Exhibit 4.16
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JORDAN TELECOMMUNICATION PRODUCTS, INC
STOCKHOLDERS AGREEMENT
Dated as of July 21, 1997
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STOCKHOLDERS AGREEMENT
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STOCKHOLDERS AGREEMENT, dated as of July 21, 1997, among JORDAN
TELECOMMUNICATION PRODUCTS, INC., a Delaware corporation (the "Company") and the
Stockholders (as hereinafter defined) listed on the signature pages hereto.
W I T N E S S E T H:
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WHEREAS, on the date hereof, the Company is authorized by its Certificate
of Incorporation to issue capital stock consisting of (i) 100,000 shares of
Common Stock, par value $0.01 per share (the "Common Stock"); and (ii) 1,000,000
shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock") of
which 20,000 shares have been designated 13 3/4% Senior Exchangeable Preferred
Stock due 2007 (the "Senior Preferred Stock") and 2,000 shares have been
designated Junior Preferred Stock (the "Junior Preferred Stock") (the Common
Stock and/or the Preferred Stock are sometimes hereinafter collectively referred
to as the "Stock"); and each of the classes of Stock has the respective voting
powers, designations, preferences and relative, participating, optional and
other special rights and the qualifications, limitations and restrictions set
forth with respect thereto in such Certificate of Incorporation; and
WHEREAS, as of the date hereof and after giving effect to the transactions
contemplated hereby, the Stockholders will beneficially own shares of Stock as
set forth in the Stockholder Schedule attached hereto as Schedule 1
("Stockholder Schedule") attached hereto; and
WHEREAS, the Company has agreed to sell certain shares of Senior Preferred
Stock and Common Stock (the "Offering Stock") to Xxxxxxxxx & Company, Inc.,
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and Xxxxx Xxxxxx Inc.
(collectively, the "Initial Purchasers") pursuant to the Purchase Agreement,
dated as of July 21, 1997, among the Company and the Initial Purchasers, and the
Initial Purchasers have proposed to resell such Offering Stock to "qualified
institutional buyers" (as defined in Rule 144A of the Securities Act) or
institutional "accredited investors" (as defined in Rule 504(a)(1), (2), (3) or
(7) of the Securities act), all as further described in the draft Offering
Circular, dated June 24, 1997 (the "Offering Circular"); and
WHEREAS, the parties hereto deem it in their best interests and in the best
interests of the Company to provide consistent and uniform management for the
Company and desire to enter into this Agreement in order to effectuate that
purpose and to set forth their respective rights and obligations in connection
with their investment in the Company; and
WHEREAS, the parties hereto also desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the shares of capital stock of the
Company, including issued and outstanding shares of Common Stock and Junior
Preferred Stock that may be issued hereafter, and to provide for certain rights
and obligations in respect thereto as hereinafter provided;
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NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
Certain Definitions
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As used in this Agreement, the following terms shall have the following
respective meanings:
Affiliate shall mean with respect to any Person, (a) any Person which
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, or (b) any Person
who is a director or executive officer (i) of such Person, (ii) of any
Subsidiary of such Person, or (iii) of any Person described in clause (a) above,
or with respect to any Stockholder, the Company; provided, that any Affiliate of
a corporation shall be deemed an Affiliate of such corporation's stockholders.
For purposes of this definition, "control" of a Person shall mean the power,
direct or indirect, (i) to vote or direct the voting of more than 5% of the
outstanding shares of Voting Stock of such Person, or (ii) to direct or cause
the direction of the management and policies of such Person, whether by contract
or otherwise.
Agreement shall mean this Agreement as in effect on the date hereof and as
hereafter from time to time amended, modified or supplemented in accordance with
the terms hereof.
Board of Directors shall mean the Board of Directors of the Company, as
duly constituted in accordance with this Agreement, or any committee thereof
duly constituted in accordance with this Agreement, the Bylaws and applicable
law and duly authorized to make the relevant determination or take the relevant
action. To the extent that the Board of Directors is required under this
Agreement to authorize or approve, or make a determination in respect of a
transaction between the Company, on the one hand, and a Stockholder, and/or a
Stockholder's Affiliate, on the other hand, the Board of Directors shall be
deemed to exclude such Stockholder, any of its Affiliates, and any of the
directors, officers, employees, agents or representatives of such Stockholder
and/or its Affiliates, who are members of the Board of Directors.
Bylaws shall mean the Bylaws of the Company as in effect on the date
hereof, substantially in the form of Exhibit B hereto, and as hereafter further
amended or restated in accordance with the terms hereof and pursuant to
applicable law.
Certificate of Incorporation shall mean the Certificate of Incorporation of
the Company as in effect on the date hereof, substantially in the form of
Exhibit A hereto, and as hereafter from time to time amended, restated, modified
or supplemented in accordance with the terms hereof and pursuant to applicable
law.
Closing Date shall mean the date on which the transactions contemplated by
the Jordan Investors Subscription Agreement shall be consummated.
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Commission shall mean the Securities and Exchange Commission and any
successor commission or agency having similar powers.
Common Stock shall mean the Common Stock, par value $0.01 per share, of the
Company.
Credit Agreement shall mean the credit agreement, to be entered into by the
Company after the date hereof, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
refunding, replacing or otherwise restructuring (including, without limitation,
increasing the amount of available borrowings thereunder or adding the direct or
indirect subsidiaries of the Company as additional borrowers or guarantors
thereunder) all or any portion of the indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, or
any similar Federal statute then in effect, and a reference to a particular
section thereof shall include a reference to the comparable section, if any, of
such similar Federal statute.
First Offer Price shall have the meaning specified in Section 5.1(a).
GAAP shall mean generally accepted accounting principles in the United
States of America in effect from time to time, applied on a consistent basis
both as to classification of items and amounts.
Indebtedness shall have the meaning specified in the Credit Agreement.
Initial Public Offering shall mean the public offer and sale of Common
Stock of the Company, pursuant to the initial registration thereof under the
Securities Act.
Jordan Investors shall mean the Persons other than the Company who are
signatories to the Jordan Investors Subscription Agreement and any Permitted
Transferee of any such Person who becomes a Stockholder in accordance with the
terms hereof.
Jordan Investors Subscription Agreement shall mean the Jordan Investors
Subscription Agreement between the Jordan Investors and the Company,
substantially in the form attached hereto as Exhibit C.
Management Investors shall mean any officer or managerial employee of the
Company or any of its Subsidiaries who hereafter acquires any shares of Common
Stock from the Company pursuant to a Management Subscription Agreement and this
Agreement, and any Permitted Transferee of any of such Person who becomes a
Stockholder in accordance with the terms hereof.
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Management Subscription Agreement shall mean the Management Subscription
Agreement entered into between the Company and each Management Investor,
substantially in the form attached hereto as Exhibit D, as such agreement may
from time to time hereafter be amended, modified or supplemented in accordance
with the terms hereof and thereof.
Notice of Exercise shall have the meaning specified in Section 5.1(b).
Notice of Intention shall have the meaning specified in Section 5.1(a).
Offered Securities shall have the meaning specified in Section 5.1(a).
Offered Circular shall have the meaning specified in the third recital.
Offering Stock shall have the meaning specified in the third recital.
Permitted Transferee shall mean those Persons to whom transfers of Common
Stock and Preferred Stock are permitted to be made pursuant to Section 4.2 or
Article V hereof.
Person shall mean an individual or a corporation, association, partnership,
joint venture, organization, business, trust, or any other entity or
organization, including a government or any subdivision or agency thereof.
Preferred Stock shall mean the Preferred Stock, par value $0.01 per share,
of the Company.
Public Distribution shall mean a Public Offering of Common Stock, at the
conclusion of which the aggregate number of shares of Common Stock that have
been sold to the public pursuant to one or more effective registration
statements under the Securities Act equals at least 25% of the shares of Common
Stock then outstanding (on a fully diluted basis) after giving effect to such
sale and net proceeds in excess of $25,000,000.
Public Offering shall mean a public offering and sale of equity securities
of the Company pursuant to an effective registration statement under the
Securities Act.
Securities shall mean any capital stock of the Company.
Securities Act shall mean, as of any date, the Securities Act of 1933, as
amended, or any similar Federal statute then in effect, and in reference to a
particular section thereof shall include a reference to the comparable section,
if any, of any such similar Federal statute and the rules and regulations
thereunder.
Selling Investors shall have the meaning specified in Section 5.8.
Selling Stockholder shall have the meaning specified in Section 5.1(a).
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Stock shall mean the Common Stock and the Preferred Stock; provided,
however, that "Stock" shall not include the Offering Stock.
Stockholder shall mean any of the Jordan Investors, the Management
Investors, and any Permitted Transferee of any such Person who becomes a party
to or bound by the provisions of this Agreement in accordance with the terms
hereof.
Subsidiary shall mean as to any Person a corporation of which outstanding
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
Board of Directors of such corporation are at the time owned, directly or
indirectly, through one or more intermediaries, or both, by such Person.
Transaction Documents shall mean this Agreement, the Offering Circular, the
Intercompany Agreements, the Credit Agreement, the Letter of Credit Agreement,
the Jordan Investors Subscription Agreement, each of the agreements that are
exhibits hereto and thereto, and all agreements, instruments and documents
contemplated thereby.
Voting Stock shall mean capital stock of the Company of any class or
classes, the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of corporate directors (or Persons performing
similar functions), including, without limitation, the Common Stock.
Voting Stockholder shall mean a Stockholder who holds Voting Stock or
retains, by proxy or otherwise, the power to vote Voting Stock.
ARTICLE II
Management
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2.1 Registration of Common Stock. In the event of Public Offering of the
Company's Common Stock, each Voting Stockholder shall, at a meeting convened for
the purpose of amending the Certificate of Incorporation, vote to increase the
number of authorized shares of Common Stock and, if necessary, increase the
number of issued and outstanding shares of Common Stock, whether by stock split,
stock dividend or otherwise, or change in its par value, as recommended by a
majority of the members of the Board of Directors in order to facilitate such
Public Offering.
2.2 Certificate of Incorporation; No Conflict with Agreement. Attached
hereto as Exhibit A is a copy of the Certificate of Incorporation as in effect
on the date hereof. Each Voting Stockholder shall vote his shares of Voting
Stock, and shall take all actions necessary, to ensure that the Certificate of
Incorporation and Bylaws do not, at any time, conflict with the provisions of
this Agreement.
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ARTICLE III
Corporate Governance
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3.1 Board of Directors. The Board of Directors shall be elected in
accordance with the terms of the Certificate of Incorporation and the Bylaws.
The Company and each member of the Board of Directors shall execute a
Directors Indemnification Agreement substantially in the form of Exhibit E
hereto.
ARTICLE IV
Transfers of Stock
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4.1 Restrictions on Transfer.
(a) Each Stockholder agrees that such Stockholder will not, directly
or indirectly, offer, sell, transfer, assign or otherwise dispose of (or
make any exchange, gift, assignment or pledge of) (collectively, for
purposes of Articles IV and V hereof only, a "transfer") any Securities,
except (i) as provided in Section 4.2; (ii) in accordance with Article V;
or (iii) pursuant to the Management Subscription Agreement.
(b) In addition to the other restrictions noted in this Article IV,
each Stockholder agrees that it will not, directly or indirectly, transfer
any of its Securities except as permitted under the Securities Act and
other applicable securities laws.
(c) Each Stockholder agrees that such Stockholder will not, directly
or indirectly, transfer (and will not announce or disclose any intention to
transfer) any Securities for a period of 180 days after the date of the
final prospectus relating to any Public Offering, except as provided in
Sections 4.2(a), 4.2(b) or 4.2(e).
(d) Each Stockholder agrees that such Stockholder will not, directly
or indirectly, transfer (and will not announce or disclose any intention to
transfer) any Securities until July 31, 2002, except as provided in Section
4.2(e).
4.2 Exceptions to Restrictions. The provisions of Section 4.1 and
Article V (other than Section 5.8) shall not apply to any of the following
transfers:
(a) (i) From any of the Jordan Investors to any of the other Jordan
Investors, (ii) from any Jordan Investor to any of the limited or general
partners of such Jordan Investor, or (iii) from any Jordan Investor to any trust
solely for the benefit of a Jordan Investor, or a Jordan Investor's spouse or
children; provided, that in the case referred to in clause (iii) such Jordan
Investor acts as trustee and retains the sole power to direct the voting and
disposition of such shares; and provided, further, that in the cases referred to
in clauses (i), (ii) and (iii), each such transferee including any trust (each a
"Permitted Transferee"), shall execute a counterpart of and
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become a party to this Agreement and shall agree in a writing in form and
substance satisfactory to the Company to be bound by the terms of this
Agreement.
(b) (i) From any Management Investor to such Management Investor's
spouse or children, or (ii) from any Management Investor to any trust
solely for the benefit of such Management Investor, or such Management
Investor's spouse or children; provided, that in the case referred to in
clause (ii), such Management Investor acts as trustee and retains the sole
power to direct the voting and disposition of such Securities; and
provided, further, that in the cases referred to in clauses (i) and (ii)
each transferee including any trust (each a "Permitted Transferee") shall
execute a counterpart of and become a party to this Agreement and the
Management Subscription Agreement and shall agree in a writing in form and
substance satisfactory to the Company to be bound by the terms of this
Agreement and the Management Subscription Agreement.
(c) From any Stockholder pursuant to a merger or consolidation
involving the Company or a sale of all or substantially all of the
outstanding shares of Common Stock.
(d) Pursuant to a Public Offering or an open market sale following a
Public Offering in accordance with Rule 144 of the Commission.
(e) Pursuant to the duly adopted resolution of either the Board of
Directors or the Stockholders.
4.3 Endorsement of Certificates. Upon the execution of this Agreement, in
addition to any other legend which the Company may deem advisable under the
Securities Act and certain state securities laws, all certificates representing
shares of issued and outstanding Stock shall be endorsed at all times prior to
any Public Distribution as follows:
THIS CERTIFICATE IS SUBJECT TO, AND IS TRANSFERABLE ONLY UPON COMPLIANCE
WITH, THE PROVISIONS OF A STOCKHOLDERS AGREEMENT, DATED JULY 21, 1997,
AMONG THE COMPANY AND ITS STOCKHOLDERS, CERTAIN SUBSCRIPTION AGREEMENT(S),
AMONG THE COMPANY AND CERTAIN INVESTORS THEREIN, AND THE RESTRICTIVE
PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE
CORPORATION. A COPY OF THE ABOVE REFERENCED AGREEMENTS ARE ON FILE AT THE
OFFICE OF THE COMPANY AT ARBORLAKE CENTRE, SUITE 550, 0000 XXXX XXXX XXXX,
XXXXXXXXX, XXXXXXXX 00000.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM
REGISTRATION, UNDER SAID ACT.
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Except as otherwise expressly provided in this Agreement, all
certificates representing shares of Stock hereafter issued to or acquired by any
of the Stockholders or their successors hereto shall bear the legends set forth
above, and shares of Stock represented by such certificates shall be subject to
the applicable provisions of this Agreement. The obligations of each party
hereto shall be binding upon each transferee to whom Securities are transferred
by any party hereto, whether or not such transfer is permitted under the terms
of this Agreement, except for transfers pursuant to a Public Offering or under
Rule 144 of the Commission. Prior to consummation of any transfer, except for
transfers pursuant to a Public Offering or under Rule 144 of the Commission, the
transferring party shall cause the transferee to execute an agreement in form
and substance reasonably satisfactory to the other parties hereto, providing
that such transferee shall fully comply with the terms of this Agreement and, in
the case of a transfer by a Management Investor, the Management Subscription
Agreement. Prompt notice shall be given to the Company and each Stockholder by
the transferor of any transfer (whether or not to a Permitted Transferee) of any
Securities.
4.4 Improper Transfer. Any attempt to transfer or encumber any shares of
Securities not in accordance with this Agreement shall be null and void and
neither the Company nor any transfer agent of such securities shall give any
effect to such attempted transfer or encumbrance in its stock records.
ARTICLE V
Rights of First Offer; New Securities: Tag Along Sales
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5.1 Transfers by a Stockholder. Except for sales of securities
contemplated by Article VI hereof, transfers permitted by Sections 4.1 or 4.2,
and transactions subject to Section 5.8, if at any time any Stockholder shall
desire to sell or otherwise transfer any Stock owned by him or it (such
Stockholder desiring to sell shares of such Stock being referred to herein as a
"Selling Stockholder"), then such Selling Stockholder shall deliver written
notice of its desire to sell such Stock (a "Notice of Intention"), accompanied
by a copy of a proposal relating to such sale (the "Sale Proposal"), to each of
the other Stockholders and to the Company, setting forth such Selling
Stockholder's desire to make such sale (which shall be for cash only), the
number and class of shares of Stock proposed to be transferred (the "Offered
Securities") and the price at which such Selling Stockholder proposes to sell
the Offered Securities (the "First Offer Price") and other terms applicable
thereto.
Upon receipt of the Notice of Intention, the Company and the other
Stockholders shall then have the right to purchase at the First Offer Price and
on the other terms specified in the Sale Proposal all or, subject to Section
5.1(d), any portion of the Offered Securities in the following order of
priority: (i) if the Selling Stockholder is a Management Investor, then the
Company shall have the first right to purchase the Offered Securities, and
thereafter, the Jordan Investors shall have the right to purchase the Offered
Securities pro rata among those of the Jordan Investors so electing on the basis
of the respective numbers of shares of Common Stock owned by such Jordan
Investors (or in such other proportion as such Jordan Investor may agree); and
(ii) if the Selling Stockholder is a Jordan Investor, the other Jordan Investors
shall have the
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first right to purchase the Offered Securities pro rata among those of the
Jordan Investors so electing on the basis of the respective numbers of shares of
Common Stock owned by such Jordan Investor (or in such other proportion as such
Jordan Investors may agree), then the Company shall have the right to purchase
the Offered Securities. The rights of the Stockholders and the Company pursuant
to this Section 5.1(b) shall be exercisable by the delivery of notice to the
Selling Stockholder (the "Notice of Exercise"), within 30 calendar days from the
date of delivery of the Notice of Intention. The Notice of Exercise shall state
the total number of shares of the Offered Securities such Stockholder (or the
Company) is willing to purchase without regard to whether or not other
Stockholders purchase any shares of the Offered Securities. A copy of such
Notice of Exercise shall also be delivered to the Company and each other
Stockholder. The rights of the Stockholders and the Company pursuant to this
Section 5.1(b) shall terminate if unexercised 30 calendar days after the date of
delivery of the Notice of Intention.
In the event that the Stockholders or the Company exercise their rights to
purchase any or all of the Offered Securities in accordance with Section 5.1(b),
then the Selling Stockholder must sell the Offered Securities to such
Stockholders (or, as the case may be, the Company) within 30 calendar days from
the date of delivery of the Notice of Exercise to the Selling Stockholder.
Notwithstanding the foregoing provisions of this Section 5.1, unless the
Selling Stockholder shall have consented to the purchase of less than all of the
Offered Securities, no Stockholder or Stockholders nor the Company may purchase
any Offered Securities hereunder unless all of the Offered Securities are to be
so purchased by the Stockholders and/or the Company.
For purposes of this Article V, any Person who has failed to give notice of
the election of an option hereunder within the specified time period will be
deemed to have waived its rights on the day after the last day of such period.
Each Stockholder agrees and acknowledges that the Company may purchase or
acquire Common Stock pursuant to Section 5.1(b) hereof, and approves such
purchases and acquisitions, and waives any objection or claim relating thereto,
whether against the Company, the Board of Directors or otherwise.
5.2 Transfer of Offered Shares to Third Parties. If all notices required to
be given pursuant to Section 5.1 have been duly given and the Stockholders and
the Company do not exercise their respective options to purchase all of the
Offered Securities at the First Offer Price and the Selling Stockholder does not
desire to sell less than all the Offered Securities, or if with the consent of
the Selling Stockholder the other Stockholders and the Company purchase less
than all of the Offered Securities pursuant to the provisions hereof, then in
either such event the Selling Stockholder shall have the right, subject to
compliance by the Selling Stockholder with the provisions of Section 4.3(b)
hereof, for a period of 120 calendar days from the earlier of (i) the expiration
of the option period pursuant to Section 5.1 with respect to such Sale Proposal
or (ii) the date on which such Selling Stockholder receives notice from the
other Stockholders and
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the Company that they will not exercise in whole or in part the options granted
pursuant to Section 5.1, to sell to any third party which is not an Affiliate
of, or related by consanguinity or marriage to, the Selling Stockholder the
Offered Securities remaining unsold at a price of not less than 95% of the First
Offer Price, and on the other terms specified in the Sale Proposal.
5.3 Purchase of Offered Shares. The consummation of any purchase and sale
pursuant to Section 5.1 shall take place on such date, not later than 30
calendar days after the expiration of the option period pursuant to Section 5.1
with respect to such option, as the Selling Stockholder shall select. Prior to
the consummation of any sale pursuant to Section 5.1, the Selling Stockholder
shall comply with Section 4.3(b) hereof. Upon the consummation of any such
purchase and sale, the Selling Stockholder shall deliver certificates evidencing
the Offered Securities sold duly endorsed, or accompanied by written instruments
of transfer in form satisfactory to the purchaser duly executed by the Selling
Stockholder, free and clear of any liens, against delivery of the First Offer
Price, payable in the manner specified in Section 5.1(a).
5.4 Waiting Period with Respect to Subsequent Transfers. In the event that
the Stockholders and the Company do not exercise their options to purchase all
of the Offered Securities, and the Selling Stockholder shall not have sold the
remaining Offered Securities to a third party for any reason before the
expiration of the 120-day period described in Section 5.2, then such Selling
Stockholder shall not give another Notice of Intention pursuant to Section 5.1
for a period of 90 calendar days after the last day of such 120-day period.
5.5 Right of First Refusal for New Securities. The Company hereby grants to
each of the Stockholders a right of first refusal to purchase shares of any New
Securities (as defined below) which the Company may, from time to time, propose
to issue and sell. Such right of first refusal shall allow each Stockholder to
purchase a pro rata portion of the shares of Common Stock or Preferred Stock as
may be included in the New Securities proposed to be issued, determined with
reference to the aggregate number of outstanding shares of Common Stock or
Preferred Stock (as the case may be) held by such Stockholder before the
proposed issuance of New Securities. In the event a Stockholder does not
purchase any or all of its pro rata portion of New Securities, the remaining
Stockholders shall have the right to purchase such unpurchased New Securities or
respective pro rata portion until all of the New Securities are purchased or
until no other Stockholder desires to purchase any additional New Securities.
The right of first refusal granted hereunder shall terminate if unexercised
within 30 calendar days after receipt of the notice described in Section 5.5(c)
below.
"New Securities" shall mean any authorized but unissued shares, and any
treasury shares, of capital stock of the Company and all rights, options or
warrants to purchase capital stock, and securities of any type whatsoever that
are, or may become, convertible into capital stock; provided, however, that the
term "New Securities" does not include (i) securities issued pursuant to the
acquisition of another corporation by the Company by merger, purchase of all or
substantially all of the assets or other reorganization whereby the Company
shall become the owner of more than 50% of the voting power of such corporation;
(ii) shares of Common Stock issued in connection with any stock split or stock
dividend of the Company; (iii) any borrowings, direct or indirect, from
financial institutions or other Persons by the Company, whether or not
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presently authorized, including any type of loan or payment evidenced by any
type of debt instrument, provided such borrowings do not have equity features,
including warrants, options or other rights to purchase capital stock, and are
not convertible into or exchangeable for capital stock of the Company; and (iv)
shares of Common Stock issued pursuant to any Public Offering; and
In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Stockholder written notice of its intention,
describing the class and number of shares of Common Stock or Preferred Stock (as
the case may be) it intends to issue as New Securities, the purchase price
therefor (which shall be payable solely in cash) and the terms upon which the
Company proposes to issue the same. Each Stockholder shall have 30 calendar days
from the date such notice is given to determine whether to purchase all or any
portion of the Stockholder's pro rata share of such New Securities for the
purchase price and upon the terms specified in the notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased.
5.6 Legally Binding Obligation; Power of Attorney; Personal Rights. Subject
to Section 5.1(a), making a written offer, giving or failing to give written
notice within the stated period, accepting an offer or making a decision or
election, in each case as provided in Section 5.1 or 5.2, shall create a legally
binding obligation to buy or sell, or an obligation not to buy or sell, as the
case may be, the subject Common Stock as provided in such Section 5.1 or 5.2.
Subject to Section 5.1(a), each holder of Common Stock hereby appoints each
officer of the Company as an attorney-in-fact for such holder with the power to
execute such documents and take such other actions to provide for the transfer
of Common Stock owned by such holder in accordance with this Article V, each
officer of the Company is hereby authorized (i) to transfer such Common Stock on
the books of the Company at the direction and without regard to the surrender of
certificates or instruments representing such Common Stock held by such holder,
and (ii) to place on all certificates or instruments representing Common Stock a
legend reflecting this authority to transfer such Common Stock.
5.7 Right to Join in Sale. Anything in this Agreement to the contrary
notwithstanding, if any Stockholder or group of Stockholders proposes, in a
single transaction or a series of transactions during any six-month period
(other than transfers permitted by Sections 4.1 or 4.2, transactions subject to
Section 5.8 and sales of securities contemplated by Article VI) to sell, dispose
of or otherwise transfer 5% or more of the outstanding Common Stock or, if less
than such amount, in the case of any Stockholder which owns Common Stock on the
date hereof, 50% or more of its initial holdings of such interests in Common
Stock, as the case may be (each a "Disposing Stockholder"), such person or group
shall refrain from effecting such transaction unless, prior to the consummation
thereof, each other Stockholder shall have been afforded the opportunity to join
in such sale of Common Stock on a pro rata basis, as hereinafter provided.
Prior to consummation of any proposed sale, disposition or transfer of
shares of Common Stock described in Section 5.7(a), the Disposing Stockholder
shall cause the person or group that proposes to acquire such shares (the
"Proposed Purchaser") to offer (the "Purchase
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Offer") in writing to each other Stockholder to purchase shares of Common Stock
owned by such Stockholder (regardless of whether the shares of Common Stock
proposed to be sold by the Disposing Stockholders are the same class as the
shares of Common Stock owned by such Stockholders), such that the number of
shares of such Common Stock so offered to be purchased from such Stockholder
shall be equal to the product obtained by multiplying the total number of shares
of such Common Stock then owned by such Stockholder by a fraction, the numerator
of which is the aggregate number of shares of Common Stock proposed to be
purchased by the Proposed Purchaser from all Stockholders (including the
Disposing Stockholder or Stockholders) and the denominator of which is the
aggregate number of shares of Common Stock. Such purchase shall be made at the
highest price per share and on such other terms and conditions as the Proposed
Purchaser has offered to purchase shares of Common Stock to be sold by the
Disposing Stockholder or Stockholders. Each Stockholder shall have 20 calendar
days from the date of receipt of the Purchase Offer in which to accept such
Purchase Offer, and the closing of such purchase shall occur within 30 calendar
days after such acceptance or at such other time as such Stockholder and the
Proposed Purchaser may agree. The number of shares of Common Stock to be sold to
the Proposed Purchaser by the Disposing Stockholder or Stockholders shall be
reduced by the aggregate number of shares of Common Stock purchased by the
Proposed Purchaser from the other Stockholders prior to the acceptance by them
of Purchase Offers in accordance with the provisions of this Section 5.7 (b). In
the event that a sale or other transfer subject to this Section 5.7 is to be
made to a Proposed Purchaser who is not a Stockholder, the Disposing Stockholder
shall notify the Proposed Purchaser that the sale or other transfer is subject
to this Section 5.7 and shall ensure that no sale or other transfer is
consummated without the Proposed Purchaser first complying with this Section
5.7. It shall be the responsibility of each Disposing Stockholder to determine
whether any transaction to which it is a party is subject to this Section 5.7.
5.8 Take Along. If at any time Jordan Investors owning interests
representing a majority of the shares of Common Stock beneficially owned by the
Jordan Investors (such Jordan Investors being referred to in this Section 5.8 as
the "Selling Investors") shall determine to sell or exchange (in a business
combination or otherwise) two-thirds or more of their aggregate shares of Common
Stock in a bona fide arm's-length transaction to a third party in which the same
price per share shall be payable in respect of all shares of all classes of the
Common Stock, then, upon the written request of such Selling Investors, each
other Jordan Investor and each Management Investor shall be obligated to, and
shall, if so requested by such third party, (a) sell, transfer and deliver or
cause to be sold, transferred and delivered to such third party, shares of
Common Stock owned by such Stockholder equal to (i) the number of shares of
Common Stock owned by such Stockholder multiplied by (ii) a fraction, the
numerator of which shall equal the number of shares of Common Stock to be sold
by the Selling Investors in the transaction, and the denominator of which shall
equal the total number of shares of Common Stock owned by the Selling Investors,
at the same price per share (irrespective of class) and on the same terms as are
applicable to the Selling Investors, and (b) if stockholder approval of the
transaction is required, vote his, her or its shares of Voting Stock in favor
thereof. The provisions of Sections 5.1 through 5.4, inclusive, and Section 5.7
shall not apply to any transactions to which this Section 5.8 applies.
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ARTICLE VI
Termination
-----------
6.1 Certain Terminations. The provisions of Articles III, IV (other than
Section 4.1(c)) and V shall terminate on the date on which any of the following
events first occurs: (i) a Public Distribution, (ii) a merger or consolidation
of the Company with or into another Person that is not an Affiliate of the
Company, as a result of which the Stockholders own less than 65% of the
outstanding shares of Voting Stock of the surviving or resulting corporation,
(iii) the sale or other disposition in compliance with Section 2.1 of all or
substantially all the assets of the Company to a Person that is not an Affiliate
of the Company, (iv) ten years from the date of this Agreement or (v) the sale
of shares of Common Stock such that the original holders of Common Stock (and
any permitted transferees of such Stockholders under Section 4.2(a) or (b)) own
less than 65% of the outstanding Common Stock.
Notwithstanding the foregoing, this Agreement shall in any event
terminate with respect to any Stockholder when such Stockholder no longer owns
any Securities.
ARTICLE VII
Miscellaneous
-------------
7.1 Successors and Assigns. Except as otherwise provided herein, all of the
terms and provisions of this Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the respective successors and assigns of
the parties hereto. No Stockholder may assign any of its rights hereunder to any
Person other than a transferee that has complied with the requirements of this
Agreement (if applicable) as provided therein in all respects. The Company may
not assign any of its rights hereunder to any Person other than an Affiliate of
the Company. If any transferee of any Stockholder shall acquire any Securities
in any manner, whether by operation of law or otherwise, except as otherwise
provided in Section 4.3(b), such shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such shares such Person shall
be entitled to receive the benefits of and be conclusively deemed to have agreed
to be bound by and to comply with all of the terms and provisions of this
Agreement.
7.2 Amendment and Modification; Waiver of Compliance; Conflicts. This
Agreement may be amended only by a written instrument duly executed by (i) a
Majority of the Jordan Investors and (ii) to the extent that such proposed
amendment would materially adversely affect the rights of the Management
Investors under this Agreement as a group, the holders of a majority of the
shares of Stock owned by the Management Investors. In the event of the amendment
or modification of this Agreement in accordance with its terms, the Stockholders
shall cause the Board of Directors of the Company to meet within 30 calendar
days following such amendment or modification or as soon thereafter as is
practicable for the purpose of
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adopting any amendment to the Amended and Restated Certificate of Incorporation
and Bylaws of the Company that may be required as a result of such amendment or
modification to this Agreement, and, if required, proposing such amendments to
the Stockholders entitled to vote thereon, and the Stockholders agree to vote in
favor of such amendments.
Except as otherwise provided in this Agreement, any failure of any of the
parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
In the event of any conflict between the provisions of this Agreement and
the provisions of any other agreement, the provisions of this Agreement shall
govern and prevail.
7.3 Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex or
telecopy (with such telex or telecopy confirmed promptly in writing sent by
first class mail), or first class mail, or other similar means of communication,
as follows:
(a) If to the Company or any Jordan Investor, addressed to the Company
or to such Jordan Investor at ArborLake Centre, Suite 550, 0000 Xxxx Xxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000; or
(b) If to a Stockholder other than a Jordan Investor, to the address
of such Stockholder set forth in the stock records of the Company.
or, in each case, to such other address or telex or telecopy number as such
party may designate in writing to each Stockholder and the Company by written
notice given in the manner specified herein.
All such communications shall be deemed to have been given, delivered or
made when so delivered by hand or sent by telex (answer back received) or
telecopy, or five business days after being so mailed.
7.4 Entire Agreement. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
agreement among the parties hereto with respect to the subject transactions
contemplated hereby and supersede all prior oral and written agreements and
memoranda and undertakings among the parties hereto with regard to this subject
matter. The Company represents to the Stockholders that the rights granted to
the holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted or obligations accepted under any other agreement
(including the Amended and Restated Certificate of Incorporation) to which the
Company is a party. Neither the Company nor any Subsidiary of the Company will
hereafter enter into any agreement with respect to its
-15-
equity or debt securities which is inconsistent with the rights granted to the
holders of Registrable Securities or any Stockholder under this Agreement
without obtaining the prior written consent of the Stockholder or holder of
Registrable Securities whose rights would be thereby affected.
7.5 Injunctive Relief. The Stockholders acknowledge and agree that a
violation of any of the terms of this Agreement will cause the Stockholders
irreparable injury for which an adequate remedy at law is not available.
Therefore, the Stockholders agree that the Company and each Stockholder shall
each be entitled to an injunction, restraining order or other equitable relief
from any court of competent jurisdiction, restraining any Stockholder from
committing any violations of the provisions of this Agreement.
7.6 Inspection. For so long as this Agreement shall be in effect, this
Agreement shall be made available for inspection by any Stockholder at the
principal executive offices of the Company.
7.7 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.8 Recapitalizations, Exchanges, Etc., Affecting the Common Stock; New
Issuances. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Common Stock and the Preferred Stock and to any
and all equity or debt securities of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets, or otherwise)
which may be issued in respect of, in exchange for, or in substitution of, such
equity or debt securities and shall be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations, reclassifications,
recapitalizations, reorganizations and the like occurring after the date hereof.
7.9 Ratification of Prior Acts of Board of Directors of Company; Right to
Negotiate. Each of the Stockholders hereby adopts, ratifies and confirms all of
the actions heretofore taken by the Board of Directors in all respects,
including, without limitation, in respect of the Stock Purchase Agreement and
the transactions contemplated thereby. Nothing in this Agreement (apart from
Section 2.1(c) and Article V hereof) shall be deemed to restrict or prohibit the
Company from purchasing Stock from any Stockholder at any time upon such terms
and conditions and at such price as may be mutually agreed upon between the
Company and such Stockholder, whether or not at the time of such purchase
circumstances exist which specifically grant the Company the right to purchase,
or such Stockholder the right to sell, Stock pursuant to the terms of this
Agreement.
7.10 LITIGATION. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS. EACH OF THE
PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS
AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE
MADE WHOLE BY
-16-
MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE
ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO SUCH EQUITABLE OR
INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. EACH PARTY AGREES THAT JURISDICTION AND
VENUE WILL BE PROPER IN CHICAGO, ILLINOIS, AND WAIVES ANY OBJECTIONS BASED UPON
FORUM NON CONVENIENS. EACH PARTY WAIVES PERSONAL SERVICE OF PROCESS AND AGREES
THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING SHALL BE
PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED
OR CERTIFIED MAIL TO THE PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT, OR AS
OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF ILLINOIS OR THE UNITED STATES.
THE CHOICE OF FORUM SET FORTH IN THIS SECTION 7.10 SHALL NOT BE DEEMED TO
PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE JURISDICTION.
7.11 ARBITRATION. ANY DISPUTE BETWEEN OR AMONG THE PARTIES TO THIS
AGREEMENT RELATING TO OR IN RESPECT OF THIS AGREEMENT, ITS NEGOTIATION,
EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY COURSE OF CONDUCT OR DEALING OR
ACTIONS UNDER OR IN RESPECT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION ANY
UNDER THE SECURITIES ACT, THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, ANY
OTHER STATE OR FEDERAL LAW RELATING TO SECURITIES OR FRAUD OR BOTH, THE
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, AS AMENDED, OR FEDERAL OR
STATE COMMON LAW, SHALL BE SUBMITTED TO, AND RESOLVED EXCLUSIVELY PURSUANT TO,
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. SUCH ARBITRATION SHALL TAKE PLACE IN CHICAGO, ILLINOIS,
AND SHALL BE SUBJECT TO THE SUBSTANTIVE LAW OF THE STATE OF ILLINOIS. DECISIONS
AS TO FINDINGS OF FACT AND CONCLUSIONS OF LAW PURSUANT TO SUCH ARBITRATION SHALL
BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES, SUBJECT TO CONFIRMATION,
MODIFICATION OR CHALLENGE PURSUANT TO 9 U.S.C. " 1 ET SEQ. ANY FINAL AWARD
SHALL BE ENFORCEABLE AS A JUDGMENT OF A COURT OF RECORD.
7.12 No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.
7.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-17-
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the date first above written.
JORDAN TELECOMMUNICATIONS
PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
JORDAN INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx XX
------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Chairman
JII PARTNERS LIMITED PARTNERSHIP
By: JORDAN INDUSTRIES, INC., a
General Partner
By: /s/ Xxxx X. Xxxxxx XX
------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Chairman
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LEUCADIA INVESTORS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
MEZZANINE INCOME & CAPITAL TRUST 2001 PLC
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Authorized Representative
XXXX X. XXXXXX, XX REVOCABLE TRUST
By: /s/ Xxxx X. Xxxxxx XX
---------------------------------
Xxxx X. Xxxxxx, XX
Trustee
THE JORDAN FAMILY TRUST
By: /s/ Xxxx X. Xxxxxx XX
---------------------------------
Xxxx X. Xxxxxx, XX
Trustee
/s/ Xxxx X. Xxxxxx XX
-------------------------------------
XXXX X. XXXXXX, XX
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JORDAN/ZALAZNICK CAPITAL COMPANY
By: /s/ Xxxx X. Xxxxxx XX
---------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Authorized Representative
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXXX
/s/ Xxxxxx X. Xxxxx
-------------------------------------
XXXXXX X. XXXXX
/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
XXXXXXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxx
-------------------------------------
XXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx Xx.
-------------------------------------
XXXXX X. XXXXXX, XX
/s/ Xxxx X. Max
-------------------------------------
XXXX X. MAX
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G. XXXXXX XXXXXX IRREVOCABLE GIFT TRUST,
UTI DATE 12/26/90
By: /s/ G. Xxxxxx Xxxxxx
---------------------------------
G. Xxxxxx Xxxxxx
Trustee
/s/ A. Xxxxxxx Xxxxxx
-------------------------------------
A. XXXXXXX XXXXXX
/s/ Xxxx Xxxxxxxx
-------------------------------------
XXXX XXXXXXXX
/s/ Xxxxxxx Xxxx
-------------------------------------
XXXXXXX XXXX
/s/ Xxxxxxx Xxxxxxx
-------------------------------------
XXXXXXX PILLEGI
/s/ Xxxx Xxxxxx O'Brien
-------------------------------------
XXXX XXXXXX X'XXXXX
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
XXXXXX X. XXXXXX
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/s/ Xxxxxxxxx X'Xxxxx Jordan
-------------------------------------
XXXXXXXXX X'XXXXX XXXXXX
/s/ Xxxxx Xxxxxxxxx
-------------------------------------
XXXXX XXXXXXXXX
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