EXHIBIT 9
STOCKHOLDERS AGREEMENT
by and among
BLACKSTONE CAPITAL COMPANY II, L.L.C.,
HEARTLAND INDUSTRIAL PARTNERS, L.P.,
XXXXXXXXXXX/C&A HOLDINGS, L.L.C.,
and
XXXXXXX & XXXXXX CORPORATION
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Dated: February 23, 2001
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Table of Contents
Page #
ARTICLE I DEFINITIONS; TERMINATION..............................................................2
1.1 Definitions.................................................................2
1.2 Termination.................................................................7
ARTICLE II TRANSFER.............................................................................8
2.1 Limitation on Transfer......................................................8
2.2 Permitted Transfers.........................................................8
2.3 Permitted Transfer Procedures...............................................8
2.4 Transfers in Compliance with Law; Substitution of Transferee................8
ARTICLE III RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
AFFILIATE TRANSACTIONS; ENCUMBRANCE.................................................9
3.1 Proposed Voluntary Transfers................................................9
3.2 Involuntary Transfers......................................................14
3.3 Certain Transactions.......................................................15
3.4 Prohibition on Encumbrance.................................................18
ARTICLE IV [Intentionally Omitted.]............................................................18
ARTICLE V AFTER-ACQUIRED SECURITIES; AGREEMENT TO BE BOUND.....................................18
5.1 After-Acquired Securities..................................................18
5.2 Beneficial Ownership.......................................................18
ARTICLE VI CORPORATE GOVERNANCE................................................................18
6.1 General....................................................................18
6.2 Stockholder Actions........................................................19
6.3 Election of Directors; Number and Composition..............................19
6.4 Removal and Replacement of Director........................................20
6.5 Reimbursement of Expenses; D&O Insurance...................................21
6.6 Quorum.....................................................................21
6.7 Observer Rights............................................................21
ARTICLE VII COVENANTS..........................................................................21
7.1 Financial Statements and Other Information.................................21
7.2 Inspection.................................................................22
ARTICLE VIII STOCK CERTIFICATE LEGEND..........................................................22
ARTICLE IX MISCELLANEOUS.......................................................................23
9.1 Notices....................................................................23
9.2 Successors and Assigns; Third Party Beneficiaries..........................25
9.3 Amendment and Waiver.......................................................25
9.4 Counterparts...............................................................25
Page #
9.5 Specific Performance.......................................................25
9.6 Headings...................................................................25
9.7 Governing Law..............................................................25
9.8 Severability...............................................................26
9.9 Rules of Construction......................................................26
9.10 Entire Agreement...........................................................26
9.11 Further Assurances.........................................................26
EXHIBITS
A Form of Transfer Agreement
ii
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated February 23, 2001, by and among
Xxxxxxx & Xxxxxx Corporation, a Delaware corporation (the "COMPANY"), Heartland
Industrial Partners, L.P. ("HEARTLAND") and the other investor stockholders
listed on Schedule 1 hereto (together with Heartland, the "INVESTORS"), and
Blackstone Capital Company II, L.L.C. ("BLACKSTONE CAPITAL II"), Blackstone
Family Investment Partnership I L.P. ("BLACKSTONE FAMILY"), Blackstone Advisory
Directors Partnership L.P. ("BLACKSTONE ADVISORY") and Blackstone Capital
Partners, L.P. ("BLACKSTONE CAPITAL") (together with Blackstone Capital II,
Blackstone Family and Blackstone Advisory, "BLACKSTONE") and Xxxxxxxxxxx/C&A
Holdings, L.L.C. ("XXXXXXXXXXX," together with Blackstone, the "ORIGINAL
STOCKHOLDERS").
WHEREAS, pursuant to the Stock Purchase Agreement, dated
January 12, 2001, (the "COMPANY STOCK PURCHASE AGREEMENT"), by and among the
Company and Heartland, the Company has agreed to issue and sell to the Investors
(x) an aggregate of 1,000,000 shares of Non-Voting Convertible Preferred Stock,
par value $0.01 per share (the "CONVERTIBLE PREFERRED SHARES"), which are
convertible into 16,510,000 shares of Common Stock, par value $0.01 per share,
of the Company (the "COMMON STOCK") and (y) 8,490,000 shares (the "TREASURY
SHARES") of Common Stock.
WHEREAS, pursuant to the Stock Purchase Agreement, dated
January 12, 2001, (the "ORIGINAL STOCKHOLDERS STOCK PURCHASE AGREEMENT," and,
together with the Company Stock Purchase Agreement, the "STOCK PURCHASE
AGREEMENTS"), by and among the Original Stockholders and Heartland, the Original
Stockholders have agreed to sell to the Investors an aggregate of 27,000,000
shares of Common Stock;
WHEREAS, the Company, Xxxxxxx & Xxxxxx Products Co. ("C&A
PRODUCTS"), Blackstone Capital and Xxxxxxxxxxx Xxxxxxx Partners, L.P. entered
into an Amended and Restated Stockholders Agreement dated as of June 29, 1994
(the "ORIGINAL STOCKHOLDERS AGREEMENT");
WHEREAS, the parties hereto wish to restrict the transfer of
the Shares (as hereinafter defined) and to provide for, among other things,
first offer, tag-along and preemptive rights, corporate governance rights and
obligations and certain other rights under certain conditions;
WHEREAS, in order to induce each of the Investors to purchase
its shares of Common Stock and the Original Stockholders to enter into this
agreement, the Company has agreed to grant registration rights with respect to
the Common Stock owned by the Investors and the Original Stockholders in a
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT"); and
WHEREAS, the Company, C&A Products, Blackstone Capital and
Xxxxxxxxxxx Xxxxxxx Partners, L.P. wish to terminate the Original Stockholders
Agreement
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and the Original Stockholders wish to enter into a new stockholders agreement
with the Investors.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; TERMINATION.
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1.1 DEFINITIONS. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:
"AFFILIATE" shall mean, when used with respect to any Person,
any other person which directly or indirectly beneficially owns or controls 25%
or more of the total voting power of shares of capital stock of such Person
having the right to vote for directors under ordinary circumstances, any Person
controlling, controlled by or under common control with any such Person (within
the meaning of Rule 405 of the Securities Act), and any director or executive
officer of any such person. Affiliate shall in any event include, when used with
respect to Xxxxxxxxxxx, Xxxxxxxxxxx Xxxxxxx Co., Inc., Xxxxxxxxxxx Xxxxxxx
Group, Inc. and Xxxxxxxxxxx Xxxxxxx Management Partners, Inc. and, when used
with respect to Blackstone, The Blackstone Group L.P. and Blackstone Group
Holdings L.P. and the successors of any of the above.
"AGREEMENT" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"BIG FIVE ACCOUNTING FIRM" means Xxxxxx Xxxxxxxx, Deloitte &
Touche LLP, Ernst & Young LLP, KPMG Peat Marwick, LLP or PricewaterhouseCoopers,
and any of their successors.
"BLACKSTONE" has the meaning set forth in the preamble to this
Agreement.
"BLACKSTONE DIRECTOR" has the meaning set forth in Section
6.3.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"CHARTER DOCUMENTS" means the Restated Certificate of
Incorporation and the By-laws of the Company each as in effect on the date
hereof.
"COMMISSION" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
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"COMMON STOCK" has the meaning set forth in the recitals to
this Agreement and any other capital stock of the Company into which such stock
is reclassified or reconstituted and any other common stock of the Company.
"COMMON STOCK EQUIVALENTS" means any security or obligation
which is by its terms convertible, exchangeable or exercisable into or for
shares of Common Stock, including any option, warrant or other subscription or
purchase right with respect to Common Stock and the Convertible Preferred Stock.
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY OPTION" has the meaning set forth in Section 3.1(c).
"COMPANY OPTION PERIOD" has the meaning set forth in Section
3.1(c).
"CONTRACT DATE" has the meaning set forth in Section 3.1(e).
"CONVERTIBLE PREFERRED STOCK" has the meaning set forth in the
preamble to this Agreement.
"DISINTERESTED MEMBERS" has the meaning set forth in Section
3.3(a).
"DRAG-ALONG NOTICE" has the meaning set forth in Section
3.1(g).
"DRAG-ALONG RIGHTHOLDERS" has the meaning set forth in Section
3.1(g).
"DRAG-ALONG SELLERS" has the meaning set forth in Section
3.1(g).
"EXCESS OFFERED SECURITIES" has the meaning set forth in
Section 3.1(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"EXEMPT ISSUANCES" has the meaning set forth in Section
3.3(d).
"EXEMPT TRANSFER" has the meaning set forth in Section 2.1.
"FAIR VALUE" has the meaning set forth in Section 3.2(b).
"GAAP" means United States generally accepted accounting
principles in effect from time to time.
"GOVERNMENTAL AUTHORITY" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
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"HEARTLAND" has the meaning set forth in the preamble.
"HEARTLAND ENTITIES" means Heartland Industrial Partners,
L.P., Heartland Industrial Partners (FF), L.P., Heartland Industrial Partners
(E1), L.P., Heartland Industrial Partners (K1), L.P., Heartland Industrial
Partners (C1), L.P. and Permitted Transferees under clause (ii)(a) or (b) of the
definition of Permitted Transferees of any of the foregoing.
"INSTITUTIONAL STOCKHOLDER means any Stockholder that is not a
natural person (other than Sponsor).
"INVESTOR DIRECTORS" has the meaning set forth in Section 6.3.
"INVESTOR SELLING STOCKHOLDER" has the meaning set forth in
Section 3.1(f).
"INVESTOR STOCKHOLDERS" means each Investor and any Permitted
Transferee thereof to whom Shares are transferred in accordance with Section 2.2
of this Agreement, and the term "Investor Stockholder" shall mean any such
person.
"INVESTORS" has the meaning set forth in the preamble to this
Agreement.
"INVOLUNTARY TRANSFER" means any transfer, proceeding or
action by or in which a Stockholder shall be deprived or divested of any right,
title or interest in or to any of the Shares, including, without limitation, (i)
any seizure under levy of attachment or execution, (ii) any transfer in
connection with bankruptcy (whether pursuant to the filing of a voluntary or an
involuntary petition under the United States Bankruptcy Code of 1978, or any
modifications or revisions thereto) or other court proceeding to a debtor in
possession, trustee in bankruptcy or receiver or other officer or agency, (iii)
any transfer to a state or to a public officer or agency pursuant to any statute
pertaining to escheat or abandoned property and (iv) any transfer pursuant to a
divorce or separation agreement or a final decree of a court in a divorce
action.
"INVOLUNTARY TRANSFEREE" has the meaning set forth in Section
3.2(a).
"IT RIGHTHOLDER" has the meaning set forth in Section 3.2(a).
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding preferred stock and equity related
preferences).
"MAJOR STOCKHOLDERS" means the Original Stockholders and any
Permitted Transferee or Partner Transferee thereof to whom Shares are
transferred in accordance with Section 2.2 of this Agreement, and the term
"Major Stockholder" shall mean any such Person.
"NEW ISSUANCE NOTICE" has the meaning set forth in Section
3.3(d).
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"NEW SECURITIES" has the meaning set forth in Section 3.3.(d).
"OFFER PRICE" has the meaning set forth in Section 3.1(a).
"OFFERED SECURITIES" has the meaning set forth in Section
3.1(a).
"OFFERING NOTICE" has the meaning set forth in Section 3.1(a).
"OFFERING STOCKHOLDERS" has the meaning set forth in the
preamble.
"ORIGINAL STOCKHOLDERS" has the meaning set forth in the
preamble.
"PARTNER TRANSFEREE" has the meaning set forth in Section 2.2.
"PARTNER TRANSFEROR" has the meaning set forth in Section 2.2.
"PERMITTED TRANSFEREE" means:
(i) with respect to any Stockholder who is a natural person,
(1) the spouse (or another individual designated in writing by a Stockholder who
has no spouse), parent or any lineal descendant (including by adoption and
stepchildren) of such Stockholder, (2) any trust of which such Stockholder is
the trustee and which is established solely for the benefit of any of the
foregoing individuals, (3) any charitable foundation selected by such
Stockholder, or (4) any partnership, all of the general partner(s) and limited
partner(s) (if any) of which are one or more Persons identified in this clause
(i), PROVIDED that, in the case of clause (1), (2), (3) or (4), such Person
executes a Transfer Agreement;
(ii) with respect to Sponsor, (a) any Person which is an
Affiliate of Sponsor on the date hereof, (b) any controlled Affiliate of
Sponsor, (c) any investor in Sponsor in connection with a pro rata distribution
of shares of Common Stock to all investors in Sponsor at the time of the
expiration or termination of the fund or any Affiliate of such investor, or
(d)(1) any Person to whom Sponsor transfers any of its Shares within a year of
the date hereof; or (2) any partner or member of any investment fund of Sponsor
to whom the Sponsor transfers any of its Shares after the first anniversary
hereof for a price of $5.00 or less per Share (equitably adjusted for stock
splits, stock combinations and similar events) plus an amount payable to reflect
any retention by Sponsor or its Affiliates of liability to make payments under
the Profit Participation Agreement; PROVIDED that, in the case of clauses (d)(1)
and (d)(2), immediately after such transfer, the Sponsor will own at least 50%
of the Shares owned by the Sponsor on the date hereof after giving effect to the
transactions contemplated by the Stock Purchase Agreements; PROVIDED that, in
the case of clause (a), (b), (c) or (d) any such transferee executes a Transfer
Agreement;
(iii) with respect to any Institutional Stockholder, (a) any
Affiliate of such Institutional Stockholder, (b) any investor of such
Institutional Stockholder that is an investment fund in connection with a pro
rata distribution of shares of Common Stock to all investors (a "STOCKHOLDER
INVESTOR" or collectively "STOCKHOLDER INVESTORS") in such
6
Institutional Stockholder at the time of the expiration or termination of the
fund, or (c) any Person acquiring all or substantially all of the investment
portfolio of such Institutional Stockholder PROVIDED, that, in the case of
clause (a), (b) or (c), all such investors execute a Transfer Agreement; and
(iv) with respect to any Stockholder, any institutional lender
to which such Stockholder pledges or grants a security interest in shares of
Common Stock in a bona fide transaction effected in good faith PROVIDED that (a)
such pledgee executes a Transfer Agreement and (b) prior to any subsequent
foreclosure or sale of such shares or any transfer resulting from such
foreclosure is effected, the provisions of Article III must be satisfied.
"PERSON" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"PROFIT PARTICIPATION AGREEMENT" means the Profit
Participation Interest Agreement, dated the date hereof, any Heartland,
Blackstone, Xxxxxxxxxxx and the Company.
"PROPORTIONATE PERCENTAGE" has the meaning set forth in
Section 3.3(d).
"PROPOSED PRICE" has the meaning set forth in Section 3.3(d).
"QUALIFIED INVESTOR" means an Investor designated by Heartland
who (x), together with its Affiliates, at or prior to any date of determination,
has made an aggregate cash investment in Common Stock of the Company equal to at
least $25.0 million (based upon the original cost of such investment) or (y)
owns, together with its Direct Permitted Transferees, at least 10% or more of
the outstanding shares of Common Stock of the Company at the date of
determination.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in
the preamble.
"RIGHTHOLDER(S)" has the meaning set forth in Section 3.1(b).
"SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"SELLING STOCKHOLDER" has the meaning set forth in Section
3.1(a).
"SHARES" means, with respect to each Stockholder, all shares,
whether now owned or hereafter acquired, of Common Stock of the Company and the
Convertible Preferred Shares (with the amount thereof calculated on an
as-converted basis, if applicable) and any other Common Stock Equivalents owned
thereby; PROVIDED, HOWEVER, for the purposes of any computation of the number of
Shares pursuant to
7
Sections 2, 3, 7 and 10.3, all outstanding Common Stock Equivalents shall be
deemed converted, exercised or exchanged as applicable and the shares of Common
Stock issuable upon such conversion, exercise or exchange shall be deemed
outstanding, whether or not such conversion, exercise or exchange has actually
been effected.
"SPONSOR" means collectively the Heartland Entities or
Heartland Industrial Partners, L.P. acting on behalf of the other Heartland
Entities.
"STOCK ISSUANCE RIGHTHOLDER" has the meaning set forth in
Section 3.3(d).
"STOCK PURCHASE AGREEMENTS" has the meaning set forth in the
recitals to this Agreement.
"STOCKHOLDERS" means the Investor Stockholders, the Major
Stockholders and any transferee thereof who has agreed to be bound by the terms
and conditions of this Agreement in accordance with Section 2.4.
"STOCKHOLDERS MEETING" has the meaning set forth in Section
6.1.
"STOCKHOLDER OPTION PERIOD" has the meaning set forth in
Section 3.1(b).
"TAG-ALONG RIGHTHOLDER" has the meaning set forth in Section
3.1(f).
"THIRD PARTY PURCHASER" has the meaning set forth in Section
3.1(a).
"TRANSFER" has the meaning set forth in Section 2.1.
"TRANSFERRED SHARES" has the meaning set forth in Section
3.2(a).
"XXXXXXXXXXX" has the meaning set forth in the preamble.
"XXXXXXXXXXX DIRECTOR" has the meaning set forth in Section
6.3.
"WRITTEN CONSENT" has the meaning set forth in Section 6.1.
1.2 TERMINATION. The Company, C&A Products, Blackstone
Capital Partners, L.P. and Xxxxxxxxxxx Xxxxxxx Partners, L.P. hereby terminate
the Original Stockholders Agreement and all the rights and obligations of each
of the parties thereto. Blackstone Capital Partners, L.P. and Xxxxxxxxxxx
Xxxxxxx Partners, L.P. hereby terminate the Voting Agreement, dated June 29,
1994, between them and each hereby represents that the existing monitoring
agreements between their respective Affiliates and the Company have been
terminated as of the date hereof and that it and its Affiliates are not party to
any other agreement with the Company or any of its subsidiaries other than this
Agreement, the Original Stockholders Purchase Agreement, the Profit
Participation Agreement, and the Registration Rights Agreement.
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ARTICLE II
TRANSFER.
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2.1 LIMITATION ON TRANSFER. No Stockholder shall directly or
indirectly sell, give, assign, hypothecate, pledge, encumber, grant a security
interest in, subject to a Lien or otherwise dispose of (whether by operation of
law or otherwise) (each a "TRANSFER") any Shares or any right, title or interest
therein or thereto, except (1) pursuant to (a) Sections 2.2, 2.3, 2.4, 3.1, 3.2
or 3.4 of this Agreement, (b) market sales in compliance with Rule 144 under the
Securities Act, (c) a registration statement filed under the Securities Act or
(d) a transaction in which all stockholders of the Company have a right to
transfer their shares on a pro rata basis and (2) otherwise in compliance with
this Agreement. Transfers referred to in clauses (1)(b), (c) and (d) are "Exempt
Transfers." Any attempt to transfer any Shares or any rights thereunder in
violation of the preceding sentence shall be null and void AB INITIO.
2.2 PERMITTED TRANSFERS. Notwithstanding anything to the
contrary contained in this Agreement, but subject to Sections 2.3 and 2.4, at
any time, (a) each Stockholder may transfer all or a portion of its Shares to
any of its Permitted Transferees, and (b) each Major Stockholder (each in such
capacity, a "PARTNER TRANSFEROR") may Transfer any Common Stock held by it, in
whole or in part, to its or its successor's members, limited partners or general
partners (a "PARTNER TRANSFEREE").
2.3 PERMITTED TRANSFER PROCEDURES. If any Stockholder wishes
to transfer Shares to a Permitted Transferee or Partner Transferee under Section
2.2, such Stockholder shall give notice to the Company of its intention to make
such a transfer not less than five (5) days prior to effecting such transfer,
which notice shall state the name and address of each Permitted Transferee or
Partner Transferee to whom such transfer is proposed, the relationship of such
Permitted Transferee or Partner Transferee to such Stockholder, and the number
of Shares proposed to be transferred to such Permitted Transferee or Partner
Transferee.
2.4 TRANSFERS IN COMPLIANCE WITH LAW; SUBSTITUTION OF
TRANSFEREE.
(a) Notwithstanding any other provision of this
Agreement, no transfer may be made pursuant to this Section 2 or Section 3
(except in an Exempt Transfer in the case of the following clauses (a) and (b))
unless (a) if (1) to a Permitted Transferee or Partner Transferee or (2) in a
transfer by any person other than a Major Stockholder, the transferee executes,
prior to such transfer, a Transfer Agreement substantially in the form attached
hereto as EXHIBIT A, which shall cause such transferee to be bound by the
obligations of this Agreement, (b) the transfer complies in all respects with
the applicable provisions of this Agreement and (c) the transfer complies in all
respects with applicable federal and state securities laws, including, without
limitation, the Securities Act. If requested by the Company, an opinion of
counsel to such transferring Stockholder shall be supplied to the Company, at
such transferring Stockholder's expense, to the effect that such transfer
complies with the applicable federal and state securities laws. Upon becoming a
party to this Agreement, (i) the
9
Permitted Transferee or Partner Transferee of a Major Stockholder shall be
substituted for and deemed to be, and shall enjoy the same rights and be subject
to the same obligations as, the transferring Major Stockholder hereunder with
respect to the Shares transferred to such Permitted Transferee or Partner
Transferee, subject to the limitations of any voting proxy granted pursuant to
Section 2.4(b) and (ii) the transferee shall be substituted for and deemed to
be, and shall enjoy the same rights and be subject to the same obligations as,
an Investor Stockholder hereunder with respect to the Shares transferred to such
transferee, subject to the limitation of any voting proxy granted pursuant to
Section 2.4(b).
(b) Each Partner Transferee shall execute prior
to a transfer by a Partner Transferor an irrevocable proxy granting to
Blackstone or Xxxxxxxxxxx or their respective Affiliates all voting rights with
respect to the Common Stock so transferred.
ARTICLE III
RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
------------------------------------------------------------
AFFILIATE TRANSACTIONS; ENCUMBRANCE.
-----------------------------------
3.1 PROPOSED VOLUNTARY TRANSFERS.
(a) OFFERING NOTICE. Subject to Sections 2.2,
2.3, 2.4 and 3.1(h), if any Stockholder other than a Heartland Entity (a
"SELLING STOCKHOLDER") wishes to transfer all or any portion of its Shares to
any Person (other than to its Permitted Transferee or in the case of a Major
Stockholder, to its Partner Transferee) (a "THIRD PARTY PURCHASER") and such
Selling Stockholder wants to make any offer or has received a bona fide offer to
purchase such Shares from a Third Party Purchaser, such Selling Stockholder
shall then offer to sell such Shares by sending written notice (an "OFFERING
NOTICE") to each Investor Stockholder and the Company, which shall state (i) the
number of Shares proposed to be transferred (the "OFFERED SECURITIES"); (ii) the
proposed purchase price per Share proposed by the Selling Stockholder or offered
by the Third Party Purchaser for the Offered Securities (the "OFFER PRICE"); and
(iii) the terms and conditions of such sale. Upon delivery of the Offering
Notice, such offer shall be irrevocable unless and until the rights of first
refusal provided for herein shall have been waived or shall have expired.
(b) STOCKHOLDER OPTION; EXERCISE.
(i) For a period of ten (10) Business
Days after the giving of the Offering Notice pursuant to Section
3.1(a) (the "STOCKHOLDER OPTION PERIOD"), each of the Investor
Stockholders (for the purpose of Section 3.1, each, a "RIGHTHOLDER"
and collectively, the "RIGHTHOLDERS") shall have the right to purchase
the Offered Securities at a purchase price equal to the Offer Price
and upon the terms and conditions set forth in the Offering Notice.
Each Rightholder shall have the right to purchase that percentage of
the Offered Securities determined by dividing (A) the total number of
Shares then owned by such Rightholder by (B) the total number of
Shares then owned by all such
10
Rightholders. If the consideration consists wholly or in material part
of consideration other than cash or marketable securities and the
Rightholder or the Company would be willing to exercise its rights
hereunder based upon the value ascribed to such consideration by the
Selling Stockholders, the Company, Heartland or any Selling
Stockholder may require that a determination of Fair Value be made in
the same manner as would apply to a determination of Fair Value under
Section 3.2(b) (with Heartland substituted for IT Rightholders and the
Selling Stockholders requesting such an appraisal substituted for the
Involuntary Transferee), and in such event, all time periods under
this Section 3.1(a) through 3.1(e) shall be tolled pending the
determination of Fair Value. If any Rightholder does not fully
subscribe for the number or amount of Offered Securities it or he is
entitled to purchase, then each other fully participating Rightholder
shall have the right to purchase that percentage of the Offered
Securities not so subscribed for (for the purposes of this Section
3.1(b), the "EXCESS OFFERED SECURITIES") determined by dividing (x)
the total number of Shares then owned by such fully participating
Rightholder by (y) the total number of Shares then owned by all fully
participating Rightholders. The calculation described in the preceding
sentence shall be made in successive proration calculations until
there are no remaining Excess Offered Securities or there is no
remaining Rightholder who indicated a willingness in the notice
referred to in Section 3.1(b)(ii) to subscribe for additional shares.
(ii) The right of each Rightholder to
purchase the Offered Securities under subsection (i) above shall be
exercisable by delivering written notice of the exercise thereof,
prior to the expiration of the Stockholder Option Period, to the
Selling Stockholder with a copy to the Company. Each such notice shall
state (a) the number of Shares held by such Rightholder, (b) the
number of Shares that such Rightholder is willing to purchase pursuant
to this Section 3.1(b), including the number of Excess Offered Shares,
if any, such Rightholder shall wish to purchase. The giving of such
notice shall constitute a binding obligation to purchase the number of
Shares elected in accordance with Section 3.1(d). The failure of a
Rightholder to respond within the Stockholder Option Period to the
Selling Stockholder shall be deemed to be a waiver of such
Rightholder's rights under subsection (i) above, PROVIDED that each
Rightholder may waive its rights under subsection (i) above prior to
the expiration of the Stockholder Option Period by giving written
notice to the Selling Stockholder, with a copy to the Company.
(c) COMPANY OPTION; EXERCISE. If the
Rightholders do not elect to purchase all of the Offered Securities, then on the
Business Day next following the earlier to occur of (A) the expiration of the
Stockholder Option Period and (B) the date upon which the Company shall have
received written notice from each of the Rightholders of its exercise of its
right pursuant to Section 3.1(b) or its waiver thereof (the "COMPANY OPTION
PERIOD"), the Company shall have the right (the "COMPANY OPTION") but not the
obligation to purchase any remaining Offered Securities at a purchase price
equal to the Offer Price and upon the terms and conditions set forth in the
Offering Notice. The right of the Company to purchase any of the Offered
Securities
11
under this Section 3.1(c) shall be exercisable by delivering written notice of
the exercise thereof, prior to the expiration of the Company Option Period, to
the Selling Stockholder. The failure of the Company to respond within the
Company Option Period to the Selling Stockholder shall be deemed to be a waiver
of the Company Option, PROVIDED that the Company may waive its rights under this
Section 3.1(c) prior to the expiration of the Company Option Period by giving
written notice to the Selling Stockholder. If the Company and/or the
Rightholders do not purchase all of the Offered Securities pursuant to Section
3.1(b) and/or Section 3.1(c), then the Selling Stockholder may, subject to
Section 3.1(f), sell the remaining Offered Securities to a Third Party Purchaser
in accordance with Section 3.1(e).
(d) CLOSING. The closing of the purchases of
Offered Securities subscribed for by the Rightholders under Section 3.1(b)
and/or the Company under Section 3.1(c) shall be held at the executive office of
the Company at 11:00 a.m., local time, on the fifteenth Business Day after the
giving of the Offering Notice pursuant to Section 3.1(a) or at such other time
and place as the parties to the transaction may agree. At such closing, the
Selling Stockholder shall deliver certificates representing the Offered
Securities, duly endorsed for transfer and accompanied by all requisite transfer
taxes, if any, and such Offered Securities shall be free and clear of any Liens
(other than those arising hereunder and those attributable to actions by the
purchasers thereof) and the Selling Stockholder shall so represent and warrant,
and shall further represent and warrant that it is the sole beneficial and
record owner of such Offered Securities. The Company and/or each Rightholder, as
the case may be, purchasing Offered Securities shall deliver at the closing
payment in full for the Offered Securities purchased by it or him. At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(e) SALE TO A THIRD PARTY PURCHASER. Unless the
Company and/or the Rightholders elect to purchase all the Offered Securities
under Sections 3.1(b) and 3.1(c), the Selling Stockholder may, subject to
Section 3.1(f), sell any remaining Offered Securities to a Third Party Purchaser
at a price not less than the price set forth in the Offering Notice and
otherwise on terms and conditions not materially more favorable to the Third
Party Purchaser than those set forth in the Offering Notice; PROVIDED, HOWEVER,
that such sale is bona fide and made pursuant to a contract within thirty (30)
days after the earlier to occur of (i) the exercise or waiver by the Company and
all of the Rightholders of their options to purchase the Offered Securities and
(ii) the expiration of the Company Option Period (the "CONTRACT DATE"); and
PROVIDED FURTHER, that such sale shall not be consummated unless and until (x)
such Third Party Purchaser shall represent in writing to the Company and each
Rightholder that it is aware of the rights of the Company and the Stockholders
contained in this Agreement and (y) prior to the purchase by such Third Party
Purchaser of any of such Offered Securities such Third Party Purchaser shall
become a party to this Agreement and shall agree to be bound by the terms and
conditions hereof in accordance with Section 2.4. If such sale is not
consummated within thirty (30) days after the Contract Date for any reason, then
the restrictions provided for herein shall again become effective, and no
transfer of such Offered Securities may be made thereafter by the Selling
Stockholder without again
12
offering the same to the Company and the Rightholders in accordance with this
Section 3.1.
(f) TAG-ALONG RIGHTS.
(i) If an Investor (an "INVESTOR SELLING
STOCKHOLDER") wishes to transfer Shares to a Third Party Purchaser,
the Company or any of its subsidiaries other than in an Exempt
Transfer, then each other Stockholder (each, a "TAG-ALONG
RIGHTHOLDER") shall have the right to sell to such Third Party
Purchaser, the Company, or any of its subsidiaries, upon the terms set
forth in the Offering Notice, that number of Shares held by such
Tag-Along Rightholder equal to that percentage of the Offered
Securities determined by dividing (A) the total number of Shares then
owned by such Tag-Along Rightholder by (B) the sum of (x) the total
number of Shares then owned by all such Tag-Along Rightholders with
respect to which Tag-Along Rightholders are exercising their rights
pursuant to this Section 3.1(f) and (y) the total number of Shares
then owned by the Investor Selling Stockholder. The Investor Selling
Stockholder and the Tag-Along Rightholder(s) exercising their rights
pursuant to this Section 3.1(f) shall effect the sale of the Offered
Securities and such Tag-Along Rightholder(s) shall sell the number of
Offered Securities required to be sold by such Tag-Along
Rightholder(s) pursuant to this Section 3.1(f)(i), and the number of
Offered Securities to be sold to such Third Party Purchaser, the
Company or any of its subsidiaries by the Investor Selling Stockholder
shall be reduced accordingly.
(ii) The Investor Selling Stockholder
shall give notice to each Tag-Along Rightholder of each proposed sale
by it of Offered Securities which gives rise to the rights of the
Tag-Along Rightholders set forth in this Section 3.1(f) at least ten
(10) Business Days prior to the proposed consummation of such sale,
setting forth the name of such Investor Selling Stockholder, the
number of Offered Securities, the name and address of the proposed
Third Party Purchaser, the Company or its subsidiaries, as applicable,
the proposed amount and form of consideration and terms and conditions
of payment offered by or to such Third Party Purchaser, the Company or
its subsidiary, as applicable, the percentage of Shares that such
Tag-Along Rightholder may sell to such Third Party Purchaser, the
Company or its subsidiary, as applicable, (determined in accordance
with Section 3.1(f)(i)), and a representation that such Third Party
Purchaser, the Company or its subsidiary has been informed of the
"tag-along" rights provided for in this Section 3.1(f) and has agreed
to purchase Shares in accordance with the terms hereof. The tag-along
rights provided by this Section 3.1(f) must be exercised by any
Tag-Along Rightholder wishing to sell its Shares within ten (10) days
following receipt of the notice required by the preceding sentence by
delivery of a written notice to the Investor Selling Stockholder
indicating such Tag-Along Rightholder's wish to exercise its rights
and specifying the number of Shares (up to the maximum number of
Shares owned by such Tag-Along Rightholder required to be purchased by
such Third Party Purchaser) it wishes to sell, PROVIDED that any
Tag-Along Rightholder may waive its rights
13
under this Section 3.1(f) prior to the expiration of such 10-day
period by giving written notice to the Investor Selling Stockholder,
with a copy to the Company. The failure of a Tag-Along Rightholder to
respond within such 10-day period shall be deemed to be a waiver of
such Tag-Along Rightholder's rights under this Section 3.1(f). If a
Third Party Purchaser, the Company or its subsidiary, as applicable,
fails to purchase Shares from any Tag-Along Rightholder that has
properly exercised its tag-along rights pursuant to this Section
3.1(f)(ii), then the Investor Selling Stockholder shall not be
permitted to consummate the proposed sale of the Offered Securities,
and any such attempted sale shall be null and void AB INITIO.
(g) DRAG-ALONG RIGHTS. For so long as Heartland
is entitled to the right to designate directors as set forth in Section 6.3, in
the event that one or more of the Heartland Entities (the "DRAG-ALONG
RIGHTHOLDERS") receive a bona fide offer from a Third Party Purchaser to
purchase (including a purchase by merger) all of the Shares held by the Investor
Stockholders or all or a substantial portion of the consolidated assets of the
Company, the Drag-Along Rightholders may send written notice (the "DRAG-ALONG
NOTICE") to the Company and the other Stockholders (the "DRAG-ALONG SELLERS")
notifying them they will be required to sell all (but not less than all) of
their Shares in such sale (or, in the case of a merger or asset sale, vote in
favor of such sale). Upon receipt of a Drag-Along Notice, each Drag-Along Seller
receiving such notice shall be obligated to (i) sell all of its Shares in the
transaction (including a sale by merger or asset sale) contemplated by the
Drag-Along Notice for the same consideration per share and otherwise on the same
terms and conditions as the Drag-Along Rightholders (including payment of its
pro rata share of all costs associated with such transaction); if, but only if,
the Drag-Along Seller shall receive cash and/or other freely tradable
consideration having a fair market value of at least $11 per Share, adjusted for
stock splits, stock dividends, reclassifications and other recapitalizations and
(ii) otherwise take all necessary action in its capacity as a stockholder to
cause the consummation of such transaction, including voting its Shares in favor
of such transaction and not exercising any appraisal rights in connection
therewith. The obligations of the Drag-Along Sellers in respect of a Transaction
under this Section 3.1(g) are subject to the satisfaction of the following
conditions: (i) upon the consummation of the Transaction, each Drag-Along Seller
shall have the right to receive cash and/or other consideration having a fair
market value of at least $11 per Share (adjusted for stock splits, stock
dividends, reclassifications and recapitalizations) in the same form and amount
per share of consideration paid to Drag-Along Rightholders in such transaction
or any other transaction related thereto (such as a payment for consulting or
management services or non-compete payments); (ii) if any Drag-Along Seller is
given an option as to the form and amount of consideration to be received, each
other Drag-Along Seller will be given the same option with respect to its
applicable Pro Rata Share; and (iii) no Drag-Along Seller shall be obligated
under the terms of any agreement respecting any transaction subject to this
Section 3.1(g) to indemnify any person in an amount greater than the proceeds to
be received by such Drag-Along Seller in such transaction.
(h) Notwithstanding anything to the contrary
contained in this Agreement, the following transfers will not be subject to the
provisions of Section 2.4 or
14
Sections 3.1(a) through (e): a transfer of any Shares pursuant to Rule 144 or a
transfer pursuant to a registration statement filed under the Securities Act.
3.2 INVOLUNTARY TRANSFERS.
(a) RIGHTS OF FIRST OFFER UPON INVOLUNTARY
TRANSFER. If an Involuntary Transfer of any Shares (the "TRANSFERRED SHARES")
owned by any Stockholder shall occur, then the Company and the Investor
Stockholders (unless such Stockholder is the Stockholder transferring the
Transferred Shares) (for the purpose of Section 3.2, each, a "IT RIGHTHOLDER"
and collectively, the "IT RIGHTHOLDERS") shall have the same rights as specified
in Sections 3.1(a), 3.1(b) and 3.1(c), respectively, with respect to such
Transferred Shares as if the Involuntary Transfer had been a proposed voluntary
transfer by a Selling Stockholder and shall be governed by Section 3.1 except
that (i) the time periods shall run from the date of agreement as to the
purchase price applicable to such Involuntary Transfer with written
determination of Fair Value in accordance with Section 3.2(b), (ii) such rights
shall be exercised by notice to the transferee of such Transferred Shares (the
"INVOLUNTARY TRANSFEREE") rather than to the Stockholder who suffered or will
suffer the Involuntary Transfer and (iii) the purchase price per Transferred
Share shall be agreed upon by the Involuntary Transferee and the Company and/or
the purchasing IT Rightholders purchasing a majority of the Transferred Shares,
as the case may be; PROVIDED, HOWEVER, that if such parties fail to agree as to
such purchase price, the purchase price shall be the Fair Value thereof as
determined in accordance with Section 3.2(b).
(b) FAIR VALUE. If the parties fail to agree
upon the purchase price of the Transferred Shares in accordance with Section
3.2(a) hereof, then the Company or the IT Rightholders, as the case may be,
shall purchase the Transferred Shares at a purchase price equal to the Fair
Value thereof. The Fair Value of the Transferred Shares shall be determined by a
nationally recognized investment banking firm or nationally recognized expert
experienced in the valuation of corporations engaged in the business conducted
by the Company. Within five (5) Business Days after the date the applicable
parties determine that they cannot agree as to the purchase price, the
Involuntary Transferee and the Board of Directors (in the case of a purchase by
the Company), or the purchasing IT Rightholders purchasing a majority of the
Transferred Shares being purchased by the purchasing IT Rightholders (if the
Company is not purchasing any Transferred Shares), or the Board of Directors and
such purchasing IT Rightholders jointly (in the case of a purchase by the
Company and IT Rightholders), as the case may be, shall designate one such
appraiser that is willing and able to conduct such determination. If either the
Involuntary Transferee or the Board of Directors or the purchasing IT
Rightholders or both, or all, as the case may be, fails to make such designation
within such period, then any other party may apply to the American Arbitration
Association or a court of appropriate jurisdiction for the appointment of such
an appraiser. The appraiser shall conduct its determination as promptly as
practicable, and the Fair Value of the Transferred Shares shall be determined by
such appraiser. Such determination shall be final and binding on the Involuntary
Transferee, the Company and the Rightholders. The Involuntary Transferee shall
be responsible for one-half the fees and expenses of the appraiser designated by
or on behalf of it, and the Company and/or
15
the purchasing IT Rightholders in proportion to the ratio in which they are
purchasing Transferred Shares shall be responsible for one-half of the fees and
expenses of the appraiser. For purposes of this Section 3.2(b), the "FAIR VALUE"
of the Transferred Shares means the fair market value of such Transferred Shares
determined in accordance with this Section 3.2(b) based upon all considerations
that the appraiser determine to be relevant.
(c) CLOSING. The closing of any purchase under
this Section 3.2 shall be held at the executive office of the Company at 11:00
a.m., local time, on the earlier to occur of (a) the fifth Business Day after
the purchase price per Transferred Share shall have been agreed upon by the
Involuntary Transferee and the Company or the purchasing IT Rightholders, as the
case may be, in accordance with Section 3.2(a)(iii), or (b) the fifth Business
Day after the determination of the Fair Value of the Transferred Shares in
accordance with Section 3.2(b), or at such other time and place as the parties
to the transaction may agree. At such closing, the Involuntary Transferee shall
deliver certificates, if applicable, or other instruments or documents
representing the Transferred Shares being purchased under this Section 3.2, duly
endorsed with a signature guarantee for transfer and accompanied by all
requisite transfer taxes, if any, and such Transferred Shares shall be free and
clear of any Liens (other than those arising hereunder) arising through the
action or inaction of the Involuntary Transferee and the Involuntary Transferee
shall so represent and warrant, and further represent and warrant that it is the
beneficial owner of such Transferred Shares. The Company or each Rightholder, as
the case may be, purchasing such Transferred Shares shall deliver at closing
payment in full in immediately available funds for such Transferred Shares. At
such closing, all parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(d) GENERAL. In the event that the provisions
of this Section 3.2 shall be held to be unenforceable with respect to any
particular Involuntary Transfer, the Company and the IT Rightholders shall have
the rights specified in Sections 3.1(b) and 3.1(c), respectively, with respect
to any transfer by an Involuntary Transferee of such Shares, and each IT
Rightholder agrees that any Involuntary Transfer shall be subject to such
rights, in which case the Involuntary Transferee shall be deemed to be the
Selling Stockholder for purposes of Section 3.1 of this Agreement and shall be
bound by the provisions of Section 3.1 and other related provisions of this
Agreement.
3.3 CERTAIN TRANSACTIONS.
(a) Without the consent of (1) Blackstone and
Xxxxxxxxxxx for so long as Sponsor directly or indirectly beneficially owns
fifty (50%) percent or more of the outstanding shares of Common Stock of the
Company and (2) the members of the Board of Directors of the Company that are
disinterested with respect to the applicable matter and not designated for
election by Heartland Industrial Partners, L.P. (the "DISINTERESTED MEMBERS"),
for so long as Sponsor directly or indirectly owns 25% or more of the Shares
(equitably adjusted for stock splits, stocks combinations and similar events)
that it beneficially owns on the date hereof after giving effect to the
transactions contemplated by the Stock Purchase Agreements, the Company and its
subsidiaries will
16
not enter into any transaction or series of related transactions with Sponsor or
any of its Affiliates involving payments or other consideration in excess of
$500,000; PROVIDED no such consent shall be required from Blackstone or
Xxxxxxxxxxx for any transaction that has been approved by a majority of the
directors of the Company who were not designated for election by Heartland
Industrial Partners, L.P. The foregoing restrictions will not apply to: (i) the
payments to Sponsor described in paragraph (b) below; (ii) from and after the
first anniversary hereof, the payment to Sponsor of advisory fees in connection
with acquisitions or divestiture by the Company or any of its subsidiaries in an
amount not exceeding 1% of the enterprise value thereof and out-of-pocket
expense reimbursement in connection therewith; (iii) reimbursement of
out-of-pocket fees and expenses by Sponsor in connection with the Transactions;
(iv) transactions involving the sale, purchase or lease of goods or services in
the ordinary course of business and on an arm's-length basis between or among
the Company or any of its subsidiaries and portfolio companies of Sponsor in an
amount involving not more than $1,250,000 in any transaction or series of
related transactions; (v) transactions between or among the Company or any of
its subsidiaries; (vi) issuances of securities in any rights offering made to
all stockholders of the Company; (vii) issuances of up to an aggregate of $25
million in value of Common Stock at fair market value in compliance with Section
3.3(d) if applicable; (viii) issuances of securities under the circumstances
contemplated by clauses (i), (ii)(x) and (iv) of Section 3.3(d); (ix) the
Company's entering into a Monitoring Fee Arrangement pursuant to which Heartland
will receive an annual monitoring fee of $4 million from the Company, payable
quarterly in advance; and (x) the Company's paying Heartland a transaction fee
not to exceed $12.0 million upon the closing of the Transaction. Heartland shall
not cause or permit the Company to take any action in contravention of Section
3.3(a)
(b) [Intentionally omitted]
(c) Without the prior written consent of
Blackstone and Xxxxxxxxxxx, the Investors shall not cause or permit the Company
to effect any transaction:
(i) which is a "Rule 13e-3 transaction,"
as defined in Rule 13e-3(a)(3) of the Exchange Act as in effect on the
date hereof, unless such transaction is a transaction in which the
Major Stockholders and the Investor Stockholders are entitled to
receive the same form and amount per Share of consideration in such
transaction or any other transaction related thereto (such as a
payment for consulting or management services or non-compete payments
but disregarding the effect of the Profit Participation Agreement); or
(ii) which requires or permits any holder
of Common Stock to exchange or sell any of such shares for an amount
in cash and/or other consideration having a fair market value of less
than $5.00 per share (as adjusted for stock splits, stock dividends,
reclassifications and recapitalizations), except that this Section
3.3(c)(ii) shall not restrict the Company from engaging in open market
purchase programs consistent with past practice; or
17
(iii) which causes the company to cease
being required to file periodic reports under Section 13(a) of the
Exchange Act, except as otherwise permitted by Section 3.3(c)(i).
(d) Except for (i) a subdivision of the
outstanding shares of Common Stock into a larger number of shares of Common
Stock, including by way of stock split or stock dividend, (ii) capital stock
issued upon exercise, conversion or exchange of any Common Stock Equivalent
either (x) previously issued or (y) issued in accordance with the terms of this
Section 3.3(d) or pursuant to the Stock Purchase Agreements, (iii) pursuant to
an effective registration statement filed under the Securities Act of 1933 , or
(iv) issuance of capital stock to all holders of Common Stock on a pro rata
basis (each, an "EXEMPT ISSUANCE"), Sponsor shall not acquire from the Company
or any of its subsidiaries any capital stock or any other securities convertible
into or exchangeable for capital stock of the Company or its subsidiaries
(collectively, "NEW SECURITIES") unless Sponsor shall offer each of the Investor
Stockholders and the Major Stockholders (each, a "STOCK ISSUANCE RIGHTHOLDER"
and collectively, the "STOCK ISSUANCE RIGHTHOLDERS") an opportunity to
participate therein on a pro rata basis in the manner set forth in this Section
3.3(d) by sending a written notice (the "NEW ISSUANCE NOTICE") to the Stock
Issuance Rightholders, which New Issuance Notice shall state (x) the number of
New Securities proposed to be issued and (y) the proposed purchase price per
security of the New Securities (the "PROPOSED PRICE"). Upon delivery of the New
Issuance Notice, such offer shall be irrevocable unless and until the rights
provided for in this Section 3.3(d) shall have been waived or shall have
expired. For a period of twenty (20) days after the giving of the New Issuance
Notice, each of the Stock Issuance Rightholders shall have the right to purchase
its Proportionate Percentage (as hereinafter defined) of the New Securities, at
a purchase price equal to the Proposed Price and upon the same terms and
conditions set forth in the New Issuance Notice. Each such Stock Issuance
Rightholder shall have the right to purchase that percentage of the New
Securities determined pro rata based on the number of Shares then owned by the
Investor Stockholders and the Major Stockholders that were acquired in purchases
directly from the Company or any subsidiary of the Company, whether pursuant to
the Stock Purchase Agreements or in issuances made in compliance with this
Section 3.3(d) or otherwise, as applicable. The right of each Stock Issuance
Rightholder to purchase the New Securities shall be exercisable by delivering
written notice of the exercise thereof prior to the expiration of the 20-day
period referred to above to the Sponsor, which notice shall state the amount of
New Securities that such Stock Issuance Rightholder elects to purchase pursuant
to this Section 3.3(d). The failure of a Stock Issuance Rightholder to respond
within such 20-day period shall be deemed to be a waiver of such Stock Issuance
Rightholder's rights under this Section 3.3(d), PROVIDED that each Stock
Issuance Rightholder may waive its rights under Section 3.3(d) prior to the
expiration of such 20-day period by giving written notice to the Company. Where
reasonably possible, the Sponsor shall give the New Issuance Notice at least 20
days prior to the issuance of capital stock to the Sponsor, but in any event,
such notice shall be given not later than five (5) days following any such
issuance.
(e) Notwithstanding anything to the contrary in
this Agreement, each of Blackstone (together with its Permitted Transferees and
Partner
18
Transferees) and Xxxxxxxxxxx (together with its Permitted Transferees and
Partner Transferees) shall cease having the rights granted under Section 3.3 if
Blackstone or Xxxxxxxxxxx, as applicable, together with its Permitted
Transferees and Partner Transferees, no longer holds at least 25% of the Shares
(equitably adjusted for stock splits, stock combinations and similar events)
held by Blackstone or Xxxxxxxxxxx, as applicable, on the date hereof after
giving effect to the transactions effected pursuant to the Original Stockholders
Stock Purchase Agreement.
3.4 PROHIBITION ON ENCUMBRANCE. No Stockholder shall pledge,
hypothecate, grant a security interest in or subject to a Lien any of the shares
of Common Stock held by it; PROVIDED, HOWEVER, that a Stockholder may pledge,
hypothecate, grant a security interest in or subject to a Lien such shares to a
lender if such lender agrees in writing to be bound by the terms of this
Agreement (and acknowledges that it shall not receive any of the rights granted
to Stockholders under this Agreement) and such lender is not granted any voting
rights with respect to Common Stock prior to foreclosure.
ARTICLE IV
[Intentionally Omitted.]
ARTICLE V
AFTER-ACQUIRED SECURITIES; AGREEMENT TO BE BOUND.
------------------------------------------------
5.1 AFTER-ACQUIRED SECURITIES. Except as otherwise provided
herein, all of the provisions of this Agreement shall apply to all of the
Shares and Common Stock Equivalents now owned or which may be issued or
transferred hereafter to a Stockholder in consequence of any additional
issuance, purchase, exchange or reclassification of any of such Shares or
Common Stock Equivalents, corporate reorganization, or any other form of
recapitalization, consolidation, merger, share split or share dividend, or
which are acquired by a Stockholder in any other manner.
5.2 BENEFICIAL OWNERSHIP. In making calculations under this
Agreement, no Shares or Common Stock Equivalents owned by any Stockholder shall
be deemed to be beneficially owned by any other Stockholder solely because of
this Agreement and the transactions contemplated hereby.
ARTICLE VI
CORPORATE GOVERNANCE.
--------------------
6.1 GENERAL. Blackstone and Xxxxxxxxxxx agree to vote their
Shares to approve the Company's proposals, to be considered at the Special
Meeting of Stockholders to be held on March 6, 2001, or at any adjournment
thereof, (x) to approve the issuance of 16,510,000 shares of Common Stock and
(y) to approve certain amendments to the Charter Documents. From and after the
execution of this Agreement,
19
each Stockholder shall vote its Shares at any regular or special meeting of
stockholders of the Company (a "STOCKHOLDERS MEETING") or in any written consent
executed in lieu of such a meeting of stockholders (a "WRITTEN CONSENT"), and
shall take all other actions necessary, to give effect to the provisions of this
Agreement (including, without limitation, Section 6.3 hereof) and to ensure that
the Charter Documents do not, at any time hereafter, conflict in any respect
with the provisions of this Agreement. In addition, each Stockholder shall vote
his, her or its Shares at any Stockholders Meeting or act by Written Consent
with respect to such Shares, upon any matter submitted for action by the
Company's stockholders or with respect to which such Stockholder may vote or act
by Written Consent, in conformity with the specific terms and provisions of this
Agreement and the Charter Documents.
6.2 STOCKHOLDER ACTIONS. In order to effectuate the provisions
of this Section 6, each Stockholder (a) hereby agrees that when any action or
vote is required to be taken by such Stockholder pursuant to this Agreement,
such Stockholder shall use his, her or its reasonable best efforts to call, or
cause the appropriate officers and directors of the Company to call, a
Stockholders Meeting, or to execute or cause to be executed a Written Consent to
effectuate such stockholder action, (b) shall use his, her or its reasonable
best efforts to cause the Board of Directors to adopt, either at a meeting of
the Board of Directors or by unanimous written consent of the Board of
Directors, all the resolutions necessary to effectuate the provisions of this
Agreement, and (c) shall use his, her or its reasonable best efforts to cause
the Board of Directors to cause the Secretary of the Company, or if there be no
secretary, such other officer of the Company as the Board of Directors may
appoint to fulfill the duties of Secretary, not to record any vote or consent
contrary to the terms of this Section 6.
6.3 ELECTION OF DIRECTORS; NUMBER AND COMPOSITION.
(a) Each Stockholder shall vote its Shares at
any Stockholders Meeting, or act by Written Consent with respect to such Shares,
and take all other actions necessary to ensure that the number of directors
constituting the entire Board of Directors shall be nine (9) prior to conversion
of the Convertible Preferred Stock and thirteen after such conversion. Each
Stockholder shall vote its Shares at any Stockholders Meeting called for the
purpose of filling the positions on the Board of Directors, or in any Written
Consent executed for such purpose, and take all other actions necessary to
ensure the election to the Board of Directors of the following: four (4)
individuals prior to conversion of the Convertible Preferred Stock and seven (7)
individuals after such conversion designated by Heartland Industrial Partners,
L.P. (collectively, the "INVESTOR DIRECTORS" and each an "INVESTOR DIRECTOR"),
so long as in each case the Heartland Entities continue to hold at least 25% of
the Shares (subject to equitable adjustments for stock splits, stock
combinations and similar events) which the Heartland Entities hold on the date
hereof after giving effect to the transactions contemplated by the Stock
Purchase Agreements; one (1) individual designated by Blackstone (the
"BLACKSTONE DIRECTOR") as long as Blackstone and its direct or indirect
Permitted Transferees continue to hold at least 25% of the Shares (subject to
equitable adjustments for stock splits, stock combinations and similar events)
which Blackstone holds on the date hereof after the transactions effected
pursuant to the Stock Purchase Agreements; one (1) individual
20
designated by Xxxxxxxxxxx (the "XXXXXXXXXXX DIRECTOR") as long as Xxxxxxxxxxx
and its direct or indirect Permitted Transferees continue to hold at least 25%
of the Shares (subject to equitable adjustments for stock splits, stock
combinations and similar events) which Xxxxxxxxxxx holds on the date hereof
after the transactions effected pursuant to the Stock Purchase Agreements; two
outside directors prior to conversion of the Convertible Preferred Stock and
three outside directors within 60 days of the dates hereof but in any event
after such conversion, in each case that satisfy the independent director
requirements of any securities exchange upon which the Common Stock is then
listed as in effect from time to time; and the person from time to time serving
as the Company's chief executive officer.
(b) Each of Blackstone and Xxxxxxxxxxx agrees
that if the Charter Amendment Effective Date (as defined in the Company Stock
Purchase Agreement) has not occurred on or prior to the date that is 45 days
after the date of this Agreement, it shall cause one of the two members of the
Board of Directors designated by them (the "B/W DIRECTOR") to resign and shall
thereafter at all times prior to the Charter Amendment Effective Date vote its
Shares at any Stockholders Meeting called for the purpose of filling the
positions on the Board of Directors, or in any Written Consent executed for such
purpose, and take all other actions necessary to ensure the election to the
Board of Directors of five (5) individuals designated by Heartland Industrial
Partners, L.P. After the Charter Amendment Effective Date, Blackstone and
Xxxxxxxxxxx'x rights under Section 6.3(a) shall be fully restored. At such time
as this clause (b) shall be in effect Blackstone and Xxxxxxxxxxx shall have the
right to designate one Observer to the board who shall have the rights, and be
subject to the restrictions, set forth in Section 6.7.
6.4 REMOVAL AND REPLACEMENT OF DIRECTOR.
(a) REMOVAL OF DIRECTORS. If at any time the
Investor Stockholders, Blackstone or Xxxxxxxxxxx notifies the other Stockholders
of their or its wish to remove at any time and for any reason (or no reason) a
director designated by them or it, then each Stockholder shall vote, or execute
a Written Consent for, all of its Shares so as to remove such director.
(b) REPLACEMENT OF DIRECTORS.
------------------------
(i) If at any time, a vacancy is created
on the Board of Directors by reason of the incapacity, death, removal
or resignation of any of the director designated pursuant to Section
6.3 hereof, then the Stockholder(s) who designated such director shall
designate an individual who shall be elected to fill the vacancy until
the next Stockholders Meeting.
(ii) Upon receipt of notice of the
designation of a nominee pursuant to Section 6.4(b)(i), each
Stockholder shall, as soon as practicable after the date of such
notice, take all reasonable actions, including the voting of its
Shares or executing a Written Consent, to elect the director so
designated to fill the vacancy.
21
6.5 REIMBURSEMENT OF EXPENSES; D&O INSURANCE. The Company
shall reimburse the Investor Stockholders, Blackstone and Xxxxxxxxxxx or their
respective designees, for all reasonable travel and accommodation expenses
incurred by the Investor Directors, the Blackstone Director and the Xxxxxxxxxxx
Director in connection with attendance at meetings of the Board of Directors and
committees thereof upon presentation of appropriate documentation therefor. The
Company shall, and each Stockholder shall use reasonable commercial efforts to
cause the Board of Directors to cause the Company to, maintain a directors'
liability insurance policy that is reasonably acceptable to the Investor
Directors, the Blackstone Director and the Xxxxxxxxxxx Director.
6.6 QUORUM. A quorum of the Board of Directors shall consist
of six (6) directors. All actions of the Board shall require approval by a
majority of the Board of Directors present at a meeting of the Board of
Directors at which a quorum is present.
6.7 OBSERVER RIGHTS. In the case of a Qualified Investor, for
so long as such Qualified Investor retains a number of shares of Common Stock
equal to at least a majority of the shares of Common Stock owned by such Person
immediately following the date hereof (subject to equitable adjustments for
stock splits, stock combinations and similar events), such Person will have
right to send one Representative on its behalf (the "OBSERVER") to attend all
meetings of the Board of Directors, including all committees thereof (other than
meetings at which confidential matters related to the Qualified Investor or its
Observer are discussed and other than confidential audit and compensation
committee meetings), solely in a non-voting observer capacity. The Company will
furnish to the Observer copies of all notices, minutes, consents and other
materials that it generally makes available to its directors. The Observer may
participate in discussions of matters under consideration by the Board of
Directors and any matters brought before any committee thereof but will not be
entitled to vote on any matter presented to the Board of Directors. Any
Qualified Investor will have the right to remove and replace its Observer in its
sole discretion and to designate a substitute representative if its Observer is
unable or unwilling to attend any of the Board's meetings, including any
committees thereof. In no event shall there be at any time more than three
Observers (in addition to any Observer under Section 6.3(b) without the approval
of a majority of the directors not designated by Heartland Industrial Partners,
L.P. Notwithstanding the foregoing, if the Company is advised by counsel that
the rules of the Securities and Exchange Commission or other applicable
securities laws require that the Observer and/or the Qualified Investor
appointing the same be subject to a confidentiality agreement, then such
Observer and/or the Qualified Investor shall enter into such reasonable form of
confidentiality agreement that the Company shall request.
ARTICLE VII
COVENANTS.
7.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
shall deliver to each Investor Stockholder, Blackstone and Xxxxxxxxxxx such
financial statements (including monthly financial statements), reports and
information as may be
22
reasonably requested by any of the Investor Stockholders, Blackstone or
Xxxxxxxxxxx including a copy of any filings by the Company with the Commission.
7.2 INSPECTION. The Company shall permit representatives of
the Investor Stockholders, Blackstone and Xxxxxxxxxxx to visit and inspect any
of its properties, to examine its corporate, financial and operating records and
make copies thereof or abstracts therefrom, and to discuss its affairs, finances
and accounts with their respective directors, officers and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably requested upon reasonable advance notice to the
Company. No Stockholder beneficially owning less than 5% of the outstanding
Common Stock shall be entitled to any of the rights under this Section 7.2.
ARTICLE VIII
STOCK CERTIFICATE LEGEND
8.1 A copy of this Agreement shall be filed with the Secretary
of the Company and kept with the records of the Company. Each certificate
representing Shares now held or hereafter acquired by any Stockholder shall for
as long as this Agreement is effective (until a transfer pursuant to Rule 144 or
an effective registration statement filed under the Securities Act) bear legends
substantially in the following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR
OTHER DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY
THE TERMS OF THE STOCKHOLDERS AGREEMENT, DATED FEBRUARY 23,
2001, AMONG THE COMPANY AND THE STOCKHOLDERS NAMED THEREIN, A
COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL
OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH
SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE
TRANSFER HAS
23
BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS
AGREEMENT.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 NOTICES. All notices, demands or other communications
provided for or permitted hereunder shall be made in writing and shall be by
telecopier, courier service, or personal delivery:
(a) Xxxxxxx & Xxxxxx Corporation
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, CEO
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, General Counsel
with copies to:
Morris, Nichols, Arsht & Xxxxxxx
0000 X. Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx
(b) if to the New Investor:
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
24
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
(c) if to Sellers:
Blackstone Capital Partners L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Esq.
and
Wasserstein, Perella Management Partners
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X'Xxxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
(d) if to any other Stockholder, at its address
as it appears on the record books of the
Company.
25
All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; and when receipt is
mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 9.1 designate another address or Person for receipt
of notices hereunder.
9.2 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon successors and
permitted assigns of the parties hereto. This Agreement is not assignable except
in connection with a transfer of Shares in accordance with this Agreement. No
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of this Agreement.
9.3 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of any party
hereto in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
parties hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by any party from the terms of any
provision of this Agreement, shall be effective only if it is made or given in
writing and signed by (i) the Company, and (ii) each Stockholder who is
adversely affected by such amendment, supplement, modification, waiver, consent
or departure. Any such amendment, supplement, modification, waiver or consent
shall be binding upon the Company and all of the Stockholders.
9.4 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by the parties hereto in separate counterparts each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.5 SPECIFIC PERFORMANCE. The parties hereto intend that each
of the parties have the right to seek damages or specific performance in the
event that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party
has an adequate remedy at law.
9.6 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF
26
THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
9.8 SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall materially impair the
benefits of the remaining provisions hereof.
9.9 RULES OF CONSTRUCTION. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.
9.10 ENTIRE AGREEMENT. This Agreement, together with the
exhibits hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises,
representations, warranties or undertakings, other than those set forth or
referred to herein or therein. This Agreement, together with the exhibits
hereto, supersede all prior agreements and understandings among the parties with
respect to such subject matter.
9.11 FURTHER ASSURANCES. Each of the parties shall, and shall
cause their respective Affiliates to, execute such documents and perform such
further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this agreement.
[Remainder of page intentionally left blank]
S-1
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed this Agreement on the date first written above.
XXXXXXX & XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
BLACKSTONE CAPITAL PARTNERS L.P.
By: Blackstone Management Associates L.P.,
its general partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
BLACKSTONE ADVISORY DIRECTORS
PARTNERSHIP L.P.
By: Blackstone Management Associates L.P.,
its general partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP I L.P.
By: Blackstone Management Associates I
L.L.C., its general partner
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
New Master Shareholder Agreement
S-2
BLACKSTONE CAPITAL COMPANY II L.L.C.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
XXXXXXXXXXX/C&A HOLDINGS, L.L.C.
By: /s/ Xxxxxxx X. X'Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. X'Xxxxxxx
Title: President
New Master Shareholder Agreement
S-3
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates,
L.L.C. its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name:
Title:
HEARTLAND INDUSTRIAL PARTNERS (FF),
L.P.
By: Heartland Industrial Associates,
L.L.C. its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name:
Title:
HEARTLAND INDUSTRIAL PARTNERS (E1),
L.P.
By: Heartland Industrial Associates,
L.L.C. its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name:
Title:
New Master Shareholder Agreement
S-4
HEARTLAND INDUSTRIAL PARTNERS (K1),
L.P.
By: Heartland Industrial Associates,
L.L.C. its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name:
Title:
HEARTLAND INDUSTRIAL PARTNERS (C1),
L.P.
By: Heartland Industrial Associates,
L.L.C. its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name:
Title:
New Master Shareholder Agreement
S-5
The undersigned hereby execute this Agreement on the
date first written above for purposes of Section 1.2
only.
XXXXXXX & XXXXXX PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name:
Title:
XXXXXXXXXXX XXXXXXX PARTNERS, L.P.
By: Xxxxxxxxxxx Management Partners,
LP, its general partner
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name:
Title:
New Master Shareholder Agreement
EXHIBIT A
ACKNOWLEDGMENT AND AGREEMENT
The undersigned wishes to receive from [NAME] ("Transferor")
certain shares or certain options, warrants or other rights to purchase [NUMBER]
shares, par value $[NUMBER] per share, of Common Stock (the "Shares") of Xxxxxxx
& Xxxxxx Corporation, a Delaware corporation (the "Company");
The Shares are subject to the Stockholders Agreement, dated
__________ [ ], 2001 (the "Agreement"), among the Company and the other parties
listed on the signature pages thereto;
The undersigned has been given a copy of the Agreement and
afforded ample opportunity to read and to have counsel review it, and the
undersigned is thoroughly familiar with its terms;
Pursuant to the terms of the Agreement, the Transferor is
prohibited from transferring such Shares and the Company is prohibited from
registering the transfer of the Shares unless and until a transfer is made in
accordance with the terms and conditions of the Agreement and the recipient of
such Shares acknowledges the terms and conditions of the Agreement and agrees to
be bound thereby; and
The undersigned wishes to receive such Shares and have the
Company register the transfer of such Shares.
In consideration of the mutual promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and to induce the Transferor to transfer such Shares to
the undersigned and the Company to register such transfer, the undersigned does
hereby acknowledge and agree that (i) he[/she] has been given a copy of the
Agreement and afforded ample opportunity to read and to have counsel review it,
and the undersigned is thoroughly familiar with its terms, (ii) the Shares are
subject to the terms and conditions set forth in the Agreement, and (iii) the
undersigned does hereby agree fully to be bound thereby as [an " Investor"] [a
"Major Stockholder"] (as therein defined).
This ________ day of ________, 20__.
SCHEDULE I
INVESTORS
Heartland Industrial Partners (FF), L.P.
Heartland Industrial Partners (E1), L.P.
Heartland Industrial Partners (K1), L.P.
Heartland Industrial Partners (C1), L.P.