Stockholder shall be deprived or divested of any right, title or
interest in or to such Restricted Securities, including, without limitation,
by seizure under levy of attachment or execution, by foreclosure upon a
pledge, in connection with any voluntary or involuntary bankruptcy or other
court proceeding to a debtor in possession, trustee in bankruptcy or
receiver or other officer or agency, pursuant to any statute pertaining to
escheat or abandoned property, pursuant to a divorce or separation agreement
or a final decree of a court in a divorce action, upon or occasioned by the
incompetence of any such Stockholder and a transfer in such event to a legal
representative of any such Stockholder; provided, that "Involuntary
Transfer" shall not include any Transfer effected pursuant to the exercise
by 399 Stockholders of Sale of
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the Company Rights under Section 2.7 hereof, any Transfer effected pursuant
to Article IV hereof, any Transfer to the Company solely resulting from a
reclassification of the capital stock of the Company or a recapitalization
of the Company and any Transfer effected as a result of a merger of the
Company with or into any other Person.
"Joinder Agreement" means a Joinder Agreement substantially in the form
attached hereto as Exhibit A.
"Lien" means any lien, claim, option, charge, encumbrance, security
interest or other adverse claim of any kind.
"Loan Documents" means (a) with respect to the senior credit financing,
the Credit Agreement, dated as of September 24, 1998, by and among Allied
Digital, Inc., the guarantors and lenders party thereto and Fleet National
Bank, as administrative agent (the "Credit Agreement") and the other Loan
Documents (as defined in the Credit Agreement) and (b) with respect to the
subordinated credit financing, the Subordinated Debt Documents and the
Warrant Agreement (each as defined in the Credit Agreement) and the Warrants
issued or to be issued pursuant to the Warrant Agreement.
"Management Securities" means all shares of Restricted Securities
issued to or acquired by Management Stockholders and Additional Management
Stockholders, unless otherwise agreed between the Company and any Management
Stockholder or Additional Management Stockholder.
"Management Stockholders" means the Management Members and their
respective Permitted Transferees, so long as any such Person shall hold
Restricted Securities.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
May 5, 1998, between the Company and AAC.
"Original Cost" means, (i) as to each share of Common Stock purchased
or otherwise acquired from the Company (A) on the Closing Date, $5.00, and
(B) after the Closing Date, the price paid (including the price at which
options were exercised) to the Company therefor, in each case appropriately
adjusted to reflect all stock splits, stock dividends, reclassifications,
recapitalizations or similar events affecting the Common Stock subsequent to
the date of purchase thereof.
"Ownership Ratio" means, as to any CMP Stockholder at the time of
determination, the percentage obtained by dividing the amount of shares of
Common Stock held by such CMP Stockholder on a Diluted Basis at such time by
the aggregate amount of shares of Common Stock held by the 399 Stockholders
on a Diluted Basis at such time.
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"Permitted Transferee" means:
(i) with respect to any Stockholder who is a natural person, (A)
the spouse of such Stockholder, (B) any lineal ancestor or descendant
(including by adoption and stepchildren) of such Stockholder, (C) any
trust of which one or more Stockholders are the controlling trustees
and which is established solely for the benefit of any of the foregoing
individuals with respect to such Stockholders and whose terms are not
inconsistent with the terms of this Agreement, (D) the estate of such
Stockholder established by reason of such Stockholder's death, or (E)
any corporation, limited liability company or partnership, all of the
interests of which are (or is) owned by one or more of the Persons
identified in this clause (i);
(ii) with respect to the estate of any Stockholder or any trust to
which such Stockholder has transferred Restricted Securities that meets
the criteria set forth in clause (C) of subparagraph (i) above with
respect to such Stockholder, any person having the relationship with
respect to such Stockholder described in clause (A) or (B) of such
subparagraph (i);
(iii) as to any 399 Stockholder, (A) any other 399 Stockholder;
(B) any director, officer, employee, representative, general partner,
limited partner, Associate or Affiliate of 399; (C) any director,
officer, employee, representative, general partner or limited partner
of any Associate or Affiliate of 399; (D) any trust, a majority in
interest of the beneficiaries of which, or corporation, limited
liability company or partnership, a majority in interest of the
stockholder, members or limited partners of which, or partnership or
limited liability company, the managing general partner or managing
member of which, are (or is) one or more of the Persons identified in
this clause (ii), the spouse of any such Person or such Person's lineal
ancestor or descendants (including by adoption and stepchildren); or
(E) any other Person in order to avoid a Regulatory Problem; and
(iv) as to any CMP Stockholder, any other CMP Stockholder, any
director, officer, employee, representative, partner or Affiliate of
CMP and any director, officer, employee, representative, or partner of
any such Affiliate; and
(v) as to any Additional Stockholder that is not a natural Person,
any Affiliate of such Stockholder.
"Person" means an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, joint venture,
government (or agency or political subdivision thereof) or any other entity
of any kind.
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"Preferred" means the Series A Preferred Stock, par value $.01 per
share, of the Company, and any securities into which such Preferred shall
have been changed or any securities resulting from any reclassification or
recapitalization of such Preferred.
"Pro Rata" means, with respect to one or more Stockholders, as it
relates to the Common Stock, in proportion to the number of shares of Common
Stock on a Diluted Basis owned by such Stockholders or which may be acquired
by any Stockholders.
"Qualifying Offering" means the consummation by the Company of an
underwritten primary or secondary public offering of Common Stock pursuant
to an effective registration statement under the Securities Act, covering
the distribution of the Common Stock which (taken together with all similar
previous public offerings) raises at least $15 million of aggregate net
proceeds to the Company (after underwriters' fees, commissions and discounts
and offering expenses).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, among the parties hereto, as the
same may be amended, modified or supplemented from time to time.
"Restricted Securities" means the Common Stock, the Equity Equivalents
and any securities issued with respect thereto as a result of any stock
dividend, stock split, reclassification, recapitalization, reorganization,
merger, consolidation or similar event or upon the conversion, exchange or
exercise thereof.
"Rule 144 Transaction" means a transfer of Common Stock (A) complying
with Rule 144 under the Securities Act as such Rule is in effect on the date
of such transfer (but not including a sale other than pursuant to a "brokers
transaction" as defined in clauses (1) and (2) of paragraph (g) of such Rule
as in effect on the date hereof) and (B) occurring at a time when shares of
such Common Stock are registered pursuant to Section 12 of the Exchange Act
(or any successor to such Section).
"Sale of the Company" means the sale of the Company (whether by merger,
consolidation, recapitalization, reorganization, sale of securities, sale of
assets or otherwise) in one transaction or series of related transactions to
a Person or Persons not an Affiliate of 399 pursuant to which such Person or
Persons (together with its Affiliates) acquires (i) securities representing
at least a majority of the voting power of all securities of the Company,
assuming the conversion, exchange or exercise of all securities convertible,
exchangeable or exercisable for or into voting securities, or (ii) all or
substantially all of the Company's assets on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the Commission thereunder.
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"Significant Subsidiaries" means those Subsidiaries of the Company
which constitute a "Significant Subsidiary" as defined in Regulation S-X
promulgated by the Commission under the Securities Act, as such Regulation
is in effect on the date hereof.
"Significant Transaction" means:
(i) any merger, consolidation or other business combination of the
Company or any of its Significant Subsidiaries with or into any Person
or any formation by the Company or any of its Significant Subsidiaries
of any subsidiary which would, upon such formation, be a Significant
Subsidiary;
(ii) any sale, lease, exchange or other disposition by the Company
or any of its Subsidiaries of assets having a book value in excess of
$1,000,000, in a single transaction or a series of related
transactions, to or with any Person, other than sales of inventory in
the ordinary course of business;
(iii) any amendment to or modification or repeal of any provision
of the Charter or the By-Laws of the Company;
(iv) any acquisition by the Company or any of its Subsidiaries of
securities or assets, in a single transaction or a series of related
transactions for consideration in excess of $1,000,000, other than (A)
purchases of inventory in the ordinary course of business, (B) capital
expenditures made in accordance with an annual budget approved by the
Board or (C) investments in commercial paper having, at the date of
acquisition, the highest credit rating obtainable from S&P or from
Xxxxx'x; investments in certificates of deposit, banker's acceptances,
money market deposit accounts and time deposits (maturing within one
year from the date of acquisition) issued by any commercial bank
organized under the laws of the United States of America or any state
thereof that has a combined capital and surplus profits of not less
than $1,000,000,000; investments in securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by S&P or "A-1" by Xxxxx'x; or investments in
money market funds complying with the risk limiting conditions of Rule
2a-7 (or any successor rule) of the Commission under the Investment
Company Act of 1940, as amended;
(v) any increase or reduction of the capital of the Company or any
of its Subsidiaries or the creation of any additional class of capital
stock of the Company or any of its Subsidiaries, or the issuance by the
Company or any of its Subsidiaries of Equity Equivalents on a basis
other than pro rata to the holders of capital stock other than (A) the
issuance of Common Stock upon the exercise or conversion of Equity
Equivalents where the issuance of such Equity Equivalents has been
approved by the Board and (B) the
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issuance of Common Stock upon the conversion of any outstanding class
of Common Stock;
(vi) the incurrence or guaranty after the Closing Date by the
Company or any of its Subsidiaries of any material Funded Debt or any
modification or amendment to any agreement governing the extension or
guaranty thereof (but excluding any incurrence under the terms of any
agreement or instrument previously approved by the Board, including,
without limitation, drawdowns on any previously approved revolving
credit facility);
(vii) the dissolution of the Company or any of its Subsidiaries,
the adoption of a plan of liquidation by the Company or any of its
Subsidiaries, any action by the Company or any of its Subsidiaries to
commence any suit, case, proceeding or other action (A) under any
existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to have an
order for relief of debtors entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or making a
general assignment for the benefit of its creditors;
(viii) any increase, decrease or change in the compensation or
benefits of the senior management of the Company or any of its
Subsidiaries; and
(ix) any transaction or dealing between the Company or any of its
Subsidiaries, on the one hand, and one or more of its Stockholders (or
any Affiliate of any Stockholder), on the other hand, not entered into
in the ordinary course of business or on an arm's-length basis or which
is material to the Company or any of its Subsidiaries, other than
transactions undertaken by the Company in compliance with the
provisions of this Agreement, the Registration Rights Agreement and the
Loan Documents.
"Stockholders" means each of the 399 Stockholders, the CMP
Stockholders, the Management Stockholders and the Additional Stockholders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association or other business entity
of which (i) if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, limited liability company,
association or other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that
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Person or a combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a partnership,
limited liability company, association or other business entity if such
Person or Persons shall be allocated a majority of partnership, limited
liability company, association or other business entity gains or losses or
shall be or control the managing director or general partner of such
partnership, limited liability company, association or other business
entity.
"Transfer" means, any direct or indirect, sale, transfer, assignment,
grant of a participation in, gift, hypothecation, pledge or other
disposition of any securities or any interests therein or, as the context
may require, to sell, transfer, assign, grant a participation in, give as a
gift, hypothecate, pledge or otherwise dispose of any securities or any
interests therein; provided, that the exercise of any conversion or exchange
right provided for in the terms of any Equity Equivalent shall not be deemed
a "Transfer."
"Unvested Shares" shall mean, with respect to each Management
Stockholder or Additional Management Stockholder, all Management Securities
other than Vested Shares.
"Vested Shares" means, unless otherwise provided in a separate
agreement between the Company and a Management Stockholder or Additional
Management Stockholder, with respect to each Management Stockholder or
Additional Management Stockholder, that portion of Management Securities
held by such Person and by such Person's Permitted Transferees who hold such
Management Securities which are attributable to such Person which is the
product of: (x) the number of Management Securities acquired by such
Management Stockholder or Additional Management Stockholder on or after the
Closing Date, and (y) the fraction in which the numerator is the number of
anniversaries that have elapsed after the Closing Date and the denominator
is 5; provided, however, that in the event such fraction is greater than one
it shall be deemed to equal one; provided, further, that simultaneously with
a Sale of the Company, all Unvested Shares shall become Vested Shares;
provided, further, that in the event that a Sale Event occurs pursuant to
Section 4.1 as a result of the death of a Management Stockholder or an
Additional Management Stockholder, any Unvested Shares of such Management
Stockholder or Additional Management Stockholder shall be deemed to be
Vested Shares.
"Warrants" means the Stock Purchase Warrants, dated the date hereof,
issued by the Company to CMP and FCF, which grants to CMP and FCF
collectively the right to purchase from the Company a total of 43,479 shares
of Class B Common in the aggregate at an initial price per share of $.01, as
adjusted under the terms of the Warrants, together with any Warrants issued
in replacement thereof.
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(b) Unless otherwise provided herein, all accounting terms used in
this Agreement shall be interpreted in accordance with GAAP as in effect from
time to time, applied on a consistent basis.
(c) The following terms, when used in this Agreement, shall have
the meanings defined for such terms in the Section set forth below (such
definitions to be equally applicable to both singular and plural forms of the
terms defined):
Term Section
------- ----------
"Acquiror" 2.7
"Agreement" Preamble
"Article III Offer" 3.1(a)
"Buyer" 3.1(a)
"Company" Preamble
"Company Designee" 4.1
"Company Notice of Purchase Intention" 2.5(c)
"CMP" Preamble
"Disinterested Director" 5.1(a)
"Election Notice" 7.18
"Inclusion Notice" 3.1(a)
"Inclusion Right" 3.1(b)
"Inclusion Shares" 3.1(b)
"Issuance Notice" 7.18
"Management Members" Preamble
"Management Director" 5.1(a)
"Management Representative" 5.8
"Management Stockholders Cumulative
Designating Group" 7.4(b)
"Management Stockholders Designating Group" 7.4(b)
"Xxxxxxx" 5.1(a)
"Nominating Committee" 5.1(a)
"Notice of Transfer Intention" 2.5(a)
"Observer" 5.6
"Offered Securities" 2.5(a)
"Offerees" 3.1(a)
"Offer Price" 2.5(a)
"Xxxxxx" 5.1(a)
"Preemptive Offered Shares" 7.18
"Prospective Buyers" 2.5(a)
"Prospective Buyer Notice" 2.5(b)
"Purchase Notice" 4.1
"Regulatory Problem" 6.4(c)
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"Regulatory Right" 5.9
"Sale Event" 4.1
"Sale of the Company Rights" 2.7
"Sellers" 4.1
"Selling Stockholder" 2.5(a)
"Subject Securities" 2.6(b)
"Third Party" 7.9
"399" Preamble
"399 Director" 5.1(a)
"399 Stockholders Cumulative Designating Group" 7.4(a)
"399 Stockholders Designating Group" 7.4(a)
"Transferor" 3.1(a)
"Transferor Shares" 3.1(a)
"Triggering Issuance" 7.18
ARTICLE II
TRANSFERS OF RESTRICTED SECURITIES
2.1 Transfer Restrictions Generally; Securities Act. (a) Each
Stockholder agrees that it will not, directly or indirectly, Transfer any
Restricted Securities except in accordance with the terms of this Agreement. Any
attempt to Transfer or any purported Transfer of any Restricted Securities not
in accordance with the terms of this Agreement shall be null and void and
neither the Company, as the issuer of such securities, nor any transfer agent of
such securities shall give any effect to such attempted Transfer in its stock
records.
(b) Each Stockholder agrees that, in addition to the other
requirements set forth in this Agreement, the Registration Rights Agreement and
in each Stockholder's respective subscription agreement with the Company, it
will not Transfer any Restricted Securities except (i) pursuant to an effective
registration statement under the Securities Act, or (ii) unless such requirement
is waived by the Company, upon receipt by the Company of (A) an opinion of
counsel to the Stockholder (which counsel and opinion are reasonably
satisfactory to the Company), or (B) an opinion of counsel to the Company, in
each case to the effect that no registration statement is required in connection
with such Transfer because of the availability of an exemption from registration
under the Securities Act.
2.2 Legends. (a) Each certificate representing Restricted
Securities held by any Stockholder shall be endorsed with the following legends
and such other legends as may be required by applicable state securities laws:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS, RIGHTS TO REPURCHASE AND TO REQUIRE TRANSFERS
CONTAINED IN AN INVESTORS' AGREEMENT, DATED AS OF SEPTEMBER 24,
1998, AS SUCH AGREEMENT MAY BE AMENDED, MODIFIED OR RESTATED FROM
TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
ISSUER HEREOF)."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS OR (ii) AN APPLICABLE EXEMPTION
FROM REGISTRATION THEREUNDER OR UNDER APPLICABLE STATE SECURITIES
LAWS."
(b) Any certificate issued at any time in exchange or substitution
for any certificate bearing such legends (except a new certificate issued upon
the completion of a Transfer pursuant to a registered public offering under the
Securities Act and made in accordance with the Securities Act) shall also bear
such legends, unless in the opinion of counsel for the Company, the Restricted
Securities represented thereby are no longer subject to the provisions of this
Agreement or, in the opinion of the Company (with advice from counsel to the
Company, as the Company may deem appropriate), the restrictions imposed under
the Securities Act or state securities laws, in which case the applicable legend
(or legends) may be removed.
2.3 Limitations on Repurchases, Dividends, Etc. Each Stockholder
understands that the Company is entering, or may from time to time enter, into
financing agreements which may contain prohibitions, restrictions and
limitations, among other things, on the ability of the Company to purchase any
Restricted Securities (whether pursuant to this Agreement or otherwise), to pay
dividends and to waive, modify or discharge any rights or obligations under this
Agreement.
2.4 Transfers by Stockholders. (a) Each of the CMP Stockholders,
Management Stockholders, Additional Management Stockholders and Additional
Stockholders severally agrees not to Transfer any Restricted Securities, except
(i) to a Permitted Transferee who shall have executed and delivered to the
Company a Joinder Agreement and thereby becomes a party to this Agreement; (ii)
with the approval of the Board acting by Affirmative Board Vote, including,
without limitation, pursuant to a merger or consolidation of the Company; (iii)
in a registered public offering, including pursuant to the exercise of rights,
if any, of such Stockholder under the Registration Rights Agreement or in a Rule
144 Transaction; (iv) to any 399 Stockholder; (v) pursuant to Section 2.5 (Right
of First Refusal), (vi) pursuant to
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Section 2.6 (Involuntary Transfers), (vii) pursuant to Section 2.7 (Sale of the
Company), (viii) in accordance with the terms of Article III (Rights of
Inclusion) in the capacity of an Offeree or (ix) pursuant to Article IV
(Repurchase of Restricted Securities); provided, however, that no Management
Stockholder or Additional Management Stockholder shall Transfer any Restricted
Securities pursuant to Section 2.5 for a period of five years following the
Closing Date; and provided, further, that no Management Stockholder or
Additional Management Stockholder shall transfer any Unvested Shares except (x)
to a Permitted Transferee who shall have executed and delivered to the Company a
Joinder Agreement and thereby becomes a party to this Agreement or (y) pursuant
to Section 2.6, Section 2.7 or Article IV.
(b) Each of the 399 Stockholders severally agrees that it will not
Transfer any Restricted Securities, except (i) to a Permitted Transferee, who
shall have executed and delivered to the Company a Joinder Agreement and thereby
becomes a party to this Agreement; (ii) pursuant to Section 2.7; (iii) to any
Person subject to compliance with the terms of Article III in the capacity of a
Transferor; (iv) in a registered public offering, including pursuant to the
exercise of rights, if any, of such Stockholder under the Registration Rights
Agreement or in a Rule 144 Transaction; and (v) to Xxxx X. Xxxxxxxx who shall
execute a Joinder Agreement, and become a party hereto, as an Additional
Stockholder.
2.5 Right of First Refusal. (a) Except for Transfers otherwise
permitted pursuant to Section 2.4(a), if, pursuant to a written bona fide
third-party offer, any CMP Stockholder, Management Stockholder or Additional
Stockholder desires to Transfer any Restricted Securities (such Transferring CMP
Stockholder, Management Stockholder or Additional Stockholder, a "Selling
Stockholder," and the Restricted Securities proposed to be so transferred, the
"Offered Securities"), prior to any such Transfer it shall give written notice
of the proposed Transfer (the "Notice of Transfer Intention") to the Company and
each of the remaining Stockholders (such parties other than the Company to whom
such Notice of Transfer Intention is given, but excluding the Selling
Stockholder, the "Prospective Buyers"), specifying the types and amounts of
Offered Securities which such Selling Stockholder wishes to transfer, the
proposed purchase price (the "Offer Price") therefor and all other material
terms and conditions of the proposed Transfer, including the identity of the
third party making such offer.
(b) For a period of 60 days following its receipt of the Notice of
Transfer Intention, each of the Prospective Buyers shall have an irrevocable
right and option to purchase, at the Offer Price and on the other terms
specified in the Notice of Transfer Intention, all or any portion of the Offered
Securities up to such Prospective Buyer's Pro Rata portion thereof as determined
by reference to all Stockholders; provided, however, that in the event that any
Stockholder does not purchase any or all of its Pro Rata portion of the Offered
Securities, the other Stockholders shall have the right to purchase such
portion, on a Pro Rata basis as among themselves, until all of such Offered
Securities are purchased or until such other Stockholders do not desire to
purchase any more Offered Securities. The rights pursuant to this Section 2.5(b)
shall be exercisable by delivery of a notice (the "Prospective Buyer Notice")
setting forth the maximum amount of Offered Securities that the relevant
Stockholder wishes to purchase,
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including any amount which would be allocated to such Stockholder in the event
that any other Stockholder does not purchase all or any of its Pro Rata portion,
to the Selling Stockholder, the Company and the other Prospective Buyers and
shall expire if unexercised within such 60-day period, as applicable.
(c) For a period of 30 days following its receipt of the final
Prospective Buyer Notice or, if no Prospective Buyer Notice is so received, for
a period of 90 days following its receipt of the Notice of Transfer Intention,
the Company shall have an irrevocable right and option to purchase, at the Offer
Price and on the other terms specified in the Notice of Transfer Intention, any
or all of the Offered Securities issued by the Company which the Prospective
Buyers have elected not to purchase. The rights of the Company pursuant to this
Section 2.5(c) shall be exercisable by delivery of a notice (the "Company Notice
of Purchase Intention") setting forth the amount of Offered Securities that the
Company wishes to purchase, to the Selling Stockholder and the Prospective
Buyers and shall expire if unexercised within such 60-day or 90-day period, as
applicable.
(d) Notwithstanding the foregoing provisions of this Section 2.5,
unless the Selling Stockholder shall have consented to the purchase of less than
all of the Offered Securities, neither the Company nor the Prospective Buyers
may purchase any Offered Securities pursuant to such foregoing provisions,
unless all of the Offered Securities are to be so purchased by any combination
of Prospective Buyers and the Company.
(e) If all notices required to be given pursuant to the foregoing
provisions of this Section 2.5 have been duly given, and the Prospective Buyers
and the Company determine not to exercise their respective options to purchase
the Offered Securities at the Offer Price and on the other terms specified in
the Notice of Transfer Intention or determine, with the consent of the Selling
Stockholder, to exercise their options to purchase less than all of the Offered
Securities, then the Selling Stockholder shall have the right, for a period of
90 days from the earlier of (i) the expiration of the last applicable exercise
period pursuant to this Section 2.5 and (ii) the date on which such Selling
Stockholder receives notice from the Prospective Buyers and the Company that
none of them will exercise in whole or in part the purchase rights granted
pursuant to this Section 2.5, to sell to the purchaser identified in the Notice
of Transfer Intention the Offered Securities remaining unsold under this Section
2.5 at a price not less than the Offer Price and on the other terms set forth in
the Notice of Transfer Intention; provided, however, that prior to any such
Transfer to such purchaser, such purchaser shall have executed and delivered to
the Company a Joinder Agreement and thereby become a party to this Agreement.
(f) The closing of any purchase by and sale to any Prospective
Buyer or Company pursuant to this Section 2.5 shall take place on such date, not
later than 105 days after the Company's receipt of the Notice of Transfer
Intention with respect to the proposed Transfer, as the parties to such purchase
and sale shall select. At the closing of such purchase and sale, the Selling
Stockholder shall deliver, against delivery of the Offer Price therefor, the
certificates or other instruments evidencing the Offered Securities being sold
accompanied by duly endorsed in
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blank stock powers or duly executed written instruments of Transfer in form
satisfactory to the purchaser thereof , by the Selling Stockholder, free and
clear of any Liens.
2.6 Involuntary Transfers. (a) Upon the occurrence of any event
which would cause any Restricted Securities owned by a Management Stockholder or
an Additional Stockholder to be Transferred by Involuntary Transfer, such
Stockholder (or his legal representative or successor) shall give the Company
written notice thereof stating the terms of such Involuntary Transfer, the
identity of the transferee or proposed transferee, the price or other
consideration, if readily determinable, for which the securities are proposed to
be or have been Transferred and the number and type of securities which are the
subject of such Transfer. After receipt of such notice or, failing such receipt,
after the Company otherwise obtains actual knowledge of such a proposed or
completed Involuntary Transfer, the Company shall have the right and option to
purchase (or to have any designee purchase) all or any portion of such
Restricted Securities, which right shall be exercised by written notice given by
the Company to the transferor (or transferee following the occurrence of any
Involuntary Transfer) within 60 days following the later of (i) the Company's
receipt of such notice or, failing such receipt, the Company's obtaining actual
knowledge of such proposed or completed Transfer and (ii) the date of such
Involuntary Transfer.
(b) In the event that the Company elects not to purchase all of
such Restricted Securities, then the Company shall on or prior to the end of
such 60 day period, notify the 399 Stockholders thereof, such notice to identify
the Securities not purchased by the Company (the "Subject Securities"). For a
period of 30 days after receipt of such notice from the Company, the 399
Stockholders shall have the irrevocable right to purchase any or all of the
Subject Securities, pro rata; provided, however, that in the event any 399
Stockholder does not purchase any or all of its pro rata portion of the Subject
Securities, the remaining 399 Stockholders shall have the right to purchase such
portion pro rata as among themselves until all of the Subject Securities are
purchased or until such persons do not desire to purchase any more Subject
Securities. The right of the 399 Stockholders to purchase Subject Securities
pursuant to this Section 2.6 shall be exercisable by delivery of a notice to the
transferor (or transferee following the occurrence of any Involuntary Transfer)
setting forth the maximum number of Subject Securities that such person wishes
to purchase including any number which would be allocated in the event that any
399 Stockholder does not purchase all or any portion of its pro rata portion.
(c) Any purchase pursuant to this Section 2.6 shall be at the
price and on the terms applicable to such Involuntary Transfer. If the nature of
the event giving rise to such Involuntary Transfer is such that no readily
determinable consideration is to be paid for or assigned to the Transfer of the
Restricted Securities, the price to be paid by the Company (i) for each share of
Restricted Securities (other than Equity Equivalents) shall be the Fair Market
Value thereof as of the date of Transfer and (ii) for each Equity Equivalent
shall be equal to (x) the Fair Market Value of the Common Stock with respect to
which such Equity Equivalent may then be exercised minus (y) the exercise price
then applicable under the terms of such Equity Equivalent. The closing of the
purchase and sale of such Restricted Securities pursuant to this Section 2.6
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shall be held at the place and on the date established by the Company or the 399
Stockholders, as the case may be, which in no event shall be less than 10 nor
more than 45 days from the date on which the Company or the 399 Stockholders, as
the case may be, gives notice of the election to purchase such securities. At
such closing, the Management Stockholder or Additional Stockholder (or, in each
case, his legal representative or successor) shall deliver the certificates
evidencing the Restricted Securities to be purchased by the Company or the 399
Stockholders, as the case may be, accompanied by duly endorsed in blank stock
powers or duly executed instruments of transfer, and any other documents that
are necessary to Transfer to the Company or the 399 Stockholders, as the case
may be, good title to such securities free and clear of all Liens and,
concurrently with such delivery, the Company or the 399 Stockholders, as the
case may be, shall deliver to the transferor thereof the full amount of the
purchase price therefor.
(d) Notwithstanding anything to the contrary contained herein, in
the event a purchase (or the payment of the purchase price) by the Company
pursuant to this Section 2.6 would violate or conflict with any statute, rule,
injunction, regulation, order, judgment or decree applicable to the Company or
any of its Subsidiaries or by which any of them or their respective properties
is bound or affected or would result in any breach of, or constitute a change of
control or a default (or an event which with notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
on any of the property or assets of the Company or any of its Subsidiaries
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, franchise or other instrument or obligation to which the Company or any
of its Subsidiaries is a party or by which any of their respective properties is
bound or affected, with the prior written consent of the 399 Stockholders, the
rights of the Company to purchase (or to have any designee purchase) the
Restricted Securities of any Management Stockholder or Additional Stockholder
shall be suspended until the date which falls 60 days following such time as
such prohibition first lapses or is waived and no such default would be caused.
For the purposes of this Section 2.6 only, the date of such lapse or waiver
shall be deemed the date of the Involuntary Transfer for purposes of the
purchase and sale of Restricted Securities pursuant to this Section 2.6. The
Company shall use its reasonable efforts to obtain a waiver of any such
prohibition, but shall not be obligated to incur any additional interest or
other costs or charges or to make any prepayment with respect to any
indebtedness in connection with such efforts.
(e) Notwithstanding anything to the contrary contained in this
Section 2.6, any event giving rise to an Involuntary Transfer which is also
subject to the provisions of Article IV shall be governed by the provisions of
Article IV.
(f) All unvested options, if any, shall automatically terminate
upon an Involuntary Transfer unless otherwise provided in the applicable option
grant.
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2.7 Sale of the Company. (a) If, in order to effect a Sale of the
Company, the 399 Stockholders (i) propose to Transfer to a third party (which is
not an Affiliate of any of the 399 Stockholders) (the "Acquiror") Restricted
Securities that include 50% or more of the shares of Common Stock owned by them
in the aggregate on a Diluted Basis, the 399 Stockholders shall have the right
to require the other Stockholders to Transfer a corresponding percentage of
their Restricted Securities (determined on a class-by-class basis) to such third
party on the same terms, or (ii) propose the Transfer of 50% or more of the
assets (whether by merger, sale or otherwise) of the Company to any such third
party, the 399 Stockholders shall in each case have the right (a "Sale of the
Company Right") to require (x) the Stockholders to take all action necessary or
appropriate (including replacement of the directors or management committee
members designated by such Stockholders) in order to cause the Company to take
all action necessary or appropriate to give effect to such transaction and (y)
the Stockholders to approve such transaction in their capacity as stockholders
of the Company (a transaction described in clause (i) or (ii), a "Sale of the
Company Sale"); provided, that upon the consummation of any transaction
resulting in a sale or transfer of all or substantially all of the assets of the
Company (whether by merger, sale or otherwise), the Company will immediately
distribute all of the net proceeds of such transaction to the Stockholders in
accordance with their respective rights and privileges.
(b) In order to exercise a Sale of the Company Right, the 399
Stockholders shall notify each other Stockholder, such notice to set forth the
terms and conditions of the proposed Sale of the Company Sale. Each such
Stockholder will take all actions reasonably requested by the 399 Stockholders
in connection with the consummation of such Sale of the Company Sale, and within
10 business days of the receipt of such notice (or such longer period of time as
the Stockholders shall designate in such notice), if such transaction is
structured as a sale of assets or a merger, such Stockholders shall approve the
transaction in their capacities as stockholders of the Company, and if such
transaction is a sale of Restricted Securities, such Stockholders shall cause
the applicable percentage of each class of their respective Restricted
Securities to be sold to the Acquiror on the same terms and conditions and for
the same per share or per unit consideration as the Restricted Securities being
sold by the 399 Stockholders; provided, however, that the consideration to be
paid for each Equity Equivalent shall be equal to the price that would be paid
for the shares of Common Stock issuable upon the exercise thereof minus the
exercise price then applicable under the terms of such Equity Equivalent. In
furtherance of, and not in limitation of the foregoing, in connection with a
Sale of the Company Sale, subject to Section 2.7(c), each Stockholder will (i)
raise no objections against the Sale of the Company Sale or the process pursuant
to which it was arranged, (ii) waive any appraisal, dissenter or similar rights
under applicable law, and (iii) execute all documents containing such terms and
conditions as those executed by other Stockholders as directed by the 399
Stockholders.
(c) Unless otherwise agreed in writing by any 399 Stockholder with
respect to the obligations of any other Stockholder, such other Stockholder
shall be severally obligated to join on a Pro Rata basis (based on such
Stockholder's share of the aggregate proceeds paid in
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such Sale of the Company Sale) in any indemnification or other obligations that
the 399 Stockholders agree to in connection with such Sale of the Company Sale,
other than any such obligations that relate specifically to a particular
Stockholder, such as indemnification with respect to representations and
warranties given by a Stockholder regarding such Stockholder's title to and
ownership of Restricted Securities or valid authorization by such Stockholder
with respect to such Sale of the Company Sale; provided that no Stockholder
shall be obligated in connection with such Sale of the Company Sale to agree to
indemnify or hold harmless the prospective transferee(s) with respect to an
amount in excess of the net cash proceeds paid to such Stockholder in connection
with such Sale of the Company Sale. All Stockholders will bear their Pro-Rata
share of the costs and expenses incurred in connection with a Sale of the
Company Sale to the extent such costs are incurred for the benefit of all
Stockholders and are not otherwise paid by the Company or the Acquiror. Costs
incurred by any Stockholder on its own behalf will not be shared by any other
Stockholder.
ARTICLE III
RIGHTS OF INCLUSION
3.1 Rights of Inclusion. (a) Except for any Transfer of Restricted
Securities pursuant to clauses (i), (ii), (iii), (iv) and (v) of Section 2.4(b),
if the 399 Stockholders propose to Transfer, in one or more transactions,
Restricted Securities representing more than 10% of the Restricted Securities
held by all 399 Stockholders as of the date hereof (appropriately adjusted for
any stock dividends, splits, reverse splits, combinations, reclassifications and
the like); provided, that this clause shall apply only to the extent such
Transfers otherwise subject to the Inclusion Right in the aggregate exceed such
10% threshold; to any Person (the "Buyer") (the transferor being referred to
herein is the "Transferor" and the securities proposed to be so transferred, the
"Transferor Shares"), then, as a condition to such Transfer, the Transferor
shall cause the Buyer to include an offer (the "Article III Offer") to each of
the Stockholders holding shares of the same class (and series) as the Transferor
Shares who are not Transferors (collectively, the "Offerees"), to sell to the
Buyer, at the option of each Offeree, that number of shares of the same class of
Restricted Securities as the Transferor, determined in accordance with Section
3.1(b), on the same terms and conditions as are applicable to the Transferor
Shares. (For purposes of this Section 3.1, except as set forth in Section
3.1(b), shares of all classes of Common Stock together with Equity Equivalents
(on an as-if-converted basis), shall be deemed one and the same class and series
of Common Stock.) The Transferor shall provide a written notice (the "Inclusion
Notice") of the Article III Offer to each Offeree, which may accept the Article
III Offer by providing a written notice of acceptance of the Article III Offer
to the Transferor within 30 days after delivery of the Inclusion Notice.
(b) Each Offeree shall have the right (an "Inclusion Right") to
sell pursuant to the Article III Offer a Pro Rata number of its shares of
Restricted Securities (the "Inclusion Shares") as is sold by the Transferor (to
the extent the Transferor's securities are subject to the Inclusion Right);
provided, however, that each Offeree's Inclusion Shares shall include: (i)
first,
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that portion of such Offeree's Vested Shares subject to such Offeree's Inclusion
Right, and (ii) that portion of such Offeree's remaining shares of Restricted
Securities subject to such Offeree's Inclusion Right. Any Offeree which owns
Equity Equivalents may sell pursuant to the Article III Offer, in lieu of shares
of Common Stock, Equity Equivalents representing that number of shares of Common
Stock which it could sell pursuant to its Inclusion Right and the purchase price
therefor shall equal the aggregate price that would be paid for the shares of
Common Stock issuable upon the exercise, exchange or conversion thereof minus
the aggregate exercise, exchange or conversion price under such Equity
Equivalent for such shares of Common Stock.
3.2 Article III Sales. (a) Upon acceptance of the Buyer's Article
III Offer, each Offeree shall, within a reasonable period prior to the closing
of such Article III Sale, deliver to the Transferor a certificate or
certificates representing the shares of Restricted Securities to be sold or
otherwise disposed of pursuant to the Article III Offer by such Offeree, free
and clear of all Liens, and a limited power-of-attorney authorizing the
Transferor to sell or otherwise dispose of such shares pursuant to the terms of
the Article III Offer; provided, however, that in the event that the purchase
and sale of Restricted Securities contemplated by the Article III Offer is not
completed, such certificate(s) and power of attorney shall be returned to the
Offeree promptly upon request by the Offeree.
(b) The Transferor shall have 120 days, commencing on the day the
Inclusion Notice is mailed, in which to sell to the Buyer or otherwise dispose
of, on behalf of itself and the Offerees, up to the number of shares of
Restricted Securities covered by the Article III Offer (and the number of
Transferor Shares). If all such shares are not sold to the Buyer, the
Transferor, at its option, may elect to sell on behalf of itself and the
Offerees such number of shares as the Buyer will purchase, Pro Rata among the
Transferor and the Offerees, as nearly as practicable. The material terms of
such sale, including, without limitation, price and form of consideration, shall
be as set forth in the Inclusion Notice. If at the end of such 120-day period
the Transferor has not completed the sale or other disposition of all the
Transferor Shares and all the Offerees' shares of Restricted Securities proposed
to be sold, the Transferor shall return to each of the Offerees its respective
certificates, if any, representing shares of Restricted Securities which the
Offerees delivered for sale or other disposition pursuant to this Article III
and which were not sold pursuant thereto and the provisions of this Article III
shall continue to be in effect.
(c) Promptly after the consummation of the sale or other
disposition of the Transferor Shares and shares of Restricted Securities of the
Offerees to the Buyer pursuant to the Article III Offer, the Transferor shall
notify the Offerees thereof, and the Buyer shall pay to the Transferor and each
of the Offerees their respective portions of the sales price of the shares sold
or otherwise disposed of pursuant thereto, and shall furnish such other evidence
of the completion of such sale or other disposition and the terms thereof as may
be reasonably requested by the Offerees.
(d) Notwithstanding anything to the contrary contained in this
Article III, except for the Transferor's obligation to return to each Offeree
any certificates representing the
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Offerees' shares of Restricted Securities there shall be no liability on the
part of the Transferor to any Stockholder in the event that the proposed sale
pursuant to this Article III is not consummated for whatever reason. Whether a
sale of any shares is effected pursuant to this Article III by the Transferor is
in the sole and absolute discretion of the Transferor.
ARTICLE IV
REPURCHASE OF RESTRICTED SECURITIES
4.1 Sale Event. (a) In the event that any Management Stockholder
or Additional Management Stockholder shall cease to be employed by (or in the
case of any non-employee ceases to be a director of) the Company or any of its
Subsidiaries for any reason, including death, permanent disability, termination
for Cause or without Cause, voluntary termination, retirement or otherwise (such
cessation of employment or directorship being referred to herein as a "Sale
Event"), but in each case subject to Section 4.4, such Management Stockholder
(or his personal representative) or such Additional Management Stockholder (or
his personal representative) shall promptly notify the Company and the 399
Stockholders of the applicable Sale Event and, within 90 days after the
Company's receipt of such notice, the Company or, at the option of the Company,
any present or future employee or director of the Company or any of its
Subsidiaries who shall have been designated by the Board acting by an
Affirmative Board Vote (a "Company Designee") may, at its option, elect to
purchase the Securities described in the next sentence of this Section 4.1(a),
exercisable by written notice (a "Purchase Notice") delivered to such Management
Stockholder (or his personal representative) or such Additional Management
Stockholder (or his personal representative) (with copies thereof to the 399
Stockholders and, in each case, his respective Permitted Transferees who hold
Management Securities which Management Securities are attributable to the
Management Stockholder or Additional Management Stockholder whose employment or
directorship has ceased (collectively, the "Sellers"). Upon the giving of such
notice, the Sellers shall be obligated to sell to the Company or the Company
Designee those Management Securities (whether Vested Shares or Unvested Shares)
of the Sellers which are designated in the Purchase Notice; provided, however,
that in the event notice of a Sale Event is not given, a Purchase Notice (or
notice from the 399 Stockholders) as described in Section 4.1(b)) may in any
event be given at any time following a Sale Event. The time periods set forth
herein and in Section 4.1(b) below shall be tolled for the duration of any
suspension period under Section 4.4 hereof and the remaining balance of any such
time period shall re-commence as of the end of any such suspension period.
(b) To the extent the Company or any Company Designee fails to
deliver a Purchase Notice or otherwise does not purchase all of the Management
Securities then owned by the Sellers, the 399 Stockholders may, at their option,
exercisable by written notice delivered to the Sellers within 15 days after
delivery of the Purchase Notice (or 100 days after written notice from the
Sellers (or any legal representative) to the Company of the applicable Sale
Event, if no Purchase Notice is given by the Company or any Company Designee),
on a Pro Rata basis (and including on such Pro Rata basis with respect to the
number of Vested Shares or Unvested Shares
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purchasable by each such Person) purchase the Management Securities not so
purchased by the Company which are designated in such written notice from the
399 Stockholders.
4.2 Purchase Price. The purchase price for each share of
Management Securities to be purchased pursuant to Section 4.1 shall be as set
forth below (and such purchase price shall be paid in cash:
(a) as to each Vested Share (provided, that the Sale Event did not
occur as a result of a voluntary termination or a termination for Cause), the
Fair Market Value thereof as of the date of the Sale Event; and
(b) as to each Unvested Share, and each Vested Share (if the Sale
Event occurred as a result of a voluntary termination or a termination for
Cause), the lower of (x) the Fair Market Value thereof as of the date of the
Sale Event or (y) the Original Cost thereof.
4.3 Closing. (a) Subject to Section 4.4, the closing for all
purchases and sales of Management Securities provided for in this Article IV
shall be held at the principal executive offices of the Company at 10:00 a.m.,
local time, on the 30th day after the determination of the purchase price in
respect thereof determined in accordance with Section 4.2 or at such other date
and time as shall have been designated by the Board (acting by Affirmative Board
Vote) and the Seller; provided, however, that if any Seller who has become
obligated to sell Management Securities is deceased on such 30th day as
aforesaid and such deceased person's personal representative shall not have been
appointed and qualified by such date, then unless otherwise agreed to as
provided above, the closing shall be postponed until either of (i) the 10th day
after the appointment and qualification of such personal representative and (ii)
the expiration of 90 days following the death of such Seller.
(b) All Management Securities to be sold pursuant to this Article
IV shall be delivered to the purchaser at the aforesaid closing free and clear
of all Liens. The purchaser will be entitled to receive customary
representations as to title, authority and capacity to sell and to require a
guaranteed signature of the Seller, as applicable. Each Seller hereby appoints
the Company as attorney-in-fact to transfer such shares on the books of the
Company in the event of a sale pursuant to this Article IV. Such Sellers shall
take all such actions as the Company or any other purchaser shall request as
necessary to vest in the Company or any other purchaser at such closing good
title to such shares, free and clear of all Liens.
4.4 Postponement. Notwithstanding anything to the contrary
contained herein, in the event a purchase (or the payment of the purchase price)
by the Company pursuant to this Article IV would:
(a) violate or conflict with any statute, rule, injunction,
regulation, order, judgment or decree applicable to the Company or any of its
Subsidiaries or by which any of them or their respective properties is bound or
affected,
22
(b) result in a change of control under, any breach of, or
constitute a default (or an event which with notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
on any of the property or assets of the Company or any of its Subsidiaries
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, franchise or other instrument or obligation to which the Company or any
of its Subsidiaries is a party or by which any of their respective properties is
bound or affected, or
(c) in the judgment of the Board, materially jeopardize the
financial condition of the Company or otherwise have a material adverse effect
on the business, condition (financial or otherwise), results of operations or
assets or properties of the Company, then, upon the delivery by the Company of
notice of suspension under this Section 4.4 to each of the Sellers, the rights
of the Company to purchase the Management Securities of the Sellers with respect
to whom the Sale Event has occurred pursuant to this Article IV shall be
suspended until, in the case of clauses (a) or (b) above, the date which falls
30 days following such time as such prohibition first lapses or is waived and no
such default would be caused and, in the case of clause (c) above, the date
which falls 30 days following such time as the Board determines that such
purchase (or payment of the purchase price) would no longer jeopardize the
financial condition of the Company or otherwise have a material adverse effect
on the business, condition (financial or otherwise), results of operations or
assets or properties of the Company. For the purposes of this Section 4.4 only,
the dates determined under the preceding sentence shall be deemed to be the date
of the relevant Sale Event for purposes of the purchase and sale of Management
Securities pursuant to this Article IV.
ARTICLE V
CORPORATE GOVERNANCE
5.1 Board of Directors. (a) From and after the date hereof, each
of the Stockholders shall vote or cause to be voted all of its or his shares of
Class A Common Stock (as described below), at any regular or special meeting of
stockholders called for the purpose of filling positions on the Board, or shall
execute a written consent in lieu of such a meeting of stockholders for the
purpose of filling positions on the Board, and shall take all actions necessary,
to ensure that the Board consists of five members as follows:
(i) up to two individuals (individually, a "399 Director," and
collectively, the "399 Directors") to be designated by the 399
Stockholders; provided, that, at any time, and from time to time, the
399 Stockholders, in their sole discretion, may determine not to
designate one or both of the 399 Directors, in which case such 399
Directors shall be designated by the Nominating Committee;
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(ii) up to two individuals (the "Management Directors") to be
designated by the Management Stockholders who initially shall be Xxxxxx
X. Xxxxxx ("Xxxxxx") (but only for so long as he remains
President-National Sales of the Company) and Xxxx X. Xxxxxxx
("Xxxxxxx") (but only for so long as he remains Chief Executive Officer
of the Company); provided, that if either Xxxxxx or Xxxxxxx ceases to
serve as a director at any time, the Board shall consist of one
Management Director thereafter (either Xxxxxx or Xxxxxxx, as the case
may be, or in the event both such Persons cease to be a director, an
individual to be designated by the Management Stockholders); and
(iii) one individual (a "Disinterested Director") who is not (A)
an Affiliate of any 399 Stockholder or an employee, director or agent
of such 399 Stockholder or Affiliate, (B) employed by the Company or
any Subsidiary of the Company or (C) a stockholder or an Affiliate of
any Stockholder; provided, however, that any of the requirements
contained in (A), (B) or (C) above may be waived by the 399
Stockholders, subject to applicable law. The initial Disinterested
Director shall be Xxxxxxxx X. Xxxxx and thereafter shall be, and any
additional Disinterested Directors (if applicable) shall be, designated
by the Nominating Committee;
provided, however, that (x) effective at the Closing, the Board shall consist of
the individuals set forth on Exhibit B hereto in the categories shown thereon,
(y) the Stockholders shall cause the 399 Directors, the Management Directors and
the Disinterested Director named thereon to be designated and elected as
director and (z) upon the written request of the 399 Stockholders, the
Stockholders shall promptly take all action necessary or appropriate (1) to
increase the composition of the Board by adding a Disinterested Director,
representing a Board of up to six members and (2) to increase the composition of
the Nominating Committee to three members (collectively, the "Nominating
Committee") by adding a second Disinterested Director, representing a Nominating
Committee of up to three members. The Nominating Committee shall initially
consist of one 399 Director and one Disinterested Director, and upon the
Closing, the Nominating Committee shall consist of the individuals set forth on
the aforementioned exhibit in the categories shown thereon. The Nominating
Committee shall act by majority vote; provided, that, if there are less than
three directors on the Nominating Committee, it shall act by the unanimous vote
of such director(s) on the Nominating Committee.
(b) If, prior to his election to the Board pursuant to Section
5.1(a), any person shall be unable or unwilling to serve as a director of the
Company, the group of Stockholders or Nominating Committee who designated such
person shall be entitled to designate a replacement.
(c) If at any time any Person designated as a 399 Director,
Management Director or any Disinterested Director is not then serving as a
director of the Company, upon the written request of the 399 Stockholders or the
Management Stockholders (as the case may be), the Stockholders shall promptly
take all action necessary or appropriate to elect individuals designated by the
399 Stockholders (in the case of any 399 Director) by the Management
Stockholders (in the case of any Management Director), and by the Nominating
Committee (in
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the case of any Disinterested Director) to serve as directors from and after the
time of such request.
5.2 Removal. If:
(a) the 399 Stockholders request that a 399 Director elected as a
director be removed (with or without Cause), by written notice to the other
Stockholders; or
(b) the Management Stockholders request that a Management Director
elected as a director be removed (with or without Cause), by written notice to
the other Stockholders; or
(c) the Nominating Committee requests that a Disinterested
Director (or a 399 Director, if the 399 Stockholders have determined not to
designate a 399 Director, and the Nominating Committee has designated such 399
Director) elected as a director be removed (with or without Cause) by written
notice to other Stockholders, or such director ceases to qualify as a
Disinterested Director; or
(d) a Management Director ceases to qualify as a Management
Director;
then in each such case, such director shall be removed and each Stockholder
agrees to vote all shares of Common Stock owned by such Stockholder and other
securities over which such Stockholder has voting control to effect such removal
or to consent in writing to effect such removal upon such request; provided,
however, that so long as the Company shall be subject to cumulative voting
requirements in accordance with the Charter, no 399 Director or Management
Director may be removed without cause if the votes cast against such director's
removal would be sufficient to cause the election of that director pursuant to
the terms of Section 7.4.
5.3 Vacancies. In the event that a vacancy is created on the Board
at any time by the death, disability, retirement, resignation or removal (with
or without cause) of a director, each Stockholder agrees to vote all shares of
Common Stock owned by such Stockholder and other securities over which such
Stockholder has voting control for the individual designated to fill such
vacancy by whichever of the Stockholders or Nominating Committee designated
and/or approved (pursuant to Section 5.1 hereof) the director whose death,
disability, retirement, resignation or removal (with or without cause) resulted
in such vacancy on the Board in the manner set forth in Section 5.1 hereof;
provided, however, that such other individual so designated may not previously
have been a director of the Company who was removed for cause from the Board.
25
5.4 Special Approval Rights. In addition to any other action
requiring an Affirmative Board Vote, so long as the 399 Stockholders have the
right to designate directors under Section 5.1(a), an Affirmative Board Vote
shall be required prior to the Company or any of its Subsidiaries entering into
a Significant Transaction.
5.5 Committees of the Board; Subsidiary Boards. For so long as the
Board shall be comprised of the individuals contemplated by Section 5.1, unless
otherwise agreed to in writing by the 399 Stockholders, the Stockholders shall
take all action necessary or appropriate to cause the Company to have a
compensation and an audit committee each consisting of up to two 399 Directors
and one Disinterested Director. Unless otherwise agreed to by 399, the
Stockholders shall take all action necessary or appropriate to cause each
additional committee of the Board to have the same number of directors and the
same composition as the audit committee. For so long as the 399 Stockholders
shall have the right to designate any directors under Section 5.1(a), at the
request of the 399 Stockholders, the Stockholders shall take all action
necessary or appropriate to cause one director designated by the 399
Stockholders to be elected to the board of directors of each Subsidiary. The
Stockholders agree that they shall take all actions necessary or appropriate to
cause (i) such persons so designated to be directors on each such Subsidiary's
board of directors and (ii) at the direction of the parties so designating each
such director, the removal or replacement of such director from any such board.
The composition of the boards of directors of such Subsidiaries of the Company
shall otherwise be as determined by the Board (acting by Affirmative Board
Vote).
5.6 Observer's Rights. (a) In the event (i) the 399 Stockholders
elect not to exercise, or are prohibited by applicable law from exercising,
their rights to designate either or both of the 399 Directors, or once
appointed, the 399 Stockholders desire to remove one or both of the 399
Directors, the 399 Stockholders shall have the right to have one individual (an
"Observer") attend any meeting of the Board or any committee thereof. The 399
Stockholders shall have the right to appoint an Observer to the board of
directors of any Subsidiary in lieu of designating a director thereto as
provided by Section 5.5. In addition, the CMP Stockholders shall have the right
to appoint an Observer to attend any meeting of the Board or any committee
thereof, such Observer to have all rights and obligations set forth in this
Section 5.6.
(b) An Observer shall not have the right to vote on any matter
presented to the Board or the board of directors of any Subsidiary or any
committee thereof. The Company shall give each Observer written notice of each
meeting thereof at the same time and in the same manner as the members of the
Board or board of directors of any Subsidiary or any committee thereof receive
notice of such meetings, and the Company shall permit each Observer to attend as
an observer all meetings thereof; provided, that in the case of telephonic
meetings, such Observer need receive only actual notice thereof at the same time
and in the same manner as notice is given to the directors.
(c) Each Observer shall be entitled to receive all written
materials and other information given to directors in connection with such
meetings at the same time such materials
26
and information are given to directors, and each Observer shall keep such
materials and information confidential. If the Company (or any Significant
Subsidiary) proposes to take any action by written consent in lieu of a meeting
of its board of directors, the Company (or such Significant Subsidiary) shall
give written notice thereof to each Observer prior to the effective date of such
consent describing the nature and substance of such action.
5.7 Action by Written Consent of Stockholders. The parties hereto
agree that whenever any action is proposed to be taken by Stockholders without a
meeting, the Stockholders proposing to act by such consent shall, or shall cause
the Company to, give the 399 Stockholders at least 7 days' prior written notice
(or such shorter notice period as is agreed to in writing) of such proposed
action specifying the action to be taken and the purpose thereof (such notice
requirement shall be deemed satisfied and waived by execution of such consent by
399 Stockholders which hold in the aggregate more than 50% of the shares of
Common Stock on a Diluted Basis held by all 399 Stockholders).
5.8 Designation of Proxy. In order to secure the performance of
the agreements set forth in the provisions of this Article V and in addition to
and not in lieu of Sections 5.1 through 5.3 hereof, each of the Management
Stockholders and Additional Management Stockholders hereby grants to the Chief
Executive Officer of the Company, or any successor Chief Executive Officer of
the Company (the "Management Representative"), an irrevocable proxy (which proxy
is coupled with an interest) to vote at any annual or special meeting of
stockholders, or to take action by written consent in lieu of such meeting with
respect to, all of the shares of Common Stock owned or held of record by the
Management Stockholders and Additional Management Stockholders solely for (a)
the election of directors designated in accordance with Section 5.1, (b) the
removal of directors in accordance with Section 5.2, (c) the election of a
director to fill any vacancy on the Board in accordance with Section 5.3 or (d)
to take the actions specified in this Agreement required in order to cause the
Company to fulfill its obligations under this Agreement. Such proxy shall be in
effect with respect to each share of Common Stock owned or held of record by a
Management Stockholder or Additional Management Stockholder until such time as
such Management Stockholder or Additional Management Stockholder no longer owns
or is the record holder of such share.
5.9 Regulatory Right. If (a) so long as the 399 Stockholders hold
at least 25% of the Common Stock on a Diluted Basis, the 399 Stockholders
determine in their sole discretion that applicable law would not prohibit the
399 Stockholders from exercising the right (the "Regulatory Right") to designate
a majority of the directors of the Board by contract or otherwise, or (b) the
399 Stockholders hold more than 50% of the Class A Common Stock, then
notwithstanding the provisions of Section 5.1 the 399 Stockholders may, upon the
giving of notice thereof to the Company, designate each of the Disinterested
Directors instead of the Nominating Committee and take any and all other actions
otherwise permitted or required to be taken by the Nominating Committee in this
Agreement or otherwise; provided, that from and after the date such notice is
given, the qualifications of a Disinterested Director set forth in clauses (A) -
(C) of Section 5.1(a)(iii) shall no longer be required.
27
ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES
6.1 Registration of Common Stock. In the event of a registration
by the Company of Common Stock under the Securities Act, each Stockholder shall,
if requested by the 399 Stockholders, at a meeting convened for the purpose of
amending the Charter, vote: (a) to remove from the Charter requirements, if any
such requirements are at such time imposed thereby, that the Board act by
Affirmative Board Vote, except as otherwise required by law; (b) to remove from
the Charter requirements, if any such requirements are at such time imposed
thereby, relating to preemptive rights with respect to Common Stock; and (c) to
change the number of authorized shares of Common Stock and, if necessary, change
the number of issued and outstanding shares of Common Stock, whether by stock
split, stock dividend or otherwise, or change its par value or effect any other
reclassification, recapitalization or similar event; in the case of each of
clauses (a), (b) and (c) above, as recommended by a majority of the members of
the Board in order to facilitate such registration.
6.2 Management Stockholders; Additional Stockholders. Unless
otherwise consented to by the 399 Stockholders, the parties hereto agree that as
a condition precedent to the issuance by the Company (or transfer to a Company
Designee pursuant to Section 4.1) of shares of Common Stock or of Equity
Equivalents (a) to any employee or director of the Company or its Subsidiaries
or (b) any Person other than any such employee or director, any 399 Stockholder,
any CMP Stockholder, or any Management Stockholder, the Company shall require
such employee or director or other Person to execute and deliver to the Company
a Joinder Agreement and thereby enter into and become a party to this Agreement.
Nothing contained herein nor the ownership of any Restricted Securities shall
confer upon any Management Stockholder or Additional Management Stockholder the
right to employment or to remain in the employ of the Company or any of its
Subsidiaries. Notwithstanding the foregoing, to the extent approved by
Affirmative Board Vote and specified in any Joinder Agreement (or amendment
thereto) pursuant to which any employee or director or other Person who is
deemed to be a Management Stockholder or Additional Stockholder may become a
party hereto, the provisions of this Agreement may be varied to be more or less
restrictive with respect to any such employee or other Person who is deemed to
be a Management Stockholder or Additional Stockholder.
6.3 Stockholder List; Certain Notices. Upon the request of any 399
Stockholder, the Company promptly shall deliver to the requesting Stockholder a
list setting forth the names of all Stockholders and the number of shares of
each class of capital stock owned by each Stockholder. In addition, the Company
shall give the 399 Stockholders prior written notice of (a) the conversion of
any shares of any class of Common Stock and (b) any record transfer of
Restricted Securities, setting forth the name of the transferee and the number
and type of Restricted Securities being so transferred, including without
limitation, any such transfer after which the number of record holders of the
Company's voting stock would be increased from fewer than 50 to 50 or more.
28
6.4 Regulatory Compliance Cooperation. (a) Before the Company
redeems, purchases or otherwise acquires, directly or indirectly, or converts or
takes any action with respect to the voting rights of, any shares of any class
of its capital stock or any securities convertible, exchangeable or exercisable
for or into any shares of any class of its capital stock, the Company will give
written notice of such pending action to the 399 Stockholders. Upon the written
request of any 399 Stockholder made within 20 days after its receipt of any such
notice, stating that after giving effect to such action such 399 Stockholder
would have a Regulatory Problem (as defined below), the Company will defer
taking such action for such period (not to extend beyond 45 days after such 399
Stockholder's receipt of the Company's original notice) as such 399 Stockholder
requests to permit it and its Affiliates to reduce the quantity of securities
owned by them in order to avoid the Regulatory Problem. In the event the Company
or any 399 Stockholder is precluded from taking any action under this Agreement
within any allotted period of time as a consequence of this Section, such period
of time shall be extended by the number of days during which the Company or such
399 Stockholder is precluded from acting.
(b) In the event that 399 determines that it has a Regulatory
Problem (as defined below), the Company agrees to take all such actions as are
reasonably requested by 399 in order to (i) effectuate and facilitate any
transfer by the 399 Stockholders or any of 399's Affiliates of any securities of
the Company then held by the 399 Stockholders or such Affiliates to any Person
designated by 399, (ii) permit the 399 Stockholders (or any of their affiliates)
to exchange all or a portion of any voting security then held by them on a
share-for-share basis for shares of a nonvoting security of the Company, which
nonvoting security shall be identical in all respects to the voting security
exchanged for it, except that it shall be nonvoting and shall be convertible
into a voting security on such terms as are requested by the 399 Stockholders in
light of regulatory considerations then prevailing, and (iii) continue and
preserve the respective allocation of the voting interests with respect to the
Company provided for herein, and with respect to 399's and its Affiliates'
ownership of the Company's securities. Such actions may include, but shall not
necessarily be limited to, entering into such additional agreements, adopting
such amendments to the Charter and by-laws of the Company and taking such
additional actions as are reasonably requested by 399 in order to effectuate the
intent of the foregoing.
(c) The Company will not be a party to any merger, consolidation,
recapitalization or other transaction pursuant to which 399 or any of its
Affiliates would be required to take any voting securities, or any securities
convertible, exchangeable or exercisable for or into voting securities, which
might reasonably be expected to cause 399 to have a Regulatory Problem. For
purposes of this Agreement, "Regulatory Problem" means any set of facts or
circumstances wherein it has been asserted by any governmental agency or other
authority, or 399 reasonably believes that, such Person and such Person's
Affiliates own, control or have power over a greater quantity of securities of
any kind issued by the Company than are permitted under any requirement of any
governmental authority.
29
6.5 Purchaser Representative. If the Company enters into any
negotiation or transaction involving the issuance of securities of another party
to the Stockholders for which Rule 506 (or any similar rule then in effect)
promulgated under the Securities Act by the Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization) each Management Stockholder and Additional Stockholder (if
an individual) will, at the request of the Company, appoint a purchaser
representative (as such term is defined in Rule 501 under the Securities Act)
reasonably acceptable to the Company. If any such Management Stockholder or
Additional Stockholder appoints the purchaser representative designated by the
Company, the Company will pay the fees of such purchaser representative, but if
any such Management Stockholder or Additional Stockholder declines to appoint
the purchaser representative designated by the Company, such Management
Stockholder or Additional Stockholder will appoint, at his own expense, another
purchaser representative reasonably acceptable to the Company.
ARTICLE VII
MISCELLANEOUS
7.1 Governing Law. The corporate laws of the State of Delaware
will govern all questions concerning the relative rights of the Company and its
stockholders hereunder. All other questions concerning the construction,
validity and interpretation of this Agreement shall be governed and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
7.2 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof and
may be amended, modified or supplemented only by a written instrument duly
executed by the Company and the 399 Stockholders, except that (a) any amendment,
modification or supplement that materially, adversely and disproportionately
affects the 399 Stockholders, the CMP Stockholders, the Management Stockholders
or the Additional Stockholders (other than the Additional Management
Stockholders), as the case may be, shall require the consent of the CMP
Stockholders, the Management Stockholders or Additional Stockholders (other than
the Additional Management Stockholders), respectively, and (b) any amendment,
modification or supplement that materially, adversely and disproportionately
affects less than all of the 399 Stockholders, the CMP Stockholders, the
Management Stockholders or Additional Stockholders (other than the Additional
Management Stockholders), as the case may be, shall require the consent of the
399 Stockholders, the CMP Stockholders, the Management Stockholders or the
Additional Stockholders (other than the Additional Management Stockholders) so
affected. In the event of an amendment, modification or supplement of this
Agreement in accordance with its terms, the Stockholders shall cause the Board
to meet within 30 calendar days following such amendment, modification or
supplement, or as soon thereafter as is practicable for the purpose of
30
adopting any amendment to the Charter and by-laws of the Company that may be
required as a result of such amendment, modification or supplement to this
Agreement, and, if required, proposing such amendments to the stockholders
entitled to vote thereon. The Stockholders hereby agree to vote their shares to
approve such amendments to the Charter and by-laws of the Company.
7.3 Term. Except as provided below in this Section 7.3, this
Agreement shall automatically and without further action terminate upon the
earliest to occur of (a) a Qualifying Offering or (b) a Sale of the Company;
provided, that upon the occurrence of a Qualifying Offering and prior to the
occurrence of a Sale of the Company, the provisions of Article IV and Article
VII and the prohibition on transfer by any Management Stockholder of any
Unvested Shares set forth in a proviso to Section 2.4(a) shall continue in full
force and effect (together with related definitions).
7.4 Certain Actions. Unless otherwise expressly provided herein,
whenever any action is required under this Agreement by:
(a) the 399 Stockholders (as a group, as opposed to the exercise
by a 399 Stockholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders representing more than 50% of the total number
of votes of Restricted Securities on a Diluted Basis then held by the 399
Stockholders as a group, or as otherwise agreed in writing by the 399
Stockholders as a group; provided, however, that as long as the Company shall be
subject to cumulative voting requirements in accordance with the Charter, the
right of the 399 Stockholders to designate directors for election pursuant to
Section 5.1(a)(i) (when acting pursuant to such right, the "399 Stockholder
Designating Group") shall be exercised in a manner consistent with such
cumulative voting requirement so that any group of 399 Stockholders within the
399 Stockholder Designating Group (a "399 Stockholders Cumulative Designating
Group") shall be entitled to designate one (1) of the 399 Directors to the
extent that (absent provisions in Section 5 regarding designation of directors)
any such 399 Stockholder Cumulative Designating Group would have sufficient
votes to cause the election of at least one (1) director; provided, however,
that for purposes of determining whether or not any such 399 Stockholders
Cumulative Designating Group could cause such election (i) each share of Common
Stock owned by each member of any such 399 Stockholders Cumulative Designating
Group shall be treated as if it were a share of Class A Common, (ii) the number
of shares of Common Stock owned by such 399 Stockholders Cumulative Designating
Group shall be calculated after assuming that each Equity Equivalent owned by
each member of such 399 Stockholders Cumulative Designating Group has been
exercised, converted or exchanged and (iii) it shall be assumed that each of the
members of the 399 Stockholders Cumulative Designating Group will vote each of
their shares of Common Stock on a cumulative basis for a single director;
(b) the CMP Stockholders (as a group, as opposed to the exercise
by a CMP Stockholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders
31
of Restricted Securities representing more than 50% of the Restricted Securities
on a Diluted Basis then held by the CMP Stockholders as a group;
(c) the Management Stockholders (as a group, as opposed to the
exercise by a Management Stockholder of its individual rights hereunder), it
shall be by the Management Representative; provided, however, that as long as
the Company shall be subject to cumulative voting requirements in accordance
with the Charter, the right of the Management Stockholders to designate
directors for election pursuant to Section 5.1(a)(ii) (when acting pursuant to
such right, the "Management Stockholders Designating Group") shall be exercised
in a manner consistent with such cumulative voting requirement so that any group
of Management Stockholders within the Management Stockholders Designating Group
(a "Management Stockholders Cumulative Designating Group") shall be entitled to
designate one (1) of the Management Directors to the extent that (absent
provisions in Section 5 regarding designation of directors) any such Management
Stockholders Cumulative Designating Group would have sufficient votes to cause
the election of at least one (1) director; provided, however, that for purposes
of determining whether or not any such Management Stockholders Cumulative
Designating Group could cause such election (i) each share of Common Stock owned
by each member of any such Management Stockholders Cumulative Designating Group
shall be treated as if it were a share of Class A Common, (ii) the number of
shares of Common Stock owned by such Management Stockholders Cumulative
Designating Group shall be calculated after assuming that each Equity Equivalent
owned by each member of such Management Stockholders Cumulative Designating
Group has been exercised, converted or exchanged and (iii) it shall be assumed
that each of the members of the Management Stockholders Cumulative Designating
Group will vote each of their shares of Common Stock on a cumulative basis for a
single director; or
(d) the Additional Stockholders (as a group, as opposed to the
exercise by a Additional Stockholder of its individual rights hereunder), it
shall be by the affirmative vote of the holders of Restricted Securities
representing more than 50% of the Restricted Securities on a Diluted Basis then
held by the Additional Stockholders as a group.
7.5 Inspection. For so long as this Agreement shall remain in
effect, this Agreement shall be made available for inspection by any Stockholder
at the principal executive offices of the Company.
7.6 Recapitalization, Exchanges, Etc., Affecting Restricted
Securities. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Restricted Securities or Preferred, to any and
all shares of the Company capital stock or any successor or assign of the
Company (whether by merger, consolidation, sale of assets, or otherwise,
including shares issued by a parent corporation in connection with a triangular
merger) which may be issued in respect of, in exchange for, or in substitution
of, the Restricted Securities and the Preferred, and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
reclassifications and the like occurring after the date hereof.
32
7.7 Compliance with Regulations. Whenever a Stockholder is
entitled to purchase Restricted Securities pursuant to the provisions of this
Agreement, any closing time period specified in such provision shall be tolled
until any necessary governmental approval is received including without
limitation, approval under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976; provided, that such tolling period shall not exceed 60 days.
7.8 Waiver. No waiver by any party of any term or condition of
this Agreement, in one or more instances, shall be valid unless in writing, and
no such waiver shall be deemed to be construed as a waiver of any subsequent
breach or default of the same or similar nature.
7.9 Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns (including, without limitation, transferees of Restricted
Securities); provided, however, that (a) nothing contained herein shall be
construed as granting any CMP Stockholder, Management Stockholder or Additional
Stockholder the right to Transfer any Restricted Securities except in accordance
with this Agreement, (b) any person not a party hereto ("Third Party") which
acquires Restricted Securities in accordance with Section 2.5 and Article III
shall be bound by the provisions of this Agreement as an Additional Stockholder
with respect to such Restricted Securities whether or not such Third Party
acquired such Restricted Securities from a CMP Stockholder, Management
Stockholder or Additional Management Stockholder, except that the provisions of
Article IV shall not apply to the Restricted Securities of such Third Party
(unless such Third Party is also an employee of the Company or any of its
Subsidiaries), (c) none of the provisions of this Agreement shall apply to any
Transfer of Restricted Securities subsequent to a Transfer pursuant to a
registered public offering under the Securities Act made in accordance with the
Securities Act or in a Rule 144 Transaction, and (d) notwithstanding any
Transfer of Restricted Securities by any Stockholder to a 399 Stockholder, CMP
Stockholder, Management Stockholder or Additional Stockholder, only the
provisions of this Agreement which are expressly applicable to such transferee
Stockholder of such Restricted Securities shall be applicable to the Restricted
Securities in the hands of such transferee Stockholder.
7.10 Remedies. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages and costs (including reasonable attorneys' fees),
will be entitled to specific performance of its rights under this Agreement. The
parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.
7.11 Income Tax Withholding. Each Management Stockholder and
Additional Stockholder authorizes the Company to make any required withholding
from such Management
33
Stockholder's compensation for the payment of any and all income taxes and other
sums that may be due any governmental authority as a result of the receipt by
the Management Stockholders of compensation income under Section 83 of the
Internal Revenue Code of 1986, as amended, or similar provisions of state or
local law, if required by applicable law, and agrees, if requested by the
Company, and in lieu of all or a portion of such withholding, to pay the Company
in a lump sum such amounts as the Company may be required to remit to any
governmental authority on behalf of the Management Stockholder in respect of any
such taxes and other sums.
7.12 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
7.13 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
7.14 Further Assurances. Each party hereto shall cooperate and
shall take such further action including, but not limited to, any action
specified in this Agreement to cause the Company to fulfill its obligations
under this Agreement, and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement.
7.15 Gender. Whenever the pronouns "he" or "his" are used herein
they shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
7.16 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
7.17 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or
mailed by prepaid first class mail, return receipt requested, or mailed by
overnight courier prepaid to the parties at the following addresses or facsimile
numbers:
34
(i) If to any 399 Stockholder, to:
399 Venture Partners, Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
(ii) If to the Company, to:
Allied Digital Technologies Corp.
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Chief Executive Officer
with a copy to:
399 Venture Partners, Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
and
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
35
(iii) If to any CMP Stockholder, to:
Citicorp Mezzanine Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Xx.
and
Fleet Corporate Finance, Inc.
x/x Xxxxxxxx Xxxxxxx
Xxx Xxxxxxx Xxxxxx
Mail Stop MA OF D03L
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 212-446-4900
Attn: Xxxx Xxxx, Esq.
(iv) If to a Stockholder other than a 399 Stockholder or
CMP Stockholder, to the address of such Person set
forth in the stock records of the Company.
All such notices, requests and other communications will (w) if delivered
personally to the address as provided in this Section 7.17 be deemed given upon
delivery, (x) if delivered by facsimile transmission to the facsimile number as
provided in this Section 7.17 be deemed given upon receipt, and (y) if delivered
by mail in the manner described above to the address as provided in this Section
7.17 upon the earlier of the third business day following mailing or upon
receipt and (z) if delivered by overnight courier to the address as provided in
this Section 7.17, be deemed given on the earlier of the first business day
following the date sent by such overnight courier or upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section 7.17). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
7.18 Limited Preemptive Rights. (a) If the Company issues to the
399 Stockholders any shares of Common Stock or any securities containing options
or rights to
36
acquire any shares of Common Stock or any securities convertible or exchangeable
for Common Stock (a "Triggering Issuance"), in each case, after the date hereof,
other than pursuant to a Permitted Issuance (as defined in the Warrants), other
than pursuant to Purchase Rights (as defined in the Warrants) and other than
pursuant to any transaction or event in which the provisions of Sections 2C, 2D
or 2E of the Warrants would be operative, the Company will offer to sell to each
of the CMP Stockholders, if any, a number of such securities ("Preemptive
Offered Shares") so that the Ownership Ratio of each such CMP Stockholder
immediately after such Triggering Issuance of such securities to the 399
Stockholders would be equal to the Ownership Ratio of each such CMP Stockholder
immediately prior to such Triggering Issuance of securities to the 399
Stockholders. The Company shall give at least 30 days' prior written notice to
each CMP Stockholder (as of the date such notice is sent) of any proposed
Triggering Issuance to the 399 Stockholders, which notice shall disclose in
reasonable detail the proposed terms and conditions of such Triggering Issuance,
including a proposed closing date (the "Issuance Notice"). Each CMP Stockholder
will be entitled to purchase the Preemptive Offered Shares at the same price, on
the same terms, and at the same time as the securities are issued to the 399
Stockholders pursuant to such Triggering Issuance by delivery of written notice
to the Company of such election within 15 days after delivery of the Issuance
Notice (the "Election Notice"); provided, that if more than one type of security
(including any debt or hybrid security) was issued to the 399 Stockholders
pursuant to such Triggering Issuance, each CMP Stockholder shall, if it
exercises its rights pursuant to this Section 7.18, purchase such securities in
the same ratio as issued to the 399 Stockholders pursuant to such Triggering
Issuance. If any CMP Stockholder has elected to purchase any Preemptive Offered
Shares, the sale of such shares shall be consummated on the proposed closing
date set forth in the Issuance Notice or as soon as practical thereafter, but in
any event within 10 days after such proposed closing date. In the event that any
CMP Stockholder elects to purchase Preemptive Offered Shares, at the request of
the CMP Stockholders (which request shall be included in the Election Notice),
the Company shall issue to the CMP Stockholders which have elected to purchase
Preemptive Offered Shares, in lieu of the securities constituting Preemptive
Offered Shares, (a) a warrant substantially in the form of the Warrant for an
issuance price per underlying share of Common Stock equal to the per share
consideration paid by the 399 Stockholder in such Triggering Issuance or (b)
nonvoting securities which shall otherwise be identical in all respects to such
securities constituting Preemptive Offered Shares, except that it (i) shall be
nonvoting and (ii) shall be convertible into the voting security constituting
Preemptive Offered Shares on such terms as are required by the CMP Stockholders
in light of the applicable regulatory considerations then prevailing. In the
event any CMP Stockholder elects not to exercise its rights pursuant to this
Section 7.18, fails to timely give an Election Notice or fails to purchase the
securities allocated to it at the closing designated therefor by the Company,
such CMP Stockholder shall cease to have any rights hereunder with respect to
such Triggering Issuance and no other CMP Stockholder shall have the right to
purchase the securities offered to such CMP Stockholder. This Section 7.18 will
terminate automatically and be of no further force and effect, upon the
consummation of an underwritten public offering registered under the Securities
Act of the Common Stock.
37
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
ALLIED DIGITAL TECHNOLOGIES CORP.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
399 VENTURE PARTNERS, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
MANAGEMENT MEMBERS
/s/ Xxxx Xxxxxxx Xxxxxxx
-----------------------------------------------
Xxxx Xxxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxx
-----------------------------------------------
Xxxxx Xxxxxx
[Signature Page to Investors' Agreement]
/s/ Xxxxx X. Xxxx
-----------------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxx
-----------------------------------------------
Xxxxxx Xxxxx
[Signature Page to Investors' Agreement]
CITICORP MEZZANINE PARTNERS, L.P.
By: Citicorp Capital Investors, Ltd.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Vice President
FLEET CORPORATE FINANCE, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director of Mainsail Capital
[Signature Page to Investors' Agreement]
Annex I - Equity Ownership Chart
Allied Digital Technologies Corp.
Equity Ownership Chart
------------------------------------------------------------------------------------------------------------------
Name Class A Common Class B Common Series A Preferred Warrant Initial Paid-
Total Total Total Total in Capital
------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx Xxxxxxx 26,250 ($131,250) 0 0 0 $131,250
------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 26,250 ($131,250) 0 0 0 $131,250
------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 2,500 ($12,500) 0 0 0 $12,500
------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 5,000 ($25,000) 0 0 0 $25,000
------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx Xxxx 3,750 ($18,750) 0 0 0 $18,750
------------------------------------------------------------------------------------------------------------------
Xxxxx Xxx Xxxxxx 3,750 ($18,750) 0 0 0 $18,750
------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxx 2,500 ($12,500) 0 0 0 $12,500
------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx Xxxxxxx 2,500 ($12,500) 0 0 0 $12,500
------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx 2,500 ($12,500) 0 0 0 $12,500
------------------------------------------------------------------------------------------------------------------
Subtotal Management 75,000 ($375,000) 0 0 0 $375,000
------------------------------------------------------------------------------------------------------------------
399 74,000 ($370,000) 351,000 165,000 0 $18,625,000
($1,755,000) ($16,500,000)
------------------------------------------------------------------------------------------------------------------
CMP 0 0 0 43,479 0
------------------------------------------------------------------------------------------------------------------
Total 149,000 ($745,000) 351,000 165,000 43,479 $19,000,000
($1,755,000) ($16,500,000)
------------------------------------------------------------------------------------------------------------------
Exhibit A
Form of Joinder Agreement
Allied Digital Technologies Corp.
000 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: President
Gentlemen:
In consideration of the [transfer] [issuance] to the undersigned of
_____ shares of Class A Common Stock, par value $.01 per share, [Describe any
other security being transferred or issued] of Allied Digital Technologies
Corp., a Delaware corporation (the "Company"), the undersigned [represents that
it is a Permitted Transferee of [Insert name of transferor] and]* agrees that,
as of the date written below, [he] [she] [it] shall become a party to [, and a
Permitted Transferee as defined in,]* that certain Investors' Agreement dated as
of _____ __, 1998, as such agreement may have been or may be amended from time
to time (the "Agreement"), among the Company and the persons named therein, and
[as a Permitted Transferee shall be fully bound by, and subject to, all of the
covenants, terms and conditions of the Agreement that were applicable to the
undersigned's transferor,]* [shall be fully bound by, and subject to, the
provisions of the Agreement that are applicable to the Management Stockholders
(other than Article IV [include parenthetical if transferee is not an employee
and is not to be an employee of the Company or any of its Subsidiaries]),]**
[shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement--list exceptions, if applicable,]***as though an
original party thereto and shall be deemed a [CMP Stockholder] [Management
Stockholder] [Additional Management Stockholder] [Additional Stockholder] [399
Stockholder] for purposes thereof.
Executed as of the day of , .
TRANSFEREE:
------------------------
Address:
------------------------
------------------------
----------
* Include if transferee is a Permitted Transferee
** Include if transferee is a Third Party
*** Include if transferee is an Additional Stockholder
Exhibit B
Board of Directors
399 Directors
-------------------
Xxxxxxx Xxxxxxx
Xxx X. Xxxxxx
Management Directors
---------------------
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Disinterested Director
----------------------
Xxxxxxxx X. Xxxxx
Nominating Committee
1. Xxxxxxxx X. Xxxxx
2. Xxx X. Xxxxxx
