Exhibit 10.6
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SHAREHOLDERS AGREEMENT
among
AMERICAN BUMPER & MFG. CO.,
WINDWARD CAPITAL ASSOCIATES, L.P.,
WINDWARD/PARK AB, L.L.C.,
WINDWARD/MERCHANT, L.P.,
WINDWARD/MERBAN, L.P.,
WINDWARD/NORTHWEST, L.P.,
WINDWARD/BADGER II, L.L.C.,
THE ▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP,
and
THE OTHER SHAREHOLDERS LISTED HEREIN
Dated as of ____________ ____,1997
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TABLE OF CONTENTS
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Page
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BACKGROUND.....................................................................................1
ARTICLE I
DEFINITIONS
1.1 Definitions...........................................................................2
ARTICLE II
CORPORATE GOVERNANCE
2.1 Voting Rights in Charter; Voting Matters Related to Charter Documents................12
2.2 Designation of Directors.............................................................13
2.3 Replacement of Nominees..............................................................14
2.4 Calling Special Meetings for the Removal of Nominees.................................15
2.5 Calling Special Meetings for the Enforcement of Corporate Governance Provisions......15
2.6 Removal for Cause....................................................................15
2.7 Grant of Proxies.....................................................................15
ARTICLE III
RESTRICTIONS ON TRANSFER
3.1 Restrictions on Transfer.............................................................16
ARTICLE IV
TAG-ALONG RIGHTS
4.1 Tag-Along Rights Generally...........................................................17
4.2 Allocation of Shares of Tag-Along Stock..............................................18
4.3 Transfer Mechanics...................................................................18
4.4 Transfers to Third Parties after Shareholders Decline Tag-Along Rights...............19
4.5 Exceptions to Tag-Along Rights.......................................................19
ARTICLE V
RIGHTS TO COMPEL SALE OR IPO EVENT
5.1 Rights to Compel Sale Generally......................................................19
5.2 Compelled Sale Pursuant to a Sale of Company Stock...................................20
5.3 Compelled Sale Other Than Pursuant to a Sale of Company Stock........................21
5.4 Cooperation in Connection with Compelled Sale........................................21
5.5 Notice of Consummation of Compelled Sale.............................................21
5.6 Rights to Compel IPO Event...........................................................22
ARTICLE VI
PUT AND CALL RIGHTS ON MANAGEMENT STOCK
6.1 Put and Call Rights..................................................................23
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TABLE OF CONTENTS
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(continued)
6.2 Obligation to Sell Several...........................................................25
6.3 Deferral of Purchases................................................................25
6.4 Payment for Stock....................................................................25
6.5 Miscellaneous........................................................................26
ARTICLE VII
PUT AND CALL RIGHTS ON FAMILY LP STOCK
7.1 Put and Call Rights..................................................................27
7.2 Obligation to Sell Several...........................................................28
7.3 Deferral of Purchases................................................................28
7.4 Payment for Stock....................................................................29
7.5 Life Insurance Policy................................................................29
7.6 Miscellaneous........................................................................30
ARTICLE VIII
COMPANY COVENANTS
8.1 Access to Information................................................................30
8.2 FIRPTA Activities....................................................................30
ARTICLE IX
REGISTRATION RIGHTS
9.1 Demand Registration Rights...........................................................30
9.2 Piggyback Registration Rights........................................................32
9.3 Priority in Piggyback Registrations..................................................33
9.4 Expenses.............................................................................34
9.5 Restrictions on Public Sale by Shareholders and Company..............................34
9.6 Indemnification by the Company.......................................................35
9.7 Indemnification by the Shareholders and Underwriters.................................36
9.8 Notices of Claims, Etc...............................................................36
9.9 Other Indemnification................................................................37
9.10 Registration Procedure...............................................................37
9.11 Rule 144.............................................................................40
ARTICLE X
ADDITIONAL SHAREHOLDERS
10.1 Transferee of Shareholders or the Company............................................40
10.2 New Shareholders.....................................................................40
10.3 Supplemental Agreements..............................................................41
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TABLE OF CONTENTS
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(continued)
ARTICLE XI
STOCK LEGENDS
11.1 Stock Certificate Legend.............................................................41
ARTICLE XII
APPOINTMENT OF AGENTS
12.1 Appointment of Agent for Windward Group Matters......................................42
12.2 Appointment of Agent for the Management Shareholders.................................44
12.3 Appointment of Agent for the Family LP...............................................44
ARTICLE XIII
TERM OF AGREEMENT
13.1 Term.................................................................................44
ARTICLE XIV
MISCELLANEOUS
14.1 Confidentiality......................................................................45
14.2 Specific Performance.................................................................45
14.3 Consent to Jurisdiction, Service of Process; Venue...................................46
14.4 Attorneys' Fees......................................................................46
14.5 Headings; No Third Party Beneficiaries...............................................46
14.6 Entire Agreement.....................................................................46
14.7 Notices..............................................................................46
14.8 Applicable Law.......................................................................47
14.9 Severability.........................................................................48
14.10 Successors; Assigns; Transferee; Amendments; Waivers.................................48
14.11 Defaults; No Circumvention of Agreement..............................................48
14.12 Further Assurances...................................................................49
14.13 Counterparts.........................................................................49
14.14 Recapitalization, etc................................................................49
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SHAREHOLDERS AGREEMENT
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This SHAREHOLDERS AGREEMENT dated as of _____________ ___, 1997 (the
"Agreement"), by and among American Bumper & Mfg. Co., a Michigan corporation
(the "Company"), Windward Capital Associates, L.P., a
Delaware limited
partnership ("Windward"), windward/Park AB, L.L.C., a
Delaware limited
liability company ("Windward/Park"), windward/Merban, L.P., a
Delaware
limited partnership ("Windward/Merban"), Windward/Merchant, L.P., a
Delaware
limited partnership ("Windward/Merchant"), Windward/Northwest, L.P., a
Delaware limited partnership ("Windward/Northwest"), Windward/Badger II,
L.L.C., a
Delaware limited liability company ("Windward/Badger"), ▇▇▇▇ ▇.
▇▇▇▇▇ ("▇▇▇▇▇"), The ▇▇▇▇▇ Family Limited Partnership, a Michigan limited
partnership (the "Family LP") and the persons listed in the Schedule of
Management Shareholders attached hereto (such persons together with any
employees of the Company or its Subsidiaries (as defined herein) who become
parties to this Agreement pursuant to the terms and conditions of this
Agreement and each of their respective Permitted Transferees (as defined
herein), but in all events excluding ▇▇▇▇▇, are referred to herein,
collectively, as the "Management Shareholders"), and such other persons or
entities who or which become parties to this Agreement pursuant to the terms
and conditions of this Agreement. Windward (and certain nominees of
Windward), Windward/Park, Windward/Merban, Windward/Merchant and
Windward/Northwest, together with their respective Permitted Transferees,
shall be referred to collectively in this Agreement as the "Windward Group".
BACKGROUND
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WHEREAS, pursuant to the terms and conditions of a Recapitalization
Agreement dated as of ,1997 (the "Recapitalization
Agreement"), by and among the Company, the Windward Group, Windward/Badger
and certain shareholders of the Company set forth on the signature pages
thereto, among other things, (a) the Company has agreed to issue to the
members of the Windward Group, and the members of the Windward Group
(excluding Windward/Merban and Windward/Merchant) have agreed to acquire in
the aggregate from the Company, 20,238.685 shares of Class A Common Stock,
par value $1.00 per share, of the Company (the "Class A Common Stock"), (b)
the Company has agreed to issue to Windward/Merchant and Windward/Merban
5,297.022 and 2,318.293 shares of Class B Common Stock, par value $1.00 per
share, of the Company (the "Class B Common Stock"), respectively, (c) the
Company has agreed to issue to Windward/Merban, and Windward/Merban has
agreed to acquire from the Company, 521.382 shares of Class C Common Stock,
par value $1.00 per share, of the Company (the "Class C Common Stock"), (d)
the Company has agreed to issue to Windward/Merchant, and Windward/Merchant
has agreed to acquire from the Company, 57.931 shares of Class D Common
Stock, par value $1.00 per share, of the Company (the "Class D Common Stock"
and together with the Class A Common Stock, the Class B Common Stock and the
Class C Common Stock, the "Common Stock") (representing, together with the
Shares issued to Windward/Badger pursuant to clause (d) below, in the
aggregate approximately 74.2% of the Company's total outstanding capital
stock (without giving effect to the exercise of any outstanding options, the
Warrants (as defined below) or other similar securities)), (d) the Company
has agreed to issue to Windward/Badger, and Windward/Badger has agreed to
acquire from the Company, 6,383.922 shares of Class A Common Stock and (e)
the Company has agreed
to purchase from Family LP and Family LP has agreed to sell to the Company
certain shares of capital stock as set forth in the Recapitalization Agreement;
WHEREAS, at or prior to the Closing (as defined in the Recapitalization
Agreement), the Company will enter into Subscription Agreements (as defined in
the Recapitalization Agreement) with each member of the Existing Core Management
Team (as defined in the Recapitalization Agreement) pursuant to which such
persons may purchase certain shares of Class A Common Stock and certain warrants
to purchase Class A Common Stock (collectively, the "Warrants"), in each case,
as set forth in Subscription Agreements, in which event such persons shall
become parties to this Agreement pursuant to Article X hereof;
WHEREAS, after the Closing, the Company has agreed to grant options
to purchase additional shares of Class A Common Stock to certain employees of
the Company and its Subsidiaries, such options to be subject to the terms
(including performance criteria) set forth in the plan governing such options
and, upon exercise, such employees will, to the extent they are not otherwise
parties hereto, become parties to this Agreement pursuant to Article X hereof;
WHEREAS, after the Closing, the Company may offer and sell
additional shares of Common Stock to certain other persons and to employees
of the Company and its Subsidiaries and such employees will, to the extent
they are not otherwise parties hereto, become parties to this Agreement
pursuant to Article X hereof;
WHEREAS, pursuant to and subject to the terms and conditions of Article
XII hereof, each of the members of the Windward Group and Windward/Badger have
designated and appointed Windward as its attorney-in-fact, agent and
representative to act on its behalf and on behalf of its Permitted Transferees
in connection with this Agreement (in such capacity, Windward, and any successor
thereof appointed pursuant to such Article XII, shall hereinafter be referred to
as "the Windward Agent"); and
WHEREAS, the Shareholders believe it to be in their best interests and
in the best interests of the Company that they enter into this Agreement
providing for certain rights and restrictions with respect to the shares of
Common Stock owned by them or their Permitted Transferees.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings ascribed to them below (such terms to be equally applicable to
both singular and plural forms of the terms defined or referred to):
(a) The term "AFFILIATE" or "AFFILIATE" shall mean, with
respect to any specified person, (x) any director or officer of, or any person
that beneficially owns at least 5% of the capital stock or other equity
interests of, such specified person, or (y) any other person directly or
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indirectly controlling, controlled by, or under common control with, such
specified person, at any time during the period for which the determination of
affiliation is being made; PROVIDED that in the case of a person who is an
individual, such terms shall also include members of such specified person's
immediate family (as defined in Instruction 2 of Item 404(a) of Regulation S-K
under the Securities Act).
(b) The term "APPRAISAL VALUE" shall mean the value of the
common equity of the Company determined in good faith within 60 days of
engagement by a nationally recognized investment banking firm (the "Valuation
Advisor") selected by mutual agreement between the general partner of the
Family LP and Windward within 10 Business Days of notice of the exercise of a
"put" or "call" right as contemplated by Article VII; if Windward and the
general partner of the Family LP fail to agree upon a Valuation Advisor
within such 10 Business Days, Windward and the general partner of the Family
LP shall each select a nationally recognized investment banking firm and such
appointees shall be instructed to agree, within 5 Business Days of their
selection, on a nationally recognized investment banking firm who shall be
the Valuation Advisor for purposes of this Agreement. In applying Appraisal
Value to any calculation contemplated by this Agreement, the Appraisal Value
shall be allocated on a per share basis (such that the relevant holder of
shares shall be entitled to the proportionate value of the shares held by it)
as follows: (x) the value per share shall be determined by dividing the
Appraisal Value by the number of shares of Company Stock outstanding
(calculated on a Fully-Diluted Basis) and (y) the value per share of a share
of Company Stock subject to a vested Option or a vested Warrant shall mean
the positive difference between Appraisal Value per share as calculated
pursuant to clause (x) of this definition and the applicable exercise price
per share of Company Stock of such Option or Warrant, as the case may be.
With respect to the Valuation Advisor, the Company shall bear the fees of
such firm. The Valuation Advisor shall be instructed to deliver written
notice to the Board of Directors, Windward and the Family LP immediately upon
its determination of such Appraisal Value, and such determination shall be
final and binding.
(c) The term "BOARD" shall mean the Board of Directors of the
Company.
(d) The term "BONA FIDE OFFER" shall mean any offer by a Third
Party in writing, setting forth a specific purchase price and a closing date of
no more than thirty days therefrom, which is fully financed and not subject to
any material conditions.
(e) The term "BOOK VALUE" shall mean, (x) as to each share
of Common Stock, the sum of (i) the price per share of Company Stock paid by
the Windward Entities pursuant to the Recapitalization Agreement and (ii) the
increase (or the decrease) in the book value per share of Common Stock (as
determined in accordance with GAAP, calculated on a Fully-Diluted Basis) for
the period commencing on the first day of the first fiscal quarter of the
Company following the date hereof through and until the last day of the
fiscal quarter of the Company immediately preceding the date on which book
value shall be determined, and (y) as to each share of Common Stock subject
to a vested Option or a vested Warrant, the positive difference between the
Book Value as calculated pursuant to clause (x) of this definition and the
applicable exercise price per share of Common Stock of such Option or a
Warrant, as the case may be.
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(f) The term "BUSINESS DAY" shall mean any calendar day which
is not a Saturday, Sunday or public holiday under the laws of the State of New
York.
(g) The term "CAUSE", used in connection with the
termination of employment of any Management Shareholder by the Company or any
Subsidiaries of the Company, shall mean a termination due to a finding by the
Board in good faith that such Management Shareholder has: (a) failed,
neglected or refused to perform his duties hereunder (including, without
limitation, the Management Shareholder's inability to perform such duties as
a result of alcohol or drug abuse, chronic alcoholism or drug addiction); (b)
committed any willful, intentional or grossly negligent act having the effect
of materially injuring the interest, business or reputation of the Company,
any of its parents, subsidiaries or affiliates and any divisions the
Management Shareholder may manage; (c) engaged in any willful misconduct,
including insubordination, in respect of the duties or obligations of the
Management Shareholder under this Agreement; (d) violated or failed to comply
in any material respect with the Company's published rules, regulations or
policies, as in effect from time to time; (e) committed a felony or
misdemeanor involving moral turpitude, fraud, theft or dishonesty (including
entry of a NOLO CONTENDERE plea); (f) misappropriated or embezzled any
property of the Company and its affiliates and subsidiaries (whether or not a
misdemeanor or felony); and (g) breached this Agreement or the applicable
employment agreement, if any; PROVIDED, HOWEVER, that in the event that the
Company determines to terminate a Management Shareholder's employment
pursuant to clauses (a), (c), (d) or (g) of this definition of Cause, such
termination shall only become effective if the Company shall first give such
Management Shareholder notice of such Cause and such Management Shareholder
shall fail within 20 Business Days of receipt of such notice to substantially
rectify or correct the same.
(h) The term "CLASS A COMMON STOCK" shall mean the Class A
Common Stock named as "Class A Common Stock" in the second paragraph of this
Agreement.
(i) The term "CLASS B COMMON STOCK" shall mean the Class B
Common Stock named as "Class B Common Stock" in the second paragraph of this
Agreement.
(j) The term "CLASS C COMMON STOCK" shall mean the Class C
Common Stock named as "Class C Common Stock" in the second paragraph of this
Agreement.
(k) The term "CLASS D COMMON STOCK" shall mean the Class D
Common Stock named as "Class D Common Stock" in the second paragraph of this
Agreement.
(l) The term "COMMON STOCK" shall mean the capital stock
named as "Common Stock" in the second paragraph of this Agreement, and any
and all shares of capital stock or other securities of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise), which may be issued in respect of, in exchange for, or
in substitution for any shares of Common Stock, by reason of any stock
dividend, split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise.
(m) The term "COMPANY" shall mean the person named as the
"Company" in the first paragraph of this Agreement, and any successor or assign
thereof.
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(n) The term "COMPANY STOCK" shall mean the Common Stock
and any other capital stock of any class or series of the Company, and any
securities of the Company convertible into, or exercisable or exchangeable
for, any such Common Stock or other capital stock of the Company (including,
without limitation, (i) shares of Common Stock issued (or issuable) pursuant
to the Recapitalization Agreement, (ii) shares of Common Stock issued
pursuant to the Company Stock Option Plan or any other stock option plan or
employee benefit or other incentive plan presently in effect or which may be
adopted by the Company after the date hereof, (iii) shares of Common Stock
issued (or issuable) upon exercise of the Warrants, any other warrants or
upon exercise of preemptive rights granted by the Company, (iv) the Warrants
and any other warrants or options to purchase Common Stock (the "Options"),
and (v) shares of Common Stock issued and outstanding prior to the date
hereof). The term "Company Stock" shall include, except as otherwise provided
herein, any and all shares of capital stock or other securities of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise), which may be issued in respect
of, in exchange for, or in substitution for any shares of Company Stock, by
reason of any stock dividend, split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.
(o) The term "COMPANY STOCK OPTION PLAN" shall mean the
American Bumper & Mfg. Co. 1997 Stock Option Plan, adopted by the Company as of
the date hereof pursuant to the Recapitalization Agreement.
(p) The term "CONTROL", when used with respect to any person,
shall mean the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
(q) The term "CREDIT AGREEMENT" shall mean the Credit
Agreement, dated as of the date hereof, among the Company, each financial
institution which is a party thereto, and BancAmerica Securities, Inc., as in
effect at the Closing (as defined in the Recapitalization Agreement), and as
the same may be amended, supplemented, modified or extended without
increasing the principal amount thereof and as the same may be renewed,
refinanced or replaced from time to time.
(r) The term "DISABILITY" shall mean an illness, injury or
other incapacitating condition as a result of which the Management
Shareholder is unable to perform the services required to be performed by the
Company in accordance with his or her job for (i) ninety (90) consecutive
days during any one year period, or (ii) a period or periods aggregating more
than ninety (90) days in any six (6) consecutive months. The Management
Shareholder agrees to submit to such medical examinations as may be necessary
to determine whether a Disability exists, pursuant to such reasonable
requests made by the Board from time to time. The date of such Disability
shall be on the last day of such 90 day period.
(s) The term "DULY ENDORSED" shall mean (i) duly endorsed in
blank by the person or persons in whose name a stock certificate or certificate
representing a debt security is registered or (ii) accompanied by a duly
executed stock or security assignment separate from the certificate, in each
case with the signature(s) thereon guaranteed by a commercial bank or trust
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company or a member of a national securities exchange or of the National
Association of Securities Dealers, Inc.
(t) The term "EBITDA" shall mean the consolidated net
income (or loss) of the Company and its Subsidiaries, excluding (to the
extent net income is reduced or increased or net loss is increased or reduced
thereby), without duplication, (a) interest expense, (b) provisions for taxes
based on income, (c) depreciation expense, (d) any amortization expense, (e)
extraordinary gains or losses, (f) gains or losses on the sale or disposal of
assets not in the ordinary course of business, (g) the cumulative effect of
any changes in accounting principles, (h) the granting or modification of
options under option (and similar) plans (other than legal and other costs
incurred in connection with the establishment and administration of such
plan), (i) investment income and losses and (j) unusual or non-recurring
income and expenses, in each case as shown on the Company's unaudited (or
audited, with respect to any four fiscal quarters for which audited
statements are otherwise available) consolidated financial statements for the
four fiscal quarters of the Company ending immediately prior to the
particular date on which the EBITDA calculation is being made, in each case
calculated in accordance with GAAP.
(u) The term "EXCHANGE ACT" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
(v) The term "FAIR MARKET VALUE", used in connection with
the value of (x) a share of Company Stock, shall mean the quotient of (i) the
excess of (1) the product of (A) 4.8 multiplied by (B) the amount of EBITDA,
as shown on the Company's unaudited (or audited, with respect to any four
fiscal quarters for which audited statements are otherwise available)
consolidated financial statements for the four fiscal quarters of the Company
ending immediately prior to the particular date of termination of employment
in question, over (2) the amount of Net Indebtedness as of the end of the
period in question, divided by (ii) the total number of shares of Company
Stock (calculated on a Fully-Diluted Basis), and (y) a share of Company Stock
subject to a vested Option or a vested Warrant shall mean the positive
difference between Fair Market Value as calculated pursuant to clause (x) of
this definition and the applicable exercise price per share of Company Stock
of such Option or Warrant, as the case may be.
(w) The term "FINANCING DEFAULT" shall mean an event or
circumstance which would constitute (or with notice or lapse of time or both
would constitute) an event of default under any outstanding Indebtedness of
the Company, or any refunding, refinancing or extension of any of the
foregoing, as any agreements pertaining thereto may be amended from time to
time, and which event or circumstance has not been waived or cured.
(x) The term "FULLY-DILUTED BASIS" shall mean, with respect
to any calculation of the outstanding number of shares of Company Stock or
the outstanding amount of common equity of the Company (as the case may be),
an amount equal to the total outstanding number of shares of Company Stock
and all other shares of common stock of the Company, calculated without
duplication and assuming the conversion of all outstanding shares of
convertible capital stock and securities of the Company and the exercise of
all vested or exercisable (or which become vested or exercisable in
connection with the events causing such calculation) warrants, options and
other rights (including, without limitation, employee stock options pursuant
to the
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Company Stock Option Plan and the Warrants to purchase shares of Company
Stock or other common stock of the Company.
(y) The term "GAAP" shall mean U.S. generally accepted
accounting principles, as in effect on the date any calculation thereunder is
made, applied on a basis consistent with prior periods.
(z) The term "INDEBTEDNESS" of any person shall mean
without duplication, (i) the principal of, premium (if any) and interest and
related fees and expenses (if any) in respect of (A) indebtedness of such
person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
person is responsible or liable (including, without limitation, any debt
offering pursuant to Rule 144A promulgated under the Securities Act); (ii)
all capital lease obligations of such person; (iii) all obligations of such
person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such person and all obligations of such
person under any title retention agreement; (iv) all obligations of such
person for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction; (v) all obligations of the type
referred to in clauses (i) through (iv) of other persons and all dividends of
other persons for the payment of which, in either case, such person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including any guarantees of such obligations and dividends, but,
in each case, only to the extent such person is responsible or liable for
such obligations or dividends; (vi) all obligations of the type referred to
in clauses (i) through (v) of other persons secured by any Encumbrance (as
defined in the Recapitalization Agreement) on any property or asset of such
person (whether or not such obligation is assumed by such person); and (vii)
to the extent not otherwise included in this definition, any interest rate or
currency swap agreement, any interest rate cap agreement, any interest rate
collar agreement or other similar agreement or arrangement designed to
protect such person or any Subsidiaries against fluctuations in interest
rates or currency.
Notwithstanding any of the foregoing provisions of this
definition of "Indebtedness", (1) the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
generally accepted accounting principles, and (2) Indebtedness shall not
include (A) any liability for federal, state, local or other taxes, (B) trade
accounts payable and other accrued expenses arising in the ordinary course of
business, or (C) with respect to the deferred purchase price of property,
obligations which are due within six months after the date of placing such
property in service or taking delivery and title thereto. The amount of
Indebtedness of any person at any date shall be (x) the outstanding balance
at such date of all unconditional obligations as described above, and (y) the
maximum liability determined by such person's Board of Directors, in good
faith, as reasonably likely to occur, upon the occurrence of the contingency
giving rise to the obligation, of any contingent obligations at such date.
(aa) The term "IPO EVENT" shall mean an initial public
offering of capital stock by the Company involving the Registration and sale of
an aggregate of $10 million or more of common equity of the Company, whether
involving a primary offering or a combined primary and secondary offering, and
pursuant to which the Company becomes listed on a national
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securities exchange or on the Nasdaq Stock Market or Nasdaq National Market;
PROVIDED that in the event that the Windward Agent consents to an initial
public offering that involves the Registration and sale of less than $10
million common equity of the Company, then an IPO Event shall be deemed, for
purposes of this Agreement, to mean a Registration which, when taken together
with all other Registrations, constitutes a sale by the Company, its
shareholders or any combination thereof, of $10 million or more of common
equity of the Company (as calculated the manner set forth above).
(ab) The term "LIFE INSURANCE PROCEEDS" shall mean proceeds
paid to the Company as beneficiary under the life insurance policy purchased
pursuant to Section 7.5 herein, whereby in the event the Family LP exercises
its "put right" pursuant to Section 7(a) herein or the Company exercises its
"call right" pursuant to Section 7(b) herein, such proceeds shall be applied
to the purchase price of any shares purchased under such "put right" or "call
right", as the case may be; PROVIDED, HOWEVER, that in no event shall such
Life Insurance Proceeds in excess of $15 million be applied to any such "put
right" or "call right".
(ac) The term "NET INDEBTEDNESS" shall mean (i)
Indebtedness less (ii) cash and cash equivalents, in each case, of the
Company as shown on the Company's most recently available balance sheet prior
to the date of determination. For purposes of this definition, cash and cash
equivalents shall be deemed to (i) include the unpaid exercise price of
vested, in the money (as determined in good faith by the Board of Directors)
Options or Warrants and (ii) exclude cash against which checks are
outstanding as of the date of determination.
(ad) The term "PERMITTED TRANSFEREE" of a Shareholder shall
mean the Company and:
i) in the case of any member of the Windward
Group, (A) corporations, partnerships or other entities which are Affiliates
of any member (or any general or limited partner or equity holder of any
member) of the Windward Group (collectively, the "Windward Affiliates"), (B)
any general partner, limited partner, controlling shareholder, director,
officer, managing director or other employee of Windward or any Windward
Affiliate (collectively, the "Windward Associates"), (C) the lineal
descendants, heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any Windward Associate and (D) any trust, the
beneficiaries of which, or corporation or partnership, the shareholders or
general or limited partners of which, include only a Windward Associate, his
or her spouse, members of his or her immediate family or his or her lineal
descendants, to which any such member of the Windward Group, a Windward
Affiliate or a Windward Associate has transferred shares of Company Stock;
ii) in the case of Windward/Badger, (A)
corporations, limited liability companies, partnerships or other entities
which are Affiliates of Windward/Badger (or any manager, member or equity
holder of Windward/Badger) (collectively, the "Windward/Badger Affiliates")
or any member of the Windward Group or any Windward Affiliate, (B) any
general partner, limited partner, member, controlling shareholder, director,
officer, managing director or other employee of Windward/Badger or any
Windward/Badger Affiliates (collectively, the "Windward/Badger Associates"),
(C) the lineal descendants, heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of any Windward/Badger Associate, and (D)
any
8
trust, the beneficiaries of which, or a corporation, limited liability
company or partnership, the stockholders, members or general or limited
partners of which, include only a Windward/Badger Associate, his or her
spouse, members of his or her immediate family or his or her lineal
descendants, to which any such member of Windward/Badger, a Windward/Badger
Affiliate or a Windward/Badger Associate has transferred shares of Company
Stock; and
iii) in the case of a Management Shareholder, (A)
the lineal descendants, heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of any Management Shareholder, as the
case may be, and (B) any trust, the beneficiaries of which, or a corporation
or partnership, the shareholders or general or limited partners of which,
include only a Management Shareholder, his or her spouse, members of his or
her immediate family or his or her lineal descendants, to which a Management
Shareholder has transferred shares of Company Stock; and
iv) in the case of the Family LP, (A)
corporations, limited liability companies, partnerships or other entities
which are Affiliates of Family LP or any general or limited partner
(collectively, the "Family LP Affiliates"), (B) any general partner, limited
partner, member or controlling shareholder of Family LP or any Family LP
Affiliates (collectively, the "Family Associates"), (C) the lineal
descendants, heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any Family LP Associate, and (D) any trust, the
beneficiaries of which, or a corporation or partnership, the shareholders or
partners of which, include only a Family LP Associate, his or her spouse,
members of his or her immediate family or his or her lineal descendants, to
which Family LP, a Family LP Associate or a Family LP Affiliate has
transferred shares of Company Stock; in each case, who has agreed in writing
(acceptable to the Board of Directors of the Company) prior to such Transfer,
that any Company Stock Transferred to such Person(s) shall be available to
satisfy indemnification claims of the Buyer/Company Indemnified Parties (as
defined in the Recapitalization Agreement) pursuant to Section 11.1 of the
Recapitalization Agreement and that such transferee shall assume the
obligations of Seller (or any prior Permitted Transferee) under Section 11.1
of the Recapitalization Agreement to the extent of such Company Stock so
Transferred;
PROVIDED that in each case (1) each such transferor has obtained the prior
written consent of the Company (which consent shall not be withheld unless,
in the opinion of the Company, such transfer together with all other
transfers of Company Stock made after the Closing could result in or create a
significant risk (as defined below) that the Company may become subject to,
or after any Registration will continue to be subject to, the informational
requirements of the Exchange Act) and (2) each such transferee (other than
the Company) has agreed in writing, in accordance with Article X hereof, to
be bound by the terms and conditions of this Agreement to the same extent and
in the same manner as the Shareholder transferring such shares of Company
Stock; PROVIDED FURTHER that the transfer to any such person is in compliance
with all applicable federal, state and foreign securities laws. For the
purposes of this Section 1.1(ad), a "significant risk" shall be deemed to
arise when the number of "holders of record" (as determined in accordance
with the Exchange Act) is greater than 80% of the number of "holders of
record" that would cause the application or continued application of the
informational requirements of the Exchange Act under the then existing
circumstances.
9
(ae) The term "PERSON" shall mean an individual,
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, or other entity of whatever nature.
(af) The term "PIGGYBACK SECURITIES" shall mean those
Registrable Securities which are requested to be sold by any Shareholder
pursuant to Section 9.2 hereof.
(ag) The term "REGISTRABLE SECURITIES" shall mean shares of
Common Stock (including, without limitation, shares of Common Stock issued
pursuant to the Recapitalization Agreement, shares of Common Stock issued
pursuant to the Company Stock Option Plan or any other stock option plan or
employee benefit or other incentive plan presently existing or which may be
adopted by the Company after the date hereof, shares of Common Stock issued
upon exercise of any warrants or options or upon exercise of preemptive
rights granted by the Company, and shares of Common Stock issued and
outstanding prior to the date hereof) and any other equity securities of the
Company or any successor corporation issued in exchange for or in respect of
such shares of Common Stock. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (i) such
securities shall have been registered under the Securities Act, the
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of pursuant to such effective registration statement, (ii) such
securities shall have been distributed pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act, (iii) such securities
shall have been otherwise transferred, if new certificates or other evidences
of ownership for them not bearing a legend restricting further transfer and
not subject to any stop transfer order or other restrictions on transfer
shall have been delivered by the Company and subsequent disposition of such
securities shall not require registration or qualification of such securities
under the Securities Act or any state securities laws then in force, or (iv)
such securities shall cease to be outstanding.
(ah) The term "REGISTRATION" shall mean a BONA FIDE public
offering of the Company's securities pursuant to an effective registration
statement under the Securities Act and in compliance with all applicable
state securities laws.
(ai) The term "REGISTRATION EXPENSES" shall mean all
expenses of the Company incident to the Company's performance of or
compliance with Article IX hereof, including, without limitation, all SEC and
stock exchange or National Association of Securities Dealers, Inc. ("NASD")
registration, filing and listing fees and expenses, fees and expenses of
compliance with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities),
rating agency fees, all fees and expenses of the transfer agent and registrar
for the Common Stock, printing expenses, messenger and delivery expenses, the
reasonable fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange or national market
system on which Registrable Securities are to be listed or on which similar
securities issued by the Company are to be listed in connection with such
transaction, reasonable fees and disbursements of counsel for the Company and
all independent certified public accountants for the Company (including the
expenses of any annual audit, special audit and "cold comfort" letters
required in connection therewith or incident thereto), securities laws
liability insurance (if the Company so desires or if the underwriters so
10
desire), the reasonable fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, all fees and expenses of any qualified
independent underwriter or any person acting in a similar capacity under the
rules of the NASD, the reasonable fees and disbursements of one counsel retained
in connection with each such registration by the Shareholders who hold a
majority of the Registrable Securities being registered, the reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration, and fees and expenses of other persons retained by the Company
(but not including any underwriting discounts or commissions or transfer taxes,
if any, attributable to the sale of Registrable Securities by the holders of
such Registrable Securities).
(aj) The term "REPRESENTATIVE" shall mean, with respect to a
particular person, any director, officer, general partner, limited partner,
co-owner, member, nominee, managing director or controlling person of such
person.
(ak) The term "RETIREMENT" shall mean, with respect to a
Management Shareholder, the Management Shareholder's retirement as an employee
of the Company or any Company Subsidiaries in accordance with the policies of
the Company or such Subsidiaries.
(al) The term "SECURITIES ACT" shall mean the Securities Act
of 1933 and the rules and regulations promulgated thereunder.
(am) The term "SEC" shall mean the United States Securities
and Exchange Commission.
(an) The term "SHAREHOLDERS" shall mean (i) each of the
members of the Windward Group, (ii) Windward/Badger, (iii) the Family LP, (vi)
the Management Shareholders, (v) persons who or which have acquired shares of
the Company's capital stock from, and are Permitted Transferees of, any of them,
and any combination of them, and (vi) such other persons who or which become
parties to this Agreement pursuant to the terms and conditions of this
Agreement.
(ao) The term "SUBSIDIARIES" shall have the same meaning as
set forth in the Recapitalization Agreement.
(ap) The term "THIRD PARTY" shall mean, with respect to any
Shareholder, any person other than (i) such Shareholder's Permitted Transferees
and (ii) the Company.
(aq) The term "TRANSFER" shall mean any direct or indirect
sale, assignment, mortgage, transfer, pledge, gift, hypothecation or other
disposition of or transfer of capital stock (other than any BONA FIDE pledge or
hypothecation of capital stock to a financial institution(s) in connection with
any loan from such financial institution(s)).
(ar) The term "VIOLATION" shall mean, with respect to any
purchase of shares of Company Stock, any event or circumstance pursuant to which
the purchase of such shares (together with any other purchases of Company Stock
pursuant to this Agreement of which the Company has at such time been given or
has given notice) would (A) conflict with or result in a violation of or breach
(or any event which with lapse of time or the occurrence of any act or event or
otherwise would constitute or result in any of the foregoing) any law, statute,
rule,
11
regulation, order, writ, injunction, decree or judgment promulgated or entered
by any federal, state, local or foreign court or governmental authority
applicable to the Company or its Subsidiaries or any of their properties or
assets or (B) violate or conflict with or constitute a breach or default, or an
event creating rights of acceleration or termination (in each case, whether upon
lapse of time or the occurrence of any act or event or otherwise), under any
agreement to which the Company or any of its Subsidiaries is a party or by which
any of their properties or assets may be bound.
(as) The term "VOLUNTARY TERMINATION" shall mean the voluntary
termination by a Management Shareholder of his or her employment with the
Company or any Company Subsidiaries by voluntary resignation or any other means,
other than (i) in connection with the Retirement, Disability or death of such
Management Shareholder or (ii) simultaneous with or following termination for
Cause or at a time when there is in existence or outstanding any matter, event
or circumstance which if known to the Company at the time of such voluntary
termination by the Management Shareholder of his or her employment would have
allowed the Company or any Company Subsidiaries to have terminated the
Management Shareholder's employment for Cause (regardless of whether the Company
knew, or should have known, of such matter, event or circumstance).
A Voluntary Termination shall be for "Good Reason" if it
follows, within a reasonable period of time thereafter, (i) a material breach
of the Company's obligations under the applicable employment agreement, if
any, with such Management Shareholder, (ii) the Board, by vote in accordance
with Article II hereof, but excluding those directors who are officers or
employees, or former officers or employees, of the Company or its
Subsidiaries, determines in its sole discretion that a Voluntary Termination
by the Management Shareholder is for "Good Reason" under the circumstances
then prevailing, (iii) a reduction in salary paid to the Management
Shareholder, (iv) material reduction in the Management Shareholder's duties,
authority or responsibilities or (v) the relocation of the Management
Shareholder's place of employment (A) outside of the State of Michigan or (B)
inside of the State of Michigan unless the Management Shareholder is provided
with a reasonable relocation benefit package which shall include reasonable
protection against loss on the sale of the Management Shareholder's
residence; PROVIDED, HOWEVER, that in the event the Management Shareholder
determines to voluntarily terminate his or her employment for Good Reason,
such termination shall only become effective if the Management Shareholder
shall first give the Company notice of such Good Reason and the Company shall
fail within 20 Business Days of receipt of such notice to substantially
rectify or correct the same.
ARTICLE II
CORPORATE GOVERNANCE
2.1 VOTING RIGHTS IN CHARTER; VOTING MATTERS RELATED TO CHARTER
DOCUMENTS.
(a) The parties hereto acknowledge that the Company's Restated
Articles of Incorporation (as amended as contemplated hereby, the "Articles")
and by-laws ("By-laws") shall be amended on the date hereof (and each of the
Shareholders agrees to use its respective best efforts to effect such amendment)
as set forth in Exhibits A-1 and A-2 hereto.
12
(b) From and after the Closing, each Shareholder shall vote
its shares of Company Stock (to the extent entitled to vote), at each regular or
special meeting of shareholders of the Company or in any written consent
executed in lieu of such a meeting of shareholders, and shall take all actions
reasonably necessary, to ensure that the Articles or Company's By-laws (x) are
consistent with the provisions of Section 2.1(a) above and (y) do not, at any
time, conflict with the provisions of this Agreement. From and after the
Closing, each Shareholder shall use its reasonable best efforts to cause its
respective Nominees (as defined below), if any, to act in a manner consistent
with the provisions of this Agreement. Any committee of the Board established by
the Board in accordance with the Articles and By-laws shall include, as a
majority of its members, Windward Nominees (as defined below), unless the
Windward Agent consents otherwise.
(c) Any act or action to be taken or required to be taken by
the Company pursuant to the terms of, or any amendment, modification, or waiver
of, (i) this Agreement, (ii) the Recapitalization Agreement (following the
closing thereunder), (iii) any Ancillary Agreement (as defined in the
Recapitalization Agreement), (iv) any employee stock, bonus or other incentive
plan or arrangement, or (v) any other agreement or arrangement contemplated
hereby or thereby, shall require approval or action by the Board in accordance
with the provisions of this Article II.
(d) The provisions of this Article II shall not apply
following such time as the Company shall have become a subsidiary of another
entity (except for any entity which is formed for the sole purpose of holding
the stock of the Company or is a subsidiary of any member of the Windward Group
or Windward/Badger).
2.2 DESIGNATION OF DIRECTORS. From and after the Closing, each of
the Shareholders shall vote its shares of Company Stock (to the extent entitled
to vote) at each regular or special meeting of the shareholders of the Company
called for the purpose of filling positions on the Board, or in any written
consent executed in lieu of such a meeting of shareholders, and shall take all
actions reasonably necessary to ensure that the Board shall consist of no more
than twelve members and the election to the Board of the following individuals:
(x) for as long as the Family LP shall own any shares of Common Stock, (i) seven
(7) individuals (the "Windward Nominees") selected by Windward, as the agent for
the Windward Group, who may be affiliated with Windward, (ii) one (1) individual
selected by the holders of a majority of the percentage interests (the "Majority
WP Holders") in Windward/Park (the "Windward/Park Nominee"), PROVIDED, HOWEVER,
that in the event that at the end of any thirty (30) consecutive day period in
which the Majority WP Holders shall have failed to select the Windward/Park
Nominee, then the Windward Agent shall select the Windward/Park Nominee to serve
until such time as the majority WP Holders shall select an individual to serve
as the Windward/Park Nominee (at which time the individual appointed by the
Windward Agent to serve as the Windward/Park Nominee shall resign and be
replaced by the individual selected by the Majority WP Holders in accordance
with Article II hereof), (iii) one (1) individual selected by the holders of a
majority of the percentage interests (the "Majority WP Holders") in
Windward/Badger (the "Windward/Badger Nominee"), PROVIDED, HOWEVER, that in the
event that at the end of any thirty (30) consecutive day period in which the
Majority WP Holders shall have failed to select the Windward/Badger Nominee,
then the Windward Agent shall select the Windward/Park Nominee to serve until
such time as the Majority WP Holders shall select an individual to serve
13
as the Windward/Park Nominee (at which time the individual appointed by the
Windward Agent to serve as the Windward/Park Nominee shall resign and be
replaced by the individual selected by the Majority WP Holders in accordance
with Article II hereof), (iii) one (1) individual selected by the holders of
a majority of the percentage interests (the "Majority WB Holders") in
Windward/Badger (the "Windward/Badger Nominee"), PROVIDED, HOWEVER, that in
the event that at the end of any thirty (30) consecutive day period in which
the Majority WB Holders shall have failed to select the Windward/Badger
Nominee, then the Windward Agent shall select the Windward/Badger Nominee to
serve until such time as the Majority WB Holders shall select an individual
to serve as the Windward/Badger Nominee (at which time the individual
appointed by the Windward Agent to serve as the Windward/Badger Nominee shall
resign and be replaced by the individual selected by the Majority WB Holders
in accordance with Article II hereof), and (iv) three (3) individuals (the
"Family LP Nominees") selected by ▇▇▇▇▇, as agent for the Family LP (or by
the Family LP and the Permitted Transferees of the Family LP, if any, as the
Family LP and such Permitted Transferees may agree between or among
themselves by the affirmative vote of the holders of a majority of the shares
of Company Stock owned by such persons); PROVIDED, that in the event the
Family LP shall own greater than 25% of the outstanding Company Stock
(calculated on a Fully Diluted Basis), then the number of Family LP Nominees
shall be increased (and correspondingly, the number of Windward Nominees
shall be decreased) such that the number of Family LP Nominees shall be equal
to the number of directors of the Company at such time multiplied by the
percentage of the outstanding Company Stock owned by the Family LP (or the
Family LP and its Permitted Transferees) (calculated on a Fully Diluted
Basis), rounded up to the nearest whole number and the Windward Nominees,
Windward/Park Nominee and Windward/Badger Nominee shall constitute the
remainder; and (y) following such time as the Family LP shall cease to own
any shares of Common Stock but for so long as the Installment Note (as
defined in the Recapitalization Agreement) shall not have been paid (or
otherwise satisfied in full, including by set-off), (i) seven (7) Windward
Nominees, (ii) one Windward/Park Nominee, (iii) one Windward/Badger Nominee
and (iv) one Family LP Nominee (who shall resign from the Board on the date
that the obligations on the Installment Notes are paid or otherwise
satisfied). To effectuate the provisions of this Section 2.2, the Secretary
of the Company, or if there be no Secretary such other officer of the Company
as the Board may appoint to fulfill the duties of Secretary (the
"Secretary"), shall not record, and the Company shall not give effect to, any
vote or consent contrary to, or inconsistent with, the terms of this Section
2.2. The Windward Nominees, the Windward/Park Nominee, the Windward/Badger
Nominee and the Family LP Nominees are sometimes collectively referred to
herein as the "Nominees" and individually as a "Nominee."
2.3 REPLACEMENT OF NOMINEES. If, prior to his election to the Board
pursuant to Section 2.2 hereof, any Nominee shall be unable or unwilling to
serve as a director of the Company, the Shareholder or Shareholders who
nominated any such Nominee shall be entitled to nominate a replacement who shall
then be a Nominee for purposes of this Article II. If, following election to the
Board pursuant to Section 2.2 hereof, any Nominee shall resign, die or be
removed or be unable to serve for any reason prior to the expiration of his or
her term as a director of the Company, the Shareholder or Shareholders who
nominated such Nominee shall within 30 days of such event, notify the Board in
writing of a replacement Nominee, and all Shareholders shall vote their shares
of Company Stock (to the extent entitled to vote), at any regular or special
meeting called for the purpose of filling positions on the Board, or in any
written consent executed in lieu of such a meeting of shareholders, and shall
take all actions necessary, to ensure the election to the Board of such
replacement Nominee to fill the unexpired term of the Nominee whom such new
Nominee is replacing; PROVIDED that no person may be selected by a Shareholder
or group of Shareholders as a Nominee if such person previously served as a
director of the Company and was previously removed for Cause in accordance with
Section 2.6 hereof. If a Shareholder or Shareholders shall fail to so notify the
Board, the Board may, in the event that there is an insufficient number of
directors to constitute a quorum or otherwise conduct any business before the
Board, nominate any other person to fill the vacancy for the remainder of that
director's term.
14
2.4 CALLING SPECIAL MEETINGS FOR THE REMOVAL OF NOMINEES. Each
Shareholder hereby agrees to use such Shareholder's best efforts to call, or
cause the appropriate officers and directors of the Company to call, a special
meeting of shareholders of the Company and to vote all of the shares of Company
Stock (to the extent entitled to vote) owned or held of record by such
Shareholder for, or to take all actions by written consent in lieu of any such
meeting necessary to cause, the removal (with or without Cause) of any director
if the persons designating such director pursuant to Section 2.2 hereof request,
in a writing signed by the holders of a majority of the Company Stock owned by
such Shareholders, his removal for any reason (with or without Cause (as set
forth in Section 2.6), notwithstanding the provisions of Section 2.6). Except
for any action taken in accordance with the previous sentence of this Section
2.4 or with respect to the removal of a director for Cause, each Shareholder
further agrees to take no action, whether by voting of shares of Company Stock
or otherwise, with respect to the removal of any director that was not
designated by such Shareholder pursuant to Section 2.2 hereof.
2.5 CALLING SPECIAL MEETINGS FOR THE ENFORCEMENT OF CORPORATE
GOVERNANCE PROVISIONS. In order to effectuate the provisions of this Article II,
each Shareholder hereby agrees that when any action or vote is required to be
taken by such Shareholder pursuant to this Agreement, such Shareholder shall use
its best efforts to call, or cause the appropriate officers and directors of the
Company to call, a special or annual meeting of shareholders of the Company, as
the case may be, or execute or cause to be executed a consent in writing in lieu
of any such meetings to effectuate such shareholder action.
2.6 REMOVAL FOR CAUSE. Each Shareholder hereby agrees that,
subject to the requirements of applicable law and the Articles, no director
shall be removed without Cause (except as provided in Section 2.4 hereof). For
the purposes of Section 2.4 and this Section 2.6, "Cause" shall mean (i) the
commission of an act of fraud or embezzlement against the Company or any of its
Subsidiaries, (ii) the breach, violation or failure to comply in any material
respect with the terms and conditions of any agreement between the director and
the Company, or (iii) any conviction or guilty plea for a felony (or a plea of
NOLO CONTENDERE thereto).
2.7 GRANT OF PROXIES. In order to effectuate the provisions of this
Article II and in addition to and not in lieu of Sections 2.1 through 2.6
hereof, (i) the Windward Agent hereby grants to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or if
▇▇. ▇▇▇▇▇▇▇ shall cease to be a managing director, officer, director,
affiliate or associate (as such terms are defined in the rules and
regulations under the Exchange Act) of the Windward Agent or of any member of
the Windward Agent or any of its affiliates or associates, to his successor,
who shall be a managing director, officer, director, affiliate or associate
of the Windward Agent or of any member of the Windward Agent or any of its
affiliates or associates and shall be selected by the Windward Agent, and
(ii) the Management Shareholders hereby grant to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or if
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall cease to be an officer and shareholder of the Company,
to a person who is an officer and shareholder of the Company and who is
selected by the Management Shareholders, and (iii) the Family LP hereby
grants to ▇▇▇▇▇, or if ▇▇▇▇▇ shall cease to be the general partner of the
Family LP, to a person who is the general partner of the Family LP and who is
selected by the Family LP, a proxy to vote at any annual or special meeting
of shareholders, or to take action by written consent in lieu of such meeting
with respect to, all of the shares of Company Stock owned or held of record
by such Shareholder solely for (x) the election of directors designated in
accordance with Section 2.2
15
hereof, (y) the removal of directors in accordance with Sections 2.4 and 2.5
hereof, and (z) the election of a director to fill any vacancy on the Board in
accordance with Section 2.3 hereof. The proxies granted pursuant to this Section
2.7 shall terminate on the ten-year anniversary of the date hereof, unless
terminated prior to such date.
ARTICLE III
RESTRICTIONS ON TRANSFER
3.1 RESTRICTIONS ON TRANSFER.
(a) No Company stock now or hereafter owned by (i) the Family
LP, (ii) the Management Shareholders, (iii) persons who or which have acquired
shares of the Company's stock from, and are Permitted Transferees of, the Family
LP or any of the Management Shareholders, and any combination of them, and (iv)
such other persons (other than members of the Windward Group or their Permitted
Transferees) who or which become parties to this Agreement pursuant to the terms
and conditions of this Agreement, or any interest therein may be Transferred,
except (i) for the sale by any Management Shareholder or the Family LP (or any
of their respective Permitted Transferees), as the case may be, to a Third Party
of any of such person's Company Stock arising as a result of the exercise of any
"tag-along" rights pursuant to Article IV hereof (provided that during the
period in which any Management Shareholder and his Permitted Transferees are
subject to the "call" provisions of Article VI hereof (including, without
limitation, any period following any termination of the Management Shareholder's
employment with the Company and its Subsidiaries up until the expiration of the
Company's call period set forth in Sections 6.1 and 6.3 hereof, such Management
Shareholder, and his Permitted Transferees shall not be permitted to Transfer
any shares of Company Stock pursuant to either the provisions of Article III
hereof or the "tag-along" provisions of Article IV hereof, except for Transfers
to the Permitted Transferees of such Management Shareholder), (ii) for any sale
of shares in connection with the exercise by the Windward Group of its rights
under Sections 5.1 through 5.6 hereof, (iii) upon the exercise by the Company
(or its designee), the Family LP or any Management Shareholder (or his or her
personal representatives) of any "call" or "put" rights, as applicable, provided
for in Article VI or Article VII hereof, (iv) Transfers to or from a Permitted
Transferee, or (v) for any sale of shares in connection with the exercise of
such person's rights under Section 5.6 and Sections 9.1 through 9.11 hereof
(provided that, prior to an IPO Event, neither the Family LP nor any Management
Shareholder, as the case may be, and their Permitted Transferees, shall be
permitted to Transfer any shares of Company Stock pursuant to the provisions of
Article IX hereof).
(b) Notwithstanding any provision herein to the contrary, no
Management Shareholder who is employed by the Company (or any successor to the
Company) may Transfer (including in connection with any Registration arising
under Article IX hereof), in the aggregate, more than (i) prior to the
consummation of the second Registration of Common Stock following an IPO Event,
one-half, (ii) following the consummation of the second Registration of Common
Stock following an IPO Event, but prior to the consummation of the third
Registration following an IPO Event, two-thirds, and (iii) thereafter,
three-quarters, in each case, of the aggregate number of shares of Common Stock
such Management Shareholder could have been entitled to own by adding (x) all
shares of Common Stock owned by such Management Shareholder as of
16
the date hereof, (y) all shares of Common Stock issuable upon exercise of all of
such Management Shareholder's Warrants as of the date hereof, and (z) all shares
of Common Stock issuable upon the exercise of such Management Shareholder's
Options as of the initial date of the grant of such Options; PROVIDED, HOWEVER,
THAT, the foregoing restriction shall not apply to any Transfer by any
Management Shareholder arising as a result of the exercise of any "tag-along"
rights pursuant to Article IV hereof.
(c) Any Transfer of Company Stock made pursuant to this
Section 3.1 to a Permitted Transferee shall be effective only if such Permitted
Transferee shall agree in writing to be bound by the terms and conditions of
this Agreement pursuant to the provisions of Article X hereof. No Transfer of
Company Stock in violation of this Agreement shall be made or recorded on the
books of the Company and any such Transfer shall be void and of no effect.
ARTICLE IV
TAG-ALONG RIGHTS
4.1 TAG-ALONG RIGHTS GENERALLY.
(a) Subject to the restrictions on Transfer set forth in
Section 3.1 hereof, any Shareholder or Shareholders who are either (i)
members of the Windward Group (or their Permitted Transferees) or (ii)
Windward/Badger (or its Permitted Transferees), may, individually or
collectively, in any one transaction or any series of similar transactions,
Transfer any shares of Company Stock to any Third Party, but only if the
Shareholder or Shareholders who are either (i) members of the Windward Group
(or their Permitted Transferees) or (ii) Windward/Badger (or its Permitted
Transferees), as the case may be, desiring to so transfer their Company Stock
(collectively, the "Transferor") first offer to each of the other
Shareholders (the "Tag-Along Offerees") to include, at the option of each
Tag-Along Offeree, in the sale or other disposition to the Third Party, such
number of shares of Common Stock (collectively, the "Tag-Along Stock") as
shall be determined in accordance with this Article IV.
(b) Upon the receipt by any Transferor or Transferors of a
Bona Fide Offer or offers to purchase or otherwise acquire (or if such
Transferor or Transferors has otherwise agreed to Transfer (other than in
connection with an IPO Event)) shares of its or their Company Stock from a Third
Party (other than a Transfer which pursuant to Section 4.5 hereof would not be
subject to the provisions of Sections 4.1 through 4.4 hereof) which such
Transferor or Transferors desire to accept, such Transferors shall cause the
Third Party's offer to be reduced to writing and shall provide a copy of such
written notice of such Third Party's offer (the "Tag-Along Notice") to the
Company, and the Company shall provide a copy of the Tag-Along Notice to each of
the Tag-Along Offerees in the manner set forth in Section 14.7 hereof. The
Tag-Along Notice must contain an offer to purchase or otherwise acquire shares
of Tag-Along Stock from the Tag-Along Offerees according to the terms and
conditions of this Article IV and upon the same terms and conditions as the
terms and conditions contained in the Third Party's offer and shall be
accompanied by a true and correct copy of the Third Party's offer.
(c) At any time within 10 Business Days after its receipt of
the Tag-Along Notice, each of the Tag-Along Offerees may irrevocably accept the
Third Party offer included in
17
the Tag-Along Notice for up to such number of shares of Tag-Along Stock as is
determined in accordance with the provisions of this Article IV by furnishing
written notice of such acceptance to the Transferor and such Third Party; such
written notice of acceptance must be accompanied by the certificate or
certificates representing the shares of Tag-Along Stock (which shall be free and
clear of liens, other than arising pursuant to the terms of this Agreement),
Duly Endorsed, to be sold or otherwise disposed of pursuant to such offer by
such Tag-Along Offeree, together with a limited power-of-attorney authorizing
the Transferor to sell or otherwise dispose of such shares of stock pursuant to
the terms and conditions of such Third Party's offer and the terms and
conditions of this Article IV.
(d) Notwithstanding anything to the contrary contained in
this Article IV, there shall be no liability on the part of the Transferor to
any Shareholder in the event that the sale of Company Stock to the Third
Party contemplated pursuant to this Article IV is not consummated for any
reason whatsoever. Whether a sale of Company Stock to the Third Party
contemplated pursuant to this Article IV is effected is in the sole and
absolute discretion of the Transferor.
4.2 ALLOCATION OF SHARES OF TAG-ALONG STOCK. Each Tag-Along
Offeree shall have the right to sell pursuant to the Third Party's offer a
number of shares of Tag-Along Stock up to the product of (x) the total number of
shares to be acquired by the Third Party as set forth in the Tag-Along Notice
(or such higher number of shares as such Third Party may agree to), times (y) a
fraction, (1) the numerator of which shall be the number of shares of Common
Stock held or deemed to be held by such Tag-Along Offeree as of the date of the
Tag-Along Notice (for the purpose of such calculation, a Tag-Along Offeree shall
be deemed to hold the number of shares of Common Stock which would be issuable,
as of the date of the Tag-Along Notice, to such Tag-Along Offeree upon
conversion, exercise or exchange of all securities then held by such Tag-Along
Offeree that are then convertible, exercisable or exchangeable (but excluding
any unvested options) into or for (whether directly or indirectly) shares of
Common Stock) and (2) the denominator of which shall be the aggregate number of
shares of Common Stock (calculated as aforesaid) held or deemed to be held on
such date by all Shareholders who have elected to participate in such Tag-Along;
PROVIDED that all allocations referred to herein shall be determined in good
faith by the Company in accordance with the provisions of this Section 4.2.
4.3 TRANSFER MECHANICS. The purchase from the Tag-Along Offerees
pursuant to this Article IV shall be on the same terms and conditions,
including any representations, warranties, covenants and indemnities and the
per share price (which, in the event of cash consideration, shall be paid by
bank, cashier's or certified check or by wire transfer of immediately
available funds, unless otherwise specified in the Tag-Along Notice provided
to the Tag-Along Offerees by the Company) and the date of sale or other
disposition, as are received by the Transferor and stated in the Tag-Along
Notice provided to the Tag-Along Offerees by the Company. As promptly as
practicable (but in no event later than 3 Business Days) after the
consummation of the sale or other disposition of Company Stock of the
Transferor and Tag-Along Stock of the Tag-Along Offerees to the Third Party
pursuant to the Third Party's offer, the Transferor shall notify the
Tag-Along Offerees thereof, shall remit to each Tag-Along Offeree who
accepted the Third Party's offer in accordance with the provisions of this
Article IV the total sales price of the shares of Tag-Along Stock of such
Tag-Along Offeree sold or otherwise disposed of pursuant thereto (together
with any excess shares of Tag-Along Stock of such Tag-Along Offeree which
18
are not sold or otherwise disposed of pursuant thereto), and shall furnish such
other evidence of the completion and time of completion of such sale or other
disposition and the terms and conditions thereof as may be reasonably requested
by the Tag-Along Offerees.
4.4 TRANSFERS TO THIRD PARTIES AFTER SHAREHOLDERS DECLINE
TAG-ALONG RIGHTS. If within 10 Business Days after the receipt of the Tag-Along
Notice, any Tag-Along Offeree has not accepted the offer contained in the
Tag-Along Notice, such Tag-Along Offeree will be deemed to have waived any and
all rights with respect to the sale or other disposition of Tag-Along Stock
described in the Tag-Along Notice and the Transferor shall have 60 days in which
to sell or otherwise dispose of the shares of Company Stock described in the
Third Party's offer, on terms and conditions not more favorable to the
Transferor than were set forth in the Tag-Along Notice. If, at the end of 60
days following the receipt of the Tag-Along Notice, the Transferor has not
completed the sale or other disposition of Company Stock of the Transferor and
Tag-Along Stock of any Tag-Along Offeree in accordance with the terms and
conditions of the Third Party's offer, the Transferor shall return to such
Tag-Along Offeree all certificates representing shares of Tag-Along Stock which
such Tag-Along Offeree delivered for sale or other disposition pursuant to this
Article IV, and all the restrictions on Transfer contained in this Agreement
with respect to Company stock owned by the Transferor shall again be in effect.
4.5 EXCEPTIONS TO TAG-ALONG RIGHTS. The provisions of this Article
IV shall not be applicable to any Transfer of Company Stock (a) from any
Shareholder to any Permitted Transferee, or from any Permitted Transferee of
such Shareholder to such Shareholder, provided that in any Transfer to a
Permitted Transferee such Permitted Transferee (other than the Company) must
agree in writing to be bound by the terms and conditions of this Agreement
pursuant to the provisions of Article X hereof, (b) made pursuant to a public
offering of Company Stock in connection with the exercise by any Shareholder of
its rights pursuant to Article IX hereof or in connection with the exercise by
the Windward Group of its rights pursuant to Section 5.6 hereof or made in
compliance with Rule 144 or into a public trading market, (c) made in connection
with the exercise by the Windward Group of a Compelled Sale Right or (d) between
the Company (or its designee), on the one hand, and the Family LP or any
Management Shareholder or employee of the Company and its Subsidiaries (or any
of their respective Permitted Transferees), on the other, pursuant to Articles
VI, VII or X hereof.
ARTICLE V
RIGHTS TO COMPEL SALE OR IPO EVENT
5.1 RIGHTS TO COMPEL SALE GENERALLY. The Windward Group shall have
the right (the "Compelled Sale Right") to cause the sale of all or substantially
all of the Company to a Third Party (the "Third Party Purchaser"), whether
pursuant to a sale of Company Stock, merger, consolidation, stock swap, business
combination, sale of assets (in which case, substantially all shall mean more
than 75% of the assets calculated on a fair market basis in good faith by the
Board of Directors) or similar transaction (any such sale, the "Compelled
Sale"); PROVIDED that the Windward Group gets treated no more favorably as to
the terms and conditions of the Compelled Sale than the other Shareholders
(other than with respect to any commercially reasonable transaction fee
arrangements entered into by the Company and Windward (or any of its Affiliates)
in connection with a Compelled Sale). If the Windward Group proposes to exercise
19
its Compelled Sale Right, the Windward Agent shall send written notice of the
exercise of its Compelled Sale Right to each of the remaining Shareholders,
setting forth the consideration to be paid by the Third Party Purchaser and the
other terms and conditions of such transaction (such notice, the "Compelled Sale
Notice").
5.2 COMPELLED SALE PURSUANT TO A SALE OF COMPANY STOCK.
(a) In the event that the Windward Group determines to
exercise its Compelled Sale Right pursuant to a sale of Company Stock to the
Third Party Purchaser, then the Windward Agent may, at its option, require
the remaining Shareholders and their respective Permitted Transferees to sell
all Company Stock (along with all rights to acquire Company Stock and similar
interests) held by them to the Third Party Purchaser for the same
consideration per share (appropriately adjusted in the case of securities
such as options and warrants) and otherwise on the same terms and conditions
upon which the Windward Group sells its shares of Company Stock (along with
all rights to acquire Company Stock and similar interests). Within 10 days
following the date on which the Windward Agent delivers the Compelled Sale
Notice, each of the remaining Shareholders shall deliver to a representative
of the Windward Agent designated in the Compelled Sale Notice, certificates
representing all shares of Company Stock (along with all rights to acquire
Company Stock and similar interests) held by such Shareholder, Duly Endorsed,
together with all other documents reasonably required to be executed in
connection with such transaction; PROVIDED that in the event that the
Windward Group does not anticipate consummating such Compelled sale within 30
days after the date of delivery of the Compelled Sale Notice, the Windward
Group shall subsequently notify the remaining Shareholders of the anticipated
date of consummation of such Compelled Sale and such remaining Shareholders
shall thereupon deliver to such designated representative of the Windward
Agent, within 5 days prior to such anticipated date of consummation, such
certificates and documents.
(b) In the event that a remaining Shareholder and its
Permitted Transferees should fail to deliver such certificates and documents to
the Windward Agent, then (i) the Company shall cause the books and records of
the Company to show that such shares are bound by the provisions of this Article
V and that such shares may be transferred only to the Third Party Purchaser and
(ii) such remaining Shareholder and each of its Permitted Transferees (A) shall
not be entitled to the consideration it is to receive under this Section 5.2
until it cures such failure (provided that after curing such failure it shall be
so entitled to such consideration without interest), (B) shall for all purposes
be deemed no longer to be a shareholder of the Company and have no voting rights
with respect to such shares of Company Stock, (C) shall not be entitled to any
dividends or other distributions with respect to the shares of Company Stock
held by it, (D) shall have no other rights or privileges granted to shareholders
under this or any other agreement and (E) in the event of liquidation of the
Company, shall have rights subordinate to the rights of any equity holder with
respect to any consideration it would have received if it had complied with this
Section 5.2, if any, until it cures such failure (provided, that after curing
such failure it shall be so entitled to such consideration without interest). If
any party so fails to deliver such certificates and documents as so required it
shall execute, acknowledge and deliver all such further agreements and take all
such further actions as may be reasonably necessary or desirable to give effect
to the provisions of this Section 5.2.
20
(c) If, within six (6) months after the Windward Agent gives
such notice, the Windward Group has not completed the sale of all the shares of
Company Stock (along with all rights to acquire Company Stock and similar
interests) of the Shareholders in accordance herewith, the Windward Agent shall
return to each of the remaining Shareholders all certificates representing
shares of Company Stock that such Shareholder delivered for sale pursuant hereto
and that were not purchased pursuant to this Article V.
(d) Shareholders who deliver to the Windward Agent
certificates representing shares of Company Stock in accordance with this
Section 5.2 or otherwise pursuant to a Compelled Sale shall retain full voting
control (to the extent such shares are entitled to vote) and any other rights
and incidents of ownership associated with such Shareholder's ownership of such
shares until the applicable Compelled Sale has been completed or such shares
have been returned in accordance with the provisions of this Article V and such
shares will be held by the Windward Agent for the benefit of such Shareholder
until such time.
5.3 COMPELLED SALE OTHER THAN PURSUANT TO A SALE OF COMPANY STOCK.
In the event that the Windward Group determines to exercise its Compelled Sale
Right pursuant to a merger, consolidation, stock swap, business combination,
sale of assets or similar transaction, then the Windward Agent may, at its
option, require the remaining Shareholders and their respective Permitted
Transferees to vote in favor of such transaction. In particular, in the event of
any such proposed transaction, upon any request by the Windward Agent, each of
the Shareholders shall use its respective best efforts (i) to call, or cause the
appropriate officers and directors of the Company to call, a special meeting of
shareholders of the Company to consider approval of such proposed transaction,
and (ii) vote in favor of such proposed transaction all of the shares of Company
Stock owned or held of record by such Shareholder (to the extent entitled to
vote), at each regular or special meeting of the shareholders of the Company
called for the purpose of voting on such matter, or in any written consent
executed in lieu of such a meeting of shareholders, and shall take all actions
reasonably necessary, to ensure that all necessary shareholder approvals for
such transaction are obtained.
5.4 COOPERATION IN CONNECTION WITH COMPELLED SALE. Each Shareholder
shall reasonably cooperate with the Windward Agent and the other members of
the Windward Group in the event that the Windward Group determines to
exercise its Compelled Sale Right pursuant to this Article V and shall take
all reasonably necessary and appropriate actions in connection with any such
Compelled Sale as may be reasonably requested by the Windward Agent
(including, without limitation, entering into such agreements and instruments
in connection with any such Compelled Sale as may be requested by the
Windward Agent (subject to the provisions of the next sentence)). Without
limitation to the foregoing provisions, each Shareholder hereby covenants and
agrees that, at the request of the Windward Agent, it will promptly enter
into any agreements and instruments (which may include such representations,
warranties, covenants and indemnities as may be negotiated by the Windward
Agent) with a Third Party Purchaser relating to any Compelled Sale that is
negotiated by the Windward Agent; PROVIDED, HOWEVER, that unless the
Shareholders shall otherwise agree, all such representations, warranties and
indemnities shall be several and not joint as among the Shareholders.
5.5 NOTICE OF CONSUMMATION OF COMPELLED SALE. Promptly (but in no
event later than 2 Business Days) after the consummation of any sale transaction
contemplated pursuant to
21
Section 5.1 hereof, the Windward Agent shall give notice thereof to the
remaining Shareholders, shall remit to each of the remaining Shareholders the
total transaction proceeds to which such Shareholders are entitled pursuant
thereto, and shall furnish such other evidence of the completion and time of
completion of such sale or other disposition and the terms and conditions
thereof as may be reasonably requested by such Shareholders.
5.6 RIGHTS TO COMPEL IPO EVENT.
(a) The Windward Agent may, on behalf of the Windward Group,
at any time, in its sole discretion, cause the Company to effect an IPO Event
(which may include, at the Windward Agent's option, the secondary sale of shares
of Company Stock then held by the Windward Group and Windward Badger (pro rata
based upon their relative ownership percentage)); PROVIDED that the Family LP,
the members of the Windward Group and Windward/Badger shall be entitled to
participate in any IPO in accordance with (and subject to the restrictions
applicable to) the "piggyback" registration rights provisions of Article IX
hereof. Notwithstanding anything to the contrary contained in Article IX, in the
event of the Family LP's participation in such public offering, and in the event
the Company has been advised that the number of shares of securities requested
to be offered by the Windward Group, Windward/Badger and the Family LP exceeds
the number that can be sold in such offering without adverse consequences, the
number of shares of securities that may be offered therein by the Windward
Group, Windward/Badger and the Family LP shall be allocated among the members of
the Windward Group, Windward/Badger and the Family LP on a pro rata basis in
proportion to each such person's relative ownership of such securities.
(b) In the event that the Windward Agent, on behalf of the
Windward Group, elects to exercise its rights pursuant to Section 5.6(a) above,
the Windward Agent shall have the right to designate all of the material terms
of such IPO Event (E.G., the underwriters, if any, to be retained by the Company
in connection therewith, the securities exchanges or national market systems, if
any, where the Company's equity would be listed for trading, the price, timing
and other terms of the proposed public offering, etc.). In addition, in the
event that the Windward Agent elects to exercise the rights of the Windward
Group contemplated pursuant to Section 5.6(a) above, then the Windward Agent
may, at its option, require the remaining Shareholders and their respective
Permitted Transferees to vote in favor of any amendment(s) to the Articles and
By-Laws which are reasonably requested by any underwriter retained in connection
with such IPO Event. In particular, in the event of any such proposed IPO Event,
upon any request by the Windward Agent, each of the Shareholders shall use its
respective best efforts (i) to call, or cause the appropriate officers and
directors of the Company to call, a special meeting of shareholders of the
Company to consider approval of such proposed amendment(s), and (ii) vote in
favor of such proposed amendment(s) all of the shares of Company Stock owned or
held of record by such Shareholder (to the extent entitled to vote), at each
regular or special meeting of the shareholders of the Company called for the
purpose of voting on such matter, or in any written consent executed in lieu of
such a meeting of shareholders, and shall take all actions reasonably necessary,
to ensure that all necessary shareholder approvals for such amendment(s) and
such IPO Event are obtained.
22
ARTICLE VI
PUT AND CALL RIGHTS ON MANAGEMENT STOCK
6.1 PUT AND CALL RIGHTS.
(a) TERMINATION WITHOUT CAUSE, ETC. (i) If, prior to an IPO
Event, a Management Shareholder's employment with the Company and its
Subsidiaries is terminated (x) by the Company and its Subsidiaries for any
reason other than Cause and other than in connection with the Retirement,
Disability or death of such Management Shareholder, or (y) by reason of
Voluntary Termination for Good Reason, then the Company (or its designee) shall
have the right, for 120 days following the date of termination of such
employment and subject in each case to the provisions of Section 6.3 hereof, to
give notice to purchase from such Management Shareholder and his or her
Permitted Transferees, and such Management Shareholder and his or her Permitted
Transferees shall be required to sell on one occasion to the Company (or its
designee), all Company Stock then held by such person(s) at a price equal to
Fair Market Value.
(ii) If, prior to an IPO Event, a Management
Shareholder's employment with the Company and its Subsidiaries is terminated (x)
by the Company and its Subsidiaries for any reason other than Cause and other
than in connection with the Retirement, Disability or death of such Management
Shareholder, or (y) by reason of Voluntary Termination for Good Reason, then,
subject in each case to the provisions of Section 6.3 hereof, such Management
Shareholder and all of his or her Permitted Transferees shall have the right,
for 90 days following the date of termination of such employment, to give notice
to sell to the Company (or its designee), and the Company (or its designee)
shall be required to purchase on one occasion from such Management Shareholder
and his or her Permitted Transferees, all shares of Company Stock held by all
such person(s) at a price equal to Fair Market Value.
(b) TERMINATION UPON DISABILITY, DEATH OR RETIREMENT. (i) If,
prior to an IPO Event, a Management Shareholder's employment with the Company
and its Subsidiaries is terminated due to the Retirement, Disability or death of
the Management Shareholder, then the Company (or its designee) shall have the
right, for 120 days following the date of termination of such employment and
subject in each case to the provisions of Section 6.3 hereof, to give notice to
purchase from such Management Shareholder (or the personal representatives of
such deceased Management Shareholder, as the case may be) and his or her
Permitted Transferees, and such Management Shareholder (or the personal
representatives of such deceased Management Shareholder, as the case may be) and
his or her Permitted Transferees shall be required to sell on one occasion to
the Company (or its designee), all Company Stock then held by such person(s) at
a price equal to Fair Market Value.
(ii) If, prior to an IPO Event, a Management
Shareholder's employment with the Company and its Subsidiaries is terminated due
to the Retirement, Disability or death of the Management Shareholder, then,
subject in each case to the provisions of Section 6.3 hereof, such Management
Shareholder (or the personal representatives of such deceased Management
Shareholder, as the case may be) and all of his or her Permitted Transferees
shall have the right, for 90 days following the date of termination of such
employment, to give notice to sell to the Company (or its designee), and the
Company (or its
23
designee) shall be required to purchase on one occasion from such Management
Shareholder and his or her Permitted Transferees, all shares of Company Stock
held by all such person(s) at a price equal to Fair Market Value.
(c) VOLUNTARY TERMINATION. If, prior to an IPO Event, a
Management Shareholder's employment with the Company and its Subsidiaries is
terminated by reason of Voluntary Termination (other than Voluntary Termination
for Good Reason), then the Company (or its designee) shall have the right, for
120 days following the date of termination of such employment and subject in
each case to the provisions of Section 6.3 hereof, to give notice to purchase
from such Management Shareholder and his or her Permitted Transferees, and such
Management Shareholder and his or her Permitted Transferees shall be required to
sell on one occasion to the Company (or its designee), all Company Stock then
held by such person(s) at a price equal to the lower of Book Value or Fair
Market Value.
(d) TERMINATION FOR CAUSE. If, prior to an IPO Event, (x) a
Management Shareholder's employment with the Company and its Subsidiaries is
terminated for Cause or (y) a Management Shareholder voluntarily terminates his
or her employment simultaneous with or following termination for Cause or an
event which if known to the Company at the time of such voluntary termination by
the Management Shareholder of his or her employment would allow the Company and
its Subsidiaries to terminate the Management Shareholder's employment for Cause,
then the Company (or its designee) shall have the right, for 120 days following
the date of termination of such employment and subject in each case to the
provisions of Section 6.3 hereof, to give notice to purchase from such
Management Shareholder and his or her Permitted Transferees, and such Management
Shareholder and his or her Permitted Transferees shall be required to sell on
one occasion to the Company (or its designee), all shares of Company Stock then
held by such person(s) at a price equal to the lower of cost, Book Value or Fair
Market Value.
(e) NOTICE OF EXERCISE; CLOSING. (i) If the Company (or its
designee) desires to exercise its option to purchase shares of Company Stock
pursuant to its rights under this Section 6.1, the Company (or its designee)
shall, not later than the expiration date of the 120-day call period referred to
in clauses (a)(i), (b)(i), (c) and (d) above (as it may be extended pursuant to
the provisions of Section 6.3 hereof), send written notice of its intention to
purchase all of the shares of Company Stock held by such Management Shareholder
and his or her Permitted Transferees pursuant to this Section 6.1. Subject in
each case to the provisions of Section 6.3 hereof, the closing of the purchase
shall take place at the principal office of the Company on the tenth day
following the giving of such notice or as soon thereafter as practicable but in
no event later than twenty days after the giving of such notice. The purchase
price shall be paid in accordance with Section 6.4 hereof.
(ii) Each Management Shareholder (and the Permitted
Transferees thereof) which desires to sell all of its shares of Company Stock
pursuant to its rights under this Section 6.1 shall, not later than the
expiration date of the 90-day put period referred to in clauses (a)(ii) and
(b)(ii) above, send a written, irrevocable notice of its intention to sell all
of its shares of Company Stock pursuant to this Section 6.1. Subject in each
case to the provisions of Section 6.3 hereof, the closing of the purchase shall
take place at the principal office of the Company as soon as practicable
thereafter; PROVIDED, HOWEVER, that the closing shall take place no more than
24
180 days from the date of the event giving rise to the Company's rights
hereunder; PROVIDED, FURTHER, notwithstanding the above, the Company shall not
be obligated to close prior to 120 days after the giving of such notice. The
purchase price shall be paid in accordance with Section 6.4 hereof.
6.2 OBLIGATION TO SELL SEVERAL. In the event that any Management
Shareholder has transferred any shares of Company Stock to any Permitted
Transferee, the failure of any one member of such group to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by the
Company (or its designee) shall not excuse, or constitute a waiver of the
Company's rights, if any, against, the defaulting member(s).
6.3 DEFERRAL OF PURCHASES.
(a) EVENTS OF DEFERRAL. The Company (and its designee) shall
not be obligated to purchase any shares of Company Stock, at any time pursuant
to this Article VI, regardless of whether it has in the case of Section 6.1
hereof delivered a notice of its election to purchase any such shares, (x) to
the extent that the purchase of such shares would give rise to or result in a
Violation or (y) if immediately prior to the time of purchase there exists, or
if immediately after giving effect to such purchase there would exist, a
Financing Default.
(b) EXTENSION OF PUT AND CALL PERIODS. The period during which
the Company (or its designee) shall have the right or obligation to purchase
shares of Company Stock pursuant to the exercise of any "put" rights pursuant to
Section 6.1 (a "Put Right") or pursuant to the exercise of any right to purchase
shares of Company Stock pursuant Section 6.1 hereof (a "Call Right"), shall be
extended in the event the Board in good faith determines that any Violation or
Financing Default exists or would result as a result of any purchase of Company
Stock pursuant to this Article VI until 90 days (in the event of the exercise of
any Put Rights) or 120 days (in the event of the exercise of any Call Rights),
as the case may be, after the Board determines that such is no longer the case;
PROVIDED, THAT, in order to exercise such rights, (i) the Management Shareholder
(or the personal representatives of such deceased Management Shareholder, as the
case may be) exercising any Put Rights must have given notice of its intention
to exercise its Put Rights within 90 days from the date the Management
Shareholder's termination of employment, and (ii) the Company (or its designee)
must have given notice of its intention to exercise its Call Rights within
120 days from the date of the Management Shareholder's termination of
employment; PROVIDED, FURTHER, that in the event the Company exercises its
rights to defer in accordance with the provisions of this Section 6.3, the
Company shall pay to the Management Shareholder (or the personal
representatives of such deceased Management Shareholder, as the case may be),
at the time of payment as provided in Section 6.4 below, interest on the
amount to be paid pursuant to the applicable provision of Section 6.1 from
the date notice of intention to exercise the Call Right or Put Right, as the
case may be, is given through and until the date of payment calculated at a
rate of 10% per annum compounded annually; it being understood and agreed
that in the event that such payment is to be made by the issuance of the
Management Repurchase Note, such interest shall be added to the principal
amount thereof.
6.4 PAYMENT FOR STOCK. The purchase price of shares of Company
Stock to be purchased by the Company (or its designee) pursuant to this Article
VI will be paid by (a) at the
25
Company's option, the cancellation of indebtedness owing from the Management
Shareholder to the Company or any of its Subsidiaries, if any, and (b) then
by the Company's delivery of a bank cashier's check or certified check for
the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Company Stock so
purchased, Duly Endorsed; PROVIDED that in the event (x) that the Company
does not have sufficient cash flow to finance the payment of such purchase
price referred to in clause (b) above, as determined in good faith by the
Board, or (y) that the Company is not permitted, pursuant to the provisions
of any Indebtedness of the Company or any of its Subsidiaries (after seeking
in good faith to obtain from the lenders thereunder a consent reasonably
acceptable to the Company with respect to effecting a cash repurchase), to
pay cash in payment of such purchase price referred to in clause (b) above,
but is permitted, pursuant thereto and pursuant to all other credit
obligations of the Company, to issue a Management Repurchase Note (as defined
below), then, in any of such events, the Company (or its designee) may, at
its option, pay for such purchase price with the delivery of a junior,
subordinated promissory note bearing interest at a ten percent (10%) annual
rate of interest, compounded annually, due on the fifth anniversary of the
date of issuance thereof (or such later date as may be required by any
financing agreement to which the Company is a party) and substantially in the
form attached hereto as Exhibit A for the remainder of the purchase price, if
any (such promissory note, the "Management Repurchase Note"); PROVIDED,
FURTHER, that if a Management Repurchase Note is issued by the Company in
connection with the exercise of any "put" or "call" right pursuant to this
Article 6, the Company covenants, notwithstanding the terms of the Management
Repurchase Note, to use reasonable efforts to repay such note as promptly
thereafter as the Company's financing documents or cash flow shall
reasonably, as determined by the Board, permit; PROVIDED, THAT, the Company
shall not be bound by the foregoing covenant to the extent that (and as long
as) any payment of any Management Repurchase Note would give rise to or
result in a Violation or Financing Default. In the event that the Company
(or its designee) intends to deliver a Management Repurchase Note upon the
exercise of any Put and Call Right, the Company (or its designee) shall
notify the intended recipient thereof prior to the delivery thereof. The
Company (or its designee) shall have the rights set forth in subsections (a)
and (b) of the first sentence of this Section 6.4 whether or not any
Permitted Transferee(s) of the Management Shareholder owing amounts to the
Company or its Subsidiaries, if applicable, is itself an obligor of the
Company or its Subsidiaries.
6.5 MISCELLANEOUS. Notwithstanding anything to the contrary set
forth in this Agreement, (a) the Company shall be permitted to reach any
agreement with any Management Shareholder (or his or her estate, as the case may
be) concerning the purchase of such Management Shareholder's shares of Company
Stock, and (b) the Company, in its sole discretion, shall have the right, but
not the obligation, to assign any of its rights, and delegate any of its
obligations, to purchase any shares of Company Stock of any Management
Shareholder (or his or her estate, as the case may be) pursuant to Article VI
hereof to any employee stock ownership plan or similar compensation or benefit
plan that the Company may have, or to any Subsidiaries or employee of the
Company (or any combination of the foregoing).
26
ARTICLE VII
PUT AND CALL RIGHTS ON FAMILY LP STOCK
7.1 PUT AND CALL RIGHTS.
(a) FAMILY LP PUT RIGHTS. If, prior to an IPO Event, ▇▇▇▇▇
dies, then, subject to the provisions of Section 7.3 hereof, the Family LP and
all of its Permitted Transferees shall have the right, for 120 days following
the date of ▇▇▇▇▇'▇ death, to give notice to sell to the Company (or its
designee), and the Company (or its designee) shall be required to purchase on
one occasion from the Family LP and its Permitted Transferees, all shares of
Company Stock then held by all such person(s) at a price equal to the portion of
the Appraisal Value attributable to the equity interests in the Company held by
such persons calculated as contemplated in the definition of Appraisal Value.
(b) FAMILY LP CALL RIGHTS. If, prior to an IPO Event, ▇▇▇▇▇
dies and the Family LP fails to exercise its "put right" within 120 days of such
death as provided in paragraph (a) above, then the Company (or its designee)
shall have the right, for 120 days following the date the Family LP's rights
pursuant to paragraph (a) above expire and subject to the provisions of Section
7.3 hereof, to give notice to purchase from the Family LP and its Permitted
Transferees, and the Family LP and its Permitted Transferees shall be required
to sell on one occasion to the Company (or its designee), the number of shares
of Company Stock then held by such person(s) equal to the quotient of (A) $15
million divided by (B) the portion of Appraisal Value attributable to the equity
interests in the Company held by such persons calculated as contemplated in the
definition of Appraisal Value; PROVIDED, HOWEVER, the Company shall use the Life
Insurance Proceeds to pay the purchase price for such shares purchased pursuant
to this paragraph (b).
(c) NOTICE OF EXERCISE; CLOSING. (i) If the Family LP (and its
Permitted Transferees) desire to sell all of their shares of Company Stock
pursuant to its rights under this Section 7.1, the Family LP (and its Permitted
Transferees) shall, not later than the expiration date of the 120-day put period
referred to in clause (a) above, send to the Company a written, irrevocable
notice of their intention to sell all of their shares of Company Stock pursuant
to this Section 7.1. Subject in each case to the provisions of Section 7.3
hereof, the closing of the purchase shall take place at the principal office of
the Company on the tenth day following the giving of such notice or as soon
thereafter as practicable. The purchase price shall be paid in accordance with
Section 7.4 hereof. Notwithstanding anything to the contrary contained in this
Article VII, in the event the Family LP and all of its Permitted Transferees
shall exercise any "put" right under this Section 7.1 (the "Family LP Put
Right") and the Company notifies such person(s) that it intends to deliver a
Family LP Repurchase Note (as defined in Section 7.4 hereof) in accordance with
the provisions of Section 7.4 hereof in respect of such repurchase of Company
Stock, the Family LP and all of its Permitted Transferees shall be permitted to
withdraw permanently such Family LP Put Right as to all of the shares held by
the Family LP and its Permitted Transferees (it being understood that there will
be no extension of the period in which to exercise such Family LP Put Rights and
that upon such withdrawal the Family LP and all of its Permitted Transferees
shall no longer be entitled to exercise any such Family LP Put Rights).
(ii) If the Company (or its designee) desires to
exercise its option to purchase shares of Company Stock pursuant to its rights
under this Section 7.1, the Company (or its designee) shall, not later than the
expiration date of the 120-day call period referred to in clause (b) above (as
it may be extended pursuant to the provisions of Section 7.3 hereof), send
written notice of its intention to purchase the number of shares of Company
Stock held by the
27
Family LP and its Permitted Transferees which the Company is permitted to
purchase pursuant to this Section 7.1. Subject to the provisions of Section 7.3
hereof, the closing of the purchase shall take place at the principal office of
the Company as soon as practicable thereafter; PROVIDED, HOWEVER, that the
closing shall take place no more than 180 days from the date of the event giving
rise to the Company's rights hereunder; PROVIDED, FURTHER, notwithstanding the
above, the Company shall not be obligated to close prior to 120 days after the
giving of such notice. The purchase price shall be paid in accordance with
Section 7.4 hereof.
7.2 OBLIGATION TO SELL SEVERAL. In the event that the Family LP
has transferred any shares of Company Stock to any Permitted Transferee, the
failure of any one member of such group to perform its obligations hereunder
shall not excuse or affect the obligations of any other member thereof, and the
closing of the purchases from such other members by the Company (or its
designee) shall not excuse, or constitute a waiver of the Company's rights, if
any, against, the defaulting member(s).
7.3 DEFERRAL OF PURCHASES.
(a) EVENTS OF DEFERRAL. The Company (and its designee) shall
not be obligated to purchase any shares of Company Stock, at any time pursuant
to this Article VII, regardless of whether it has in the case of Section 7.1
hereof delivered a notice of its election to purchase any such shares, (x) to
the extent that the purchase of such shares would give rise to or result in a
Violation or (y) to the extent of any purchase in excess of the Life Insurance
Proceeds, if immediately prior to the time of purchase there exists, or if
immediately after giving effect to such purchase there would exist, a Financing
Default.
(b) EXTENSION OF PUT AND CALL PERIODS. The period during which
the Company (or its designee) shall have the right or obligation to purchase
shares of Company Stock pursuant to the exercise of any Family LP Put Right or
pursuant to the exercise of any right to purchase shares of Company Stock
pursuant Section 7.1 hereof ("Family LP Call Right"), shall be extended in the
event the Board in good faith determines that any Violation or, to the extent of
any purchase in excess of the Life Insurance Proceeds, Financing Default exists
or would result as a result of the purchase of Company Stock pursuant to this
Article VII until one-hundred and twenty (120) days after the Board determines
that such is no longer the case; PROVIDED THAT, in order to exercise such
rights, the Family LP if exercising any Family LP Put Right or the Company if
exercising any Family LP Call Right must have given notice of their intention to
exercise their Family LP Put Right or Family LP Call Right, as the case may be,
within 120 days from, in the case of the Family LP Put Right, the date of
▇▇▇▇▇'▇ death or, in the case of the Family LP Call Right, the date the Family
LP Put Right expires; PROVIDED, FURTHER, that, in the event the Company
exercises its rights to defer in accordance with the provisions of this Section
7.3, the Company shall pay to Family LP, at the time of payment as provided in
Section 7.4 below, interest on the amount to be paid from the date the Valuation
Advisor finally determines Appraisal Value through and until the date of payment
calculated at the rate of 10% per annum, compounded annually; it being
understood and agreed that in the event that such payment is to be made by the
issuance of the Family LP Purchase Note, such interest shall be added to the
principal amount thereof.
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7.4 PAYMENT FOR STOCK. The purchase price of shares of Company
Stock to be purchased by the Company (or its designee) pursuant to this Article
VII will be paid by (a) at the Company's option, the cancellation of
indebtedness owing from the Family LP to the Company or any of its Subsidiaries,
(b) then, until the tenth anniversary of the date hereof, the Life Insurance
Proceeds, if any, and (c) then, by the Company's delivery of a bank cashier's
check or certified check for the remainder of the purchase price, if any,
against delivery of the certificates or other instruments representing the
Company Stock so purchased, Duly Endorsed; PROVIDED THAT, in the event (x) that
the Company does not have sufficient cash flow to finance the full payment of
such purchase price referred to in clause (c) above, as determined in good faith
by a majority of the Board (including at least one Family LP Nominee) or (y)
that the Company is not permitted, pursuant to the provisions of any
Indebtedness of the Company or any of its Subsidiaries (after seeking in good
faith to obtain from the lenders thereunder a consent reasonably acceptable to
the Company with respect to effecting a cash repurchase), to pay cash in full
payment of such purchase price referred to in clause (c) above, but is
permitted, pursuant thereto and pursuant to all other credit obligations of the
Company, to issue either or both of the Family LP Repurchase Notes (as defined
below) in lieu thereof, then, in any of such events, the Company (or its
designee) may, at its option, pay for that portion of such purchase price not
payable from the cash flow of the Company or not permitted to be paid pursuant
to the provisions of any credit obligations of the Company and its Subsidiaries
(but only to the extent the notes contemplated by clauses (x) and (y) below are
permitted to be issued pursuant to the provisions of any credit obligations of
the Company and its Subsidiaries), following the payment of the Life Insurance
Proceeds (which in no event shall exceed $15 million), any excess over such
payment of Life Insurance Proceeds, (x) first, up to $15 million, with the
delivery of a junior, subordinated promissory note bearing interest (payable in
cash to the extent permitted by the credit obligations of the Company and its
Subsidiaries and to the extent not permitted by the credit obligations of the
Company and its Subsidiaries payable-in-kind) at a ten percent (10%) annual rate
of interest, compounded annually and (y) the remainder, if any, with the
delivery of a junior subordinated promissory note bearing pay-in-kind interest
at a ten percent (10%) annual rate of interest, compounded annually, in the case
of both clause (y) and (z), due on the fifth anniversary of the date of issuance
thereof but, in the event that the Credit Agreement remains outstanding at the
time such notes are issued, not prior to May 1, 2005 and substantially in the
form attached hereto as Exhibit A (each such promissory note, a "Family LP
Repurchase Note"). In the event that the Company (or its designee) intends to
deliver a Family LP Repurchase Note upon the exercise of any Family LP Put
Rights, the Company (or its designee) shall notify the intended recipient
thereof prior to the delivery thereof. The Company (or its designee) shall have
the right set forth in clause (a) of the first sentence of this Section 7.4
whether or not any Permitted Transferee(s) of the Family LP owing amounts to the
Company or its Subsidiaries is itself an obligor of the Company or its
Subsidiaries.
7.5 LIFE INSURANCE POLICY. The Company shall obtain a life
insurance policy in an amount of $15 million on the life of ▇▇▇▇▇ and shall
maintain such policy for a period of ten years, in each case, to the extent
available on commercially reasonable terms; it being agreed that a policy
providing for premiums no greater than 110% of the premium set forth on the
proposal attached as Exhibit 7.5 hereto shall be commercially reasonable. The
premiums on such policy shall be paid by the Company. The Company's obligation
to purchase and maintain such insurance policy is contingent upon ▇▇▇▇▇
qualifying as a "standard" (or in case of Prudential Insurance Company of
America, a health rating no lower than "B") or better insurance risk and
29
▇▇▇▇▇ taking all necessary steps required in order for the Company to purchase
and maintain such policy.
7.6 MISCELLANEOUS. Notwithstanding anything to the contrary set
forth in this Agreement, (a) the Company shall be permitted to reach any
agreement with the Family LP concerning the purchase of the Family LP's shares
of Company Stock, and (b) the Company, in its sole discretion, shall have the
right, but not the obligation, to assign any of its rights to purchase any
shares of Company Stock of the Family LP pursuant to Article VII hereof to any
employee stock ownership plan or similar compensation or benefit plan that the
Company may have, or to any Subsidiaries or employee of the Company (or any
combination of the foregoing).
ARTICLE VIII
COMPANY COVENANTS
8.1 ACCESS TO INFORMATION. Subject to the provisions of Section
14.1 hereof, the Company shall provide to ▇▇▇▇▇ access to the books and records
of the Company and its Subsidiaries during the regular business hours of the
Company and such Subsidiaries, following the Company's receipt of a written
notice from such Shareholder requesting such access.
8.2 FIRPTA ACTIVITIES. The Company agrees that it will not,
without first obtaining the prior written consent of the Windward Agent, take
any actions that would result in the Company becoming a United States real
property holding company within the meaning of section 897(c)(2) of the Code (or
any successor statutory or regulatory provision of similar effect).
ARTICLE IX
REGISTRATION RIGHTS
9.1 DEMAND REGISTRATION RIGHTS.
(a) Upon written notice from a Shareholder entitled to request
Registration pursuant to Section 9.1(c) below (the "Requesting Shareholder"),
the Company shall use its best efforts to effect at the earliest possible date
and maintain the registration under the Securities Act of offers and sales of
Common Stock by the Requesting Shareholder (and no offers and sales of any other
securities by any other person shall be registered with such Common Stock of the
Requesting Shareholder without the Requesting Shareholder's prior consent), its
Permitted Transferees and any underwriter with respect to such stock, in
accordance with the intended method or methods of disposition specified by the
Requesting Shareholder (including, but not limited to, an offering on a delayed
or continuous basis pursuant to Rule 415 (or any successor rule) promulgated
under the Securities Act); PROVIDED that if, after a Registration request
pursuant to this Section 9.1 has been made, the outside legal counsel of the
Company has determined in good faith that the filing of a Registration request
would require the disclosure of material information which the Company has a
BONA FIDE business purpose for preserving as confidential, the Company shall not
be obligated to effect a Registration pursuant to this Section 9.1 until the
earlier of (A) the date upon which such material information is disclosed to the
30
public or ceases to be material, or (B) 45 days after such outside legal counsel
of the Company first makes such good faith determination; PROVIDED, FURTHER,
that no Requesting Shareholder may request any such Registration pursuant to
this Section 9.1 (x) until at least six (6) months after the anniversary of the
closing of the last Registration and sale of Company securities and (y) unless
the anticipated gross proceeds of the Registrable Securities sought to be
registered exceed $2,500,000; PROVIDED, HOWEVER, that the Requesting Shareholder
shall not have the right to utilize the services of an underwriter unless the
anticipated gross proceeds of the Company Stock to be offered exceed
$20,000,000. The Requesting Shareholder(s) requesting a Registration under this
Section 9.1 may, at any time prior to the effective date of the registration
statement relating to such Registration, revoke such request by providing
written notice thereof to the Company.
(b) In connection with any Registration requested pursuant to
this Section 9.1, (i) the Requesting Shareholder shall have the right, subject
to Section 9.1(a), to designate the managing underwriter(s) and (ii) the Company
shall take such other actions, including, without limitation, listing such
shares for trading on any securities exchange or national market system and
registering or qualifying such shares under state securities laws, as may be
reasonably requested by the Requesting Shareholder. If the Requesting
Shareholder consents to the inclusion of offers and sales of any other
securities in a Registration of Common Stock by the Requesting Shareholder
pursuant to this Section 9.1 and the underwriter(s) retained in connection with
such Registration advise the Company in writing that such offering would be
materially and adversely affected by the inclusion of such securities, the
Requesting Shareholder may in its sole discretion exclude all or some of such
securities from such offering.
(c) After the occurrence of an IPO Event:
(i) the Windward Agent, on behalf of the Windward
Group and Windward/Badger (collectively, the "Windward Registration Group"),
will have the right to request Registration of Company Stock of the Windward
Registration Group as a Requesting Shareholder pursuant to this Section 9.1 an
aggregate of five (5) times; PROVIDED, that if the Windward Group had elected,
pursuant to Section 5.6 hereof, to cause the Company to effect the IPO Event,
such election will not be a request for Registration of Company Common Stock for
purposes of this Section 9.1(c) hereof; and
(ii) the Family LP will have the right to request
Registration of Company Stock owned by the Family LP pursuant to this Section
9.1 two (2) times; PROVIDED, THAT, prior to such time the Windward Group shall
have effected one Registration pursuant to Section 9.1(c)(i);
PROVIDED, FURTHER, if ▇▇▇▇▇ dies prior to the occurrence of an IPO Event, then
Family LP shall, subject to Section 9.5, have the right following an IPO Event
to request Registration of Company Stock owned by the Family LP regardless of
whether the Windward Group shall have effected one Registration pursuant to
Section 9.1(c)(i);
PROVIDED, FURTHER, that any Registration requested by any Requesting Shareholder
pursuant to this Section 9.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of this Section 9.1(c)), (i) unless it has
become effective, provided that a registration which does
31
not become effective after the Company has filed a registration statement with
respect thereto solely by reason of the refusal to proceed by the Requesting
Shareholder (other than a refusal to proceed based upon the advice of counsel
relating to a matter with respect to the Company) shall be deemed to have been
effected by the Company at the request of such Requesting Shareholder unless the
Requesting Shareholder shall have elected to pay all Registration Expenses in
connection with such registration, (ii) if after it has become effective such
Registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court for any reason
other than a misrepresentation or an omission by the Requesting Shareholder and,
as a result thereof, the Common Stock requested to be registered cannot be
completely distributed in accordance with the plan of distribution set forth in
the related registration statement, or (iii) if the closing pursuant to the
purchase agreement or underwriting agreement entered into in connection with
such Registration does not occur. Any Registration effected pursuant to Section
9.2 shall not be deemed to have been requested by a Requesting Shareholder for
purposes of this Section 9.1(c).
9.2 PIGGYBACK REGISTRATION RIGHTS. If at any time following the
completion of an IPO Event the Company proposes to effect another
Registration, whether or not for sale for its own account and (subject to the
provisions of Section 9.1 above) whether or not pursuant to the exercise of
any of the demand registration rights referred to in Section 9.1 hereof, in a
manner which would permit Registration of Registrable Securities for sale to
the public under the Securities Act, it will each such time, subject to the
provisions of Sections 9.1 and 9.2(c) hereof, give prompt written notice to
all Shareholders of record of Registrable Securities of its intention to do
so and of such Shareholders' rights under this Article IX, at least 25 days
prior to the anticipated filing date of the registration statement relating
to such Registration. With respect to the first such Registration following
the completion of an IPO Event (the "First Registration"), such notice shall
offer the Family LP the opportunity to include in such registration statement
such number of Registrable Securities as the Family LP may request. With
respect to any second or subsequent Registration following the First
Registration, such notice shall offer all such Shareholders the opportunity
to include in such registration statement such number of Registrable
Securities as each such Shareholder may request (subject to the limitations
on participation by Management Shareholders set forth in Sections 3.1(b) and
9.3). Upon the written request of any such Shareholder made within 10 days
after the receipt of the Company's notice (which request shall specify the
number of Registrable Securities intended to be disposed of by such
Shareholder and the intended method of disposition thereof), the Company will
use its best efforts to effect the Registration under the Securities Act and
the qualification under any applicable state securities or Blue Sky laws of
all Registrable Securities which the Company has been so requested to
register by the Shareholders thereof, to the extent required to permit the
disposition (in accordance with such intended methods thereof) of the
Registrable Securities so requested to be registered; PROVIDED that:
(a) if such Registration involves an underwritten public
offering, all Shareholders requesting that their Registrable Securities be
included in the Company's Registration must, upon request by the underwriter(s),
sell their Registrable Securities to such underwriter(s) selected by the Company
(or the Requesting Shareholders in accordance with Section 9.1, as the case may
be) on the same terms and conditions as apply to the Company or any selling
securityholder (or on equivalent terms and conditions, in the event that such
requesting Shareholders hold different securities from those being sold by the
Company or such
32
selling securityholder), including, without limitation, executing and delivering
such underwriting agreements or other related agreements to which the Company or
any such selling securityholder has agreed to execute and deliver;
(b) if, at any time after giving written notice of its
intention to register any securities pursuant to this Section 9.2 and prior to
the effective date of the registration statement filed in connection with such
Registration, the Company shall determine for any reason not to register such
securities, the Company shall give written notice to all Shareholders of
Registrable Securities and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such Registration
(without prejudice, however, to the rights of the Shareholders immediately to
request that such registration be effected as a Registration under Section 9.1);
(c) if a Registration pursuant to this Section 9.2 involves an
underwritten public offering, any Shareholder of Registrable Securities
requesting to be included in such Registration may elect, in writing at least 10
days prior to the effective date of the registration statement filed in
connection with such Registration, not to register such securities in connection
with such Registration;
(d) the Company shall not be required to effect any
Registration of Common Stock under this Section 9.2 incidental to the
registration of any of its securities in connection with mergers, acquisitions,
exchange offers, subscription offers, dividend reinvestment plans or stock
option or other executive or employee benefit or compensation plans (including,
without limitation, any registration of securities on a Form S-4 or S-8
registration statement or any successor or similar forms), other than in
connection with an employee stock ownership plan meeting the requirements of
Section 1042 of the Internal Revenue Code and involving an acquisition by an
employee stock ownership plan of more than 30% (calculated on a Fully-Diluted
Basis) of the outstanding Common Stock of the Company; and
(e) no Registration of Common Stock effected under this
Section 9.2 shall relieve the Company of its obligation to effect a Registration
of shares of Common Stock pursuant to Section 9.1.
9.3 PRIORITY IN PIGGYBACK REGISTRATIONS.
(a) If at any time following an IPO Event the Company proposes
to effect another Registration in connection with an underwritten offering
(including any Registration pursuant to the exercise of any of the demand
registration rights referred to in Section 9.1 hereof, the "Permitted Demand
Registration Rights"), including any Registration for the Company's account, and
the managing underwriter(s) advise the Company in writing that, in its or their
judgment, the number of shares of equity securities of the Company (including
all shares of Registrable Securities) which the Company, the Shareholders and
any other persons intend to include in such Registration exceeds the largest
number of securities which can be sold without having an adverse effect on such
offering, including the price at which such securities can be sold, the Company
shall include in such Registration: (i) first all securities the Company
proposes to sell for its own account (the "Company Securities"), (ii) second, to
the extent that the number or dollar amount of the Company Securities to be
offered by the Company, if any, is less
33
than the number of shares of securities which the Company has been advised can
be sold in such offering without having the adverse effect referred to above,
the number of Piggyback Securities requested to be sold by any Shareholder
(provided that if the number of the Company Securities and Piggyback Securities
exceeds the number of shares of securities which the Company has been advised
can be sold in such offering without having the adverse effect referred to
above, the number of such Piggyback Securities to be included in such offering
shall be allocated pro rata among all holders of such Piggyback Securities on
the basis of the relative number or amount of Piggyback Securities each such
holder has requested to be included in such Registration), and (iii) third, to
the extent that the number of Company Securities and Piggyback Securities held
by Shareholders is less than the number of shares of securities which the
Company has been advised can be sold in such offering without having the adverse
effect referred to above, the equity securities requested to be sold for the
account of any other persons (allocated among the persons holding such other
securities in such proportions as such persons and the Company may agree);
PROVIDED that, in the event the Windward Registration Group has not consummated
its first demand registration pursuant to Section 9.1, unless the Windward Agent
otherwise agrees or the number of Company Securities and Piggyback Securities
held by the Windward Registration Group is less than the number of shares of
securities which the Company has been advised can be sold in such offering
without having the adverse effect referred to above (in which case the other
Shareholders may participate pro rata to the extent of any excess) only the
Windward Registration Group and Family LP (allocated on a pro rata basis) may
exercise "piggyback" registration rights with respect to such offering;
PROVIDED, FURTHER, that in all events Management Stockholders shall be subject
to the limitations with respect to Management Shareholders contained in clause
3.1(b) above and clause 9.3(b) below.
(b) Notwithstanding any rights provided in this Article IX, no
Management Shareholder may participate in any Registration hereunder prior to
such time as the Windward Group shall have effected one Registration pursuant to
Section 9.1(c)(i).
9.4 EXPENSES. The Company will pay all Registration Expenses in
connection with each Registration of Registrable Securities requested pursuant
to this Article IX (including any Registration deemed not to be "effected" under
Section 9.1(c) or not consummated as contemplated by Section 9.2(b)) and any
other actions that may be taken in connection with any such Registration as
contemplated by this Article IX; PROVIDED that the Company will not be obligated
to pay any underwriting discounts or commissions or transfer taxes, if any,
relating to the sale or disposition of shares sold by persons other than the
Company pursuant to any such Registration.
9.5 RESTRICTIONS ON PUBLIC SALE BY SHAREHOLDERS AND COMPANY.
(a) In connection with any offering of securities of the
Company, including, without limitation, any offering contemplated by this
Article IX, each Shareholder agrees that, whether or not such Shareholder's
Registrable Securities are included in such Registration, it will consent and
agree to comply with any "hold back" restriction, relating to Common Stock or
any other securities of the Company then owned by such holder, that may be
reasonably requested by the underwriter(s) or placement or other selling
agent(s) of such offering. Without limitation to the foregoing, each Shareholder
shall, upon request by such underwriter(s) or agent(s), agree not to effect any
public sale or distribution, including any sale pursuant to Rule 144 under the
34
Securities Act, of any Registrable Securities, and not to effect any such public
sale or distribution of any other equity security of the Company or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (in each case, other than as part of such underwritten public
offering) during the 30 days prior to, and during the 180 day period beginning
on, the effective date of such registration statement (except as part of such
Registration).
(b) If any Registration of Registrable Securities pursuant to
Article IX shall be in connection with an underwritten public offering, the
Company agrees, if requested by the underwriter(s) or placement or other
selling agent(s), (i) not to effect any public sale or distribution of any of
its equity securities or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (other than any such sale or
distribution of such securities in connection with any merger or consolidation
by the Company or Subsidiaries of the Company or in connection with the purchase
of all or substantially all the assets of any other person or in connection with
an employee stock option or other benefit plan) during the 30 days prior to, and
during the 180 day period beginning on, the effective date of such registration
statement (except as part of such Registration) and (ii) that any agreement
entered into after the date of this Agreement pursuant to which the Company
issues or agrees to issue any privately placed equity securities shall contain a
provision under which holders of such securities agree not to effect any public
sale or distribution of any such securities during the period referred to in the
foregoing clause (i) or during any of the periods referred to in Section 9.5(a)
above, including any sale pursuant to Rule 144 under the Securities Act (except
as part of such Registration, if permitted).
(c) In connection with any offering of securities of the
Company contemplated by this Article IX, the Company shall take such other
actions in connection therewith as may be necessary or appropriate, including,
without limitation, entering into customary underwriting arrangements and
agreeing to indemnify any Requesting Shareholder or any other Shareholder
selling Common Stock in such offering.
9.6 INDEMNIFICATION BY THE COMPANY. In the event of any
Registration of any securities of the Company under the Securities Act pursuant
to Article IX, the Company will, and it hereby does, indemnify and hold
harmless, to the full extent permitted by law, each of the Shareholders holding
any Registrable Securities covered by such registration statement, its
Representatives, each other person who participates as an underwriter in the
offering or sale of such securities and each other person, if any, who controls,
is controlled by or is under common control with such Shareholder or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the Company's
consent, which consent shall not be unreasonably withheld) to which such
Shareholder, any such Representative or any such underwriter or controlling
person may become subject under the Securities Act, state securities or blue sky
laws, common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) or expenses arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto,
(ii) any omission or alleged omission to state therein a material fact required
to be stated therein or
35
necessary to make the statements therein not misleading, or (iii) any violation
by the Company of any federal, state or common law rule or regulation applicable
to the Company and relating to action required of or inaction by the Company in
connection with any such Registration, and the Company will reimburse such
Shareholder and each such Representative or underwriter and controlling person
for any legal or any other expenses reasonably incurred by them in connection
with investigating or defending such loss, claim, liability, action or
proceeding; PROVIDED that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expenses arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such Shareholder or any such Representative or underwriter specifically
stating that it is for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Shareholder or any such Representative or underwriter and shall
survive the transfer of such securities by such Shareholder.
9.7 INDEMNIFICATION BY THE SHAREHOLDERS AND UNDERWRITERS. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed in accordance with Article IX, that the Company
shall have received an undertaking reasonably satisfactory to it from the
Shareholders of such Registrable Securities and any underwriter, to indemnify
and hold harmless (in the same manner and to the same extent as set forth in
Section 9.6) the Company and its Representatives and all other prospective
sellers and their respective Representatives, and their respective controlling
persons with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto, if
such statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company or its representatives through an instrument duly executed by or on
behalf of such Shareholder or underwriter, as the case may be, specifically
stating that it is for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement thereto, or
a document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any of the Shareholders, underwriters or any of
their respective Representatives or controlling persons and shall survive the
transfer of such securities by such Shareholder; PROVIDED that no such
Shareholder shall be liable under this Section 9.7 for any amounts exceeding the
product of the purchase price per Registrable Security and the number of
Registrable Securities being sold pursuant to such registration statement or
prospectus by such Shareholder (net of any underwriters' or placement agents'
fees, discounts or commissions related thereto).
9.8 NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Article IX, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, promptly give written
notice to the latter of the commencement of such action; PROVIDED, HOWEVER, that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subsections of this Article IX, except to the extent that the
36
indemnifying party is actually materially prejudiced by such failure to give
notice. In case any such action is brought against an indemnified party, unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in respect of such claim,
the indemnifying party will be entitled to participate in and, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party of its election
so to assume the defense thereof, the indemnifying party will not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defense thereof, and the indemnifying party will not be subject to any liability
for any settlement made without its consent (which consent shall not be
unreasonably withheld). No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
9.9 OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding Sections of this Article IX (with appropriate
modifications) shall be given by the Company and each Shareholder of Registrable
Securities with respect to any required Registration or other qualification of
securities under any federal or state law or any regulation of a governmental
authority other than arising under the Securities Act.
9.10 REGISTRATION PROCEDURE.
(a) If and whenever the Company is required to effect or cause
the Registration of any Registrable Securities pursuant to this Article IX, the
Company will, as expeditiously as possible:
(1) Prepare in cooperation with the sellers (and, in
the event of an underwritten public offering, with the underwriter(s)), and file
with the SEC, in a manner consistent with the provisions of this Article IX, a
registration statement with respect to such Registrable Securities on any form
for which the Company then qualifies or which counsel for the Company shall deem
appropriate as the case may be, and which form shall be available for the sale
of the Registrable Securities in accordance with the intended methods of
distribution thereof, and use its best efforts to cause such registration
statement to become and remain effective; PROVIDED that before filing with the
SEC a registration statement or prospectus or any amendments or supplements
thereto, the Company will (i) furnish to one counsel selected by the Requesting
Shareholder(s), in the event of a Registration effected pursuant to Section 9.1
hereof, or selected by the holders of a majority of the Registrable Securities
covered by such registration statement, in the event of any other Registration,
copies of all such documents proposed to be
37
filed, which documents will be subject to the timely review of such counsel, and
(ii) notify each holder of Registrable Securities covered by such registration
statement of any stop order issued or threatened by the SEC and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(2) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than 120 days or such shorter period which will terminate
when all Registrable Securities covered by such registration statement have been
sold (but not before the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement.
(3) Furnish to each holder of Registrable Securities
covered by the registration statement and to each underwriter, if any, of such
Registrable Securities, such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), and the prospectus included in such registration statement (including
each preliminary prospectus), and such other documents, as such person may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such holder.
(4) Use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as any holder, and
underwriter, if any, of Registrable Securities covered by such registration
statement shall reasonably request, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such seller; PROVIDED that the Company shall not for any such purpose,
be required to (A) qualify to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this section 9.10, it is not
then so qualified, (B) subject itself to taxation in any such jurisdiction, or
(C) take any action which would subject it to consent to general or unlimited
service or process not then so subject.
(5) Use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities.
(6) Immediately notify each seller of Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event which comes to the Company's attention if as a result of
such event the prospectus included in such registration statement, as then in
effect, includes any untrue statement of a material fact or omits to state a
material, fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading and at the
request of any such seller, deliver a reasonable
38
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(7) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, in each case as soon as practicable, an earnings statement covering a
period of at least 12 months, beginning with the first month after the effective
date of the registration statement (as the term "effective date" is defined in
Rule 158(c) under the Securities Act), which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act including, at the option
of the Company, Rule 158 thereunder.
(8) Use its best efforts to cause all such
Registrable Securities to be listed on such national securities exchange or the
National Association of Securities Dealers National Market System as may be
reasonably requested by the Requesting Shareholder, and if any similar
securities issued by the Company are then listed on any securities exchanges or
national market systems, to also list all such Registrable Securities on such
securities exchanges or national market systems, and enter into such customary
agreements including a listing application and indemnification agreement in
customary form, provided that the applicable listing requirements are satisfied,
and to provide a transfer agent and registrar for such Registrable Securities
covered by such registration statement no later than the effective date of such
registration statement.
(9) Use its best efforts to obtain a "cold comfort"
letter from the independent public accountants for the Company in customary form
and covering matters of the type customarily covered by such letters as may be
reasonably requested by the Requesting Shareholder(s), in the event of a
Registration effected pursuant to Section 9.1 hereof, or by the holders of a
majority of the Registrable Securities covered by such registration statement,
in the event of any other Registration.
(10) Execute and deliver all instruments and
documents (including in an underwritten offering an underwriting agreement in
customary form) and take such other actions and obtain such certificates and
opinions as sellers of a majority of the Registrable Securities being sold
reasonably request in order to effect an underwritten public offering of such
Registrable Securities. The Company may require each holder of Registrable
Securities as to which any Registration is being effected to furnish to the
Company such information regarding such holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
in writing in connection with effecting such offering.
(b) Each holder of Registrable Securities will, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 9.10(a)(6), forthwith discontinue disposition of the
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 9.10(a)(6), and, if
so directed by the Company, such holder will deliver to the Company (at the
Company's expense) all copies, other than
39
permanent file copies, then in such holder's possession, of the prospectus
covering such Registrable Securities at the time of receipt of such notice.
9.11 RULE 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act,
the Company covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required
to file such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information), and it will take such
further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder
to sell shares of Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time,
or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
ARTICLE X
ADDITIONAL SHAREHOLDERS
10.1 TRANSFEREE OF SHAREHOLDERS OR THE COMPANY. No Transfers of shares
of Company Stock may be made (and shall not be effective) to a Permitted
Transferee or to any Third Party, unless in each case prior to such Transfer any
such transferee agrees in writing to be bound (to the same extent as
contemplated with respect to the Shareholder (or the Permitted Transferee(s)
thereof) transferring such shares of Company Stock) by the terms and conditions
of this Agreement pursuant to a supplementary agreement reasonably satisfactory
in form and substance to the Company. The Company may, as a condition to any
original issuance of Company Stock to a person who or which is not at such time
a Shareholder, require that such person agree in writing to be bound by the
terms and conditions of this Agreement pursuant to a supplementary agreement
reasonably satisfactory in form and substance to the Company. Upon entering into
such supplementary agreement, such transferee or purchaser of Company Stock
shall be deemed to be a Shareholder for all purposes of this Agreement. The
provisions of this Section 10.1 shall not apply to any Transfer (a) made
pursuant to a public offering of Company Stock, including in connection with the
exercise by any Shareholder of its rights pursuant to Article IX hereof or in
connection with the exercise by the Windward Agent of its rights pursuant to
Section 5.6 hereof, (b) made in connection with the exercise by the Windward
Group of a Compelled Sale Right or (c) following a public offering of Common
Stock, made pursuant to Rule 144.
10.2 NEW SHAREHOLDERS. Each director, member of management or other
employee of the Company or any of its Subsidiaries who becomes a holder of
Company Stock after the date hereof shall be deemed, upon the execution of a
supplementary agreement described below, to have the same rights and obligations
as a Shareholder for purposes of this Agreement. The Company shall not issue
Company Stock to any director, member of management or other employee of the
Company or any of its Subsidiaries unless the person to whom the Company Stock
is to be issued or transferred agrees in writing to be bound by the terms and
conditions of this Agreement pursuant to a supplementary agreement reasonably
satisfactory in form and
40
substance to the Company; upon entering into such agreement, such member of
management or other employee of the Company or any of its Subsidiaries shall be
deemed to be a Management Shareholder for all purposes of this Agreement. The
parties hereto acknowledge and agree that the Company Stock Option Plan (or the
agreements entered into in connection therewith) shall provide that
optionholders thereunder will be required to become parties to this Agreement
upon any exercise of options granted thereunder, as a condition to the exercise
of such options.
10.3. SUPPLEMENTAL AGREEMENTS. Each supplementary agreement referred to
in Sections 10.1 and 10.2 above, shall become effective upon its execution by
the Company and the new holder of Company Stock, and it shall not require the
signatures or the consent of the other Shareholders (or their respective
Permitted Transferees). The supplementary agreement between the Company and any
new holder of Company Stock may modify some of the terms and conditions of this
Agreement as they affect the rights and obligations of the new holder of Company
Stock, provided that the modified terms and conditions shall be no less
favorable to the other Shareholders (or their respective Permitted Transferees)
than the terms and conditions set forth in this Agreement. The Schedule of
Management Shareholders attached hereto shall be updated from time to time to
include each Management Shareholder who becomes a party to this Agreement after
the date hereof.
ARTICLE XI
STOCK LEGENDS
11.1 STOCK CERTIFICATE LEGEND. A copy of this Agreement shall be
filed with the Secretary of the Company and kept with the records of the
Company. Each of the Shareholders agrees that the following two legends shall be
placed on the certificates representing any shares of Company Stock owned by
them:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND CERTAIN OTHER CONDITIONS, AS SPECIFIED IN
A SHAREHOLDERS AGREEMENT DATED AS OF ___________, 1997 (COPIES OF WHICH
ARE ON FILE WITH THE SECRETARY OF AMERICAN BUMPER & MFG. CO. (TOGETHER
WITH ITS SUCCESSORS, THE "COMPANY") AND WHICH WILL BE MAILED TO A
SHAREHOLDER WITHOUT CHARGE WITHIN FIVE DAYS AFTER RECEIPT BY THE
COMPANY OF A WRITTEN REQUEST THEREFOR FROM SUCH SHAREHOLDER). THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH SHAREHOLDERS AGREEMENT.
NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT PURSUANT TO THE PROVISIONS OF SUCH SHAREHOLDERS AGREEMENT
AND, EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND
THE RULES AND REGULATIONS IN EFFECT
41
THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS (SUCH
FEDERAL AND STATE LAWS, THE "SECURITIES LAWS") OR (B) IF THE COMPANY
HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH
OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO
THE EFFECT THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF THE SECURITIES
LAWS."
All Shareholders shall be bound by the requirements of such legends to
the extent that such legends are applicable. Upon a Registration of any shares
of Company Stock, the certificate representing such shares shall be replaced, at
the expense of the Company, with certificates bearing only the first of the two
legends referred to above.
ARTICLE XII
APPOINTMENT OF AGENTS
12.1 APPOINTMENT OF AGENT FOR WINDWARD GROUP MATTERS.
(a) Each member of the Windward Group and Windward/Badger
hereby irrevocably (subject to the provisions of paragraph (d) below) designates
and appoints Windward as its attorney-in-fact, agent and representative, to act
on its behalf and on behalf of its Permitted Transferees, (i) in connection with
exercising any of its rights hereunder, performing any of its duties or
obligations hereunder or enforcing any claims or rights on its behalf under this
Agreement, (ii) to investigate, contest, litigate, demand, ▇▇▇ for, collect,
recover and receive all claims, debts, monies and other amounts whatsoever which
may hereafter become due to the members of the Windward Group in connection with
this Agreement (including, without limitation, instituting any action, suit or
legal proceeding to enforce any of its rights hereunder) and to make, execute
and deliver receipts, releases, settlements, adjustments and other discharges
therefor, (iii) to defend, settle, adjust, submit to arbitration or compromise
all actions, suits, accounts, reckonings, claims and demands that may be brought
against the members of the Windward Group in connection with this Agreement
(including, without limitation, defending, or settling any claims brought by the
Company, the Family LP, the Management Shareholders or any of the other parties
hereto in connection with this Agreement), (iv) to amend, supplement or grant
any waiver under this Agreement or any other agreement or document contemplated
hereby, (v) to vote at any annual or special meeting of shareholders, or to take
action by written consent in lieu of such meeting with respect to, all of the
shares of Company Stock owned or held of record by such Shareholder, but only
for (1) the election of directors designated in accordance with Section 2.2
hereof, (2) the removal of directors in accordance with Sections 2.4 and 2.5
hereof, and (3) the election of a director to fill any vacancy on the Board in
accordance with Section 2.3 hereof, (vi) in executing, acknowledging, verifying
and/or delivering any and all agreements, certificates and instruments in
connection with taking any of the actions referred to in clauses (i), (ii),
(iii), (iv) and (v) above, and (vii) in doing, executing and performing any
other act, deed, matter or thing, of any kind or nature whatsoever, that is
necessary, appropriate or advisable to enforcing any claims or rights under this
Agreement or performing any of its duties or obligations hereunder or otherwise
representing its interests hereunder; all of the foregoing
42
actions may be taken in such manner as Windward determines in its sole
discretion to be appropriate, advisable or necessary.
(b) The designation and appointment of windward referred to in
the previous paragraph (a) shall be deemed to be irrevocable (subject to the
provisions of paragraph (d) below) and coupled with an interest and shall
survive the death, dissolution, bankruptcy, incompetency or legal disability of
any member of the Windward Group. Without limitation to the foregoing and
notwithstanding anything to the contrary contained in this Agreement, if any
payments or other amounts are received by Windward on behalf of the members of
the Windward Group from the Company, the Family LP, the Management Shareholders
or any of the other parties hereto in connection with this Agreement, Windward
shall, after deducting any expense reimbursement amounts with which it may be
entitled, distribute such amounts to the various members of the Windward Group
in such manner as Windward deems reasonably appropriate in light of each
member's relevant interests and the particular circumstances.
(c) Each of the parties to this Agreement acknowledges and
agrees that, notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 12.1 may be amended, modified or supplemented by a
majority in number of the members of the Windward Group (such majority in number
of members, the "Requisite Members"); PROVIDED that (i) such amendment,
modification or supplement is in writing and copies thereof are provided to the
other parties to this Agreement within a reasonable period following the date of
such amendment, modification or supplement and (ii) such amendment, modification
or supplement does not adversely affect any of the rights, duties or obligations
of any party to this Agreement (other than the members of the Windward Group).
Other than Windward (or any successor thereof appointed pursuant to Section
12.1(d) hereof) and other than any actions taken at the request or with the
consent of Windward or such successor, each of the members of the Windward Group
agrees that it will not take any action, nor institute any actions or
proceedings, against the Company, the Family LP, the Management Shareholders or
any of the other parties hereto (other than another member of the Windward
Group) in connection with this Agreement or with respect to any matters referred
to in this Agreement, except with the prior written consent of the Requisite
Members.
(d) Windward (or any successor thereof appointed pursuant to
this Section 12.1(d)) may resign from the performance of all its functions and
duties as agent on behalf of the Windward Group under this Agreement at any time
by giving at least 30 Business Days' prior written notice to the other parties
to this Agreement. Such resignation shall take effect upon the acceptance by a
successor agent of its appointment pursuant to this Section 12.1(d). Upon any
such notice of resignation by Windward (or any such successor thereof), the
Requisite Members shall appoint a successor agent. If a successor agent shall
not have been so appointed within said 30 Business Day period, Windward (or any
duly appointed successor thereof) shall then appoint a successor who shall serve
as agent on behalf of the Windward Group under this Agreement until such time,
if any, as the Requisite Members appoint a successor agent as provided in this
Section 12.1(d). Windward (or any successor thereof appointed pursuant to this
Section 12.1(d)) may be removed by the Requisite Members and replaced with
another person, at any time and for any reason, upon ten (10) days prior written
notice given by the Requisite Members to the agent then in effect and all other
parties to this Agreement. Upon the appointment of a successor agent hereunder,
references in this Agreement to Windward, acting in its role as agent for the
43
Windward Group, shall, for all purposes of this Agreement, thereafter mean such
successor agent.
(e) In the event that any member of the Windward Group does
not opt to sell its allocable shares pursuant to the "tag-along" rights in
Article IV, Windward (or any successor thereof appointed pursuant to Section
12.1(d) above) may reallocate such shares among the remaining members of the
Windward Group, in such manner as it deems reasonably appropriate in light of
each member's relevant interests and the particular circumstances.
12.2 APPOINTMENT OF AGENT FOR THE MANAGEMENT SHAREHOLDERS. Each
Management Shareholder hereby irrevocably designates and appoints ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ as its attorney-in-fact, agent and representative, to act on its behalf
and on behalf of its Permitted Transferees in connection with exercising any of
its rights, performing any of its duties or obligations or enforcing any claims
or rights on its behalf, arising pursuant to Article IX of this Agreement.
12.3 APPOINTMENT OF AGENT FOR THE FAMILY LP. The Family LP hereby
irrevocably designates and appoints [▇▇▇▇ ▇. ▇▇▇▇▇] as its attorney-in-fact,
agent and representative, to act on its behalf and on behalf of its Permitted
Transferees in connection with exercising any of his rights, performing any of
its duties or obligations or enforcing any claims or rights on its behalf,
arising pursuant to Article IX of this Agreement.
ARTICLE XIII
TERM OF AGREEMENT
13.1 TERM. This Agreement shall terminate, and be of no further
force or effect, automatically without any further action on the part of any
parties hereto, upon the earlier of (a) the ten (10) year anniversary of the
date hereof, (b) an IPO Event, (c) a sale of all or substantially all of the
assets or equity interests in the Company to a Third Party (whether by merger,
consolidation, sale of assets or securities or otherwise), (d) approval by each
of (i) those shareholders who hold at least a majority of the total outstanding
number of Shares of Company Stock, (ii) Windward as agent for the Windward Group
and Windward/Badger, and (iii) ▇▇▇▇▇, as agent for the Family LP, provided, in
the event the Windward Group's and Windward/Badger's, taken as a whole, or the
Family LP's aggregate percentage ownership of the total outstanding number of
shares of Company Stock is less than five (5%) percent, such person's agent's
approval shall not be necessary, or (e) the Windward Group and Windward/Badger
(together with their Permitted Transferees) ceases to own at least five percent
(5%) of the total outstanding number of shares of Company Stock (calculated on
a Fully-Diluted Basis), unless such reduction is the result of any Transfers to
Permitted Transferees in accordance with this Agreement; PROVIDED that, in the
event of an IPO Event, the provisions of Articles VIII, IX, X, XII, XIII and XIV
(other than Section 14.1) of this Agreement shall continue in full force and
effect until the earliest to occur of the events set forth in clauses (a), (c),
(d) or (e) above; PROVIDED, FURTHER, THAT, notwithstanding the provisions of
clauses (a), (d) or (e), the provisions of Article VII shall continue in full
force and effect until the earliest to occur of (1) the events set forth in
clauses (b) or (c), (2) ▇▇▇▇▇ (or any successor to ▇▇▇▇▇), as agent for Family
LP, consents to termination of such provisions or (3) the Company shall enter
into a transaction pursuant to which the surviving entity or successor shall be
listed on a national securities exchange or on the Nasdaq Stock
44
Market or Nasdaq National Market and shall have a market capitalization in
excess of $10 million.
ARTICLE XIV
MISCELLANEOUS
14.1 CONFIDENTIALITY. Except with the prior written consent of the
Company (which consent may not be unreasonably withheld) and except as otherwise
required by law or the listing requirements of any securities exchange on which
the securities of such Shareholder are then traded, each Shareholder shall, and
shall cause each of its Representatives to (a) hold in strict confidence all
confidential, proprietary or other non-public information or trade secrets
relating to the Company or its Subsidiaries or their respective assets or
operations (the "Confidential Information"), and (b) not release or disclose in
any manner whatsoever to any other person any such Confidential Information;
PROVIDED that (i) the foregoing provisions shall not apply to any disclosure, to
the extent reasonably required, to (A) those of such Shareholder's auditors,
attorneys and other representatives who agree to be bound by the provisions of
this Section 14.1 and (B) any other persons in connection with any actions to be
taken pursuant to Article V of this Agreement, (ii) the foregoing provisions
shall not apply where such Shareholder or any of its Representatives is
compelled to disclose such Confidential Information, by judicial or
administrative process or, in the reasonable opinion of its counsel, by other
requirements of law (provided that prior written notice of such disclosure is
given to the Company and any such disclosure is limited to only that portion of
the Confidential Information which such person is compelled to disclose), (iii)
the term "Confidential Information" shall not include information (A) which is
or becomes generally available to the public other than as a result of
disclosure of such information by such Shareholder or any of its
Representatives, (B) becomes available to the recipient of such information on a
non-confidential basis from a source which is not, to the recipient's knowledge,
bound by a confidentiality or other similar agreement, or by any other legal,
contractual or fiduciary obligation which prohibits disclosure of such
information to the other parties hereto, or (C) which can be demonstrated to
have been developed independently by the representatives of such recipient which
representatives have not had any access to any information which would otherwise
be deemed to be "Confidential Information" pursuant to the provisions of this
Section 14.1, and (iv) each of the Shareholders acknowledges and agrees that any
information they may receive from the Company in its reports to shareholders is
confidential, proprietary and non-public in nature.
14.2 SPECIFIC PERFORMANCE. Each of the Shareholders acknowledges
and agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed, no adequate remedy at law would
exist and damages would be difficult to determine. It is accordingly agreed that
(x) in the event of a breach of any provision of this Agreement, the aggrieved
party shall be entitled to specific performance of this Agreement and to enjoin
any continuing breach of this Agreement (without the necessity of proving actual
damages and without posting bond or other security), in addition to any other
remedy to which such aggrieved party may be entitled at law or in equity, and
(y) the Shareholders will waive the defense in any action for specific
performance or other equitable relief that a remedy at law would be adequate.
45
14.3 CONSENT TO JURISDICTION, SERVICE OF PROCESS; VENUE. Each party
hereto hereby irrevocably and unconditionally (i) consents to the submission to
the exclusive jurisdiction of the courts of the State of
Delaware and of the
United States of America located in the State of
Delaware, county of Wilmington,
for any Actions (as defined in the Recapitalization Agreement) arising out of or
relating to this Agreement or the breach, termination or validity thereof and
the transactions contemplated by this Agreement, (ii) agrees not to commence any
Action relating thereto except in such courts and in accordance with the
provisions of this Agreement, (iii) agrees that service of any process, summons,
notice, or document by U.S. registered mail or as otherwise provided in this
Agreement shall be effective service of process for any Action brought in any
such court, (iv) waives any objection to the laying of venue of any Action
arising out of this Agreement or the transactions contemplated by this Agreement
in the courts of the State of
Delaware or the United States of America located
in the State of
Delaware, and (v) agrees not to plead or claim in any such court
that any such Action brought in any such court has been brought in an
inconvenient forum.
14.4 ATTORNEYS' FEES. In any legal action or proceeding (including,
without limitation, any arbitration proceeding) brought to enforce any provision
of this Agreement, or where any provision hereof is validly asserted as a
defense, or because of an alleged dispute, breach or default in connection with
any of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other available remedy
or relief to which such party or parties may be entitled.
14.5 HEADINGS; NO THIRD PARTY BENEFICIARIES. The headings and
captions contained herein are for convenience of reference only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Except as otherwise expressly provided herein, the covenants, agreements and
other provisions contained in this Agreement are for the sole benefit of the
parties hereto and their permitted successors and assigns, and they shall not be
construed as conferring, and are not intended to confer, any rights, remedies or
other benefits hereunder on any other persons. Neither this Agreement nor any
purchase or sale of Company Stock shall create, or be construed or deemed to
create, any right to employment in favor of ▇▇▇▇▇ or any Management Shareholder
or any other person by the Company or any Subsidiaries of the Company.
14.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
14.7 NOTICES. All notices, requests, instructions and other
communications to be given hereunder by any party hereto to another party hereto
shall be in writing and, unless otherwise provided herein, shall be deemed duly
given if delivered personally, telecopied (which is confirmed) or sent by
registered or certified mail (postage prepaid, return receipt requested) or by
Federal Express or other similar courier service (i) to the Company, any member
of the Windward Group at the addresses set forth below, (ii) in the case of a
Permitted Transferee, to the
46
address set forth in the written agreement executed pursuant to Article X
hereof, (iii) if to the Family LP or a Management Shareholder, as listed on the
signature page hereto, or, if not so listed, to him or her at his or her address
as reflected in the stock records of the Company, or (iv) in the case of any
member of management or other employee of the Company or any of its Subsidiaries
who becomes a holder of Company Stock or options to acquire Company Stock after
the date hereof, to the address set forth in the written agreement executed
pursuant to Article X hereof:
If to the Company, Family LP or to any Management Shareholder, to it
at:
American Bumper & Mfg. Co.
▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
[ ]
Attention:
Fax:
If to Windward, Windward/Badger or any member of the Windward Group,
to:
Windward Capital Partners, L.P.
Eleven Madison Avenue
26th floor
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
; PROVIDED that in the event any of the parties referred to above desires to
designate another address to which such notices should be sent to such party,
such party may designate such other address by giving notice to the other
parties hereto in writing as set forth in this Section 14.7 (provided that any
change of address shall be effective only upon receipt thereof).
14.8 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THE PARTIES SUBJECT HERETO SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE
47
WITH, THE LAW OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE CHOICE OF
LAW PRINCIPLES THEREOF.
14.9 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
14.10 SUCCESSORS; ASSIGNS; TRANSFEREE; AMENDMENTS; WAIVERS.
(a) The provisions of this Agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Notwithstanding the foregoing, this Agreement
may not be amended, modified or supplemented, no waivers of, consents to or
departures from the provisions hereof may be given, and neither this Agreement
nor any right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by the Company or any Shareholder without the
approval by each of (i) those shareholders who hold at least a majority of the
total outstanding number of Shares of Company Stock, (ii) Windward as agent for
the Windward Group and Windward/Badger, and (iii) ▇▇▇▇▇ as agent for the Family
LP; PROVIDED, THAT, in the event the Windward Group's and Windward/Badger's,
taken as a whole, or the Family LP's aggregate percentage ownership of the total
outstanding number of shares of Company Stock is less than five (5%) percent,
such person's agent's approval shall not be necessary, except with respect to
any amendment to Article VII which shall require approval of ▇▇▇▇▇, as agent for
Family LP; PROVIDED, FURTHER, that this Agreement may be amended, modified or
supplemented by the Company, and waivers of, consents to or departures from the
provisions hereof may be given by the Company, in order to cure any ambiguity,
defect or inconsistency in this Agreement, so long as (x) such action does not
adversely affect the rights of any Shareholder in any material respect and (y)
the Company promptly notifies each Shareholder in accordance with the provisions
of Section 14.7 hereof of such action.
(b) The rights and remedies of the Shareholders and the
Company under this Agreement shall be cumulative and not exclusive of any rights
or remedies which either would otherwise have hereunder or at law or in equity
or by statute, and no failure or delay by either party in exercising any right
or remedy shall impair any such right or remedy or operate as a waiver of such
right or remedy, nor shall any single or partial exercise of any power or right
preclude such party's other or further exercise or the exercise of any other
power or right.
14.11 DEFAULTS; NO CIRCUMVENTION OF AGREEMENT. A default by any
party to this Agreement in such party's compliance with any of the conditions or
covenants hereof or performance of any of the obligations of such party
hereunder shall not constitute a default by any other party. No Shareholder or
any of its Permitted Transferees may do indirectly, through the sale of capital
stock of its or their subsidiaries or otherwise, that which is not permitted by
this Agreement (including, without limitation, the provisions of Articles III,
IV and V hereof).
48
14.12 FURTHER ASSURANCES. Each party hereto or person subject hereto
shall do and perform or cause to be done and performed all such further acts and
things and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party hereto or person subject hereto may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
14.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
14.14 RECAPITALIZATION, ETC. Except as otherwise provided in this
Agreement, the provisions of this Agreement shall apply to any and all shares of
capital stock or other securities of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets, or otherwise)
which may be issued in respect of, in exchange for, or in substitution of, any
shares of Company Stock by reason of any reorganization, any recapitalization,
reclassification, merger, consolidation, partial or complete liquidation, sale
of assets, spin-off, stock dividend, split, distribution to shareholders or
combination of the shares of Company Stock or any other change in the Company's
capital structure, in order to preserve fairly and equitably as far as
practicable, the original rights and obligations of the parties hereto under
this Agreement.
49
IN WITNESS WHEREOF, this Agreement has been duly executed by each of
the parties hereto as of the date first written above.
AMERICAN BUMPER & MFG. CO.
By:
----------------------------------------
Name:
Title:
WINDWARD CAPITAL ASSOCIATES, L.P.
By: Windward Capital
Associates, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
WINDWARD/PARK AB L.L.C.
By: Windward Capital Associates,
L.P., its manager
By: Windward Capital
Associates, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
WINDWARD/MERBAN, L.P.
By: Windward Capital Associates,
L.P., its general partner
By: Windward Capital
Associates, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
WINDWARD/MERCHANT, L.P.
By: Windward Capital Associates,
L.P., its general partner
By: Windward Capital
Associates, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
WINDWARD/NORTHWEST, L.P.
By: Windward Capital Associates,
L.P., its general partner
By: Windward Capital
Associates, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
WINDWARD/BADGER II, L.L.C.
By: Windward Capital Associates,
L.P., its manager
By: Windward Capital
Associates, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
THE ▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP
By:
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
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▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE OF MANAGEMENT SHAREHOLDERS
▇▇▇▇▇▇ ▇▇▇▇▇▇, a resident of [ ]
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, a resident of [ ]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a resident of [ ]
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a resident of [ ]
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a resident of [ ]
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▇▇▇▇▇ ▇. ▇▇▇▇▇, a resident of [ ]
EXHIBIT A
FORM OF JUNIOR SUBORDINATED PROMISSORY NOTE
FORM OF MANAGEMENT NOTES AND ▇▇▇▇▇ EXCHANGE NOTES
THIS JUNIOR SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). NO SALE, HYPOTHECATION, TRANSFER OR
OTHER DISPOSITION OF THIS JUNIOR SUBORDINATED NOTE (OTHER THAN TO THE ISSUER
THEREOF) MAY BE MADE UNLESS (A) EITHER PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH THE
PROVISIONS OF THIS JUNIOR SUBORDINATED NOTE.
JUNIOR SUBORDINATED NOTE
[Date]
FOR VALUE RECEIVED, the undersigned, AMERICAN BUMPER & MFG. CO., a
Michigan corporation [ALTERNATIVELY, INSERT NAME OF DESIGNEE OF COMPANY] (the
"OBLIGOR"), hereby promises to pay to [INSERT NAME OF MANAGEMENT SHAREHOLDER,
FAMILY LP OR PERMITTED TRANSFEREE (AS THE CASE MAY BE)] (such person, or any
Authorized Transferee (as defined below) of such person, the "HOLDER") the
principal amount of [INSERT PRINCIPAL AMOUNT OF NOTE] ($_______), plus interest
accrued but unpaid thereon, on [INSERT DATE WHICH IS FIFTH ANNIVERSARY OF THE
DATE OF ISSUANCE OF THIS JUNIOR SUBORDINATED NOTE OR, IF THE CREDIT AGREEMENT
REMAINS OUTSTANDING, THE LATER OF THE FIFTH ANNIVERSARY AND APRIL 30, 2005)] (or
such later date as may be required pursuant to the terms of any financing
agreement of the Company (as defined below)). Interest on the unpaid principal
amount hereof shall accrue at a ten percent (10%) annual rate of interest, from
the date hereof until maturity, computed on the basis of a 365-day year for the
actual number of days elapsed and shall be payable semiannually on the first day
of June and December in each year commencing with the June or December next
following the issuance of this Junior Subordinated Note (each such semiannual
date, an "INTEREST PAYMENT DATE"); PROVIDED that in the event that, on any
Interest Payment Date, the Company is permitted to defer any repurchases of
Common Stock pursuant to Section 6.3 or 7.4 of the Shareholders Agreement (as
defined below), the Company shall be permitted to defer such payment of
interest until the next Interest Payment Date on which it is no longer
permitted to defer any repurchases of Common Stock pursuant to Section 6.3 or
7.4 of the Shareholders Agreement (at which time all interest accrued to such
date shall become due and payable), and such deferred interest shall be
compounded on an annual basis (with such compounding occurring on each
anniversary of any such deferral while such deferral is in effect).
Notwithstanding anything to the contrary herein, no payment or prepayment of
principal of or interest on this Junior Subordinated Note may be made,
directly or indirectly, if a Default or Event of Default (as each such term
is defined below) shall have occurred and be continuing or would result
therefrom.
1. SHAREHOLDERS AGREEMENT. This Junior Subordinated Note has been
issued pursuant to the provisions of Article VI and VII, as applicable, of the
Shareholders Agreement. All capitalized terms used herein and not otherwise
defined herein shall have the same meanings as set forth in the Shareholders
Agreement.
2
2. PAYMENT OF AMOUNTS. Payments of principal and interest shall
be made in lawful money of the United States of America at the principal office
of the Obligor upon presentation of this Junior Subordinated Note for notation
of such payment hereon [: PROVIDED, that notwithstanding anything to the
contrary herein, interest on this Junior Subordinated Note shall be payable
through the issuance of additional notes in the form of this Junior
Subordinated Note](1).
3. NON-TRANSFERABILITY OF NOTE. This Junior Subordinated Note is not
negotiable and may be transferred by the Holder only to one or more Permitted
Transferees who agree to be bound by the transfer restrictions hereunder (any
such transferee to whom this Junior Subordinated Note is transferred in
compliance with the provisions of this Junior Subordinated Note, an
"AUTHORIZED TRANSFEREE"). In addition, each such transfer shall be subject to
the prior written consent of the Company (which consent shall not be
unreasonably withheld). With respect to any such authorized transfer, this
Junior Subordinated Note is transferable only by surrender and cancellation
of this Junior Subordinated Note at the principal office of the Obligor at ▇▇
▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other location as shall
at such time be the principal office of the Obligor, by the Holder in person
or by an attorney-in-fact duly authorized in writing. Upon any such
authorized transfer a new note, in the name of such Authorized Transferee(s),
in substantially the form of this Junior Subordinated Note and for the
aggregate unpaid principal amount hereof, will be issued in exchange hereof.
4. REGISTERED HOLDER. The Obligor, and any agents of the Obligor,
may deem and treat the Holder as the registered holder hereof, and as the
absolute owner of this Junior Subordinated Note, for the purpose of receiving
payment of or on account of the principal of and interest on this Junior
Subordinated Note and neither the Obligor nor any such agent shall be
affected by any notice to the contrary. The Obligor, and any agent of the
Obligor, may without liability refuse to recognize any assignee or other
holder of this Junior Subordinated Note, other than any Authorized
Transferee, as owner of this Junior Subordinated Note for any and all
purposes whatsoever.
5. OPTIONAL PREPAYMENT. Subject to Section 8 hereof, the amounts
owed under this Junior Subordinated Note are prepayable (at the discretion of
the Obligor) at any time and from time to time, in whole or in part, upon
notice to the Holder given by certified mail, return receipt requested, not
less than 10 Business Days prior to the date fixed for prepayment, at a
prepayment price equal to the principal amount of this Junior Subordinated
Note to be prepaid, together with the interest accrued but unpaid hereon, to
the date fixed for prepayment. Any prepayment of less than the entire
principal amount of this Junior Subordinated Note (plus all accrued but
unpaid interest thereon) shall be applied first towards the payment of unpaid
interest hereon and then to the unpaid principal hereof.
6. SET-OFF. The indebtedness evidenced hereunder may be reduced
or offset by the Obligor in respect of any and all indebtedness or other
obligations owed to the Obligor by the Holder. [In addition, the Obligor may,
at its option, set-off and apply any and all amounts owed to the
--------
(1) Do not insert bracketed text in management notes or in first $15,000,000
principal amount of Family LP/▇▇▇▇▇ notes.
3
Company by the Family LP or ▇▇▇▇▇ arising under the indemnification provided for
in Article 11 of the Recapitalization Agreement against any and all of the
obligations of the Obligor now or hereafter existing under this Junior
Subordinated Note, whether or not (in the case of any Holder other than the
Family LP or ▇▇▇▇▇) the Holder is in any way liable for such amounts. In such
event, the Obligor shall so notify the Holder in writing at least three (3) days
before such set-off.](2)
7. ACCELERATION.
(a) An "ACCELERATION EVENT" occurs if (i) the Obligor pursuant
to or within the meaning of Title 11 of the United States Code, or any similar
Federal or state law for the relief of debtors (a "BANKRUPTCY LAW"): (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
custodian of the Obligor or for all or substantially all of its property or (D)
makes a general assignment for the benefit of its creditors; or (ii) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the Obligor in an involuntary case, (B) appoints a
custodian of the Obligor or for all or substantially all of its property or (C)
orders the winding up or liquidation of the Obligor, and such order or decree
remains unstayed and in effect for 60 days.
(b) If an Acceleration Event occurs, then the amounts amount
owed under this Junior Subordinated Note shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Holder.
8. SUBORDINATION.
(a) The Junior Subordinated Debt (as defined below) is
subordinate and junior in right of payment to all the Senior Debt (as defined
below) to the extent and in the manner provided herein.
(b) Payment of the Junior Subordinated Debt is and shall be
expressly subordinate and junior in right of payment to the prior payment in
full in cash of the Senior Debt to the extent and in the manner set forth
herein, and the Junior Subordinated Debt is hereby so subordinated as a claim
against the Obligor or any of the assets of the Obligor, whether such claim
be (i) in the event of any distribution of the assets of the Obligor upon any
voluntary or involuntary dissolution, winding-up, total or partial
liquidation or reorganization, or bankruptcy, insolvency, receivership or
other statutory or common law proceedings or arrangements involving the
Obligor or the readjustment of its liabilities or any assignment for the
benefit of creditors or any marshalling of its assets or liabilities
(collectively called a "REORGANIZATION"), or (ii) other than in connection
with a Reorganization, to the prior payment in full in cash of the Senior
Debt.
(c) If the Holder shall receive any payment in violation of
the terms hereof, it shall hold such payment in trust for the benefit of the
Senior Creditors and forthwith pay it over to the Agent, for application to and
payment of the Senior Debt under the Credit Documents.
--------
(2) Do not insert bracketed text in management notes.
4
(d) In the event of any Reorganization relative to the
Obligor or its properties, then all of the Senior Debt shall first be paid in
full in cash before any payment is made upon the Junior Subordinated Debt,
and in any such proceedings any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable or
deliverable in respect of this Junior Subordinated Note shall be paid or
delivered directly to the Agent, for application in payment of the Senior
Debt under the Credit Documents, unless and until all such Senior Debt is
paid in full in cash, and the Holder hereby irrevocably authorizes the Agent,
as attorney-in-fact for such holder, to prove any claim in such proceedings
on the Junior Subordinated Debt, and to demand, ▇▇▇ for, collect and receive
any such payment or distribution, and to apply such payment or distribution
to the payment of the then unpaid Senior Debt under the Credit Documents, and
to take such other action (including acceptance or rejection of any plan of
Reorganization) in the name of the Holder or of the relevant Senior Creditors
as the Agent may deem necessary or advisable for the enforcement of the
provisions hereof. The Holder shall execute and deliver such other and
further powers of attorney, assignments, proofs of claim or other instruments
as may be requested by the Agent in order to accomplish the foregoing, but
only with respect to the Holder's capacity as a holder hereof and not in
respect of any other relationship between the Holder and the Obligor.
(e) In the event that, notwithstanding the foregoing, upon
any such Reorganization, any payment or distribution of the assets of the
Obligor of any kind or character, whether in cash, property or securities,
shall be received by the Holder in respect of this Junior Subordinated Note
before all Senior Debt is paid in full in cash, such payment or distribution
shall be held in trust for the Senior Creditors and shall forthwith be paid
over to the Agent for application to the payment of all Senior Debt under the
Credit Documents remaining unpaid until all such Senior Debt shall have been
paid in full in cash, after giving effect to any concurrent payment or
distribution to the Agent.
(f) The Holder agrees that, until the Senior Debt has been
paid in full in cash, (i) if a Default or Event of Default shall have
occurred and be continuing or would result therefrom, or if a Reorganization
shall have commenced, it will not take, demand or receive, or take any action
to accelerate or collect, any payment of all or any part of the Junior
Subordinated Debt and (ii) it will not file, join in or facilitate any
petition or proceeding seeking the involuntary bankruptcy of the Obligor.
(g) The holders of the Senior Debt, or any of them, may, at
any time and from time to time, without the consent of or notice to the
Holder, without incurring any responsibility to the Holder, and without
impairing or releasing any of the rights of any of the holders of the Senior
Debt, or any of the obligations of the Holder:
(i) change the amount or terms of or renew or
extend or enter into or amend in any manner any agreement relating
to any Senior Debt;
(ii) sell, exchange, release or otherwise deal with
any property at any time pledged or mortgaged to secure any Senior
Debt;
(iii) release anyone liable in any manner for the
payment or collection of any Senior Debt; and
5
(iv) exercise or refrain from exercising any rights
against the Obligor and others (including the Holder).
(h) The Holder hereby waives notice of or proof of reliance by
any holder of Senior Debt upon the provisions hereof, and the Senior Debt shall
conclusively be deemed to have been created, contracted, incurred or maintained
in reliance upon the provisions hereof.
(i) The Obligor hereby waives diligence, presentment,
demand, protest and notice of any kind whatsoever. The nonexercise by the
Agent or any other holder of Senior Debt of any of its rights hereunder in any
particular instance shall not constitute a waiver thereof in that or any
subsequent instance.
(j) The subordination provisions contained herein are for the
benefit of the holders of the Senior Debt and their respective successors and
assigns and may not be rescinded or cancelled or modified in any way without the
prior written consent of (i) the Agent and (ii) holders (or representatives
thereof) of a majority in outstanding principal amount of Senior Debt (other
than Senior Debt that is not outstanding under either the Credit Documents or
the Note Documents).
9. DEFINED TERMS.
As used herein, the following terms shall have the following
meanings:
"AGENT" shall mean Bank of America National Trust and Savings
Association, Bank of America Illinois and their respective subsidiaries
and affiliates (or any successor administrative agent under the
Original Credit Agreement), as administrative agent under the Original
Credit Agreement or, if the Original Credit Agreement shall have been
terminated in its entirety and all Senior Debt outstanding thereunder
shall have been paid in full in cash, the administrative agent (or
comparable representative) under the Replacement Credit Agreement.
"COMPANY" shall mean American Bumper & Mfg. Co., a Michigan
corporation.
"CREDIT AGREEMENT" shall mean the collective reference to the
Original Credit Agreement and any Replacement Credit Agreement.
"CREDIT DOCUMENTS" shall mean the collective reference to the
Credit Agreement, the other Loan Documents referred to therein, any
other security document mortgage, guarantee or promissory note executed
and delivered in connection with the Credit Agreement and any Hedge
Agreement.
"DEFAULT" shall mean any of (a) a "Default" as defined in the
Credit Agreement, (b) a "Default" as defined in the Subordinated Note
Agreement or (c) a "default" as defined in any other agreement or
indenture governing or evidencing Senior Debt.
"EVENT OF DEFAULT" shall mean any of (a) an "Event of Default"
as defined in the Credit Agreement (b) an "Event of Default" as defined
in the Subordinated Note
6
Agreement or (c) an "event of default" as defined in any other
agreement or indenture governing or evidencing Senior Debt.
"HEDGE AGREEMENT" shall mean any interest rate protection
agreement, interest rate future agreement, interest rate option
agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement entered into for the purpose of
providing interest rate protection in respect of Indebtedness under the
Credit Agreement.
"INDEBTEDNESS" shall mean (a) all indebtedness for borrowed
money, (b) all obligations for the deferred purchase price of
property or services (other than current trade payables incurred in
the ordinary course of business), (c) all obligations of evidenced
by notes, bonds, debentures or other similar instruments (d) all
indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property, (e) all capital
lease obligations, (f) all obligations, contingent or otherwise, as
an account party under acceptance, letter of credit or similar
facilities, (g) all obligations under any Hedge Agreement, (h) all
guarantee obligations in respect of obligations of the kind referred
to in clauses (a) through (g) above, and (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or for
which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any lien on property
(including, without limitation, accounts and contract rights) owned
by the Obligor, whether or not the Obligor has assumed or become
liable for the payment of such obligation.
"JUNIOR SUBORDINATED DEBT" shall mean the principal amount
of this Junior Subordinated Note from time to time outstanding and
unpaid, together with accrued and unpaid interest thereon and any
fees, expenses or other amounts of any kind whatsoever from time to
time owing hereunder.
"NOTE CREDITORS" shall mean the collective reference to each
holder of Senior Debt under the Note Documents and any Note
Representative.
"NOTE DOCUMENTS" shall mean the collective reference to (a)
the Subordinated Note Agreement and the Subordinated Notes and (b)
any agreement, indenture or note governing or evidencing Senior Debt
incurred to replace or refinance, in whole or in part, (i) Senior
Debt governed or evidenced by any agreement, indenture or note
referred to in this definition or (ii) Senior Debt under the Credit
Agreement, in each case except to the extent the same constitutes a
Credit Document.
"NOTE REPRESENTATIVE" shall mean any trustee or other
representative acting on behalf of the Note Creditors.
"ORIGINAL CREDIT AGREEMENT" shall mean the Credit Agreement
dated as of April 30, 1997, among the Company, the several banks and
other financial institutions or entities from time to time parties
thereto, Fleet Capital Corporation, as documentation agent,
BancAmerica Securities, Inc., as arranger and syndication agent,
Bank of America National Trust and Savings Association, as
administrative agent, as amended, restated, restructured,
supplemented or otherwise modified from time to time (whether or not
any
7
of the foregoing have the effect of increasing the principal amount of
Senior Debt outstanding thereunder).
"REPLACEMENT CREDIT AGREEMENT" shall mean any senior credit
or senior loan agreement or facility (which may include a revolving
or working capital facility) with one or more banks or other
financial institutions or entities entered into in connection with
the replacement or refinancing from time to time, in whole or in
part, of Indebtedness under the Original Credit Agreement or any
other such credit or loan agreement or facility, in each case as
amended, restated, restructured, supplemented or otherwise modified
from time to time (whether or not any of the foregoing have the
effect of increasing the principal amount of Senior Debt outstanding
thereunder).
"SENIOR BANKS" shall mean the collective reference to the
Lenders (as defined in the Credit Agreement) and any affiliate of any
Lender party to a Hedge Agreement.
"SENIOR CREDITORS" shall mean the collective reference to the
Senior Banks and the Agent.
"SENIOR DEBT" shall mean (a) (i) the principal amount of all
loans and reimbursement obligations from time to time outstanding or
owing under the Credit Agreement, together with interest thereon
(including, without limitation, any interest subsequent to the filing
by or against the Obligor of any bankruptcy, reorganization or similar
proceeding, whether or not such interest would constitute an allowed
claim in any such proceeding, calculated at the rate set forth for
overdue loans in the Credit Agreement) and all fees and expenses owing
under the Credit Documents and (ii) all other obligations of the
Obligor (whether in respect of fees, expenses, indemnities or
otherwise) to the Senior Creditors under the Credit Documents; (b) (i)
the principal amount of all notes or securities issued pursuant to the
Note Documents, together with interest thereon (including, without
limitation, any interest subsequent to the filing by or against the
Obligor of any bankruptcy, reorganization or similar proceeding,
whether or not such interest would constitute an allowed claim in any
such proceeding, calculated at the rate set forth for overdue loans in
the relevant Note Documents) and all fees and expenses owing under the
Note Documents and (ii) all other obligations of the Obligor (whether
in respect of fees, expenses, indemnities or otherwise) to the Note
Creditors under the Note Documents; and (c) all other Indebtedness of
the Obligor, except for Indebtedness which is expressly by its terms or
the terms of the instrument creating or evidencing such Indebtedness
made equal or subordinate in right of payment with respect to the
Junior Subordinated Debt.
"SHAREHOLDERS AGREEMENT" shall mean the Shareholders Agreement
dated as of May l, 1997, by and among the Company, Windward Capital
Associates, L.P., a Delaware limited partnership, Windward/Park AB,
L.L.C., a Delaware limited liability company, Windward/Merban, L.P., a
Delaware limited partnership, Windward/Merchant, L.P., a Delaware
limited partnership, Windward/Northwest, L.P., a Delaware limited
partnership, ▇▇▇▇▇ and the members of the Company's management listed
in the Schedule of Management Shareholders attached thereto, and such
other persons or
8
entities who or which become parties to the Shareholders Agreement
pursuant to the terms and conditions of the Shareholders Agreement.
"SUBORDINATED NOTE AGREEMENT" shall mean the Subordinated
Note Agreement, dated as of April 30, 1997, entered into by the
Company and the Purchasers named therein, in connection with the
issuance of the Subordinated Notes, as the same may be renewed,
replaced or refinanced from time to time.
"SUBORDINATED NOTES" shall mean the 12% Subordinated Notes
due 2007 of the Company issued pursuant to the Subordinated Note
Agreement, as the same may be renewed, replaced or refinanced from
time to time.
After the Senior Debt under the Credit Documents shall have been paid
in full in cash and the commitments and letters of credit thereunder shall have
expired or been terminated, unless the context otherwise requires, all
references herein to the "Agent" shall be deemed to be references to the "Note
Representative", all references herein to the "Senior Creditors" shall be deemed
to be references to the "Note Creditors", all references herein to the "Credit
Documents" shall be deemed to be references to the Note Documents and all
references herein to the "Note Documents" shall be deemed to include any other
agreement, indenture or note governing or evidencing Senior Debt.
10. NO RECOURSE AGAINST AFFILIATES. No recourse for the payment of
principal of or interest on this Junior Subordinated Note, or for any claim
based hereon or otherwise in respect hereof, or in relation to the creation
of any indebtedness represented hereby, shall be had against any
incorporator, shareholder, officer of the Obligor or any of its Affiliates or
of any successor thereof, either directly or through the Obligor or any of
its Affiliates or any successor thereof, whether by virtue of any statute or
rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived or released.
11. APPLICABLE LAW. THIS JUNIOR SUBORDINATED NOTE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES
THEREOF.
12. HEADINGS; NO THIRD PARTY BENEFICIARIES. The headings and
captions contained herein are for convenience of reference only and shall not
control or affect the meaning or construction of any of the provisions hereof,
Except as otherwise expressly provided herein (including, without limitation,
the subordination provisions of Section 8 hereof), the provisions contained in
this Junior Subordinated Note are for the sole benefit of the Holder, and they
shall not be construed as conferring, and are not intended to confer, any
rights, remedies or other benefits hereunder on any other persons or entities.
13. SUCCESSORS AND ASSIGNS. All covenants and agreements of the
Obligor under this Junior Subordinated Note shall be binding on the Obligor and
its successors and assigns.
14. SEVERABILITY. The invalidity or unenforceability of any
provision of this Junior Subordinated Note in any jurisdiction shall not affect
the validity, legality or enforceability of the
9
remainder of this Junior Subordinated Note in such jurisdiction or the
validity, legality or enforceability of this Junior Subordinated Note,
including any such provision, in any other jurisdiction, it being intended
that all rights and obligations of the parties hereunder shall be enforceable
to the fullest extent permitted by law.
IN WITNESS WHEREOF, the Obligor has caused this Junior Subordinated
Note to be duly executed effective as of this ______ day of _____________
19__.
[INSERT NAME OF OBLIGOR]
By:________________________________
Name:
Title:
Acknowledged and Agreed:
[INSERT NAME OF PAYEE]
By:_________________________
Name:
Title
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FAX Transmission
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From: ▇▇▇ ▇▇▇▇ Date: April 30, 1997
To: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Time: 1:46 PM
Company FAX#: ▇▇▇ ▇▇▇ ▇▇▇▇
13 pages
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Re: Insurance on the life of ▇▇▇▇ ▇▇▇▇▇ Prudential file # X-4029984
This is to confirm that the above file has received formal approval by
the Prudential and is now being processed by the issuance department.
An actual policy will be produced overnight and will be faxed to you
for delivery tomorrow morning along with delivery instructions.
Annual premium for the policy will be $134,300 per year for the first
ten years or $69,000 semiannual if you prefer.
Please wire the premium to the Prudential (information to follow).
In addition I have attached a specimen policy for your review.
Regards
VOICE: ▇▇▇ ▇▇▇ ▇▇▇▇ FAX: ▇▇▇ ▇▇▇ ▇▇▇▇
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