AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT OF CBS PERSONNEL HOLDINGS, INC.
Exhibit 4.2
Execution Copy
AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT
OF
CBS PERSONNEL HOLDINGS, INC.
OF
CBS PERSONNEL HOLDINGS, INC.
THIS AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated as of February 1,
2008, by and among CBS Personnel Holdings, Inc., a Delaware corporation (the “Company”), Compass
Group Diversified Holdings LLC, a Delaware limited liability company (“CODI” and, together with its
successors and assigns, the “Majority Stockholder”), Staffing Holding LLC, a Delaware limited
liability company (together with its successors and assigns,
“Xxxxxxxx”), Madison Capital
Funding LLC, a Delaware limited liability company (together with its successors and assigns,
“Madison”), and any Additional Holders (as defined herein) from time to time a party
hereto, amends and restates that certain Stockholders’ Agreement dated as of January 21, 2008.
RECITALS
WHEREAS, the Majority Stockholder currently owns beneficially and of record 2,573,267.56 Class
A Shares and 1,675,904 Class B Shares (as such terms are defined herein), which Shares represent a
majority of all Shares;
WHEREAS, Xxxxxxxx currently owns beneficially and of record 1,168,243 Class A Shares and
760,846 Class B Shares, which Shares are all of the Purchased Shares not currently owned by the
Majority Stockholder;
WHEREAS, 2,000,000 shares of authorized Class C Shares (as defined herein) have been reserved
for issuance to one or more employees or directors of the Company or its subsidiaries
(collectively, the “Optionees”) under that certain Amended 2000 Stock Option Plan of the Company
(as may be amended, restated or otherwise modified from time to time, the “Company Option Plan”),
and it is contemplated that Class C Shares will from time to time be issued to Optionees, upon
effective exercise of such stock options, each of whom will own such Class C Shares beneficially
and of record;
WHEREAS, Madison currently owns beneficially and of record 25,000 Class C Shares; and
WHEREAS, the Stockholders party hereto and the Company desire to set forth certain rights,
preferences, privileges, obligations and restrictions accorded to and imposed on some or all of the
Stockholders;
NOW, THEREFORE, in consideration of the forgoing recitals and the mutual promises herein
contained, and for other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
Section 1. Definitions. Whenever used in this Agreement, the following terms shall
have the following respective meanings:
1.1 “Additional Holder” and “Additional Holders” mean any additional Stockholder or
Stockholders, as the case may be, who from time to time become party to this Agreement by signing
an Additional Holder Signature Page or who receive Shares pursuant to a Transfer permitted
hereunder;
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1.2 “Additional Holder Signature Page” means an Additional Holder signature page in the form
attached hereto as Exhibit A.
1.3 “Affiliate” of any particular Person means any other Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under common control with
such particular Person.
1.4 “Agreement” has the meaning set forth in the first paragraph hereto.
1.5 “Appraiser” has the meaning set forth in Section 2.5(c).
1.6 “Approved Sale” has the meaning set forth in Section 2.5(a).
1.7 “Authorized Representative” has the meaning set forth in Section 2.5(a).
1.8 “Capital Stock” means (i) with respect to any Person that is a corporation, any and all
shares, interests, participations, rights or other equivalents (however designated) of corporate
stock; and (ii) with respect to any other Person, any and all partnership, membership or other
equity interests of such Person.
1.9 “Class A Shares” means the Company’s Class A common stock with a par value of $0.001 per
share.
1.10 “Class B Shares” means the Company’s Class B common stock with a par value of $0.001 per
share.
1.11 “Class C Shares” means the Company’s Class C common stock with a par value of $0.001 per
share.
1.12 “CODI” has the meaning set forth in the first paragraph hereto.
1.13 “Competing Concern” has the meaning set forth in Section 4.1(a).
1.14 “Common Stock” means the Class A Shares, the Class B Shares and the Class C Shares.
1.15 “Company” has the meaning set forth in the first paragraph hereto.
1.16 “Contest Notice” has the meaning set forth in Section 2.5(c).
1.17 “Control” (including the terms “controls,” “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or cause the direction
of the management policies of a Person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
1.18 “Disposition Notice” has the meaning set forth in Section 2.4(a).
1.19 “Drag Along Stockholder” has the meaning set forth in Section 2.4(b).
1.20 “Drag Along Right” has the meaning set forth in Section 2.4(b).
1.21 “Electing Put Option Stockholder” has the meaning set forth in Section 2.5(a).
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1.22 “Exempt Transfers” has the meaning set forth in Section 2.3.
1.23 “Fair Market Value” has the meaning set forth in Section 2.5(c).
1.24 “Family Members” has the meaning set forth in Section 2.3.
1.25 “Lender” has the meaning set forth in Section 2.4(a).
1.26 “Liquidity Event” has the meaning set forth in Section 2.5(a).
1.27 “Majority Stockholder” has the meaning set forth in the first paragraph hereto.
1.28 “New Shares” means any Common Stock not outstanding as of the date of this Agreement,
whether now authorized or not, and rights, options or warrants to purchase such Common Stock, and
securities of any type whatsoever that are, or may become, convertible into Common Stock;
provided that the term “New Shares” does not include (i) securities issued pursuant to the
acquisition of another business entity or business segment of any such entity by the Company by
merger, purchase of all of the capital stock or substantially all the assets or other
reorganization whereby the Company will own more than fifty percent (50%) of the voting power of
such business entity or business segment of any such entity; (ii) any borrowings, direct or
indirect, from financial institutions or other Persons by the Company, whether or not presently
authorized, including any type of loan or payment evidenced by any type of debt instrument,
provided such borrowings do not have any equity features including warrants, options or other
rights to purchase capital stock and are not convertible into capital stock of the Company; (iii)
securities issued to employees, consultants, officers or directors of the Company pursuant to the
Company Option Plan; (iv) securities issued to vendors or customers or to other Persons in similar
commercial situations with the Company if such issuance is approved by the Board of Directors and
otherwise issued in accordance with the terms and conditions of the Company’s Certificate of
Incorporation; (v) securities issued in connection with obtaining lease financing, whether issued
to a lessor, guarantor or other Person if such issuance is approved by the Board of Directors and
otherwise issued in accordance with the terms and conditions of the Company’s Certificate of
Incorporation ; (vi) securities issued in a firm commitment underwritten public offering pursuant
to a registration under the Securities Act of 1933, as amended; (vii) securities issued in
connection with any stock split, stock dividend or recapitalization of the Company; and (viii) any
right, option or warrant to acquire any security convertible into the securities excluded from the
definition of New Shares pursuant to subsections (i) through (vii) above.
1.29 “Notice of Intent” has the meaning set forth in Section 2.5(b).
1.30 “Person” means an individual, corporation, partnership, bank, limited liability company,
trust, association, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act).
1.31 “Permitted Trust Holder” has the meaning set forth in Section 2.3.
1.32 “Pledge” has the meaning set forth in Section 2.4(a).
1.33 “Proposed Sale” has the meaning set forth in Section 2.4(a).
1.34 “Purchased Shares” means all Shares other than Class C Shares and Shares held by or for
the benefit of the Majority Stockholder.
1.35 “Put Option Notice” has the meaning set forth in Section 2.5(a).
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1.36 “Put Option Right” has the meaning set forth in Section 2.5(a).
1.37 “Ratable Portion” has the meaning set forth in Section 3.2.
1.38 “Registrable Securities” means (i) shares of Common Stock and (ii) any Capital Stock of
the Company or any successor entity issued as (or issuable upon the conversion or exercise of any
warrant, right or other security that is issued as) a dividend or other distribution with respect
to, or in exchange for, or in replacement of, the Registrable Securities referenced in clause
(i) above. As to any particular securities that are Registrable Securities, such securities
shall cease to be Registrable Securities when they have been distributed to the public pursuant to
an offering registered under the Securities Act or sold to the public through a broker, dealer or
market maker in compliance with Rule 144 under the Securities Act (or any similar rule then in
force) or other Public Sale.
1.39 “Restricted Period” means, with respect to any Restricted Stockholder, the period of
time commencing on the date hereof and ending on the date that is one year after the final
disposition of all of such Restricted Stockholder’s Shares.
1.40 “Restricted Stockholders” means all Stockholders, including all Additional Holders, if
any, other than the Majority Stockholder.
1.41 “Securities Act” means the Securities Act of 1933, as amended, or any similar successor
federal statute, all as the same shall be in effect from time to time.
1.42 “Shares” means the issued and outstanding shares of Common Stock and any other series or
class of capital stock of the Company which may from time to time come into existence.
1.43 “Stockholders” means, collectively, all holders of Shares who from time to time are
parties to this Agreement.
1.44 “Tag Along Notice” has the meaning set forth in Section 2.4(c).
1.45 “Tag Along Right” has the meaning set forth in Section 2.4(c).
1.46 “Tag Along Stockholder” has the meaning set forth in Section 2.4(c).
1.47 “Third Anniversary Date” has the meaning set forth in Section 2.5(a).
1.48 “Third Party Purchaser” has the meaning set forth in Section 2.4(b).
1.49 “Transfer” has the meaning set forth in Section 2.2.
Section 2. Shares Subject to Agreement; Restrictions; Rights.
2.1 Shares Subject to Agreement. All Shares of the Stockholders (and their
transferees) hereunder, whether currently outstanding or hereafter issued, shall be subject to
this Agreement and to all the rights, privileges, preferences, obligations and restrictions
hereof.
2.2 No Transfers. Except as permitted pursuant to Section 2.3 or as required
under Section 2.4 or Section 2.5, no Restricted Stockholder shall sell, assign,
convey, transfer, encumber or in any other manner dispose of (each, a “Transfer”) any or all of
the Shares held or owned by him, her or it without the prior written consent of the Majority
Stockholder, which consent may be withheld in the Majority Stockholder’s absolute discretion. Any
Transfer of the Shares in violation of this Agreement is void ab initio.
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2.3 Exempt Transfers. Notwithstanding anything to the contrary in Section
2.2, a Restricted Stockholder (other than any Restricted Stockholder who received Shares from
another Restricted Stockholder pursuant to a transfer of such Shares that was in violation of this
Agreement) may, upon prior written notice to the Majority Stockholder, make an Exempt Transfer.
The following transfers by such Restricted Stockholder shall constitute “Exempt Transfers” as that
term is used in this Agreement: (i) Transfers, whether inter vivos or by testate or intestate
succession, to such Restricted Stockholder’s spouse or any one or more lineal ancestors, lineal
descendants or siblings (whether by birth, adoption or marriage) of a Restricted Stockholder
(collectively, “Family Members”), to any trust established for the benefit of such Restricted
Stockholder and/or any Family Members of such Restricted Stockholder (each a “Permitted Trust
Holder”); (ii) Transfers from any Permitted Trust Holder established by or for the benefit of such
Restricted Stockholder to such Restricted Stockholder and/or the Family Members of such Restricted
Stockholder; and (iii) Transfers by Madison to the New York Life Insurance Company or any of
its majority owned subsidiaries, provided that Madison shall provide the Company with written
notice of such Transfer within 60 days of the Transfer. The Shares Transferred to any such
permitted transferee enumerated in clauses (i), (ii) and (iii) of the preceding sentence shall
remain subject to the provisions of this Agreement and such permitted transferee shall become a
Restricted Stockholder for purposes of this Agreement. Every such transferee shall observe and
comply with this Agreement and with all obligations and restrictions imposed hereby and shall,
promptly upon the request of the Majority Stockholder, execute an Additional Holder Signature
Page.
2.4 Drag Along/Tag Along Rights. The Majority Stockholder shall be permitted to
Transfer any or all of the Shares held or owned by it, subject, however, to the following
restrictions and provided, however, that each transferee of the Majority Stockholder shall be
subject to and observe and comply with the obligations and restrictions under this Agreement and
shall (except for transferees described in (B) and (C) of the definition of Excluded Transfers,
below), upon the request of any party hereto, execute an Additional Holder Signature Page:
(a) Disposition Notice. If the Majority Stockholder proposes at any time to
Transfer (other than Excluded Transfers, as defined below), whether in a single transaction
or in a series of related transactions to one or more purchasers, including any redemption
or repurchase of its Shares by the Company, (i) in the context of Section 2.4(b),
not less than 50% of all of its Shares, or (ii) in the context of Section 2.4(c),
but subject to the last sentence of this subsection (a), more than 5% of the then
outstanding Shares (determined by dividing the number of Shares subject to the Transfer by
the total number of Shares outstanding (on a fully diluted basis) for all classes and series
of capital stock) of the Company (each a “Proposed Sale”) to any Person, the Majority
Stockholder shall send written notice (the “Disposition Notice”) to the other Stockholders
specifying the identity and address of such Person, the number of Shares proposed to be
sold, the proposed per Share sale price, the form (whether cash, publicly traded securities
or otherwise) of consideration to be paid, any other material terms and conditions of the
Proposed Sale and, for bona fide sales subject to Section 2.4(b), below, if the
Majority Stockholder is thereby exercising its Section 2.4(b) Drag Along Rights,
notice of such exercise. Clause (ii) of this subsection (a) and the provisions of
Section 2.4(c) shall not apply to: (A) a Transfer by the Majority Stockholder to
any Person, if the Majority Stockholder or any of its Affiliates Controls the Person to whom
such Shares are proposed to be Transferred; (B) the pledge of or grant of a security
interest or other collateral right in or to, or otherwise encumbering (collectively, a
“Pledge”), any or all Shares held by the Majority Stockholder to any third-party lender
(“Lender”) as collateral security for any loans from the Lender to the Majority Stockholder;
or (C) any Transfer to the Lender in connection with the Lender’s exercise of its
enforcement rights and remedies in respect of a Pledge (collectively, “Excluded Transfers”).
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(b) Drag Along Rights. In the event that the Proposed Sale is a “bona fide”
sale or other transfer for fair value to a non-affiliated third party (a “Third Party
Purchaser”), the Majority Stockholder shall, subject to Section 2.4(f), have the right to
require each of the other Stockholders to sell, and each of the other Stockholders hereby
agrees to sell, an equal percentage (by number and by class and series of security, provided
that all series of common stock shall be counted as one series for purposes of determining
this percentage and such percentage shall be determined on a fully diluted basis) of his,
her or its Shares (the “Drag Along Right”) to such Third Party Purchaser on the same terms
and conditions, and at the same time as, the Proposed Sale. If the Majority Stockholder has
by way of the Disposition Notice exercised its Drag Along Rights, then, promptly upon
receipt of such Disposition Notice, each Stockholder (each a “Drag Along Stockholder”) shall
deliver or cause to be delivered to the Majority Stockholder (or such other Person as may be
agreed upon between the Majority Stockholder and each such Drag Along Stockholder) to be
held by the Majority Stockholder (or such other agreed upon Person) in escrow for sale or
return upon the terms of this Section 2.4, the certificate or certificates
representing the Shares to be sold pursuant to this Section 2.4(b), duly endorsed or
accompanied by executed stock powers, together with a limited power-of-attorney authorizing
the Majority Stockholder to sell such Shares in accordance with the terms of this
Section 2.4(b). To the fullest extent of the law, the Stockholders expressly waive
any appraisal rights conferred under the Delaware General Corporation Law for any
transaction with respect to which the Drag Along Right is validly exercised. For purposes
of the Section 2, a “bona fide” sale or other Transfer shall mean a completed sale in which
seller makes such sale or other Transfer in good faith without notice of objection thereto
(other than by any Drag Along Stockholder).
(c) Tag Along Rights. Upon receipt of any Disposition Notice, subject to
Section 2.4(a), each of the Restricted Stockholders shall have the right to require
(the “Tag Along Right”) that the same percentage (by number and by class and series of
security ultimately disposed of by the Majority Stockholder, provided that all series of
Common Stock shall be counted as one series for purposes of determining this percentage and
such percentage shall be determined on a fully diluted basis) of his, her or its Shares
(other than Class C Shares, to which the Tag Along Right does not attach), as is determined
by dividing the number of Shares ultimately to be sold by the Majority Stockholder by the
total number of Shares then held by the Majority Stockholder, be sold as part of, and upon
the same terms and conditions as, the Proposed Sale. The Tag Along Right shall be exercised
by written notice (the “Tag Along Notice”) from the exercising Restricted Stockholder (each
a “Tag Along Stockholder”) to the Majority Stockholder. The Tag Along Notice shall only be
deemed effective if received by the Majority Stockholder on or before the 30th day after the
Disposition Notice was received by such Tag Along Stockholder. Promptly upon giving the Tag
Along Notice, each Tag Along Stockholder shall deliver to or as directed by the Majority
Stockholder the certificate or certificates representing the Shares to be sold as part of
the Proposed Sale, duly endorsed or accompanied by executed stock powers, together with a
limited power-of-attorney authorizing the Majority Stockholder to sell such Shares in
accordance with the terms of this Section 2.4, which certificate or certificates
shall be held in escrow for sale or return upon the terms of this Section 2.4.
(d) Promptly upon the consummation of any Proposed Sale, but in no event later than
five days after such consummation, the Majority Stockholder shall deliver to each Drag Along
Stockholder or Tag Along Stockholder, as the case may be, the total sale price of his, her
or its Shares sold as part of the Proposed Sale (after deduction of his, her or its
proportionate share, based on number of Shares sold, of the reasonable out-of-pocket
expenses associated with such Proposed Sale), together with evidence of the expenses
associated with, and the completion and time of completion of, such Proposed Sale.
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(e) Notwithstanding anything herein to the contrary, the Majority Stockholder shall
have 90 days from the date it first delivers any Disposition Notice during which to
consummate the Proposed Sale to which such Disposition Notice relates. If, at the end of
such 90 day period, the Majority Stockholder has not consummated the Proposed Sale, all
certificates representing Shares delivered by either a Drag Along Stockholder or Tag Along
Stockholder, as the case may be, to the Majority Stockholder for sale or other disposition
as part of such Proposed Sale shall be returned to such Drag Along Stockholder or Tag Along
Stockholder, as the case may be, and the transaction contemplated by the Proposed Sale shall
be deemed to be a new Proposed Sale and shall again be subject to the provisions of this
Section 2.4.
(f) Notwithstanding anything in Section 2.4(b) to the contrary, if the Majority
Stockholder has by way of the Disposition Notice exercised its Drag Along Rights and the
form of consideration to be paid in the applicable Proposed Sale as specified in such
Disposition Notice is other than cash or publicly traded securities, then, within 5 business
days of its receipt of such Disposition Notice, Xxxxxxxx may, by written notice to the
Majority Stockholder (the “Opt Out Notice”), notify the Majority Stockholder that its Shares
shall not be subject to the Drag Along Rights; provided, however, that upon
receipt of any such Opt Out Notice, the Majority Stockholder shall then have the right, in
Majority Stockholder’s sole discretion, to purchase all (but not less than all) of the
Shares then held by Xxxxxxxx for cash at their Fair Market Value (as defined in and
determined pursuant to Section 2.5(c)) (the “Call Option”). The Call Option shall be
exercisable by a written notice (the “Call Option
Notice”) signed by the Majority
Stockholder delivered to Xxxxxxxx within 5 business days of receipt by the Majority
Stockholder of the Opt Out Notice. Upon receipt of the Call Option Notice, Xxxxxxxx shall
proceed in good faith to consummate such sale of its Shares to the Majority Stockholder at
such time as will not delay the consummation of the applicable Proposed Sale by the Majority
Stockholder.
(g) Limitations. Notwithstanding anything herein to the contrary, (i) in the
event that all of the Stockholders are required to provide indemnities in connection with
the Proposed Sale, Madison shall not be liable for more than its pro rata share (based upon
the amount consideration received in exchange for its Shares) of any liability for
indemnity, and such liability shall not exceed (a) the total purchase price or consideration
received by Madison for its Shares in the Proposed Sale (including any contingent payments)
plus (b) its pro rata share of any escrow established in connection with any such Proposed
Sale; and (ii) Madison shall only be obligated to make representations and warranties in any
such Proposed Sale as to (a) its title and ownership of the Shares to be sold by it,
including the absence of liens or encumbrances on such Shares, (b) its authorization,
execution and delivery of the relevant documents, and (c) the enforceability of the relevant
documents against it.
2.5 Put Option Rights.
(a) Put Option Right. In the event that neither a public offering of the
Shares as described in Section 2.6(d) nor a sale of substantially all of the assets of or
equity interests in the Company has occurred (each a “Liquidity Event”) by, or if neither
the Company nor the Majority Stockholder, as applicable, has entered into binding agreements
or a letter of intent to consummate a Liquidity Event (each a “Commitment”) that remain in
effect on, the third anniversary date of this Agreement (the “Third Anniversary Date”), or
if the transactions contemplated by a Commitment that was in effect on the Third Anniversary
Date are not
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consummated within 90 days after the Third Anniversary Date, the Electing Put Option
Stockholders (as defined below) shall have the right (the “Put Option Right”), subject to
Section 2.6(c), to direct the Majority Stockholder to, at the sole option of the Majority
Stockholder, either (i) promptly initiate such commercially reasonable actions as could
reasonably be expected to result in an Approved Sale (as defined below), or (ii) offer to
purchase all Purchased Shares then held by the Electing Put Option Stockholders (as defined
below) at their Fair Market Value (as defined in paragraph (c) below). The Put Option Right
shall be exercisable by a written notice (the “Put Option Notice”) signed by Restricted
Stockholders then holding not less than 80% of all Purchased Shares (the “Electing Put
Option Stockholders”) delivered to the Majority Stockholder at any time on or after the
Third Anniversary Date. The Put Option Notice shall designate one Restricted Stockholder as
the authorized representative of all Restricted Stockholders holding Purchased Shares (the
“Authorized Representative”) who is hereby authorized by all such Restricted Stockholders to
make all decisions, including giving or receiving all notices, consents and approvals, or
waiving any requirements, in respect of the Put Option Right. For purposes hereof,
“Approved Sale” means a sale of substantially all of the assets of or equity interests in
the Company on terms and subject to such conditions as shall be reasonably approved by the
Authorized Representative on behalf of all applicable Restricted Stockholders.
(b) Obligations of Majority Stockholder upon Receipt of Put Option Notice.
Promptly upon (and in no event later than five business days after) receipt of a timely and
effective Put Option Notice, the Majority Stockholder shall notify each Restricted
Stockholder then holding Purchased Shares in writing that it has received a Put Option
Notice. Within 75 days after receiving such Put Option Notice, the Majority Stockholder
shall notify the Authorized Representative in writing (the “Notice of Intent”) of its
intentions to pursue either an Approved Sale or the purchase of their Purchased Shares in
accordance with the provision hereof. From and after delivery of such Notice of Intent, the
Majority Stockholder shall proceed in good faith and using all commercially reasonable
efforts towards effecting either an Approved Sale or the purchase of the Purchased Shares at
their Fair Market Value, as applicable, and to keep the Authorized Representative fully
informed of its progress. In the event that the Majority Stockholder elects to pursue an
Approved Sale, it may thereafter, upon written notice to all the Restricted Stockholders,
opt instead to purchase the Purchased Shares as provided herein.
(c) Definition of Fair Market Value. “Fair Market Value” shall be that value
determined by the Board of Directors of the Company, acting in good faith, by reference to
the financial statements of the Company and its subsidiaries to be the price at which the
Purchased Shares then owned by Xxxxxxxx would change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or to sell and both having
reasonable knowledge of the relevant facts, assuming no minority interest discount,
illiquidity or similar circumstance, and communicated to the Authorized Representative in
writing. If the Authorized Representative disagrees with the Fair Market Value as so
determined by the Board of Directors, the Authorized Representative shall promptly provide
written notice to the Majority Stockholder of such disagreement (a “Contest Notice”). If
the parties are unable to agree on the Fair Market Value within 10 business days of receipt
by the Majority Stockholder of a Contest Notice, the contested determination of Fair Market
Value shall be referred to an independent, nationally recognized third party appraiser with
experience in valuing similar securities and businesses to those in question, who shall be
appointed by the Board of Directors to determine the Fair Market Value of the Purchased
Shares within 30 days of referral thereto (the “Appraiser”). The decision of the Appraiser
shall be final and binding on the parties and nonappealable. If the final determination
made by the Appraiser is more than 15.0% greater than the Fair Market Value as originally
determined by the Board of Directors as provided herein, the costs of the Appraiser shall be
borne
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by the Company, otherwise, such costs shall be borne proportionately by the selling
Restricted Stockholders.
2.6 Expiration of Restrictions. All provisions under this Section 2 and
Section 6 shall terminate:
(a) at any time upon the written agreement of the Company and all the Stockholders then party
to this Agreement as it may be amended or revised from time to time;
(b) immediately upon the dissolution of the Company or the bankruptcy or insolvency of the
Company;
(c) in the event of the exercise by the Majority Stockholder of its Drag Along Rights, unless,
in connection with the applicable Proposed Sale, Xxxxxxxx delivers to the Majority Stockholder an
effective Opt Out Notice and the Majority Stockholder does not exercise its Call Option, in each
case pursuant to Section 2.4(f), immediately upon the consummation of such Proposed Sale (provided,
however, that during the period between such exercise and the consummation of such Proposed Sale,
the rights granted to Restricted Stockholders under Section 2.5(a) shall not be exercisable);
(d) immediately upon the Company becoming subject, pursuant to an effective registration
statement or otherwise, to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”); provided that any such registration statement covers the offer and
sale of Shares of which the aggregate net proceeds attributable to sales for the account of the
Company exceed $30,000,000; provided, further, that, in connection with a public offering pursuant
to any such registration statement, the Stockholders shall be required to enter into customary
lock-up agreements in such form as is generally required from company insiders by the lead
underwriter in such offering; or
(e) upon the acquisition by merger of the Company by an existing publicly traded company;
provided that the Stockholders receive cash or publicly-tradeable securities in exchange for their
Shares pursuant to such acquisition.
Section 3. Preemptive Right of Certain Restricted Stockholders.
3.1 The Right. If the Company shall propose to issue any New Shares to the Majority
Stockholder, it shall offer to sell to each Restricted Stockholder who holds Purchased Shares a
Ratable Portion of such New Share on the same terms and conditions and at the lowest price as such
New Securities are offered to any Person in the transaction at issue. For purposes of this
Section 3.1, the “Ratable Portion” which each such Restricted Purchaser shall be entitled to
purchase shall be an amount of New Shares equal to a fraction of all such New Shares proposed to
be issued. The numerator of such fraction shall be the number of shares of Common Stock held by
such Restricted Stockholder (assuming full conversion and exercise of all convertible or
exercisable securities) and the denominator shall be the total number of Shares then outstanding
(assuming full conversion and exercise of all convertible or exercisable securities but excluding
the New Shares so issued). Notwithstanding anything in this Agreement to the contrary, no
preemptive rights under this Section 3 shall apply to any issuance of Class C Shares pursuant to
the Company Option Plan.
3.2 Notice. The Company shall give written notice of the proposed issuance of New
Shares to each Restricted Stockholder holding Purchased Shares. Such notice shall contain all
material terms and conditions of the issuance and of the New Shares. Each such Restricted
Stockholder may elect to exercise its rights under this Section 3 to purchase up to its Ratable
Portion of such New Shares by giving written notice to the Company within fifteen (15) days of
receipt of the Company’s notice. If any such Restricted Stockholder shall fail to exercise its
right of purchase within such fifteen (15) day period, then Company shall have ninety (90) days
thereafter to sell or enter into an agreement to sell
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(pursuant to which the sale of New Shares to Majority Stockholders covered thereby shall be
closed, if at all, within sixty (60) days from the date of said agreement), the New Shares not
elected to be purchased by such Restricted Stockholder at the price and upon terms no more
favorable than specified in Company’s notice. If Company has not sold the New Shares or entered
into an agreement to sell the New Shares to Majority Stockholders within said ninety (90) day
period (or sold and issued New Shares in accordance with the foregoing within sixty (60) days from
the date of said agreement), the Company shall not thereafter issue or sell any New Shares to
Majority Stockholders without first offering such New Shares in the manner set forth in this
Section 3. If the consideration paid by others for the New Shares is not cash, the value of the
consideration shall be determined in good faith by the Company’s Board of Directors, and any
electing Restricted Stockholder shall pay the cash equivalent thereof as so determined. All
payments shall be delivered by electing Restricted Stockholders to the Company not later than the
date specified by the Company in its notice, but in no event earlier than thirty (30) days after
the Company’s notice. Each such Restricted Stockholder shall be entitled to apportion New Shares
to be purchased among its partners and affiliates, provided that such Restricted Stockholder
timely notifies the Company of such allocation.
Section 4. Piggyback Registrations. Notwithstanding anything in this Section 4 to the
contrary, the following provisions of this Section 4 shall apply only after the consummation of the
transactions contemplated by Section 2.6(d):
4.1 Piggyback Registrations.
(i) Piggyback Rights. If (but without any obligation to do so) the Company proposes
to register, whether or not for its own account, any Shares in connection with the public offering
for cash of such securities (but excluding any (i) registration relating solely to employee benefit
plans, (ii) a registration on Form S-4 or Form S-8 under the Securities Act or similar forms that
may be promulgated under the Securities Act in the future, (iii) registration a registration
pursuant to which the Company is offering to exchange its own securities, (iv) a registration
relating solely to dividend reinvestment or similar plans, or (v) shelf registration pursuant to
which only the initial purchasers and subsequent transferees of debt securities of the Company or
any of its subsidiaries that are convertible for Shares and that are initially issued pursuant to
Rule 144A and/or Regulation S of the Securities Act may resell such notes and sell the Shares into
which such notes may be converted), the Company shall, at such time, promptly give to each of
Xxxxxxxx and Madison written notice of such registration. Upon the written request of Xxxxxxxx
and/or Madison given in writing to the Company within 15 days after receipt of such notice by the
Company, the Company shall, subject to the provisions of this Section 4.1, include in the
Registration Statement all of the Registrable Securities that each such Stockholder has requested
to be registered.
(ii) Right to Terminate Registration. The Company shall have the right to terminate
or withdraw any registration initiated by it under this Section 4.1 prior to the effectiveness of
such registration and the commencement of the public offer of the securities covered by such
registration whether or not any Stockholder has elected to include securities in such registration.
The expenses of such withdrawn registration shall be borne by the Company in accordance with
Section 4.4 hereof. Any such withdrawal shall be without prejudice to the rights of any
Stockholder to request that a registration be included in subsequent registrations under Section
4.1(a).
(iii) Underwriting Requirements. In connection with any offering involving an
underwriting of shares of Common Stock for the benefit of the Company or any security holder of the
Company, the Company shall not be required under this Section 4.1 to include any of the
Stockholders’ Registrable Securities in such underwriting pursuant to this Section 4.1 unless they
accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by it and enter
into an
- 10 -
underwriting agreement in customary form with an underwriter or underwriters selected by
the Company. Notwithstanding any other provision of this Section 4.1, if the managing underwriters
with respect to the proposed offering advises the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the number of securities
which can be sold in such offering without being likely to have a material adverse effect on the
offering of securities as then contemplated (including a material adverse effect on the price at
which it is proposed to sell the securities), then the Company shall so advise all holders of
securities that would otherwise be included in such registration, and the number of shares that may
be included in the registration shall be allocated (A) first, pro rata among all selling security
holders of the Company according to the total amount of securities requested to be included in such
registration, and (B) second, to securities being sold for the account of the Company.
(iv) Selection of Underwriters. The Company shall have the right to select the
managing underwriter or underwriters to administer any offering pursuant to this Section
4.1.
4.2 Obligations of the Company. Whenever required under this Section 4 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(i) prepare and file with the SEC a Registration Statement with respect to such Registrable
Securities and use its best efforts to cause such Registration Statement to become effective, and
keep such Registration Statement effective for a period of up to one hundred 180 days or, if
earlier, until the distribution contemplated in the Registration Statement has been completed;
(ii) prepare and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection with such registration as may be necessary to
comply with the provisions of the Securities Act with respect to disposition of all securities
covered by such Registration Statement for the period set forth in Section 4.2(a);
(iii) furnish to each selling Stockholder and its counsel selected in accordance with Section
4.4 copies of all documents proposed to be filed with the SEC in connection with such registration,
which documents will be provided to such counsel and each selling Stockholder prior to the filing
thereof;
(iv) furnish to the selling Stockholders, without charge, such number of (i) conformed copies
of the Registration Statement and of each amendment or supplement thereto (in each case including
all exhibits and documents filed therewith), and (ii) copies of the prospectus included in such
Registration Statement, including each preliminary prospectus and any summary prospectus, in
conformity with the requirements of the Securities Act, and such other documents, in each case, as
they may reasonably request in order to facilitate the disposition of Registrable Securities owned
by them in accordance with the intended method or methods of such disposition;
(v) in the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriters of
such offering and enter into such other agreements and take such other actions in order to expedite
or facilitate the disposition of such Registrable Securities, including preparing for, and
participating in, “road shows” and all other customary selling efforts, all as the underwriters
reasonably request;
(vi) notify each selling Stockholder covered by such Registration Statement, at any time when
a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the
issuance of any stop order by the SEC in respect of such Registration Statement (and use every
reasonable effort to obtain the lifting of any such stop order at the earliest possible moment),
(ii) any
period when the Registration Statement ceases to be effective, or (iii) the happening of any
event as a result of which the prospectus included in such Registration Statement, as then in
effect, includes an
- 11 -
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and, as promptly as is practicable, prepare and furnish to such
selling Stockholder a reasonable number of copies of any supplement to or amendment of such
prospectus as may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(vii) cause all such Registrable Securities registered hereunder to be listed on each
securities exchange or any automated quotation system (or NASDAQ) on which similar securities
issued by the Company are then listed or, if not so listed, use its commercially reasonable efforts
to cause such Registrable Securities registered hereunder to be listed on a securities exchange or
any automated quotation system (or NASDAQ) selected by the Board of Directors of the Company;
(viii) provide a transfer agent and registrar for all Registrable Securities registered
pursuant hereto and a CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration;
(ix) use its best efforts to register and qualify the securities covered by such Registration
Statement under such other securities or blue sky laws of such jurisdictions in the United States
as shall be reasonably requested by the selling Stockholders and such other jurisdictions as shall
be reasonably requested by the managing underwriters (or obtain an exemption from registration or
qualification under such laws) and do any and all other acts and things which may be necessary or
advisable to enable such selling Stockholders to consummate the disposition of the Registrable
Securities in such jurisdictions in accordance with the intended method or methods of distribution
thereof; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business, where not otherwise required, or to
file a general consent to service of process or become subject to taxation in any such states or
jurisdictions;
(x) use its best efforts to cause all Registrable Securities covered by such Registration
Statement to be registered with or approved by such other Governmental Authorities as may be
necessary by virtue of the business and operations of the Company and its subsidiaries to enable
each selling Stockholder thereof to consummate the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition thereof;
(xi) furnish to each selling Stockholder and underwriter a signed opinion of counsel for the
Company, which counsel is experienced in securities law matters, dated the effective date of the
Registration Statement (and, if any registration includes an underwritten public offering, the date
of the closing under the underwriting agreement), addressed to such selling Stockholder, covering
such matters as are customarily covered in opinions of issuer’s counsel delivered to the
underwriters in underwritten public offerings of securities and such other matters as may be
reasonably requested by the Stockholders, if any;
(xii) otherwise use its best efforts to comply with all applicable rules and regulations of
the SEC, and make available to its security Stockholders, as soon as reasonably practicable, an
earnings statement of the Company (in form complying with the provisions of Rule 158 under the
Securities Act) covering the period of at least 12 months, but not more than 18 months, beginning
with the first month after the effective date of the registration statement; and
(xiii) use its best efforts to take all other reasonable and customary steps typically taken
by issuers to effect the registration and disposition of such Registrable Securities as
contemplated hereby.
- 12 -
4.3 Obligations of Stockholder.
(i) Information from Stockholder. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 4 with respect to the
Registrable Securities of any selling Stockholder that such Stockholder shall, within ten business
days of a request by the Company, furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of such securities as
shall be reasonably required by the Company to effect the registration of such Stockholder’s
Registrable Securities.
(ii) Participation in Underwritten Registrations. No Stockholder may participate in
any registration hereunder which is underwritten unless such Stockholder (i) agrees to sell such
Stockholder’s securities on the basis provided in any underwriting arrangements approved by the
Person(s) entitled hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
4.4 Expenses of Registration. All expenses (other than underwriting discounts and
commissions) incurred in connection with registrations pursuant to Section 4.1, including all
registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements
of counsel for the Company all independent certified public accountants, underwriters (excluding
discounts and commissions) and other Persons retained by the Company and the reasonable fees and
disbursements of one counsel for the selling Stockholders selected by the Majority Stockholder
(collectively, “Registration Expenses”), shall be borne by the Company.
4.5 Delay of Registration. No Stockholder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this Section 4.
4.6 Indemnification. In the event any Registrable Securities are included in a
Registration Statement under this Section 4.6:
(i) To the extent permitted by law, the Company will indemnify and hold harmless each
Stockholder, the partners, members, managers, officers and directors of each Stockholder, any
underwriter (as defined in the Securities Act) for such Stockholder and each Person, if any, who
controls such Stockholder or underwriter, within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, expenses or liabilities (joint or several) (or actions,
proceedings or settlements in respect thereof), to which they may become subject under the
Securities Act, the Exchange Act or other federal, state or foreign securities laws, or common law,
insofar as such losses, claims, damages, expenses or liabilities (or actions proceeding or
settlements in respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”) by the Company: (i) any untrue
statement or alleged untrue statement of a material fact contained in such Registration Statement,
including any preliminary prospectus or final prospectus (or similar offering documents) contained
therein or any amendments or supplements thereto, or any other document required in connection
therewith or any qualification or compliance associated therewith; (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or (iii) any violation or alleged violation of the Securities
Act, the Exchange Act, any state or foreign securities laws or any rule or regulation promulgated
under the
Securities Act, the Exchange Act or other federal, state or foreign securities laws or common
law; and the Company will reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending or settling any such
loss, claim, damage, liability
- 13 -
or action as such expenses are incurred; provided,
however, that the indemnity agreement contained in this Section 2.7(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall not be unreasonably
withheld or delayed), nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished expressly for use in
connection with such registration by such Stockholder, underwriter or controlling Person;
provided further, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus (or similar offering document) shall not inure to the benefit of any
Stockholder, underwriter, or any Person controlling such Stockholder or underwriter, from whom the
Person asserting any such losses, claims, damages or liabilities purchased shares in the offering,
if a copy of the prospectus (or similar offering document) (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Stockholder (in an offering other than an underwritten offering) or such underwriter
(in an underwritten offering) to such Person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the shares to such Person, and if the prospectus
(or similar offering document) (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of any Stockholder and shall survive
the transfer of such securities by any Stockholder.
(ii) To the extent permitted by law, each selling Stockholder, on a several and not joint
basis, will indemnify and hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement, each Person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter, any other Stockholder selling securities in such
Registration Statement and any controlling Person of any such underwriter or other Stockholder,
against any losses, claims, damages, expenses or liabilities (joint or several) (or actions,
proceedings or settlements in respect thereof) to which any of the foregoing Persons may become
subject, under the Securities Act, the Exchange Act or other federal, state or foreign securities
laws, or common law, insofar as such losses, claims, damages or liabilities (or actions proceedings
or settlements in respect thereto) arise out of or are based upon any Violation (but excluding
clause (iii) of the definition thereof), in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written information furnished by such
Stockholder expressly for use in connection with such registration; and each such Stockholder will
reimburse any Person intended to be indemnified pursuant to this Section 4.6(b) for any legal or
other expenses reasonably incurred by such Person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 4.6(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is effected without the
consent of such Stockholder (which consent shall not be unreasonably withheld or delayed),
provided, further that in no event shall any indemnity under this Section 4.6(b)
exceed the net proceeds from the offering received by such Stockholder.
(iii) Promptly after receipt by an indemnified party under this Section 4.6 of written notice
of the commencement of any action (including any governmental action), such indemnified party will,
if a claim in respect thereof is to be made against any indemnifying party under this Section 4.6,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any such action, if
materially
- 14 -
prejudicial to its ability to defend such action, shall relieve such indemnifying party
of any liability to the indemnified party under this Section 4.6 to the extent of such prejudice,
but the omission to so deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this Section 4.6. No
indemnifying party, in the defense of any such claim or action, shall, except with the consent of
each indemnified party, consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or action.
(iv) If the indemnification provided for in this Section 4.6 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of and, except as to the Company where the Company does
not participate in the offering, the relative benefits received by the indemnifying party on the
one hand and of the indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations, provided that no Person guilty of fraud shall be entitled to
contribution. The relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or omission. The relative
benefits received by the indemnifying party and the indemnified party shall be determined by
reference to the net proceeds and underwriting discounts and commissions from the offering received
by each such party. In no event shall any contribution of any Stockholder under this Section
4.6(d) exceed the net proceeds from the offering received by such Stockholder, less any amounts
paid under Section 4.6(b).
(v) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into by the Company and a Stockholder
in connection with an underwritten public offering are in conflict with the foregoing provisions,
the provisions in the underwriting agreement shall control with respect to the Company and such
Stockholder.
(vi) The obligations of the Company and Stockholders under this Section 4.6 shall survive the
completion of any offering of Registrable Securities in a Registration Statement under this Article
II and the termination of this Agreement.
(vii) The obligations of the parties under this Section 4.6 shall be in addition to any
liability which any party may otherwise have to any other party.
Section 5. Legend on Certificates. Each certificate representing Shares shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a
legend (in addition to any legends as may be required pursuant to applicable state securities laws)
substantially similar to the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED BY A HOLDER UNLESS AND UNTIL THE SECURITIES ARE
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS
- 15 -
AVAILABLE AND, IF REQUIRED
BY THE COMPANY, THE HOLDER HAS DELIVERED TO THE COMPANY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER APPLICABLE
FEDERAL AND STATE SECURITIES LAWS.
THIS CERTIFICATE AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ALL RIGHTS
HEREIN ARE SUBJECT TO AND TRANSFERABLE (INCLUDING WITHOUT LIMITATION BY WAY OF PLEDGE OR
OTHER GRANT OF A SECURITY INTEREST THEREIN) ONLY IN ACCORDANCE WITH THE PROVISIONS OF
THAT CERTAIN STOCKHOLDERS’ AGREEMENT, DATED AS OF JANUARY 21, 2008 AMONG THE COMPANY’S
STOCKHOLDERS AND THE COMPANY. A COPY OF SUCH STOCKHOLDERS’ AGREEMENT, AS MAY BE AMENDED
FROM TIME TO TIME, IS ON FILE AND AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
THE COMPANY. ANY SALE, PLEDGE, GIFT, BEQUEST, TRANSFER, ASSIGNMENT, ENCUMBRANCE OR
OTHER DISPOSITION OF THIS CERTIFICATE AND THE SECURITIES REPRESENTED HEREBY IN VIOLATION
OF SAID STOCKHOLDERS’ AGREEMENT SHALL BE INVALID.
Section 6. Non-Solicitation.
6.1 Each Restricted Stockholder (other than Madison) acknowledges the importance of
protecting the business and goodwill of the Company and agrees and covenants that such Restricted
Stockholder (other than Madison), during the Restricted Period shall not, without the prior
written consent of the Board of Directors of the Company (which may be withheld solely in the
discretion of the Board of Directors): directly or indirectly (i) induce or attempt to induce any
employee of the Company or any subsidiary to leave the employ of the Company or such subsidiary,
or in any way interfere with the relationship between the Company or any subsidiary and any
employee thereof, or (ii) induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company or any subsidiary to cease doing business
with the Company or such subsidiary, or in any way interfere with the relationship between any
such customer, supplier, licensee, licensor, franchisee or other business relation and the Company
or any subsidiary (including, without limitation, making any negative or disparaging statements or
communications about the Company, its subsidiaries or affiliates, or the respective directors,
officers, employees or stockholders thereof).
6.2 Whenever possible each provision and term of this Section 6 will be interpreted in a
manner to be effective and valid but if any provision or term of this Section 6 is held to be
prohibited or invalid, then such provision or term will be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this Section 6. If
any of the covenants set forth in this Section 6 are held to be unreasonable, arbitrary or against
public policy, such covenants will be considered divisible with respect to scope, time and
geographic area and shall be interpreted in such manner as to be effective and valid under
applicable law, and in such lesser scope, time and geographic area, will be effective, binding and
enforceable against each Restricted Stockholder.
Section 7. Board Representation. For so long as the Company is not subject to the
reporting requirements of the Exchange Act and the Restricted Stockholders holding Purchased Shares
continue to own 90% or more of all outstanding Purchased Shares, the Majority Stockholder hereby
agrees to vote its
Shares in favor of, for so long as the Board of Directors consists of seven (7) members, two
(2) members designated by Xxxxxxxx and, in the event that the Board consists of other than seven
(7) members, members comprising not less than 2/7ths of the total number of members
designated by Xxxxxxxx.
- 16 -
Section 8. Custody of Shares by Company. To facilitate the enforcement of the
rights and obligations agreed to herein by the parties, including, without limitation, the Transfer
restrictions and Drag-Along Rights, each Restricted Stockholder (other than Xxxxxxxx and Madison)
acknowledges such rights and obligations and agrees that the Company or its designee shall hold
each such Restricted Stockholder’s Shares (other than Shares of Xxxxxxxx and Madison) for the
benefit of such Restricted Stockholder, subject to any rights granted to another party as permitted
herein. Each Restricted Stockholder (other than Xxxxxxxx and Madison) shall promptly deliver to
the Company all stock certificates evidencing the Shares of such holder, together with a stock
power for transfer of such Shares, executed in blank and in a form acceptable to the Company and
its counsel. Subject to any rights granted to another party as permitted herein, so long as the
Company shall hold the Shares on behalf of a Restricted Stockholder (other than Xxxxxxxx and
Madison), such Restricted Stockholder shall be entitled to exercise such holder’s right to vote
such Shares and shall be entitled to receive any dividend (ordinary or extraordinary, whether paid
in cash or property) or other distribution with respect to such Shares.
Section 9. Miscellaneous.
9.1 Effectiveness of Transfers. No Shares shall be Transferred on the Company’s
books and records, and Transfers of Shares shall be otherwise ineffective, unless any such
transfer is made pursuant to and in accordance with the terms and conditions of this Agreement.
9.2 Notices. All notices and other communications given or made pursuant hereto
shall be in writing (and shall be deemed to have been duly given or made when received) by
delivery in person, by facsimile, electronic mail, cable, telecopy, telegram or telex (if being
sent electronically, a written confirmation shall be required to be mailed to the receiving
parties), by registered or certified mail (postage prepaid, return receipt requested), or by
express mail through a nationally recognized overnight courier, in each case to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice):
Company:
|
CBS Personnel Holdings, Inc. | |
| 000 Xxx Xxxxxx | ||
| Xxxxxxxxxx, Xxxx 00000 | ||
| Attn: Xxxxxxxxx X. Xxxxxx | ||
| Facsimile No.: (000) 000-0000 | ||
with copies to:
|
Compass Group Diversified Holdings, LLC | |
| 00000 Xxxxxxx xx xx Xxxxxxx, Xxxxx 000 | ||
| Xxxxxx Xxxxx, XX 00000 | ||
| Attn: Xxxxx X. Xxxx | ||
| Fax: (000) 000-0000 | ||
| and: | ||
| Squire, Xxxxxxx & Xxxxxxx L.L.P. | ||
| 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxxxxxx, Xxxx 00000 | ||
| Attention: Xxxxxxx X. Xxxxx | ||
| Facsimile No.: (000) 000-0000 |
- 17 -
Majority Stockholder:
|
Compass Group Diversified Holdings LLC | |
| 00 Xxxxxx Xxxx, 0xx Xxxxx | ||
| Xxxxxxxx, Xxxxxxxxxxx 00000 | ||
| Attn: Chief Executive Officer | ||
| Facsimile No.: (000) 000-0000 | ||
with copies to:
|
Compass Group Diversified Holdings, LLC | |
| 00000 Xxxxxxx xx xx Xxxxxxx, Xxxxx 000 | ||
| Xxxxxx Xxxxx, XX 00000 | ||
| Attn: Xxxxx X. Xxxx | ||
| Fax: (000) 000-0000 | ||
| and: | ||
| Squire, Xxxxxxx & Xxxxxxx L.L.P. | ||
| 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxxxxxx, Xxxx 00000 | ||
| Attention: Xxxxxxx X. Xxxxx | ||
| Facsimile No.: (000) 000-0000 | ||
Xxxxxxxx:
|
Staffing Holding LLC | |
| c/x Xxxxxxxx Capital Partners LLC | ||
| 000 Xxxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxx Xxxx, Xxxxxxxx 00000 | ||
| Attention: Xxxxxxx Xxxxxx, Jr. | ||
| Facsimile No.: (000) 000-0000 | ||
The other
Stockholders listed
on the signature
page hereto:
|
As applicable, to the address of each such Stockholder set forth on the signature page hereto. | |
Any Additional Holders:
|
As applicable, to the address of each Additional Holder set forth on the Additional Holder Signature Page. |
9.3 Specific Performance. Due to the fact that the Shares cannot be readily
purchased or sold in the open market, and for other reasons, the parties will be irreparably
damaged in the event that this Agreement is not specifically enforced. In the event of a breach
or threatened breach of any of the terms, covenants and conditions of this Agreement by any of the
parties hereto, the other parties shall, in addition to all other remedies, be entitled to a
temporary or permanent injunction, without showing any actual damage, and/or a decree for specific
performance in accordance with the provisions hereof.
9.4 Entire Agreement. This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement and supersedes any and all other prior
agreements and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
9.5 Amendments. This Agreement may be amended, in whole or in part, only by the
affirmative vote or written consent of (i) Stockholders holding more than 50% of the voting power
of all issued and outstanding Shares, (ii) for so long as the Majority Stockholder or any
Affiliate thereof is a Stockholder, the Majority Stockholder, (iii) for so long as Xxxxxxxx and
its Affiliates hold, in the aggregate, not less than 80% of the Purchased Shares held by Xxxxxxxx
on the date hereof, Xxxxxxxx, and (iv) for so long as Madison is a Stockholder and the
amendment modifies Sections 2.3, 2.4, 2.6, 3, 4,
9.5 or 9.14, Madison.
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9.6 Related Party Transactions. The Company hereby agrees that it will not, and
will not permit any of its subsidiaries to, enter into any transaction, arrangement or contract
with (i) any Affiliate of the Majority Stockholder without the prior written consent of Xxxxxxxx,
or (ii) any Affiliate of Xxxxxxxx without the consent of the Majority Stockholder, in each case
which is not on arm’s length terms.
9.7 Waiver. Any party may waive compliance by any other with any of the covenants or
conditions herein, but no waiver shall be binding unless executed in writing by the party making
the waiver. No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver of any breach or default hereunder shall be considered
valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
9.8 Successors; Assigns. Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Majority Stockholder, its
successors and permitted assigns, and the Restricted Stockholders, their heirs, personal
representatives, successors and permitted assigns; provided, however, that nothing contained
herein shall be construed as granting any Stockholder the right to transfer his, her or its Shares
except as expressly provided in this Agreement.
9.9 Section Headings. The headings contained herein are for reference purposes only
and shall not affect the meaning or interpretation of this Agreement.
9.10 Further Assurances. Each party hereto shall cooperate and shall take such
further action 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.
9.11 Interpretations. When the context in which words are used in this Agreement
indicates that such is the intent, words used in the singular shall have a comparable meaning when
used in the plural and vice versa; pronouns stated in the masculine, feminine or neuter shall
include each other gender.
9.12 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to be
one and the same instrument. Any party may execute this Agreement by electronic signature
(including facsimile or scanned email), and the other parties will be entitled to rely on such
signature as conclusive evidence that this Agreement has been duly executed by such party.
9.13 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the principles of conflicts of law of
such State.
9.14 No Effect Upon Lending Relationship. Notwithstanding anything herein to the
contrary, nothing contained in this Agreement shall affect, limit or impair the rights and
remedies of the Majority Stockholder, any of its Affiliates or any other lender in their capacity
as lenders to the
Company or any of its Affiliates or Subsidiaries pursuant to any agreement under which the
Company or such Affiliate or Subsidiary has borrowed money. Without limiting the generality of
the foregoing, neither the Majority Stockholder nor any such Person, in exercising its rights as a
lender, including making its decision on whether to foreclose on any collateral security, will
have any duty to consider (a) its status as a direct or indirect Stockholder of the Company, (b)
the interests of the Company or any of its Subsidiaries or (c) any duty it may have to any other
direct or indirect Stockholder of the Company, except as may be required under the applicable loan
documents.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| “COMPANY” | ||||||
| CBS PERSONNEL HOLDINGS, INC. | ||||||
| By: Name: Title: |
/s/ Xxxxxxxxx X. Xxxxxx
|
|||||
| “MAJORITY STOCKHOLDER” | ||||||
| COMPASS GROUP DIVERSIFIED HOLDINGS LLC | ||||||
| By: Name: |
/s/ Xxxxx X. Xxxxxxxxxxx
|
|||||
| Title: | Chief Financial Officer
|
|||||
| “XXXXXXXX” | “MADISON” | |||||||||||
| STAFFING HOLDING LLC | MADISON CAPITAL FUNDING LLC | |||||||||||
| By: | /s/ Xxxxxxx Xxxxxx, Jr.
|
|||||||||||
| Name: | Xxxxxxx Xxxxxx, Jr.
|
By: | /s/ Xxxxx Xxxx
|
|||||||||
| Title: | Senior Vice President
|
Name: | Xxxxx Xxxx
|
|||||||||
| Title: | Managing Director
|
|||||||||||
| Address for notices: | ||
| 00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000 | ||
| Xxxxxxx, Xxxxxxxx 00000 | ||
| Attn: Fox Factory Account Manager | ||
| Facsimile No: (000) 000-0000 | ||
| with a copy to: | ||
| Xxxxxxxx Xxxx | ||
| 00 Xxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxxx, Xxxxxxxx 00000 | ||
| Attn: Xxxxxxx X. Xxxxxx | ||
| Facsimile No.: (000) 000-0000 |
[Signature Page to Amended and Restated Stockholders’ Agreement]
EXHIBIT A
ADDITIONAL HOLDER SIGNATURE PAGE
The undersigned, desiring to become a stockholder of CBS PERSONNEL HOLDINGS, INC., a Delaware
corporation (the “Company”), and treated as a Restricted Stockholder, hereby agrees to all
of the terms of that certain Stockholders’ Agreement dated as of __, 20__ among the Company
and certain of its stockholders, and agrees to be bound by the terms and provisions thereof.
Executed by the undersigned as a Stockholder of the Company.
Number of
Shares:
shares of Class __ Common Stock
| RESTRICTED STOCKHOLDER: | ||||||
| By: |
|
|||||
| Name: |
|
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| Tax ID No.: |
|
|||||
| Address: |
|
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|
|
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|
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Date:
