Exhibit 10.13
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UNITED INDUSTRIES CORPORATION
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of
January 20, 1999, by and among United Industries Corporation, a Delaware
corporation (the "Company"), UIC Holdings, L.L.C., a Delaware limited liability
company ("Holdings"), and certain other stockholders of the Company who are from
time to time party hereto (Holdings and such other stockholders who are parties
hereto from time to time are collectively referred to as the "Stockholders" and
individually as a "Stockholder"). Each Stockholder and the Company are referred
to individually as a "Party" and collectively as the "Parties." Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in Section 6 hereof.
The execution and delivery of this Agreement by certain of
the Stockholders, the Company and Holdings is a condition to closing under that
certain Agreement and Plan of Recapitalization, Purchase and Redemption, dated
as of December 24, 1998 (as amended from time to time, the "Recapitalization
Agreement"), by and among the Company, Holdings and certain sellers listed
therein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
Section 1. Representations and Warranties; No Inconsistent
Agreements.
(a) Each Stockholder represents and warrants that (i) such
Stockholder is the record owner of the number of Stockholder Shares set forth
opposite its name on the Schedule of Stockholders attached hereto, (ii) in the
case of any Stockholder that it not a natural person, this Agreement has been
duly authorized, and in the case of all Stockholders, this Agreement has been
duly executed and delivered by such Stockholder and constitutes the valid and
binding obligation of such Stockholder, enforceable in accordance with its
terms, and (iii) such Stockholder has not granted and is not a party to any
proxy, voting trust or other agreement which is inconsistent with, conflicts
with or violates any provision of this Agreement.
(b) No holder of Stockholder Shares shall grant any proxy or
become party to any voting trust or other agreement which is inconsistent with,
conflicts with or violates any provision of this Agreement.
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Section 2. Restrictions on Transfer of Stockholder Shares.
(a) Restrictions on Transfer Applicable to All Stockholders
Other Than Holdings. No Stockholder (other than Holdings) may, directly or
indirectly, Transfer Stockholder Shares except (i) with the prior written
consent of the Board of Directors of the Company, which consent may be withheld
in its sole discretion, or (ii) pursuant to Sections 2(b), 2(c), 3 or 5 below.
(b) Restrictions on Transfer Applicable to Holdings;
Participation Rights. Holdings may Transfer its Stockholder Shares in its sole
discretion; provided that Holdings shall comply with the provisions of this
Section 2(b) in connection with any such Transfer (other than pursuant to a
Public Sale or to a Permitted Transferee). At least 15 days prior to any
Transfer of Stockholder Shares by Holdings (other than pursuant to a Public Sale
or to a Permitted Transferee), Holdings shall deliver a written notice (the
"Sale Notice") to the Company and each other Stockholder, specifying in
reasonable detail the number of shares to be Transferred and the terms and
conditions of the Transfer. Each Stockholder may elect to participate in the
contemplated Transfer at the same price per share and on the same terms by
delivering written notice to Holdings within 15 days after delivery of the Sale
Notice. If any Stockholder elects to participate in such Transfer, such
Stockholder shall be entitled to Transfer in the contemplated Transfer, at the
same price and on the same terms as Holdings, a number of Stockholder Shares
equal to the product of (i) the percentage of the total number of outstanding
Stockholder Shares owned by such Stockholder and (ii) the number of Stockholder
Shares to be Transferred in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100
Stockholder Shares by Holdings, and if one Stockholder
elects to participate and owns 10% of the total number of
outstanding Stockholder Shares, such Stockholder would be
entitled to sell 10 shares (10% x 100 shares).
Holdings shall not Transfer any of its Stockholder Shares to any prospective
transferee if such prospective transferee(s) declines to allow the participation
of electing Stockholders. Each Stockholder Transferring Stockholder Shares
pursuant to this Section 2(b) shall pay its pro rata share (based on the number
of Stockholder Shares to be sold) of the expenses incurred by the Stockholders
in connection with such Transfer (other than transaction fees paid to Holdings
or its Affiliates) and shall be obligated to join on a pro rata basis (based on
the number of Stockholder Shares to be sold) in any representations, warranties,
indemnification provisions or other obligations (including without limitation
any escrow arrangements) that Holdings agrees to provide in connection with such
Transfer (other than any such obligations that relate specifically to a
particular Stockholder such as indemnification with respect to representations
and warranties given by a Stockholder regarding such Stockholder's title to and
ownership of Stockholder Shares); provided that no Stockholder shall be
obligated in connection with such Transfer to agree to indemnify or hold
harmless the transferees with respect to an amount in excess of the sum of the
net cash and value of other proceeds paid to such Stockholder in connection with
such Transfer. Notwithstanding anything to the contrary contained in this
Section 2(b), no Stockholder shall be entitled to participate in such Transfer
(other than a Transfer which constitutes a Sale of the Company) if the Company's
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independent accountants advise the Company in writing (copies of which the
Company will promptly provide to any Stockholder upon request therefor) that the
inclusion of such Stockholder will adversely affect the recapitalization
accounting treatment of the transactions contemplated by the Recapitalization
Agreement; provided, that the foregoing is intended solely to protect the
recapitalization accounting treatment of the transactions contemplated by the
Recapitalization Agreement and shall not be deemed to allow Holdings, without
sufficient basis in the form of written advice from the Company's independent
accountants, to prohibit any Stockholder from participating in a Transfer if
such participation will not adversely affect such recapitalization accounting
treatment.
(c) Permitted Transfers. The restrictions set forth in this
Section 2 shall not apply with respect to any Transfer of Stockholder Shares (i)
by Holdings to any of its Affiliates (ii) by Holdings to the Company within 180
days after the date hereof of Stockholder Shares with a purchase price not to
exceed in the aggregate $2,000,000, or (iii) by a Stockholder to members of such
Stockholder's Family Group (such transferees are collectively referred to herein
as "Permitted Transferees"); provided that the restrictions contained in this
Section 2 shall continue to be applicable to the Stockholder Shares after any
such Transfer; and provided further that prior to or in connection with such
Transfer, the transferee of such Stockholder Shares shall have executed a
Transfer Notice in the form attached hereto as Exhibit A pursuant to which such
transferee agrees to be bound by the provisions of this Agreement affecting the
Stockholder Shares so Transferred. Notwithstanding the foregoing, no Party shall
avoid the provisions of this Agreement by making one or more Transfers to one or
more Permitted Transferees and then disposing of all or any portion of such
Party's interest in any such Permitted Transferee, or, in the case of an entity
Stockholder, by permitting a Transfer of any ownership interests in such entity
Stockholder.
Section 3. Sale of Company; Reorganization Prior to Public
Offering.
(a) Approved Sale. Subject to Section 3(c) below, if the
Company's Board of Directors recommends or approves or the holders of a majority
of the outstanding shares of Common Stock (the "Majority Holders") approve a
Sale of the Company (an "Approved Sale"), each Stockholder agrees to vote for,
consent to and raise no objections against the Approved Sale. If the Approved
Sale is structured as a (i) merger or consolidation, each Stockholder shall
waive any dissenters' rights, appraisal rights or similar rights in connection
with such merger or consolidation or (ii) sale of stock, each Stockholder shall
agree to sell all of its shares of Common Stock on the terms and conditions
approved by the Majority Holders. Each Stockholder shall take all necessary or
desirable actions in connection with the consummation of the Approved Sale as
reasonably requested by the Majority Holders and/or the Company.
(b) Reorganization Prior to Public Offering. Subject to
Section 3(c) below, if the Company's Board of Directors recommends or approves
or the Majority Holders approve a reorganization of the Company in connection
with a proposed initial Public Offering by the Company (the "Approved
Reorganization"), each Stockholder agrees to vote for, consent to and raise no
objections against the Approved Reorganization. If the Approved Reorganization
is structured
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as a (i) merger or consolidation, each Stockholder shall waive any dissenters'
rights, appraisal rights or similar rights in connection with such merger or
consolidation or (ii) sale of stock, each Stockholder shall agree to sell all of
its shares of Common Stock on the terms and conditions approved by the Majority
Holders. Each Stockholder shall take all necessary or desirable actions in
connection with the consummation of the Approved Reorganization as reasonably
requested by the Majority Holders and/or the Company.
(c) Obligations of Stockholders. In connection with an
Approved Sale or Approved Reorganization: (i) upon the consummation of the
Approved Sale or Approved Reorganization, all of the Stockholders shall receive
the same form and amount of consideration per share of Common Stock, or if any
Stockholders are given an option as to the form and amount of consideration to
be received, all Stockholders shall be given the same option; provided, that if
any consideration to be paid in connection with such Approved Sale or Approved
Reorganization takes the form of restricted securities of another entity and any
Stockholder is granted registration rights with respect thereto in connection
with such Approved Sale or Approved Reorganization, then all Stockholders shall
be entitled to similar registration rights (it being understood that if the
holders (or former holders) of Holdings Stockholder Shares are granted demand
registration rights and the holders (or former holders) of other Stockholder
Shares are granted piggyback registration rights similar to the provisions set
forth in Section 5 hereto, such rights shall qualify as "similar registration
rights"); and (ii) all Stockholders who hold then currently exercisable rights
to acquire shares of Common Stock shall be given an opportunity to either (A)
exercise such rights prior to the consummation of the Approved Sale or Approved
Reorganization and participate in such sale as Stockholders or (B) upon the
consummation of the Approved Sale or Approved Reorganization, receive in
exchange for such rights consideration equal to the amount determined by
multiplying (1) the same amount of consideration per share of Common Stock
received by the Stockholders in connection with the Approved Sale or Approved
Reorganization less the exercise price per share of Common Stock of such rights
to acquire Common Stock by (2) the number of shares of Common Stock represented
by such rights.
(d) Purchaser Representative. If any transaction undertaken
pursuant to this Section 3 involves entering into any negotiation or transaction
for which Rule 506 under the Securities Act (or any similar rule then in effect)
promulgated by the Securities and Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization), those Stockholders involved in such transaction who are
not "accredited investors" (as such term is defined in Rule 501 under the
Securities Act) (the "Unaccredited Stockholders") shall, at the request of the
Company or the Majority Holders, appoint one "purchaser representative" (as such
term is defined in Rule 501 under the Securities Act (or any similar rule then
in effect)) for all such Unaccredited Stockholders reasonably acceptable to the
Company. The Company shall first propose a purchaser representative to the
Unaccredited Stockholders. If holders of a majority of the Stockholders Shares
held by the Unaccredited Stockholders do not approve the purchaser
representative designated by the Company, such holders shall appoint one
purchaser representative to represent all Unaccredited Stockholders, subject to
the
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approval of the Company (which approval shall not be unreasonably withheld). The
Company shall be responsible for the fees of the purchaser representative so
appointed.
(e) Transaction Costs and Indemnity. Each Stockholder
involved in any transaction pursuant to this Section 3 shall be required to bear
its pro rata share (based upon the number of shares sold or the number of shares
to be acquired pursuant to options or other rights) of the expenses incurred by
the Stockholders in connection with such transaction (other than transaction
fees paid to Holdings or its Affiliates) to the extent such costs are incurred
for the benefit of all such Stockholders and are not otherwise paid by the
Company or the acquiring party and each Stockholder shall be obligated to join
on a pro rata basis (based on the number of shares sold or the number of shares
to be acquired pursuant to options or other rights) in any representations,
warranties, indemnification provisions or other obligations (including without
limitation any escrow arrangements) that Holdings agrees to provide in
connection with such transaction (other than any such obligations that relate
specifically to a particular Stockholder such as indemnification with respect to
representations and warranties given by a Stockholder regarding such
Stockholder's title to and ownership of Stockholder Shares); provided that no
Stockholder shall be obligated in connection with such transaction to agree to
indemnify or hold harmless the transferees with respect to an amount in excess
of the net cash proceeds paid to such Stockholder in connection with such
transaction. The Company will use its reasonable best efforts to provide a draft
of any agreement to be signed by any Stockholder in connection with any such
transaction to be sent to each Stockholder at least five days prior to the date
of execution and delivery of such agreement. Costs incurred by any such
Stockholder on its own behalf shall not be considered costs of the transaction
hereunder.
Section 4. Additional Restrictions on Transfer.
(a) Restricted Securities Legend. The Stockholder Shares
have not been registered under the Securities Act and, therefore, in addition to
the other restrictions on Transfer contained in this Agreement, cannot be sold
unless subsequently registered under the Securities Act or an exemption from
such registration is then available. Each certificate evidencing Stockholder
Shares and each certificate issued in exchange for or upon the Transfer of any
Stockholder Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON ___________, AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE STOCKHOLDERS
AGREEMENT, DATED AS OF JANUARY 20, 1999 (THE "STOCKHOLDERS
AGREEMENT"), AS AMENDED AND MODIFIED FROM
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TIME TO TIME, AMONG THE ISSUER (THE "COMPANY"), AND CERTAIN
INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER
OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO ANY TRANSFER. A COPY OF THE STOCKHOLDERS AGREEMENT SHALL
BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST
AND WITHOUT CHARGE."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares. The legend set forth above shall be removed from the certificates
evidencing any securities of the Company which cease to be Stockholder Shares in
accordance with the definition thereof.
(b) Opinion of Counsel. No holder of Stockholder Shares may
Transfer any Securities (except (i) pursuant to an effective registration
statement under the Securities Act, (ii) to a wholly-owned Affiliate or (iii) as
part of a Public Sale) without first delivering to the Company (unless waived by
the Board of Directors) an opinion of counsel (reasonably acceptable in form and
substance to the Board of Directors) that neither registration nor qualification
under the Securities Act and applicable state securities laws is required in
connection with such Transfer. The conditions to Transfer set forth in this
Section 4(b) are in addition to any other restrictions on Transfer contained in
this Agreement.
(c) Actions By Transferee. Prior to Transferring any
Stockholder Shares (other than pursuant to a Public Sale), the Transferring
holder of Stockholder Shares shall cause the prospective transferee to be bound
by this Agreement and to execute and deliver to the Company and the other
holders of Stockholder Shares counterparts to this Agreement.
(d) Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be void, and the Company shall not record such Transfer on
its books or treat any purported transferee of such Stockholder Shares as the
owner of such shares for any purpose.
Section 5. Registration Rights.
(a) Demand Registrations.
(i) Requests for Registration. At any time, the
holders of a majority of Holdings Stockholder Shares may
request registration under the Securities Act of (x) all or
any portion of their Stockholder Shares on Form S-1 or any
similar long-form registration ("Long-Form Registrations"),
or (y) all or any portion of its Stockholder Shares on Form
S-2 or S-3 (including pursuant to Rule 415 under the
Securities Act) or any similar short-form registration
("Short-Form Registrations"), if available. All
registrations requested pursuant to this Section 5(a) are
referred to herein as "Demand Registrations." Each request
for a Demand Registration shall specify the approximate
number of Stockholder Shares requested
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to be registered and the anticipated per share price range
for such offering. Within 10 days after receipt of any such
request, the Company shall give written notice of such
requested registration to all other holders of Stockholder
Shares and, subject to Section 5(a)(iv) below, shall include
in such registration all Stockholder Shares with respect to
which the Company has received written requests for
inclusion therein within 15 days after the receipt of the
Company's notice. In connection with a Demand Registration
or Piggyback Registration (as defined below), Stockholder
Shares which are options, warrants or other securities which
are exerciseable, convertible or exchangeable for Common
Stock shall be required to be exercised, converted or
exchanged prior to being included in such registration;
provided that the Company shall permit such exercise,
conversion or exchange to be conditioned upon inclusion in
such registration.
(ii) Long-Form Registrations. The holders of a
majority of Holdings Stockholder Shares shall be entitled to
request unlimited Long-Form Registrations in which the
Company shall pay all Registration Expenses (as defined in
Section 5(e) below). All Long-Form Registrations shall be
underwritten registrations.
(iii) Short-Form Registrations. In addition to the
Long-Form Registrations provided pursuant to Section
5(a)(ii), the holders of a majority of Holdings Stockholder
Shares shall be entitled to request an unlimited number of
Short-Form Registrations in which the Company shall pay all
Registration Expenses. Notwithstanding anything contained
herein to the contrary, Demand Registrations shall be
Short-Form Registrations whenever the Company is permitted
to use any applicable short form. After the Company has
become subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, the Company
shall use its best efforts to make Short-Form Registrations
on Form S-3 available for the sale of Stockholder Shares. If
the Company is qualified to and, pursuant to the request of
the holders of Stockholder Shares entitled to demand a
registration as permitted above, has filed with the
Securities and Exchange Commission a registration statement
under the Securities Act on Form S-3 pursuant to Rule 415
under the Securities Act (the "Required Registration"), the
Company shall use its best efforts to cause the Required
Registration to be declared effective under the Securities
Act as soon as practicable after filing, and once effective,
the Company shall cause such Required Registration to remain
effective for a period ending on the earlier of (x) the date
on which all Stockholder Shares have been sold pursuant to
the Required Registration or (y) the date which is 90 days
following the declaration of effectiveness of the Required
Registration (the "Effective Period").
(iv) Priority on Demand Registrations. The Company
shall not include in any Demand Registration any securities
which are not Stockholder Shares without the prior written
consent of the holders of a majority of Holdings Stockholder
Shares, unless the Company has granted Piggyback
Registration rights to the holder of such securities. If a
Demand Registration is an underwritten offering and the
managing underwriters advise the Company in writing (with a
copy to each party hereto requesting registration of
Stockholder
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Shares) that in their opinion the number of Stockholder
Shares and, if permitted hereunder, other securities
requested to be included in such offering exceeds the number
of Stockholder Shares and other securities, if any, which
can be sold without adversely affecting the marketability of
the offering, the Company shall include in such registration
(x) first, Stockholder Shares requested to be included in
such registration and Warrant Shares requested to be
included in such registration, pro rata among the holders of
such shares on the basis of the number of shares owned by
each such holder and (y) second, the other securities
requested to be included in such registration.
(v) Restrictions on Demand Registrations. The
Company shall not be obligated to effect any Demand
Registration within 180 days after the effective date of a
previous Demand Registration or within 90 days prior to the
proposed effective date of any such registration statement.
The Company shall be entitled to postpone, for up to 180
days, the filing or the effectiveness of a registration
statement for a Demand Registration if the Company
determines, through its Board of Directors, that such Demand
Registration would be reasonably expected (x) to have an
adverse effect on any proposal or plan by the Company or any
of its Subsidiaries to engage in any acquisition of assets
(other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction
or (y) to otherwise be detrimental to the Company or its
securityholders.
(vi) Selection of Underwriters. The holders of a
majority of Holdings Stockholder Shares included in any
Demand Registration will have the right to select the
investment banker(s) and manager(s) to administer the
offering.
(vii) Other Registration Rights. Except as
provided in this Agreement, the Company shall not grant to
any Persons the right to request the Company to register any
equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such
securities, without the prior written consent of the holders
of a majority of Holdings Stockholder Shares.
(b) Piggyback Registrations.
(i) Right to Piggyback. Whenever the Company
proposes to register any of its equity securities under the
Securities Act (other than pursuant to any Demand
Registration and other than a registration on Forms S-4 or
S-8 (or any successor forms thereto) or any other form for
which Stockholder Shares are not eligible under the
Securities Act for registration) (a "Piggyback
Registration"), the Company shall give prompt written notice
to all holders of Stockholder Shares of its intention to
effect such a registration and shall include in such
registration all Stockholder Shares with respect to which
the Company has received written requests for inclusion
therein within 15 days after the receipt of the Company's
notice.
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(ii) Piggyback Expenses. The Registration Expenses
of the holders of Stockholder Shares shall be paid by the
Company in all Piggyback Registrations.
(iii) Priority on Piggyback Registrations. If a
Piggyback Registration is an underwritten registration on
behalf of the Company or any other Person, and the managing
underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in
such registration exceeds the number which can be sold in
such offering without adversely affecting the marketability
of the offering, the Company shall include in such
registration (w) first, the securities the Company proposes
to sell, (x) second, all Common Stock hereafter issued to
Persons (other than Holdings or its Affiliates) who exercise
demand registration rights pursuant to agreements binding
upon the Company, (y) third, the Stockholder Shares held by
all Stockholders requested to be included in such
registration and Warrant Shares requested to be included in
such registration, pro rata among the holders of such shares
on the basis of the number of shares owned by each such
holder, and (z) fourth, other securities requested to be
included in such registration.
(c) Holdback Agreement. Each holder of Stockholder Shares
shall not effect any public sale or distribution (including sales pursuant to
Rule 144) of equity securities of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, during the seven days
prior to and the 180-day period beginning on the effective date of any
underwritten registration of the Company's securities (except as part of such
underwritten registration), unless the underwriters managing the Public Offering
otherwise agree.
(d) Registration Procedures. Whenever the holders of
Stockholder Shares have requested that any Stockholder Shares be registered
pursuant to this Agreement, the Company shall use its reasonable best efforts to
effect the registration and the sale of such Stockholder Shares in accordance
with the intended method of disposition thereof, and pursuant thereto the
Company shall as expeditiously as possible:
(i) prepare and file with the Securities and
Exchange Commission a registration statement with respect to
such Stockholder Shares and use its reasonable best efforts
to cause such registration statement to become effective
(provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the
Company shall furnish to the counsel selected by the holders
of a majority of the Stockholder Shares covered by such
registration statement copies of all such documents proposed
to be filed, which documents shall be subject to the review
and comment before filing of such counsel);
(ii) notify each holder of Stockholder Shares of
the effectiveness of each registration statement filed
hereunder and prepare and file with the Securities and
Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration
statement effective for a period of not less than 180 days
and comply with the provisions of
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the Securities Act with respect to the disposition of all
securities covered by such registration statement during
such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such
registration statement;
(iii) furnish to each seller of Stockholder Shares
such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary
prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of
the Stockholder Shares owned by such seller;
(iv) use its reasonable best efforts to register
or qualify such Stockholder Shares under such other
securities or blue sky laws of such jurisdictions as any
seller reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such
jurisdictions of the Stockholder Shares owned by such seller
(provided that the Company shall not be required to (x)
qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this
subsection, (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in
any such jurisdiction);
(v) notify each seller of such Stockholder Shares,
at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in
such registration statement contains an untrue statement of
a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of
any such seller, the Company shall prepare a supplement or
amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Stockholder Shares, such
prospectus shall not contain an untrue statement of a
material fact or omit to state any fact necessary to make
the statements therein not misleading;
(vi) cause all such Stockholder Shares to be
listed on each securities exchange on which similar
securities issued by the Company are then listed and, if not
so listed, to be listed on the NASD automated quotation
system;
(vii) provide a transfer agent and registrar for
all such Stockholder Shares not later than the effective
date of such registration statement;
(viii) enter into such customary agreements
(including underwriting agreements in customary form)
approved by the holders of a majority of the Stockholder
Shares and take all such other actions as the holders of a
majority of the Stockholder Shares being sold or the
underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Stockholder
Shares (including effecting a stock split or a combination
of shares);
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(ix) make available for inspection by any seller
of Stockholder Shares, any underwriter participating in any
disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and
independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration
statement;
(x) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the
Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve
months beginning with the first day of the Company's first
full calendar quarter after the effective date of the
registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder;
(xi) use its reasonable best efforts to cause such
Stockholder Shares covered by such registration statement to
be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such
Stockholder Shares; and
(xii) cause representatives of the Company to
participate in any "road show" or "road shows" reasonably
requested by any underwriter.
(e) Registration Expenses.
(i) All expenses incident to the Company's
performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws,
printing expenses, travel expenses, filing expenses,
messenger and delivery expenses, fees and disbursements of
custodians, fees and disbursements of counsel for the
Company and fees and disbursements of all independent
certified public accountants, underwriters (excluding
discounts and commissions) and other Persons retained by the
Company (all such expenses being herein called "Registration
Expenses"), shall be borne by the Company, except as
otherwise expressly provided in this Agreement, except that
the Company shall, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting
duties), the expense of any audit or quarterly review, the
expense of any liability insurance and the expenses and fees
for listing the securities to be registered on each
securities exchange on which similar securities issued by
the Company are then listed or on the NASD automated
quotation system (or any successor or similar system).
(ii) In connection with each Demand Registration
and each Piggyback Registration, the Company shall reimburse
the holders of Stockholder Shares included in
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such registration for the reasonable fees and disbursements
of one counsel (in addition to local counsel) chosen by the
holders of a majority of the Stockholder Shares included in
such registration.
(iii) To the extent Registration Expenses are not
required to be paid by the Company, each holder of
securities included in any registration hereunder shall pay
those Registration Expenses allocable to the registration of
such holder's securities so included (other than transaction
fees paid to Holdings or its Affiliates), and any
Registration Expenses not so allocable shall be borne by all
sellers of securities included in such registration in
proportion to the aggregate selling price of the securities
to be so registered (other than transaction fees paid to
Holdings or its Affiliates).
(f) Indemnification.
(i) The Company agrees to indemnify, to the extent
permitted by law, each holder of Stockholder Shares, its
officers and directors and each Person who controls such
holder (within the meaning of the Securities Act) against
all losses, claims, damages, liabilities and expenses caused
by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar
as the same are caused by or contained in any information
furnished in writing to the Company by such holder expressly
for use therein or by such holder's failure to deliver a
copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of
the same. In connection with an underwritten offering, the
Company shall indemnify such underwriters, their officers
and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification
of the holders of Stockholder Shares.
(ii) In connection with any registration statement
in which a holder of Stockholder Shares is participating,
each such holder shall furnish to the Company in writing
such information and affidavits as the Company reasonably
requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law,
shall indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or
alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus
or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information
or affidavit so furnished in writing by such holder;
provided that the obligation to indemnify shall be
individual, not joint and several, for each holder and shall
be limited to the net
- 12 -
amount of proceeds received by such holder from the sale of
Stockholder Shares pursuant to such registration statement.
(iii) Any Person entitled to indemnification
hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it
seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to
indemnification hereunder to the extent such failure has not
prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties
may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying party shall not be
subject to any liability for any settlement made by the
indemnified party without its consent (but such consent
shall not be unreasonably withheld). An indemnifying party
who is not entitled to, or elects not to, assume the defense
of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties
with respect to such claim.
(iv) The indemnification provided for under this
Agreement shall remain in full force and effect regardless
of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of
securities. The Company also agrees to make such provisions,
as are reasonably requested by any indemnified party, for
contribution to such party in the event the Company's
indemnification is unavailable for any reason.
(g) Participation in Underwritten Registrations. No Person
may participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons 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.
Section 6. Definitions.
(a) Defined Terms. The following definitions shall be
applied to the capitalized terms used in this Agreement for all purposes, unless
otherwise clearly indicated to the contrary.
"Affiliate" of any Person means any other Person, directly
or indirectly controlling, controlled by or under common control with such
Person.
"Common Stock" means the Company's Class A Voting Common
Stock, par value $0.01 per share and the Company's Class B Non-Voting Common
Stock. par value $0.01 per share.
- 13 -
"Family Group" means a Stockholder's spouse, siblings,
parents and descendants (whether natural or adopted), any trust solely for the
benefit of such Stockholder and/or the Stockholder's spouse and/or descendants
(and the beneficiaries of such trusts upon their dissolution), a Stockholder's
heirs, devises or estate upon such Stockholder's death and any corporation,
partnership or limited liability company controlled (as defined below) by one or
more Stockholders; provided that in the case of such a corporation, partnership
or limited liability company, such entity shall be part of a Family Group only
so long as such Stockholder(s) continue(s) to control such entity, and if for
any reason such Stockholder(s) no longer control such entity, such
Stockholder(s) shall be required to cause the Stockholder Shares owned by such
entity to be Transferred back to such Stockholder(s). For purposes of this
definition, "control" shall mean record and beneficial ownership of more than
50% of both (i) the outstanding shares of common stock or other equity
securities of such entity and (ii) the combined voting power of the such
entity's then outstanding voting securities entitled to vote generally in the
election of directors of such entity.
"Holdings Stockholder Shares" means the Stockholder Shares
originally issued to Holdings pursuant to the Recapitalization Agreement.
"Independent Third Party" means any Person who, immediately
prior to the contemplated transaction, does not own in excess of 50% of the
Class A Voting Common Stock on a fully-diluted basis (a "50% Owner"), who is not
an Affiliate of any such 50% Owner, who is not the spouse or descendent (by
birth or adoption) of any such 50% Owner or a trust for the benefit of any such
50% Owner and/or such other Persons, and who is not a Person who through
contract or other arrangements (other than arrangements entered into in
connection with the contemplated transactions) would be an Affiliate immediately
after the contemplated transaction.
"Person" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means the sale in an underwritten public
offering registered under the Securities Act of shares of any class of the
Common Stock.
"Public Sale" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of
Rule 144 under the Securities Act.
"Sale of the Company" means the sale of the Company to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power under normal circumstances to elect a majority of the Company's
Board of Directors (whether by merger, consolidation, sale or transfer of the
Company's capital stock) or (ii) more than 50% of the Company's assets
determined on a consolidated basis.
- 14 -
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Stockholder Shares" means (i) any Common Stock purchased or
otherwise acquired by any Stockholder, (ii) any Common Stock issued or (to
extent vested and exerciseable) issuable to any Stockholder upon exercise of any
options, warrants or other convertible or exchangeable securities and (iii) any
Common Stock issued or issuable to any Stockholder with respect to the
securities referred to in clauses (i) and (ii) above by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular shares
constituting Stockholder Shares, such shares shall cease to be Stockholder
Shares when they have been (x) effectively registered under the Securities Act
and disposed of in accordance with the registration statement covering them, (y)
sold to the public through a broker, dealer or market maker pursuant to Rule 144
(or any similar provision then in force) under the Securities Act or (z) or
repurchased by the Company or any Subsidiary.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the limited liability company, partnership or
other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the
managing director or general partner of such limited liability company,
partnership, association or other business entity.
"Transfer" means any sale, transfer, assignment, pledge or
other disposition (whether with or without consideration and whether voluntarily
or involuntarily or by operation of law).
"Warrant Shares" means shares of Common Stock issued or
issuable upon exercise of any warrants issued by the Company in connection with
the Senior Subordinated Increasing Rate Notes issued in connection with the
consummation of the transactions contemplated by the Recapitalization Agreement
(or any warrants issued in connection with other debt securities which are used
to refinance the Subordinated Increasing Rate Notes).
(b) Other Definitions. The terms set forth below are defined
on the following pages of this Agreement.
Agreement.......................................................... - 1 -
Approved Reorganization............................................ - 3 -
- 15 -
Approved Sale ..................................................... - 3 -
Company............................................................ - 1 -
Demand Registration................................................ - 6 -
Effective Period................................................... - 7 -
50% Owner.......................................................... - 14 -
Holdings........................................................... - 1 -
Long-Form Registrations............................................ - 6 -
Majority Holders................................................... - 3 -
Parties ........................................................... - 1 -
Party ............................................................. - 1 -
Permitted Transferees.............................................. - 3 -
Piggyback Registration............................................. - 8 -
Recapitalization Agreement......................................... - 1 -
Registration Expenses.............................................. - 11 -
Required Registration.............................................. - 7 -
Sale Notice........................................................ - 2 -
Short-Form Registrations........................................... - 6 -
Stockholder........................................................ - 1 -
Stockholders....................................................... - 1 -
Unaccredited Stockholder........................................... - 4 -
Section 7. Amendment and Waiver. Except as otherwise
provided herein, no modification, amendment or waiver of any provision of this
Agreement shall be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company,
Holdings and the holders of a majority of the Stockholder Shares held by all
Stockholders (other than Holdings); provided that without the prior written
consent of a Stockholder, no modification, amendment or waiver shall be
effective against such Stockholder if it adversely affects in any material
respect the rights or obligations of such Stockholder under this Agreement. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
Section 8. Termination. This Agreement shall continue in
effect until the earlier of: (a) the consummation of a Sale of the Company and
(b) January 20, 2009, after which time this Agreement shall terminate
automatically and shall have no further force and effect; provided that the
restrictions set forth in Section 2 and Section 3(b) shall terminate earlier
upon the consummation of a Public Offering by the Company; provided further that
(notwithstanding anything contained in this Section 8) the provisions of Section
5 shall not terminate until the consummation of a Sale of the Company.
- 16 -
Section 9. Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of any other provision of
this Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
Section 10. Entire Agreement. Except as otherwise expressly
set forth herein, this Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
Section 11. Successors and Assigns. Except as otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and the Stockholders
and any subsequent holders of Stockholder Shares and the respective successors
and assigns of each of them, so long as they hold Stockholder Shares.
Section 12. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
Section 13. Remedies. The Company and each Stockholder shall
be entitled to enforce their rights under this Agreement specifically, to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights existing in their favor. The parties hereto agree
and acknowledge that money damages would not be an adequate remedy for any
breach of the provisions of this Agreement and that the Company and any
Stockholder may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
Section 14. Notices. Any notice provided for in this
Agreement shall be in writing and shall be either personally delivered, or
mailed first class mail (postage prepaid) or sent by reputable overnight courier
service (charges prepaid) to the Company at the address set forth below and to
any other recipient at the address indicated on the Schedule of Stockholders
attached hereto and to any subsequent holder of Stockholder Shares subject to
this Agreement at such address as indicated by the Company's records, or at such
address or to the attention of such other person as
- 17 -
the recipient party has specified by prior written notice to the sending party.
Notices shall be deemed to have been given hereunder when delivered personally,
five days after deposit in the U.S. mail and one day after deposit with a
reputable overnight courier service. The Company's address is:
United Industries Corporation
0000 Xxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President
With copies to:
UIC Holdings, L.L.C.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: X. Xxxxxx Xxxx, Xxxxx X. Xxxxxx
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Section 15. Governing Law. All issues and questions
concerning the relative rights and obligations of the Company and its
stockholders, or the construction, validity, enforcement and interpretation of
this Agreement and the exhibits and schedules hereto, shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
Section 16. Business Days. If any time period for giving
notice or taking action hereunder expires on a day which is a Saturday, Sunday
or legal holiday in the state in which the Company's chief-executive office is
located, the time period shall automatically be extended to the first business
day immediately following such Saturday, Sunday or legal holiday.
Section 17. Descriptive Headings. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
Section 18. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
* * * *
- 18 -
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date and year first above written.
THE COMPANY: UNITED INDUSTRIES CORPORATION
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
HOLDINGS: UIC HOLDINGS, L.L.C.
By:
----------------------------------
Name:
----------------------------------
Its:
----------------------------------
OTHER STOCKHOLDERS:
----------------------------------------
XXXXX X. XXXXX
XXXXX X. XXXXX GRANTOR RETAINED
INTEREST TRUST
----------------------------------------
Name:
Title:
XXXX X. XXXX REVOCABLE TRUST
----------------------------------------
Name:
Title:
- 19 -
----------------------------------------
M. XXXXXX XXXX
----------------------------------------
XXXXXXX X. XXXX
----------------------------------------
XXXXXXXX X. XXXX
XXXXX XXXXXXX REVOCABLE TRUST
----------------------------------------
Name:
Title:
XXXXX X. XXXXX RETAINED ANNUITY TRUST
----------------------------------------
Name:
Title:
RYDER XXXXX GRANTOR RETAINED
ANNUITY TRUST
----------------------------------------
Name:
Title:
1994 RYDER XXXXX GRANTOR RETAINED
ANNUITY TRUST
----------------------------------------
Name:
Title:
- 20 -
1998 XXXX FAMILY NEVADA IRREVOCABLE
TRUST
----------------------------------------
Name:
Title:
By: Ternion Corporation as Trustee
----------------------------------------
Name:
Title:
----------------------------------------
XXXXXXX X. XXXXXX
----------------------------------------
XXXXXXX X. XXXXX
----------------------------------------
XXXXXXX X. XXXXXXX
----------------------------------------
XXXXXX X. XXXXXXXX
----------------------------------------
XXXXX XXXXX
- 21 -
XXXXX X. XXXXXXX, TRUSTEE UNDER THE
XXXXX FAMILY TRUST FBO XXXXXXX X. XXXXX
----------------------------------------
Xxxxx X. Xxxxxxx, Trustee
XXXXX X. XXXXXXX, TRUSTEE UNDER THE
XXXXX FAMILY TRUST FBO XXXXXX X. XXXXX
----------------------------------------
Xxxxx X. Xxxxxxx, Trustee
XXXXX X. XXXXXXX, TRUSTEE UNDER THE
XXXXX FAMILY TRUST FBO XXXX X. XXXXX
----------------------------------------
Xxxxx X. Xxxxxxx, Trustee
XXXXX X. XXXXXXX, TRUSTEE UNDER THE
XXXXX FAMILY TRUST FBO XXXXXXX X.
KINDLE
----------------------------------------
Xxxxx X. Xxxxxxx, Trustee
XXXXX X. XXXXXXX, TRUSTEE UNDER THE
XXXXX FAMILY TRUST FBO XXXXXX X.
KINDLE
----------------------------------------
Xxxxx X. Xxxxxxx, Trustee
- 22 -
XXXXXXX X. XXXXX, TRUSTEE UNDER THAT
CERTAIN TRUST AGREEMENT, DATED
JANUARY 20, 1999 BETWEEN THE COMPANY
AND XXXXXXX X. XXXXX, TRUSTEE FBO
XXXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx, Trustee
XXXXXXX X. XXXXX, TRUSTEE UNDER THAT
CERTAIN TRUST AGREEMENT, DATED
JANUARY 20, 1999 BETWEEN THE COMPANY
AND XXXXXXX X. XXXXX, TRUSTEE FBO
XXXXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx, Trustee
XXXXXXX X. XXXXX, TRUSTEE UNDER THAT
CERTAIN TRUST AGREEMENT, DATED
JANUARY 20, 1999 BETWEEN THE COMPANY
AND XXXXXXX X. XXXXX, TRUSTEE FBO
XXXXXX X. XXXXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx, Trustee
- 23 -
