EXHIBIT 10.36
SHAREHOLDERS AGREEMENT
by and among
PAMECO CORPORATION
XXXXXXXXXX FUND II, L.P.
QUILVEST AMERICAN EQUITY, LTD.
and
Willem X. X. xx Xxxxx
dated as of
February 18, 2000
TABLE OF CONTENTS
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Page
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1. Certain Defined Terms...................................................... 1
2. Agreements to Vote; Irrevocable Proxy...................................... 4
3. Transfers of Securities.................................................... 6
4. Participation Rights....................................................... 8
5. Joinder Requirements....................................................... 9
6. Composition, Nomination and Election of Board.............................. 9
7. Stock Splits............................................................... 11
8. Representations and Warranties of Xxxxxxxxxx............................... 11
9. Representations and Warranties of Quilvest and xx Xxxxx.................... 12
10. Representations and Warranties of the Company.............................. 13
11. Termination; Securities Free from Agreement................................ 14
12. Expenses................................................................... 14
13. Fees....................................................................... 14
14. Certain Covenants of Quilvest and xx Xxxxx................................. 15
15. Financial Reports and Information.......................................... 16
16. Transaction with Affiliates................................................ 16
17. Legend and Stop Transfer Instructions...................................... 16
18. Survival of Representations and Warranties................................. 17
19. Notices.................................................................... 17
20. Entire Agreement; Amendment................................................ 18
21. Successors and Assigns..................................................... 18
22. Governing Law; Consent to Jurisdiction..................................... 18
23. Injunctive Relief.......................................................... 19
24. Counterparts; Facsimile Signatures......................................... 19
25. Severability............................................................... 19
26. Further Assurances......................................................... 19
27. No Third Party Beneficiaries; No Partnership or Fiduciary Relationship..... 19
28. Legal Expenses............................................................. 19
29. Interpretation............................................................. 19
30. Effectiveness.............................................................. 20
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SHAREHOLDERS AGREEMENT
----------------------
SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of February 18,
2000, by and among Xxxxxxxxxx Fund II, L.P., a Delaware limited partnership
("Xxxxxxxxxx"), Quilvest American Equity, Ltd., a British Virgin Islands
international business company ("Quilvest"), Willem X.X. xx Xxxxx, a resident of
the State of New York ("xx Xxxxx"; and together with Xxxxxxxxxx and Quilvest,
the "Shareholders"), and Pameco Corporation, a Georgia corporation (the
"Company").
W I T N E S S E T H:
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WHEREAS, as of the Effective Time (as defined in Section 1 below) each
of the Shareholders owns such number of shares of Common Stock, par value $.01
per share (the "Common Stock"), such number of shares of Series A Preferred
Shares (as defined in Section 1 hereof) and such number of warrants to purchase
Series A Preferred Shares (the "Warrants"), in each case indicated next to his
or its name on Schedule 1 attached hereto;
WHEREAS, the Company and the Shareholders have agreed to provide for
certain restrictions with respect to the ownership and transfer of Securities
(as defined in Section 1 hereof) owned by the Shareholders and certain other
rights incident to the ownership of such Securities pursuant to this Agreement;
and
WHEREAS, this Agreement is being entered into in order to induce
Xxxxxxxxxx to enter into the Purchase Agreement (as defined in Section 1 hereof)
and to consummate the Contemplated Transactions (as defined in Section 1
hereof).
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, the parties hereto, hereby agree, as of
the Effective Time, as follows:
1. Certain Defined Terms.
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As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Additional Closing" has the meaning set forth in the Purchase
Agreement.
"Affiliate" of a Person shall mean any Person which, directly or
indirectly, controls, is controlled by, or is under common control with such
Person. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to elect
a majority of the board of directors (or other governing body) or to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise and, in any
event and without limiting the generality of the foregoing, any Person owning
10% or more of the voting securities of another Person shall be deemed to
control that Person.
"Aggregate Proceeds" shall be determined as of the date of an
applicable Participation Notice and shall equal the gross proceeds received as
of the date of determination by Xxxxxxxxxx or Xxxxxxxxxx Permitted Transferees
from sales, if any, of shares of Common Stock or Preferred Stock to any Person
who is not a Xxxxxxxxxx Permitted Transferee (a) pursuant to an effective
registration statement, (b) pursuant to Rule 144 under the Securities Act or (c)
in transactions otherwise exempt from the registration requirements of the
Securities Act.
"Applicable Percentage" has the meaning set forth in the Purchase
Agreement.
"Articles of Incorporation" means the Articles of Incorporation of the
Company, as they may hereafter be amended or modified.
"Beneficial Owner" and "beneficial ownership" shall be determined in
accordance with Rule 13d-3 promulgated under the Exchange Act.
"Board" has the meaning set forth in Section 2.1(c) hereof.
"Business Day" has the meaning set forth in the Purchase Agreement.
"By-laws" means the By-laws of the Company, as they may hereafter be
amended or modified.
"Class A Common Stock" means the Class A Common Stock of the Company,
par value $0.01 per share.
"Class B Common Stock" means the Class B Common Stock of the Company,
par value $0.01 per share.
"Commission" means the United States Securities and Exchange
Commission, or any successor thereto.
"Common Stock" means the Class A Common Stock and Class B Common Stock
of the Company.
"Contemplated Transactions" has the meaning set forth in the Purchase
Agreement.
"Credit Agreement" has the meaning set forth in Section 13(a) hereof.
"Effective Time" shall mean the time when the Initial Closing is
completed.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
"Family Trust" means with respect to any Shareholder who is a natural
person, a trust for the benefit of a member of such Shareholder's Immediate
Family.
"GBCC" means the Georgia Business Corporation Code, as amended.
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"Immediate Family" means with respect to any Shareholder who is a
natural person, such Shareholder's parents, children, siblings, grandparents,
grandchildren, nieces and nephews.
"Initial Closing" has the meaning set forth in the Purchase Agreement.
"Initiating Holder" has the meaning set forth in Section 5.1 hereof.
"Irrevocable Proxy" has the meaning set forth in Section 2.3 hereof.
"Lenders" shall have the meaning set forth in the Credit Agreement.
"Xxxxxxxxxx" means Xxxxxxxxxx Fund II, L.P., a Delaware limited
partnership.
"Xxxxxxxxxx Permitted Transferee" means (a) any Affiliate of
Xxxxxxxxxx, or (b) any Immediate Family Member, or Family Trust established by
an Immediate Family Member, of an Affiliate of Xxxxxxxxxx who is a natural
person.
"Management Fee" has the meaning set forth in Section 13(a) hereof.
"Offered Securities" has the meaning set forth in Section 4.1 hereof.
"Option Period" has the meaning set forth in Section 4.3 hereof.
"Overadvance Fee" has the meaning set forth in Section 13(b) hereof.
"Participation Notice" has the meaning set forth in Section 4.1
hereof.
"Participation Right" has the meaning set forth in Section 4.3 hereof.
"Participating Shareholder" has the meaning set forth in Section 4.2
hereof.
"Person" means any individual, corporation, partnership, firm, joint
venture, limited liability company or partnership, association, joint-stock
company, trust, unincorporated organization or Governmental Body.
"Preferred Stock" means any series of preferred stock, par value $1.00
per share, of the Company, including the Series A Preferred Shares.
"Purchase Agreement" means that certain Securities Purchase Agreement,
dated as of February 18, 2000, by and among the Company, Quilvest and
Xxxxxxxxxx, as amended from time to time.
"Purchaser" has the meaning set forth in Section 4.1 hereof.
"Quilvest" means Quilvest American Equity, Ltd., a British Virgin
Islands international company.
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"Registrable Securities" has the meaning set forth in the Registration
Rights Agreement.
"Registration Rights Agreement" means that certain registration rights
agreement, dated today's date, among the Company, Xxxxxxxxxx and Quilvest, as
the same may be amended or modified from time to time.
"Required Approval" has the meaning set forth in the Purchase
Agreement.
"Return Amount" has the meaning set forth in Section 4.5 hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Selling Shareholder" has the meaning set forth in Section 4.1 hereof.
"Securities" means and include (a) all shares of the Common Stock and
Preferred Stock of the Company, (b) all options, warrants or rights to acquire
shares of Common Stock or Preferred Stock, (c) all securities which are
convertible into or exchangeable or exercisable for, Common Stock or Preferred
Stock, and (d) all other securities of the Company which may be issued in
exchange for or in respect of shares of Common Stock or Preferred Stock (whether
by way of stock split, stock dividend, combination, reclassification,
reorganization or any other means).
"Series A Preferred Shares" means the Series A Cumulative Pay-in-Kind
Preferred Stock of the Company, as the same may be amended or modified from time
to time.
"Subsequent Preferred Shares" has the meaning set forth in the
Certificate of Designation for the Series A Preferred Shares.
"Third Party Offer Terms" has the meaning set forth in Section 4.1
hereof.
"Transfer" means any transfer of Securities, whether by sale,
assignment, gift, will, devise, bequest, operation of the laws of descent and
distribution, or in trust, pledge, hypothecation, mortgage, encumbrance or other
disposition. The verb to "transfer" shall mean to sell, assign, give, dispose,
transfer (including by gift, will, devise, bequest, or operation of laws of
descent and distribution, or in trust), pledge, hypothecate, mortgage, or
encumber.
"Voting Securities" has the meaning set forth in Section 2.1(a)
hereof.
"Warrants" has the meaning set forth in the preamble hereof.
2. Agreements to Vote; Irrevocable Proxy.
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2.1. Voting for Matters to be Considered. Each of the Shareholders
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hereby agrees that, until the Required Approval is obtained or the Company's
shareholders vote to reject the matters contemplated to be voted on pursuant to
Section 7.6 of the Purchase
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Agreement (the "Matters to be Considered"), whichever shall occur first, at any
meeting of the shareholders, however called, such Shareholder shall:
(a) vote all Securities which are entitled by the GBCC, the Articles
of Incorporation or the By-laws to be voted ("Voting Securities") and which are
beneficially owned by it, in favor of the Matters to be Considered;
(b) vote all Voting Securities beneficially owned by him or it against
any action or agreement that would result, to its or his knowledge, in a breach
of any covenant, obligation or agreement or any representation or warranty of
the Company or Quilvest under or pursuant to the Purchase Agreement;
(c) vote all Voting Securities beneficially owned by him or it against
any action or agreement that would impede, interfere with, delay, postpone or
attempt to discourage obtaining the Required Approval, including (i) any
corporate transaction not entered into in the ordinary course of business,
including a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving the Company, (ii) a sale
or transfer of a material amount of assets of Company, (iii) any change in the
board of directors of Company (the "Board"), except in accordance with the
Purchase Agreement, (iv) any change in the capitalization of the Company, except
in accordance with the Purchase Agreement, (v) any change in the Articles of
Incorporation, By-laws or other organizational or constitutive documents of the
Company, except in accordance with the Purchase Agreement, or (vi) any other
material change in the corporate structure or business of the Company. Each
Shareholder acknowledges receipt and review of a copy of the Purchase Agreement.
2.2. Agreement to Vote on All Other Matters. Quilvest and xx xxxxx
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hereby agree that, so long as the Purchase Agreement has not been terminated in
accordance with its terms, at any meeting of the shareholders, however called,
such Shareholder shall vote all Voting Securities which are beneficially owned
by him or it in accordance with written instructions which such Shareholder
reasonably believes in good faith after reasonable inquiry were signed by an
authorized officer of Xxxxxxxxxx. In the absence of receipt of such written
instructions as to how such Voting Securities should be voted with respect to a
particular meeting, Quilvest and xx Xxxxx shall refrain from voting such Voting
Securities on such particular matter. Notwithstanding anything to the contrary,
Xxxxxxxxxx shall be entitled to exercise the voting rights attributable to such
Voting Securities at any time pursuant to the Irrevocable Proxy without notice
to Quilvest or xx Xxxxx. Nothing contained in this Section 2.2 shall require
Quilvest or xx Xxxxx, or shall permit Xxxxxxxxxx through the exercise of the
Irrevocable Proxy, to vote the Voting Securities beneficially owned by Quilvest
or xx Xxxxx, in the case of the election of members of the Board, in
contravention of the provision of Section 6 hereof.
2.3. Irrevocable Proxy. Contemporaneously with the execution of
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this Agreement: (a) Quilvest and xx Xxxxx shall deliver to Xxxxxxxxxx a proxy
in the form attached hereto as Exhibit A, which shall become effective as of the
Effective Time and shall be irrevocable to the fullest extent permitted by law
(the "Irrevocable Proxy"), with respect to all Voting Securities owned of record
by each of them as of the Effective Time; and (b) Quilvest and xx Xxxxx shall
cause to be delivered to Xxxxxxxxxx additional Irrevocable Proxies executed on
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behalf of each record owner of any Voting Securities owned beneficially (but not
owned of record) by him or it. From time to time after the date of this
Agreement: (i) if Quilvest or xx Xxxxx shall become the record owner of
additional Voting Securities, it shall immediately deliver to Xxxxxxxxxx an
Irrevocable Proxy with respect to such additional Voting Securities; and (ii) if
Quilvest or xx Xxxxx shall become the beneficial owner (but not the record
owner) of additional Voting Securities, it shall immediately cause to be
delivered to Xxxxxxxxxx an Irrevocable Proxy with respect to such additional
Voting Securities from the record holder of such additional Voting Securities.
The terms of any Irrevocable Proxy executed and delivered by xx Xxxxx shall
automatically terminate and be of no further force or effect at and after the
earlier of (x) such time as he no longer beneficially owns any shares of Class B
Common Stock or (y) he is no longer a member of the Board. The terms of any
Irrevocable Proxy executed and delivered by a record owner of Voting Securities
which are beneficially owned by xx Xxxxx shall automatically terminate and be of
no further force or effect at and after the earlier of (x) such time as xx Xxxxx
no longer beneficially owns any shares of Class B Common Stock or (y) xx Xxxxx
is no longer a member of the Board.
2.4. Written Consents. The provisions of this Article 2 shall be
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equally applicable to any action taken or proposed to be taken by the Company's
shareholders without a meeting, including any such action taken or proposed to
be taken by written consent pursuant to Section 14-2-704 of the GBCC.
2.5. General. The Company agrees to use its best efforts to cause
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the Matters to be Considered to be presented for a vote of the Company's
shareholders as soon as practicable. Quilvest and xx Xxxxx hereby confirm each
and every action to be taken by Xxxxxxxxxx pursuant to the Irrevocable Proxy (so
long as such action was taken when the Irrevocable Proxy was in effect) as if it
were its own and waives any right to make any claim against Xxxxxxxxxx that may
arise, directly or indirectly, as a result of Xxxxxxxxxx'x voting of any of the
Voting Securities pursuant to the Irrevocable Proxy. Each of Quilvest and xx
Xxxxx hereby agrees, severally and not jointly, to defend, indemnity and hold
Xxxxxxxxxx harmless from and against any Losses and Investigatory and Defense
Costs (as such terms are defined in the Purchase Agreement) that Xxxxxxxxxx may
sustain, suffer or incur, directly or indirectly, as a result of a breach by it
of any of its representations, warranties, covenants or agreements contained in
this Agreement.
3. Transfers of Securities.
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3.1. Except as expressly permitted by the terms of this
Agreement, each of xx Xxxxx and Quilvest hereby agrees that he or it shall not
Transfer, or permit the Transfer of, all or any of the Securities beneficially
owned by him or it. Xxxxxxxxxx agrees that it will not transfer any Securities
if such Transfer is prohibited by the terms and conditions of this Agreement.
As a condition to any Transfer to a Xxxxxxxxxx Permitted Transferee, such
Xxxxxxxxxx Permitted Transferee shall execute a counterpart agreeing to be bound
by the terms and conditions of this Agreement to the same extent as its
transferor. No Transfer shall be effective and the Company shall not, and shall
not be compelled to, recognize any Transfer or record any Transfer on its books
if such Transfer is prohibited by this Agreement, or issue any certificate
representing any Securities to any Person who has received such Securities in a
Transfer made in contravention of the terms of this Agreement, and only if such
Person has delivered to the
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Company and Xxxxxxxxxx an executed counterpart where one is required to be
delivered hereunder.
3.2. Each of Quilvest and xx Xxxxx shall be permitted to Transfer
Securities beneficially owned by it to any Affiliate of such Shareholder, and xx
Xxxxx shall be permitted to transfer Securities beneficially owned by him to a
member of his Immediate Family or to a Family Trust, provided that, in any such
case, any such transferee shall, as a condition to such Transfer, execute a
counterpart, and deliver such counterpart to the Company and Xxxxxxxxxx,
providing that such transferee shall be bound by the terms and provisions of
this Agreement to the same extent as the transferor was bound.
3.3. In the case of a proposed Transfer of Securities by Quilvest
or xx Xxxxx to someone other than one of its Affiliates, or, in the case of xx
Xxxxx, to a member of his Immediate Family or to a Family Trust, then Quilvest
or xx Xxxxx shall provide Xxxxxxxxxx with written notice at least 20 days prior
to the anticipated Transfer. Such notice shall contain (a) the identity of the
proposed transferor and (b) the proposed number of Securities to be transferred.
Within 15 days of receipt of written notice of a proposed Transfer, Xxxxxxxxxx
shall provide either (i) written consent to the proposed Transfer, which consent
may be denied for any reason or for no reason, and which may be given or denied
in Xxxxxxxxxx'x sole and absolute discretion, (ii) written notice specifying an
alternate number of shares to be transferred to which it would be prepared to
provide consent, or (iii) written notice to the applicable Shareholder of
Xxxxxxxxxx'x decision not to consent to the proposed Transfer. If Xxxxxxxxxx
shall fail to respond, it shall be deemed not to have consented to such
Transfer. The proposed transferor shall provide Xxxxxxxxxx with such other
information as Xxxxxxxxxx shall reasonably request, including the terms and
conditions of the Transfer and information concerning the proposed transferee.
Upon receipt of the written consent of Xxxxxxxxxx, if at all, the transferring
Shareholder may consummate the proposed Transfer. Such Shareholder may also
consummate a transfer of the number of Securities set forth in the alternate
proposal of Xxxxxxxxxx, provided, however, that such Shareholder shall notify
Xxxxxxxxxx of its decision to accept the Xxxxxxxxxx alternate proposed number of
Securities to be transferred not less than 10 days after receipt of the same
from Xxxxxxxxxx, if at all. No Transfer may be effected pursuant to this
Section 3.3 until after receipt of the Required Approval.
3.4. Except as otherwise consented to in writing by Xxxxxxxxxx,
which consent may be denied for any reason or for no reason, and which may be
given or denied in Xxxxxxxxxx'x sole and absolute discretion, in no event shall
any Transfer by Quilvest or xx Xxxxx of its or his Class B Common Stock be
permitted under Section 3.3 if such Transfer would result in a conversion of the
Class B Common Stock into shares of Class A Common Stock.
3.5. Notwithstanding the provisions of Sections 3.3 and 3.4
hereof, commencing on the date which is five years after the date hereof, and
from time to time thereafter, so long as Xxxxxxxxxx beneficially owns and is
entitled to the economic benefits of greater than 50% of the then outstanding
Common Stock and Preferred Stock (determined after giving effect to any Transfer
contemplated by this Section 3.5), Quilvest and xx Xxxxx may sell Securities
pursuant to Rule 144 promulgated under the Securities Act and in private
transactions exempt from the Securities Act; provided, however, the amount of
Securities sold in all such
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transactions shall not exceed, in the aggregate for any three-month period, the
volume limitation set forth in Rule 144, regardless if such rule or limitation
is applicable to the sale.
3.6. Notwithstanding the provisions of Sections 3.3 and 3.4
hereof, Quilvest and xx Xxxxx shall be entitled to sell Registrable Securities
pursuant to and in accordance with the terms and conditions of the Registration
Rights Agreement.
3.7. The parties agree that the transfer restrictions set forth
in this Article 3 are not manifestly unreasonable.
4. Participation Rights.
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4.1. If Xxxxxxxxxx or a Xxxxxxxxxx Permitted Transferee (for
purposes of this section, a "Selling Shareholder") proposes to sell a portion of
the Securities beneficially owned by it ("Offered Securities") in a transaction
which is exempt from the registration requirements of the Securities Act and the
proposed transferee is not a Xxxxxxxxxx Permitted Transferee (the "Purchaser"),
it shall give written notice ("Participation Notice") to Quilvest and xx Xxxxx
hereunder and comply with this Section 4 before making such sale. The
Participation Notice shall identify the third party purchaser and the material
terms (including the proposed closing date) of the proposed sale of the Offered
Securities (the "Third Party Offer Terms").
4.2. Quilvest or xx Xxxxx may elect to participate (such
Shareholder so electing being herein a "Participating Shareholder") in the
Selling Shareholder's sale of Offered Securities to the Purchaser in accordance
with this Section 4.
4.3. For a period of 15 days after receipt of the Participation
Notice (the "Option Period"), any such Participating Shareholder shall have the
right ("Participation Right") to Transfer to the Purchaser, on the same terms
and conditions as the Selling Shareholder, part or all of the Offered Securities
to be sold to the Purchaser.
4.4. The Participation Right shall be exercised, if at all, by
any Participating Shareholder giving written notice of exercise of the
Participation Right, including the number of Securities it desires to sell, to
the Selling Shareholder before the expiration of the Option Period.
4.5. The number of Offered Securities to be sold by the
Shareholders in a transaction governed by this Section 4 shall be determined as
follows: (a) until Xxxxxxxxxx and the Xxxxxxxxxx Permitted Transferees shall
have received Aggregate Proceeds equal to the amount invested by Xxxxxxxxxx and
its Affiliates to purchase Securities, plus the amount of accrued and unpaid
dividends, if any, thereon (whether or not declared), in each case through the
date of the particular Participation Notice (the "Return Amount"), the Offered
Securities shall be allocated (without priority between the two groups described
below), between Xxxxxxxxxx and the Xxxxxxxxxx Permitted Affiliates, on the one
hand, and Quilvest, xx Xxxxx and their respective permitted transferees who are
party to this Agreement, on the other hand, such that Xxxxxxxxxx and the
Xxxxxxxxxx Permitted Transferees will be permitted to sell up to Xxxxxxxxxx'x
Applicable Percentage of the Offered Securities, allocated among them as they
shall so determine, and Quilvest, xx Xxxxx and their respective permitted
transferees who are party to this Agreement will be permitted to sell up to
Quilvest's Applicable Percentage of the Offered Securities,
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allocated among them as they shall so determine; and (b) after Xxxxxxxxxx shall
have received the Return Amount, the Offered Securities shall be allocated among
Xxxxxxxxxx, Quilvest, xx Xxxxx and their respective permitted transferees who
are party to this Agreement pro rata based upon the number of shares of Common
Stock beneficially owned by them. If this Section 4 shall have terminated as to
xx Xxxxx pursuant to Section 11.3 hereof, this Section 4.5 shall be construed to
exclude xx Xxxxx and his permitted transferees from all aspects hereof.
4.6. Notwithstanding anything to the contrary contained in this
Section 4, any sale of Securities in connection with an effective registration
statement, or pursuant to the provisions of Rule 144 of the Securities Act,
shall not be restricted by Section 4 or 5 of this Agreement.
5. Joinder Requirements.
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5.1. If at any time Xxxxxxxxxx (for purposes of this section, the
"Initiating Holder") proposes to sell at least 90% of the Securities
beneficially owned by it to a prospective purchaser which is not an Affiliate of
Xxxxxxxxxx, and the purchaser of such Securities requires as a condition of the
sale that it acquire the same percentage of the Securities beneficially owned by
Quilvest and xx Xxxxx, then Quilvest and xx Xxxxx shall be required to sell the
same percentage of its respective Securities to the purchaser as Xxxxxxxxxx is
selling to the purchaser on terms providing Quilvest and xx Xxxxx with
substantially the same economic benefit as was provided to the Initiating
Holder, after taking into consideration the relative rights, preferences and
privileges of the various Securities to be purchased and sold, and otherwise on
the same terms and conditions as those offered to the Initiating Holder. Each
of Quilvest and xx Xxxxx agrees to execute an irrevocable proxy in favor of the
purchaser under this Section 5 if the purchaser so requires it in order to
retain voting control of the Company, which proxy shall be in substantially the
form of Exhibit A attached hereto.
5.2. Any sale of Securities pursuant to this Section 5 shall not
be subject to the provisions of Sections 3 and 4 of this Agreement. Nothing
contained in this Section 5 shall apply to sales made pursuant to Rule 144 under
the Securities Act or pursuant to an effective registration statement.
6. Composition, Nomination and Election of Board.
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(a) The Board shall at all times have nine directors.
(b) So long as there shall be any shares of Class B Common Stock
outstanding, the Board shall be comprised of two persons elected by the holders
of the Class A Common Stock (the "Class A Directors") and seven persons elected
by the holders of the Class B Common Stock (the "Class B Directors"). The Class
A Directors, neither of whom shall be Affiliates or Associates (as defined for
purposes of the Securities Act or the GBCC) of Xxxxxxxxxx or Quilvest, shall be
nominated in accordance with the requirements of the GBCC, and the rules and
regulations of the Commission and the New York Stock Exchange. Xxxxxxxxxx shall
nominate five persons to stand for election to serve as Class B Directors,
Quilvest shall nominate one person to stand for election to serve as a Class B
Director and the directors then in office, acting by a majority, shall nominate
one person to stand for election to serve as a Class B Director, which nominee
shall not be an Affiliate or Associate of Xxxxxxxxxx. Each of the Shareholders
shall vote their Voting Securities, to the extent entitled to vote for the
election of
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Class B Directors, in favor of the seven persons nominated as provided above in
this Section 6. If there shall occur a vacancy for any reason, whether by
resignation, removal or otherwise, in the position of any Class B Director, then
the Shareholder who originally nominated such Class B Director, or the Board,
acting by a majority of the Directors then in office, if such Class B director
was nominated by the Board, shall be entitled to nominate such Class B
Director's successor, and the Shareholders shall promptly take such action,
including causing such Shareholder's nominee(s) for Class B Director(s), if any,
to take such action, so as to cause the successor Class B Director to be duly
and properly elected or appointed. No Shareholder shall take any action, or
permit any Class B Director nominated by it to take any action, to remove a
Class B Director which was nominated by another Shareholder without the consent
of such other Shareholder. Any person nominated to serve as a Class B Director
by a Shareholder may be removed from such position, with or without cause, only
by the Shareholder nominating such Class B Director, and the other Shareholders
shall promptly take such action, including causing such Shareholder's nominee(s)
for Class B Director(s), if any, to take such action, as may be requested by the
Shareholder who nominated the Class B Director sought to be removed, to duly and
properly effect the removal of such Class B Director from such position. If
there shall occur a vacancy for any reason, whether by resignation, removal or
otherwise, in the position of any Class A Director, then the remaining Class A
Director, if there shall be one, shall be entitled to nominate an individual
(who shall be qualified to serve as a director by reason of his experience) to
fill the vacancy, and the other directors and the Shareholders shall promptly
take such action, including causing such Shareholder's nominee(s) for Class B
Director(s), if any, to take such action, so as to cause the proposed successor
Class A Director to be duly and properly elected or appointed. If there shall be
no Class A Directors, then the vacancies in such directorships shall be filled
by the Class B Directors with persons who are not Affiliates or Associates of
Xxxxxxxxxx or Quilvest.
(c) From and after the time that there are no longer any shares of
Class B Common Stock outstanding, Xxxxxxxxxx shall nominate five persons to
stand for election to serve as directors, Quilvest shall nominate one person to
stand for election to serve as a director, and three persons, neither of whom
shall be Affiliates or Associates of Xxxxxxxxxx or Quilvest, shall be nominated
in accordance with the requirements of the GBCC and the rules and regulations of
the Commission and the New York Stock Exchange. Each of the Shareholders shall
vote their Voting Securities in favor of the nine persons nominated as provided
above in this Section 6(c). If there shall occur a vacancy for any reason,
whether by resignation, removal or otherwise, in the position of any director
who was nominated by a particular Shareholder pursuant to this Agreement, then
the Shareholder who originally nominated such director, shall be entitled to
nominate such director's successor, and the Shareholders shall promptly take
such action, including causing such Shareholder's nominee(s) for director(s), if
any, to take such action, so as to cause the successor director to be duly and
properly elected or appointed. No Shareholder shall take any action, or permit
any director nominated by it to take any action, to remove a director which was
nominated by another Shareholder without the consent of such other Shareholder.
Any person nominated to serve as a director by a Shareholder pursuant to this
Agreement may be removed from such position, with or without cause, only by the
Shareholder nominating such director, and the other Shareholders shall promptly
take such action, including causing such Shareholder's nominee(s) for
director(s), if any, to take such action, as may be requested by the Shareholder
who nominated the director sought to be removed, to duly and properly effect the
removal of such director from such position. If there shall occur a vacancy
-10-
for any reason, whether by resignation, removal or otherwise, in the position of
any director who was not nominated by a particular Shareholder pursuant to this
Agreement, then the successor to any such director (who shall be qualified to
serve as a director by reason of his experience and who shall not be an
Affiliate or Associate of Xxxxxxxxxx or Quilvest) shall be nominated by the
remaining directors, if any, who were not themselves nominated by any
Shareholder pursuant to this Agreement, and the other directors and the
Shareholders shall promptly take such action, including by causing the director
nominee(s), to cause the successor director to be duly and properly elected or
appointed. If there shall be no directors in office who were not nominated by a
Shareholder pursuant to this Agreement, then the vacancies in such directorships
shall be filled by the remaining directors then in office with persons who are
not Affiliates or Associates of Xxxxxxxxxx or Quilvest.
(d) Notwithstanding the foregoing, the provisions of
subsections (b) and (c) shall remain in full force and effect, in the case of
Xxxxxxxxxx, so long as it beneficially owns at least 25% of the Class A Common
Stock then outstanding on a fully-diluted basis; and the provisions of
subsections (b) and (c) shall remain in full force and effect, in the case of
Quilvest, so long as it beneficially owns at least 5% of Class A Common Stock
then outstanding on a fully-diluted basis and Xxxxxxxxxx beneficially owns at
least 25% of the Class A Common Stock then outstanding on a fully-diluted basis.
After such time, if any, that either Xxxxxxxxxx or Quilvest shall no longer be
entitled to nominate persons to stand for election to serve as a director in
accordance with clause (i) or clause (ii) above, upon the expiration of the
term, resignation or removal of any director nominated by such Purchaser which
is no longer entitled to nominate persons to stand for election to serve as a
director, the successor to such director(s) shall be designated or nominated in
accordance with the requirements of the GBCC and the rules and regulation of the
Commission and the principal national securities exchange or trading market on
which shares of the Class A Common Stock are then listed.
(e) Quilvest's initial director nominee shall be xx Xxxxx.
Notwithstanding anything to the contrary, if, from and after the Effective Time
xx Xxxxx ceases to serve as a member of the Board for any reason, he may not be
renominated or reappointed by Quilvest without the consent of Xxxxxxxxxx.
(f) Each Shareholder shall vote their Voting Securities
against any proposal brought before the Company's Shareholders, including a
proposal to amend the Articles of Incorporation or the By-laws, which, if
adopted, would frustrate the provisions of this Section 6.
7. Stock Splits. If there shall be any change in the Securities of
------------
the Company as a result of any merger, consolidation, reorganization,
recapitalization, stock dividend, split-up, combination, exchange or otherwise,
the provisions of this Agreement shall apply with equal force to additional
and/or substitute Securities, if any, received by each Shareholder in exchange
for or by virtue of its ownership of Securities.
8. Representations and Warranties of Xxxxxxxxxx. Xxxxxxxxxx
--------------------------------------------
represents and warrants to Quilvest, xx Xxxxx and the Company as follows:
8.1. Ownership of Shares. The Securities listed by its name on
-------------------
Schedule 1 are all of the Securities beneficially owned by Xxxxxxxxxx.
Xxxxxxxxxx has with respect
-11-
to the Securities listed by its name on Schedule 1 as of the consummation of the
Initial Closing, good, valid and marketable title, free and clear of all liens,
encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable Federal and State securities laws).
8.2. Power; Non-Contravention; Binding Agreement. Xxxxxxxxxx has
-------------------------------------------
the full power and authority to enter into this Agreement and perform all of its
obligations herewith. Neither the execution, delivery nor performance by
Xxxxxxxxxx will violate its charter, by-laws or other organizational or
constitutive documents, or any other agreement, contract or arrangement to which
it is a party or is bound, including any voting agreement, shareholders
agreement or voting trust. This Agreement has been duly executed and delivered
by Xxxxxxxxxx and constitutes a legal, valid and binding agreement of
Xxxxxxxxxx, enforceable in accordance with its terms. Neither the execution or
delivery of this Agreement nor the consummation by Xxxxxxxxxx of the
transactions contemplated hereby will (a) require any consent or approval of or
filing with any governmental or other regulatory body, other than filings
required under the federal or state securities laws, or (b) constitute a
violation of, conflict with or constitute a default under (i) any law, rule or
regulation applicable to Xxxxxxxxxx, or (ii) any order, judgment or decree to
which Xxxxxxxxxx is bound.
8.3. Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Xxxxxxxxxx in connection with this Agreement or
the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Purchase Agreement.
9. Representations and Warranties of Quilvest and xx Xxxxx. Each
-------------------------------------------------------
of Quilvest and xx Xxxxx represents and warrants, as to itself, to Xxxxxxxxxx,
each other and the Company, as follows:
9.1. Ownership of Securities. The Securities listed by his or
-----------------------
its name on Schedule 1 are all of the Securities beneficially owned by him or it
as of the consummation of the Initial Closing. Such Shareholder does not have
any rights to acquire any additional Securities other than, in the case of
Quilvest, pursuant to (a) the Warrants issued in connection with the Initial
Closing, (b) Securities to be issued in the future pursuant to the Purchase
Agreement, and (c) pursuant to the terms of, or upon the exercise or conversion
of, or any of the Securities described in clauses (a) or (b). It has with
respect to the Securities listed by his, her or its name on Schedule 1 good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws). Neither the execution, delivery or performance of this
Agreement nor the consummation of the Contemplated Transactions will result in
or otherwise trigger an automatic conversion of the Class B Common Stock owned
by Quilvest or xx Xxxxx into shares of Class A Common Stock, except as expressly
set forth in Section 14.2 hereof.
9.2. Power; Non-Contravention; Binding Agreement. Each of
-------------------------------------------
Quilvest and xx Xxxxx has the full, right, power and authority (and in the case
of xx Xxxxx, legal capacity)
-12-
to enter into this Agreement and perform all of its obligations hereunder.
Neither the execution, delivery nor performance of this Agreement by such
Shareholder will, in the case of Quilvest, violate the charter, by-laws or other
organizational or constitutive documents of Quilvest, or, in the case of either
Quilvest or xx Xxxxx, any other agreement, contract or arrangement to which each
such Shareholder is a party or is bound, including any voting agreement,
shareholders agreement or voting trust. This Agreement has been duly executed
and delivered by each such Shareholder and constitutes a legal, valid and
binding agreement of such Shareholder, enforceable in accordance with its terms.
Neither the execution or delivery of this Agreement nor the consummation by such
Shareholder of the transactions contemplated hereby will (a) require any consent
or approval of or filing with any governmental or other regulatory body, other
than filings required under the federal or state securities laws, or (b)
constitute a violation of, conflict with or constitute a default under (i) any
law, rule or regulation applicable to any such Shareholder, or (ii) any order,
judgment or decree to which any such Shareholder is bound.
9.3. Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Quilvest or xx Xxxxx in connection with this
Agreement or the transactions contemplated hereby.
Quilvest hereby represents and warrants to Xxxxxxxxxx that the issuance of the
shares of Common Stock issued to Tinvest Limited pursuant to that certain merger
of Pameco Holdings Inc. with and into the Company on June 3, 1997 was approved
by the Board, and such merger was approved by the Board and, accordingly, the
transaction which resulted in Tinvest Limited, an Affiliate of Quilvest,
becoming an "interested shareholder" as defined in GBCC section 14-2-1110 was
approved by the Board.
10. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Shareholder as follows:
10.1. Power Authority; Non-Contravention; Binding Agreement. The
-----------------------------------------------------
Company has full right, power and authority to enter into and perform all of its
obligations under this Agreement. Neither the execution, delivery nor
performance of this Agreement by the Company will violate the charter, by-laws
or other organizational or constitutive documents of the Company or any of its
Subsidiaries, or any other agreement, contract or arrangement to which the
Company or any of its Subsidiaries is a party or is bound. This Agreement has
been duly executed and delivered by the Company and constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
Neither the execution of this Agreement nor the consummation by the Company of
the transactions contemplated hereby will (a) require any consent or approval of
or filing with any governmental or other regulatory body other than filings
required under federal or state securities laws, or (b) constitute a violation
of, conflict with or constitute a default under (i) any law, rule or regulation
applicable to the Company or any of its Subsidiaries, or (ii) any order,
judgment or decree to which the Company or any of its Subsidiaries is bound.
10.2. Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from the Company in connection with this Agreement or
the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Purchase Agreement.
-13-
11. Termination; Securities Free from Agreement.
-------------------------------------------
11.1. This Agreement (other than the provisions of the second and
third sentences of Section 2.5, and the provisions of Section 12 and Sections 18
through 30 which shall survive any termination of this Agreement), shall
terminate on the earliest of (i) 10 years from the date hereof, (ii) the mutual
agreement of the Shareholders which beneficially own a majority of the Class A
Common Stock issued or issuable upon conversion of the Series A Preferred Shares
or the Subsequent Preferred Shares or upon the exercise of the Warrants, in each
case which are subject to this Agreement, and (iii) the sale of 90% or more of
the Securities described in clause (ii) to a Person which is not a Xxxxxxxxxx
Permitted Transferee or a permitted transferee of either Quilvest or xx Xxxxx
who becomes party to this Agreement.
11.2. Securities which are sold by a Shareholder pursuant to and
in accordance with the provisions of Section 3.5, Article IV or Article V
hereof, or Registrable Securities which are sold pursuant to and in accordance
with the terms and conditions of the Registration Rights Agreement, shall be
deemed sold, upon the consummation of such sale in accordance therewith, free
and clear of this Agreement and the Irrevocable Proxy granted to Xxxxxxxxxx.
11.3. From and after such time as xx Xxxxx is no longer a member
of the Board, the provisions of Sections 3, 4 and 5 hereof will no longer be
applicable to him.
12. Expenses. Except as provided in Section 28, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisors.
13. Fees.
----
(a) Commencing August 31, 2001, the Company shall pay to
Xxxxxxxxxx & Co., LLC and Quilvest or its designees, pro rata based upon their
respective Applicable Percentages, a management fee in such amount, not to
exceed $500,000 for each annual period ended on August 31st, determined by
Xxxxxxxxxx and the Company (the "Management Fee"), payable on the last Business
Day in February and August of each year, or on such dates as the parties shall
otherwise agree. The foregoing fee shall continue as long as Xxxxxxxxxx has the
right to elect a majority of the members of the Board, whether through the
ownership of securities, by contract or otherwise. Notwithstanding the
foregoing, the Management Fee shall not be paid (and shall not accrue), if (i)
at the time of the payment of the Management Fee the Company would not be, in
violation of the financial covenants contained in the Loan and Security
Agreement between the Company, Fleet Bank, as agent, and the lenders named
therein), or (ii) the Board determines that the payment of the Management Fee is
reasonably likely to result in the Company not being able to achieve its
budgeted earnings before interest, takes, depreciation and amortization
(determined in accordance with generally accepted accounting principles) for
such fiscal year.
(b) To induce Xxxxxxxxxx to enter into an agreement to
purchase or guarantee from the Lender any funds lent to the Company pursuant to
any overadvance under the Credit Agreement, up to $5 million,
-14-
the Company agrees to pay Xxxxxxxxxx a fee calculated at a rate of 8% per annum
of the actual amount of such overadvance outstanding from time to time (the
"Overadvance Fee") which Xxxxxxxxxx is then so required to guarantee or
purchase. The Overadvance Fee shall be payable quarterly in arrears commencing
three months after the first day in which there is an overadvance pursuant to
the Credit Agreement and only with respect to such days in which there is an
overadvance. Notwithstanding the foregoing, the Company shall not be required to
pay an Overadvance Fee to the extent that, at the time of the payment thereof,
or after giving effect to the payment thereof, the Company is, or would be in
violation of the financial covenants contained in the Credit Agreement, in which
case any such Overadvance Fee would accrue and be payable as soon as possible.
14. Certain Covenants of Quilvest and xx Xxxxx.
------------------------------------------
14.1. Except in accordance with the provisions of this Agreement
and the Purchase Agreement, each of Quilvest and xx Xxxxx agree not to, directly
or indirectly:
(a) grant any proxies, deposit any Securities into a voting
trust or enter into a voting agreement with respect to any Securities; or
(b) except in connection with a Transfer permitted by and
made in accordance with Section 3.3, 3.5 or 3.6 or Article 4 or Article 5
hereof, and except as required in accordance with Section 14.2 below, convert
any shares of Class B Common Stock beneficially owned by it into shares of Class
A Common Stock or take any action or omit to take any action which could
reasonably be expected to result in the conversion of any Class B Common Stock
beneficially owned by it into shares of Class A Common Stock.
14.2. Immediately after the Required Approval is obtained, each
Shareholder shall take such action pursuant to the Articles of Incorporation and
otherwise to cause any Class B Common Stock beneficially owned by it to be
converted into shares of Class A Common Stock as soon as possible thereafter.
14.3. Each Shareholder agrees, while this Agreement is in effect
and to the extent disclosure would be required under the Exchange Act, to notify
the Company, as soon as practicable, of the number of any Voting Securities,
beneficial ownership of which is acquired by such Shareholder after the date
hereof, and to prepare and file with the Commission an amendment to its Schedule
13D, as and when required to be filed, which amendment shall comply as to form
in all material respects with the applicable provisions of the Exchange Act.
Such Shareholder represents and warrants that any such Schedule 13D amendment,
at the time it is filed with the Commission, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, no
representation or warranty is deemed made by such Shareholder with respect to
information supplied by any other Shareholder for use in preparing the Schedule
13D or any such Schedule 13D amendment. Such Shareholder will provide the other
Shareholders who are members of the "group" (within the meaning of the Exchange
Act) filing such Schedule 13D with a reasonable opportunity to review and
comment on any proposed Schedule 13D amendment prior to filing such with the
Commission (subject to any requirements of law to file promptly), will provide
-15-
such other Shareholders with a copy of all such filings made with the Commission
and will notify such other shareholders as promptly as practicable after the
receipt of any comments or any request for additional information from the
Commission or its staff and, upon request of any such other Shareholder, will
supply each of them and their legal counsel with copies of all correspondence
between it or any of its representatives, on the one hand, and the Commission,
its staff or any state securities administrators, on the other hand.
14.4. In the event the Company determines to raise additional
monies through the sale of additional Securities and Xxxxxxxxxx is afforded the
opportunity to purchase from the Company such additional Securities then, from
time to time after the date hereof, subject to applicable law, Xxxxxxxxxx shall
permit Quilvest to purchase from the Company such additional securities offered
for sale to Xxxxxxxxxx in proportion with Xxxxxxxxxx pro rata based upon their
respective Applicable Percentages. Notwithstanding the foregoing, the
provisions of this Section 14.4 shall not be applicable to any additional
issuances of securities set forth in or contemplated by the Purchase Agreement.
14.5. Quilvest shall deliver to Xxxxxxxxxx, as a condition to the
effectiveness of this Agreement and the Initial Closing under the Purchase
Agreement, (a) an opinion of Xxxx Xxxxx Rifkind Xxxxxxx & Xxxxxxxx to
Xxxxxxxxxx, (b) an opinion of Xxxxxx, Westwood & Riegels and (c) an opinion of
Xxxxx, Xxxxxxxx & Xxxxxxx LLP. in substantially the form as set forth in Exhibit
B, C and D, respectively.
15. Financial Reports and Information. If the Company is not required
---------------------------------
to file periodic reports under the Exchange Act, it will furnish to each
Shareholder financial statements (including accompanying notes) similar in form
and substance to those which would be required to be filed by it in any annual
or quarterly report filed under the Exchange Act if the Company were subject to
such Exchange Act. Such reports will be furnished within 45 days after the end
of the first, second and third fiscal quarters of each year, and within 90 days
after the end of each fiscal year.
16. Transaction with Affiliates. The Company hereby agrees that it
---------------------------
shall not enter into any transaction with an Affiliate except upon fair and
reasonable terms that are no less favorable to it than it reasonably believes it
could obtain in a comparable arm's length transaction with a Person not its
Affiliate.
17. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), each Shareholder, if the particular restriction is applicable
to it, shall request the Company to provide that each certificate representing
Securities beneficially owned by it will bear a legend in substantially the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE (I) MAY NOT BE SOLD,
EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE
WITH THE TERMS AND CONDITIONS OF THE SHAREHOLDERS AGREEMENT, AND (II)
ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE SHAREHOLDERS AGREEMENT
DATED AS OF FEBRUARY __, 2000, AND THE IRREVOCABLE PROXY REFERRED
-16-
TO THEREIN, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND
COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), each Shareholder shall request the
Company to require that the transfer agent for its Securities shall make a
notation in its records prohibiting the transfer of any of the Securities owned
of record by such Shareholder, except in accordance with the terms and
conditions of this Agreement. Each Shareholder agrees to surrender to the
Company each certificate representing Securities in order to effectuate the
provisions of this Section 17.
18. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, the representations, warranties, covenants and agreements made
by the Shareholders, or the Company in this Agreement shall survive the Initial
Closing.
19. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:
If to the Company, to:
Pameco Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Vice Chairman and Chief Financial Officer
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: E. Xxxxx Xxxxxxxxx, Esquire
Facsimile: 000-000-0000
Telephone: 000-000-0000
If to Xxxxxxxxxx, to:
Xxxxxxxxxx & Co., LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxxxx, Xx.
Facsimile: 000-000-0000
Telephone: 000-000-0000
-17-
with a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
Attention: Xxxxx X. Xxxxxxx, Esquire
Facsimile: 000-000-0000
Telephone: 000-000-0000
If to Quilvest or xx Xxxxx, to:
c/o Three Cities Research, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Willem X. X. xx Xxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esquire
Facsimile: 212-757-3990
Telephone: 000-000-0000
20. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter (including any agreements between Quilvest and the
Company regarding shareholder rights.) This Agreement may not be modified,
amended, altered or supplemented except by an agreement in writing executed by
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.
21. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors, and
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
22. Governing Law; Consent to Jurisdiction. This Agreement shall be
--------------------------------------
construed and enforced in accordance with the laws of the State of Georgia
without regard to the application of the principles of conflicts or choice of
laws. Each party hereto submits to the jurisdiction of the courts of the State
of Georgia in Xxxxxx County and to the jurisdiction of the United States
District Court for the Northern District of Georgia, and hereby agrees that
service
-18-
of process may be effected in accordance with the delivery methods described in
Section 19 hereof.
23. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
24. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
25. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
26. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
27. No Third Party Beneficiaries; No Partnership or Fiduciary
---------------------------------------------------------
Relationship. Nothing in this Agreement, expressed or implied, shall be
------------
construed to give any person, other than the parties hereto, any legal or
equitable right, remedy or claim under or by reason of this Agreement or any
provision contained herein. Nothing in this Agreement shall create, or is
intended to create, a fiduciary relationship among Quilvest, xx Xxxxx and
Xxxxxxxxxx or a partnership or similar relationship among Quilvest, xx Xxxxx and
Xxxxxxxxxx.
28. Legal Expenses. In the event any legal proceeding is commenced by
--------------
any party to this Agreement to enforce, or recover damages for any breach of,
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees and disbursements.
29. Interpretation. Unless the context of this Agreement otherwise
--------------
requires, (i) words of any gender include each gender and the neuter; (ii) words
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby and derivative or
similar words refer to this entire Agreement; (iv) the term "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (v)
the term "including" or similar words shall be construed as to refer to such
matter without limitation
-19-
thereof. Whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
30. Effectiveness. This Agreement shall become effective as of the
-------------
Effective Time, and only if the Initial Closing actually occurs.
-20-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date and year first above written.
PAMECO CORPORATION
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
XXXXXXXXXX FUND II, L.P.
By: Xxxxxxxxxx Associates II, L.L.C.
its General Partner
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxxxxxx, Xx.
Title: Managing Member
QUILVEST AMERICAN EQUITY, LTD.
By: /s/ J. Xxxxxx Xxxxx
---------------------------------------
Name: J. Xxxxxx Xxxxx
Title: Attorney-in-Fact
/s/ Willem X. X. xx Xxxxx
-------------------------------------------
Willem X. X. xx Xxxxx
-21-
