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AMERIKING, INC.
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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
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Dated as of November ____, 1996
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of ______, 1996, is made by and among
AmeriKing, Inc., a Delaware corporation (the "Company"), BancBoston Investments
Inc., MCIT PLC, a corporation organized under the laws of England, the Jordan
Investors, the Management Stockholders, the Jaro Investors and the ▇▇▇▇▇▇
Investors (each as defined in the Stockholders Agreement, dated as of September
1, 1994, as amended by the Consent and Amendment No. 1 to Stockholders
Agreement, dated as of November 30, 1994 and Waiver and Amendment No. 2 to
Stockholders Agreement, dated as of February 7, 1996 (as so amended, the
"Original Stockholders Agreement"), between the Company and certain of the
parties hereto.
W I T N E S S E T H:
WHEREAS, concurrent with the date hereof, the Company is consummating
concurrent public offerings (the "Offerings") of ___% Senior Notes due 2006 in
the aggregate principal amount of $100 million and Units consisting of Senior
Exchangeable Preferred Stock due 2008 with an aggregate liquidation preference
of $30 million and Common Stock; and
WHEREAS, the parties to the Original Stockholders Agreement desire to
make certain amendments to the Original Stockholders Agreement, as set forth
below.
WHEREAS, as of the date hereof and after giving effect to the
transactions contemplated hereby, the Stockholders will beneficially own the
shares of Stock as set forth in the Stockholder Schedule ("Stockholder
Schedule") attached hereto and the FNBB Affiliate or its designee will own
Warrants immediately exercisable to purchase the number of shares of Non-Voting
Common Stock set forth on the Stockholders Schedule; and
WHEREAS, the parties hereto also desire to restrict the sale,
assignment, transfer, encumbrance or other disposition of the shares of capital
stock of the Company, including issued and outstanding shares of Common Stock,
Class A Preferred Stock and Class B Preferred Stock that may be issued
hereafter, and to provide for certain rights and obligations in respect thereto
as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
Certain Definitions
As used in this Agreement, the following terms shall have the
following respective meanings:
Affiliate shall mean with respect to any Person, (a) any Person which
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, or (b) any Person
who is a director or executive officer (i) of such Person, (ii) of any
Subsidiary of such Person, or (iii) of any Person described in clause (a)
above, or with respect to any Stockholder, the Company; provided, that any
Affiliate of a corporation shall be deemed an Affiliate of such corporation's
stockholders. For purposes of this definition, "control" of a Person shall mean
the power, direct or indirect, (i) to vote or direct the voting of more than 5%
of the outstanding shares of Voting Stock of such Person, or (ii) to direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.
Agreement shall mean this Agreement as in effect on the date hereof
and as hereafter from time to time amended, modified or supplemented in
accordance with the terms hereof.
Bank of Boston shall mean The First National Bank of Boston, a
national banking association.
Board of Directors shall mean the Board of Directors of the Company,
as duly constituted in accordance with this Agreement, or any committee thereof
duly constituted in accordance with this Agreement, the By-laws and applicable
law and duly authorized to make the relevant determination or take the relevant
action. To the extent that the Board of Directors is required under this
Agreement to authorize or approve, or make a determination in respect of a
transaction between the Company, on the one hand, and a Stockholder, and/or a
Stockholder's Affiliates, on the other hand, the Board of Directors shall be
deemed to exclude such Stockholder, any of its Affiliates, and any of the
directors, officers, employees, agents or representatives of such Stockholder
and/or its Affiliates, who are members of the Board of Directors.
Burger King means The Burger King Corporation, a Florida corporation.
Burger King Regulations means the rules, regulations and requirements,
policies and procedures of Burger King as in effect from time to time, relating
to the Company and its subsidiaries, including but not limited to those set
forth in the Franchise
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Agreements, the Burger King Franchise Offering Circular (October 1995) or other
agreements between the Company and/or its subsidiaries, on the one hand, and
Burger King, on the other hand.
By-Laws shall mean the By-Laws of the Company as amended and in effect
on the date hereof and as hereafter further amended or restated in accordance
with the terms hereof and pursuant to applicable law.
Certificate of Incorporation shall mean the Amended and Restated
Certificate of Incorporation of the Company as in effect on the date hereof and
as hereafter from time to time amended, restated, modified or supplemented in
accordance with the terms hereof and pursuant to applicable law.
Class A Preferred Stock shall mean the Class A Preferred Stock, par
value $0.01 per share, consisting of two tranches, the Class A1 Preferred Stock
and the Class A2 Preferred Stock, ranking pari passu with each other, of the
Company.
Class B Preferred Stock shall mean the Class B Preferred Stock, par
value $0.01 per share, of the Company.
Closing Date shall mean the date on which the Offerings shall be
consummated.
Commission shall mean the Securities and Exchange Commission and any
successor commission or agency having similar powers.
Common Stock shall mean the Common Stock, the Non-Voting Common Stock
and shall include unless otherwise noted, the Warrant Stock.
Company shall have the meaning set forth in the preamble to this
Agreement.
Credit Agreement shall mean the Second Amended and Restated Revolving
Credit and Term Loan Agreement, dated February 7, 1996, by and among
Enterprises, the Company, the lenders thereto and Bank of Boston, as agent as
amended or otherwise modified from time to time.
Enterprises shall mean National Restaurant Enterprises, Inc., a
Delaware corporation.
Exchange Act shall mean the Securities Exchange Act of 1934, as
amended, or any similar Federal statute then in effect, and a reference to a
particular section thereof shall include a reference to the comparable section,
if any, of such similar Federal statute.
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Executive and Advisors Subscription Agreement shall mean the Executive
and Advisors Subscription Agreement, dated as of September 1, 1994, by and
among the investors listed on the signature pages thereto and the Company, as
amended from time to time.
First Offer Price shall have the meaning specified in Section 5.1(a).
FNBB Affiliate shall mean BancBoston Investments Inc.
Franchise Agreements shall mean the franchise agreements in effect
from time to time between Enterprises and its subsidiaries on the one hand, and
Burger King on the other hand.
GAAP shall mean generally accepted accounting principles in the United
States of America in effect from time to time, applied on a consistent basis
both as to classification of items and amounts.
Initial Public Offering shall mean the public offer and sale of Common
Stock of the Company for net proceeds to the Company from the sale of Common
Stock of at least $30 million, pursuant to a firm commitment underwritten offer
registered under the Securities Act.
Institutional Lender shall mean any bank, savings and loan
association, insurance company, or other institutional lender.
Jaro Investors shall mean ▇▇▇▇▇▇▇▇ ▇▇▇▇, the Persons so listed on the
Stockholder Schedule and any Permitted Transferee of any of them who becomes a
Stockholder in accordance with the terms hereof.
Jaro Proxy Agreement shall mean the Jaro Proxy Agreement, dated
September 1, 1994, between ▇▇▇▇▇▇▇▇ ▇▇▇▇ and the signatories listed therein.
Jordan Investors shall mean JZCC, MCIT and the Persons listed on the
Schedule of Jordan Investors including the signatories to the Jordan Investors
Subscription Agreement, the Executive and Advisors Subscription Agreement and
any Permitted Transferee of any of them who becomes a Stockholder in accordance
with the terms hereof.
Jordan Investors Subscription Agreement shall mean the Jordan
Investors Subscription Agreement, dated September 1, 1994, between certain
Jordan Investors and the Company, as amended from time to time.
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Jordan Party shall have the meaning given to it in the MCIT Purchase
Agreement.
JZCC shall mean the Jordan/Zalaznick Capital Company, a New York
general partnership.
Letter Agreement shall mean the letter agreement, dated September 1,
1994, by and among MCIT and the Jordan Investors and attached as Exhibit I to
the MCIT Purchase Agreement.
Management Agreement shall mean the Management Consulting Agreement,
dated September 1, 1994, between TJC Management Corporation and the Company, as
amended by Amendment No. 1 to the Management Consulting Agreement, dated
February 7, 1996, and as such agreement may from time to time hereafter be
further amended, modified or supplemented in accordance with the terms hereof
and thereof.
Management Investors shall mean any officer or managerial employee of
the Company or any of its Subsidiaries or his or her Affiliates who holds any
shares of Common Stock from the Company in accordance with the Management
Subscription Agreement and this Agreement, and any Permitted Transferee of any
of such Persons who becomes a Stockholder in accordance with the terms hereof.
Management Stockholders shall mean ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇.
Management Subscription Agreement shall mean the Management
Subscription Agreement, dated September 1, 1994, between the Company and each
Management Investor as amended, modified or supplemented in accordance with the
terms hereof and thereof.
Managing Underwriter shall have the meaning specified in Section
6.1(f).
MCIT shall mean MCIT PLC, a corporation organized under the laws of
the United Kingdom.
MCIT Purchase Agreement shall mean the Amended and Restated Purchase
Agreement, dated as of February 7, 1996, between the Company and MCIT, as
amended or supplemented from time to time.
Non-Voting Common Stock shall mean the Non-Voting Common Stock, par
value $.01 per share, of the Company.
Notice of Exercise shall have the meaning specified in Section 5.1(b).
Notice of Intention shall have the meaning specified in Section
5.1(a).
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Offered Shares shall have the meaning specified in Section 5.1.
Offerings shall have the meaning specified in the recitals.
▇▇▇▇▇▇ Investors shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the Persons so listed on
the Stockholder Schedule and any Permitted Transferee of any of them who
becomes a Stockholder in accordance with the terms hereof.
▇▇▇▇▇▇ Proxy Agreement shall mean the ▇▇▇▇▇▇ Proxy Agreement, dated
September 1, 1994, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and the signatories listed therein.
Owner shall refer to each of ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇ and any other person who is designated an owner pursuant to applicable
Burger King Regulations.
Owner Selling Stockholder shall have the meaning specified in Section
4.3.
Permitted Transferee shall mean, (i) any Jordan Investor, the FNBB
Affiliate, or any Management Investor and (ii) those Persons to whom Transfers
of Common Stock and Preferred Stock are permitted to be made by them pursuant
to Section 4.2 and Article V hereof.
Person shall mean an individual or a corporation, association,
partnership, joint venture, organization, business, trust, or any other entity
or organization, including a government or any subdivision or agency thereof.
Preferred Stock shall mean the Class A Preferred Stock, Class B
Preferred Stock, Senior Exchangeable Preferred Stock and undesignated preferred
stock of the Company.
Public Distribution shall mean a Public Offering of Common Stock, at
the conclusion of which the aggregate number of shares of Common Stock that
have been sold to the public pursuant to one or more effective registration
statements under the Securities Act equals at least 25% of the shares of Common
Stock then outstanding (on a fully diluted basis), including without
limitation, the Warrant Stock, after giving effect to such sale.
Public Offering shall mean a public offering and sale of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act.
Purchase and Sale Agreement shall mean the Purchase and Sale
Agreement, dated September 1, 1994, by and among the Company, Enterprises and
Burger King.
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Registrable Securities shall mean:
(a) all shares of Common Stock and Non-Voting Common Stock outstanding
on the date hereof but prior to the consummation of the Offerings, and all
shares of Common Stock issued or issuable upon (x) the conversion or exchange
of outstanding shares of NonVoting Common Stock in accordance with the
applicable provisions of the Certificate of Incorporation or this Agreement, or
(y) the conversion or exchange of the Warrant Stock; provided, however, that no
holder of shares of Non-Voting Common Stock shall have any registration rights
hereunder with respect to any shares of Non-Voting Common Stock, but only with
respect to shares of Common Stock into which such shares of Non-Voting Common
Stock shall be so exchanged or converted in connection with an effective
registration and sale under the Securities Act of such shares of Common Stock;
and, solely for purposes of Article VI of this Agreement, each holder of shares
of Non-Voting Common Stock and each holder of Warrants to purchase shares of
Non-Voting Common Stock that are to be converted into shares of Common Stock to
be sold in connection with such a registration shall be deemed to be the holder
of the shares of Common Stock into which such shares of Non-Voting Common Stock
shall be convertible; and
(b) any shares of capital stock issued or issuable by the Company in
respect of any shares of Common Stock referred to in the foregoing by way of a
stock dividend or stock split or in connection with a combination or
subdivision of shares, reclassification, recapitalization, merger,
consolidation or other reorganization of the Company.
As to any particular Registrable Securities that have been issued,
such securities shall cease to be Registrable Securities when (i) a
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 under such registration statement, (ii) they shall have been
distributed to the public pursuant to Rule 144, (iii) they shall have been
otherwise transferred or disposed of, and new certificates therefor not bearing
a legend restricting further transfer shall have been delivered by the Company,
and subsequent transfer or disposition of them shall not require their
registration or qualification under the Securities Act or any similar state law
then in force, or (iv) they shall have ceased to be outstanding.
Registration Expenses shall mean any and all out-of-pocket expenses
incident to the Company's performance of or compliance with Article VI hereof,
including, without limitation, all Commission, stock exchange or National
Association of Securities Dealers, Inc. ("NASD") registration and filing fees,
all fees and expenses of complying with securities and blue sky laws (including
the reasonable fees and disbursements of underwriters'
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counsel in connection with blue sky qualifications and NASD filings), all fees
and expenses of the transfer agent and registrar for the Registrable
Securities, all printing expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants, including the expenses
of any special audits and/or "cold comfort" letters required by or incident to
such performance and compliance, and one firm of counsel (other than house
counsel) retained by the FNBB Affiliate if holding Registrable Securities being
registered and one firm of counsel (other than house counsel) retained by the
Jordan Investors holding Registrable Securities being registered, but excluding
underwriting discounts and commissions and applicable transfer and documentary
stamp taxes, if any, which shall be borne by the seller of the securities in
all cases.
Requesting Holder shall have the meaning specified in Section 6.5.
Securities shall mean (i) any capital stock of the Company and (ii)
any instrument evidencing indebtedness of the Company or Enterprises to the
Jaro Investors or the ▇▇▇▇▇▇ Investors.
Securities Act shall mean, as of any date, the Securities Act of 1933,
as amended, or any similar Federal statute then in effect, and in reference to
a particular section thereof shall include a reference to the comparable
section, if any, of any such similar Federal statute and the rules and
regulations thereunder.
Securities Purchase Agreement shall mean the Securities Purchase
Agreement, dated as of November 30, 1994, between the Company and the FNBB
Affiliate.
Selling Investors shall have the meaning specified in Section 5.9.
Selling Stockholder shall have the meaning specified in Section
5.1(a).
Senior Exchangeable Preferred Stock shall mean the ___% Senior
Exchangeable Preferred Stock due 2008 issued by the Company in the Offerings.
Senior Preferred Stock shall mean any new class or series of Preferred
Stock of the Company that is senior in right of payment of dividends and
preference in liquidation to the Class A Preferred Stock and Class B Preferred
Stock; provided, Senior Preferred Stock shall not include the Senior
Exchangeable Preferred Stock.
Stock shall mean the Common Stock and the Preferred Stock.
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Stockholder shall mean any of the Jordan Investors, MCIT, the FNBB
Affiliate, the Management Investors, the Jaro Investors, the ▇▇▇▇▇▇ Investors,
holders of the Company's capital stock issued pursuant to the Stock Option
Agreement to any Permitted Transferee of any such Person who becomes a party to
or bound by the provisions of this Agreement in accordance with the terms
hereof.
Stock Option Agreements shall mean the Stock Option Agreements, dated
September 1, 1994, as amended, between the Company and each of ▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
Subsidiary shall mean as to any Person a corporation of which
outstanding shares of stock having ordinary voting power (other than stock
having such power only by reason of the happening of a contingency) to elect a
majority of the Board of Directors of such corporation are at the time owned,
directly or indirectly through one or more intermediaries, or both, by such
Person.
Transaction Documents shall mean this Agreement, the Recapitalization
Agreement, each of the agreements that are exhibits hereto and thereto, and all
agreements, instruments and documents contemplated hereby and thereby.
Underwritten Offering shall have the meaning given to it in Section
6.1(c).
Voting Stock shall mean capital stock of the Company of any class or
classes, the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of corporate directors (or Persons performing
similar functions).
Voting Stockholder shall mean a Stockholder who holds Voting Stock or
retains, by proxy or otherwise, the power to vote Voting Stock.
Warrant Stock shall mean and include all shares of common stock issued
or issuable pursuant to the Warrants and the Stock Option Agreement and all
references in this Agreement to outstanding Common Stock shall be deemed to
include all Warrant Stock whether or not issued and outstanding.
Warrants shall mean (i) the Warrant, immediately exercisable to
purchase 31.2801 shares of Non-Voting Common Stock, issued to the FNBB
Affiliate or its designee pursuant to the Credit Agreement and (ii) the
Warrant, immediately exercisable to purchase 81.0799 shares of Non-Voting
Common Stock, issued to the FNBB Affiliate, as such Warrants may from time to
time be amended, modified or supplemented in accordance with the terms hereof
and thereof.
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ARTICLE II
Management
Section 2.1 Conduct of Business.
(a) The parties hereto confirm that it is their intention that the
business and affairs of the Company shall be managed by its Board of Directors
in the best interests of the Company and its Subsidiaries taken as a whole. In
furtherance of the foregoing, the parties hereto agree that, after the date
hereof, except in the case of the transactions expressly contemplated by the
Transaction Documents, neither they, any of their Affiliates nor any Affiliates
of the Company will enter into any written or oral contract, agreement or other
arrangement to engage in business or enter into any transaction, or will engage
in business or enter into any transaction, with the Company or any of its
Subsidiaries unless the terms and provisions of such contract, agreement or
other arrangement or the terms on which such business or transaction is
conducted, as the case may be, are fair to the Company or such Subsidiary and
are substantially equivalent to terms that would have been obtained in an
arm's-length relationship other than as required in connection with the
execution, performance and delivery of the Transaction Documents.
Notwithstanding any of the above, the Company may pay to TJC Management
Corporation or another Affiliate of JZCC, investment banking fees in accordance
with and subject to the terms of the Management Agreement, and directors of the
Company, directors fees not to exceed in the aggregate an amount per year equal
to $120,000 per year.
(b) Unless otherwise authorized by a vote of at least 60% of the whole
Board of Directors, whether or not there shall be any vacancies on the Board of
Directors, the parties hereto shall cause the Company to conduct its business
substantially as that business is conducted on the date hereof and shall not
conduct any other business.
(c) The parties hereto shall cause the Company to conduct its business
and affairs in all material respects in compliance with all Burger King
Regulations.
Section 2.2 Registration of Common Stock. In the event of a Public
Offering of the Company's Common Stock, each Voting Stockholder shall, at a
meeting convened for the purpose of amending the Certificate of Incorporation,
vote to increase the number of authorized shares of Common Stock and Non-Voting
Common Stock and, if necessary, increase the number of issued and outstanding
shares of Common Stock and Non-Voting Common Stock, whether by stock split,
stock dividend or otherwise, or change in
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its par value, as recommended by a majority of the members of the Board of
Directors in order to facilitate such Public Offering.
Section 2.3 Certificate of Incorporation; No Conflict with Agreement.
Each Voting Stockholder shall vote his shares of Voting Stock, and shall take
all actions necessary, to ensure that the Certificate of Incorporation and
By-Laws do not, at any time, conflict with the provisions of this Agreement.
ARTICLE III
Corporate Governance and Issuance of Senior Preferred Stock
Section 3.1 Board of Directors.
(a) The Stockholders hereby agree that at all times after the Closing
Date, the Board of Directors of the Company shall consist of not less than
seven members, including the individuals described in this Section 3.1(a). The
Voting Stockholders shall take all actions necessary to elect, or to cause the
Board of Directors to approve and appoint, the designees described below to be
members of the Board of Directors, and such other members as may be selected by
the holders of Voting Stock from time to time outstanding:
(i) four individuals, designated by the beneficial owners of the
majority of the shares of Common Stock beneficially owned by the
Jordan Investors ("Jordan Directors"); and
(ii) three individuals designated by the holders of a majority of
the shares of Common Stock beneficially owned by the Management
Stockholders; provided, that such individuals have executed employment
agreements with the Company, and that such employment agreements
remain in full force and effect ("Management Directors").
(b) Each Voting Stockholder hereby agrees to vote all shares of Voting
Stock owned or held of record by such Stockholder at each annual or special
meeting of Stockholders of the Company at which directors of the Company are to
be elected, in favor of, or to take all actions by written consent in lieu of
any such meeting as are necessary to cause, the election as members of the
Board of Directors of those individuals described in Section 3.1(a) in
accordance with, and to otherwise effect the intent of, the provisions of
Section 3.1(a).
Section 3.2 Vacancies. In the event that a vacancy is created on the
Board of Directors at any time by the death, disability, retirement,
resignation or removal of any member of
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the Board of Directors, or for any other reason there shall exist or occur any
vacancy on the Board of Directors, each Voting Stockholder hereby agrees to
take such actions as will result in the election or appointment as a director
of an individual designated or elected to fill such vacancy and serve as a
director by the Stockholders that had designated or elected (pursuant to
Section 3.1) the director whose death, disability, retirement, resignation or
removal resulted in such vacancy on the Board of Directors (in the manner set
forth in Section 3.1). In the interim from the time the vacancy is created
until a new director is elected, if the vacancy is for a Jordan Director, the
remaining Jordan Directors may appoint a replacement to act as a director until
a new director is duly elected, and if the vacancy is for a Management
Director, the remaining Management Directors may appoint a replacement to act
as a director until a new director is duly elected.
Section 3.3 Covenant to Vote. Each Voting Stockholder hereby agrees to
take all actions necessary to call, or cause the Company and the appropriate
officers and directors of the Company to call, an annual meeting (and when
circumstances so require, a special meeting) of Stockholders of the Company and
to vote all shares of Voting Stock owned or held of record by such Voting
Stockholder at any such meeting and at any other annual or special meeting of
stockholders in favor of, or take all actions by written consent in lieu of any
such meeting as may be necessary to cause, the election as members of the Board
of Directors of those individuals so designated in accordance with, and to
otherwise effect the intent of, this Article III. In addition, each Voting
Stockholder agrees to vote the shares of Voting Stock owned by such Stockholder
upon any other matter arising under this Agreement submitted to a vote of the
Stockholders in such a manner as to implement the terms of this Agreement. In
addition, each Voting Stockholder is aware of the terms of the Letter
Agreement.
Section 3.4 Issuance of Senior Preferred Stock. The Company shall not
issue shares of a class of Senior Preferred Stock with an aggregate liquidation
preference (including all issuances of Senior Preferred Stock after the date
hereof) in excess of $15,000,000 without the consent of the holders of a
majority of the Class A Preferred Stock and the Class B Preferred Stock then
outstanding, voting together as a single class.
ARTICLE IV
Transfers of Stock
Section 4.1 Restrictions on Transfer. Each Stockholder agrees that
such Stockholder will not, directly or indirectly,
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offer, sell, transfer, assign or otherwise dispose of (or make any exchange,
gift, assignment or pledge of) (collectively, for purposes of Articles IV and V
hereof only, a "transfer") any Securities or Warrants, as the case may be,
except (a) as provided in Section 4.2; (b) in accordance with Article V; (c) an
exchange of Common Stock of one class for Common Stock of another class in
accordance with Section 8.1(b); (d) a conversion of Common Stock of one class
into Common Stock of another class pursuant to the Certificate of
Incorporation; (e) the exercise of Warrants; (f) pursuant to the Management
Subscription Agreement; or (g) with regard to any pledge, hypothecation or
charge by MCIT. In addition to the other restrictions noted in this Article IV,
each Stockholder agrees that it will not, directly or indirectly, transfer any
of its Securities or Warrants except as permitted under the Securities Act and
other applicable securities laws.
Section 4.2 Exceptions to Restrictions. The provisions of Section 4.1
and Article V (other than Section 5.8) shall not apply to any of the following
transfers:
(a) (i) From JZCC to the Jordan Investors or any Jordan Party, (ii)
from any of the Jordan Investors or any Jordan Party to any of the other Jordan
Investors, (iii) from any Jordan Investor or any Jordan Party to any Trust
solely for such Jordan Investor's or such Jordan Party's benefit or the benefit
of such Jordan Investor's or such Jordan Party's spouse or children (as the
case may be); provided, that such Jordan Investor or such Jordan Party acts as
trustee and retains the sole power to direct the voting and disposition of such
shares; and provided, further, that in the case referred to in clause (iii),
each such Person including any such trust (each a "Permitted Transferee", shall
execute a counterpart of and become a party to this Agreement and shall agree
in a writing in form and substance satisfactory to the Company to be bound and
becomes bound by the terms of this Agreement.
(b) (i) From any Management Investor to such Management Investor's
spouse or children, (ii) from any Management Investor to any trust solely for
such Management Investor's benefit or the benefit of such Management Investor's
spouse or children, (iii) from any Jaro Investor to such Jaro Investor's spouse
or children, (iv) from any Jaro Investor to any trust solely for the benefit of
such Jaro Investor's spouse or children, (v) from any ▇▇▇▇▇▇ Investor to such
▇▇▇▇▇▇ Investor's spouse or children or (vi) from any ▇▇▇▇▇▇ Investor to any
trust solely for the benefit of such ▇▇▇▇▇▇ Investor's spouse or children;
provided, that, in each case referred to above, such Management Investor, Jaro
Investor or ▇▇▇▇▇▇ Investor, as the case may be, acts as trustee and retains
the sole power to direct the voting and disposition of such Securities; and
provided, further that each such Person
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including any such trust (each a "Permitted Transferee") shall execute a
counterpart of and become a party to this Agreement and shall agree in a
writing in form and substance satisfactory to the Company to be bound and
becomes bound by the terms of this Agreement as a Stockholder.
(c) from the FNBB Affiliate, to any of its respective affiliates, the
Jordan Investors or any Institutional Lender.
(d) From any Stockholder to any Affiliate of the Company, or pursuant
to a merger or consolidation involving the Company or a sale of all or
substantially all of the outstanding shares of Common Stock.
(e) Pursuant to the provisions of the Credit Agreement, including any
pledge of stock or foreclosure on that pledge.
(f) Pursuant to a Public Offering or an open market sale following a
Public Offering in accordance with Rule 144 of the Commission.
(g) Transfers by the Jordan Investors or the Jordan Parties of
Preferred Stock, including donations to charitable organizations.
Section 4.3 Burger King Authorization. Other than (i) as set forth in
Section 4.1(c), (d), (e) or (f), (ii) as set forth in Section 4.2(a), (b), (c),
(d) or (g); provided, that, with respect to Section 4.2(b), the transfer of
Stock by either ▇▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ do not result in either ▇▇.
▇▇▇▇ or ▇▇. ▇▇▇▇▇▇ holding less than 5% of the Company's Voting Stock, (iii)
transfers of Securities other than Voting Stock, and (iv) transfers that would
not result in a "Change of Control" (as defined in the MCIT Purchase
Agreement), the Company and each Stockholder agree and acknowledge that any
issuance or transfer of Stock must be authorized by Burger King in accordance
with the terms and conditions set forth in the Franchise Agreement and the
Burger King Regulations.
If at any time any Owner who is a Stockholder shall desire to transfer
Securities or Warrants owned by him or it (such Stockholder desiring to
transfer shares of such Stock or Warrants being referred to herein as an "Owner
Selling Stockholder"), then such Owner Selling Stockholder shall deliver
written notice of its desire to transfer such Securities or Warrants,
accompanied by a copy of a proposal relating to such sale, to each of Burger
King and to the Company, setting forth such Owner Selling Stockholder's desire
to make such sale, the number and the class of shares of Securities or Warrants
proposed to be transferred and other terms applicable thereto.
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Upon receipt of the notice referred to above, the Company will use its
best efforts to cause Burger King to consent to the transfer proposal.
Notwithstanding the foregoing, any Owner who is a Stockholder acknowledges,
agrees and consents to any and all stop transfer restrictions placed on their
Securities and Warrants prior to the Company's receipt of Burger King's consent
to the transfer and the satisfaction of all applicable agreements, rules and
regulations regarding the transfer or conveyance of the Securities and
Warrants.
Section 4.4 Endorsement of Certificates.
(a) Upon the execution of this Agreement, in addition to any other
legend which the Company may deem advisable under the Securities Act and
certain state securities laws, all Warrants and certificates representing
shares of issued and outstanding Common Stock shall be endorsed at all times
prior to any Public Distribution as follows:
THIS CERTIFICATE IS SUBJECT TO, AND IS TRANSFERABLE ONLY UPON
COMPLIANCE WITH, THE PROVISIONS OF A STOCKHOLDERS AGREEMENT, DATED
SEPTEMBER 1, 1994, AMONG THE COMPANY AND ITS STOCKHOLDERS, AS AMENDED;
SUBSCRIPTION AGREEMENTS, DATED SEPTEMBER 1, 1994, AMONG THE COMPANY
AND CERTAIN INVESTORS THEREIN, AS AMENDED AND THE TERMS AND CONDITIONS
OF FRANCHISE AND OTHER AGREEMENTS WITH BURGER KING CORPORATION.
REFERENCE IS MADE TO SUCH AGREEMENTS AND THE RESTRICTIVE PROVISIONS OF
THE CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE COMPANY. COPIES OF
THE ABOVE REFERENCED AGREEMENTS ARE ON FILE AT THE OFFICE OF THE
COMPANY AT THE JORDAN COMPANY, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN
EXEMPTION FROM REGISTRATION, UNDER SAID ACT.
(b) Except as otherwise expressly provided in this Agreement, all
Warrants and certificates representing shares of Stock hereafter issued to or
acquired by any of the Stockholders or their successors hereto (including,
without limitation, all certificates representing shares of Common Stock
hereafter issued upon conversion of shares of Non-Voting Common Stock) shall
bear the legends set forth above, and the Warrants and shares of Stock
represented by such certificates shall be subject to the applicable provisions
of this Agreement. The obligations of each party hereto shall be binding upon
each transferee to whom Securities or Warrants are transferred by any party
hereto, whether or not such transfer is permitted under the terms of this
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Agreement, except for transfers pursuant to a Public Offering. Prior to
consummation of any transfer, except for transfers pursuant to a Public
Offering, such party shall cause the transferee to execute an agreement in form
and substance reasonably satisfactory to the other parties hereto, providing
that such transferee shall fully comply with the terms of this Agreement.
Prompt notice shall be given to the Company and each Stockholder by the
transferor of any transfer (whether or not to a Permitted Transferee) of any
Securities or Warrants.
Section 4.5 Improper Transfer. Any attempt to transfer or encumber any
shares of Securities or Warrants not in accordance with this Agreement shall be
null and void and neither the Company nor any transfer agent of such securities
shall give any effect to such attempted transfer or encumbrance in its stock
records.
ARTICLE V
Rights of First Offer;
New Securities; Tag Along Sales
Section 5.1 Transfers by a Stockholder.
(a) Except for sales of securities contemplated by Article VI hereof,
transfers permitted by Sections 4.1, 4.2 and 4.3, transfers of Preferred Stock
and transactions subject to Section 5.9, if at any time any Stockholder shall
desire to sell any Stock or Warrants owned by him or it (such Stockholder
desiring to sell shares of such Stock or Warrants being referred to herein as a
"Selling Stockholder"), then such Selling Stockholder shall deliver written
notice of its desire to sell such Stock or Warrants (a "Notice of Intention"),
accompanied by a copy of a proposal relating to such sale (the "Sale
Proposal"), to each of the other Stockholders and to the Company, setting forth
such Selling Stockholder's desire to make such sale (which shall be for cash
only), the number and class of shares of Stock or Warrants proposed to be
transferred (the "Offered Securities") and the price at which such Selling
Stockholder proposes to sell the Offered Securities (the "First Offer Price")
and other terms applicable thereto.
(b) Upon receipt of the Notice of Intention, the Company and the other
Stockholders shall then have the right to purchase at the First Offer Price and
on the other terms specified in the Sale Proposal all or, subject to Section
5.1(d), any portion of the Offered Securities in the following order of
priority: (i) if the Selling Stockholder is a Management Investor, the other
Management Investors shall have the first right to purchase the Offered
Securities pro rata among those Management Investors so
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electing on the basis of the respective number of shares of Common Stock or
Warrants owned or held as trustee by such Management Investors (or in such
other proportions as such Management Investors may agree), then the Company
shall have the second right to purchase the Offered Securities, and thereafter,
the Jordan Investors shall have the right to purchase the Offered Securities
pro rata among those of the Jordan Investors so electing on the basis of the
respective numbers of shares of Common Stock or Warrants owned by such Jordan
Investors (or in such other proportion as such Jordan Investors may agree) and
thereafter, the other Stockholders (excluding the Management Investors) shall
have the right to purchase the Offered Securities pro rata among the
Stockholders (excluding the Management Investors) so electing on the basis of
the respective numbers of shares of Common Stock or Warrants owned by such
Stockholders (or in such other proportion as such other Stockholders may
agree); (ii) if the Selling Stockholder is a Jordan Investor, the other Jordan
Investors shall have the first right to purchase the Offered Securities pro
rata among those of the Jordan Investors so electing on the basis of the
respective numbers of shares of Common Stock or Warrants owned by such Jordan
Investors (or in such other proportion as such Jordan Investors may agree), and
thereafter, the Company shall have the right to purchase the Offered Securities
and thereafter, all other Stockholders shall have the right to purchase the
Offered Securities pro rata among the Stockholders so electing to purchase on
the basis of the respective numbers of shares of Common Stock (including
Warrant Stock) owned by such Stockholders (or in such other proportion as such
other stockholders may agree); and (iii) if the Selling Stockholder is the FNBB
Affiliate, or MCIT, the Jordan Investors shall have the first right to purchase
the Offered Securities pro rata among those of the Jordan Investors so electing
on the basis of the respective numbers of shares of Common Stock (including
Warrant Stock) owned by such Jordan Investors (or in such other proportion as
such Jordan Investors may agree), and thereafter, the Company shall have the
right to purchase the Offered Securities and thereafter, all other Stockholders
shall have the right to purchase the Offered Securities pro rata among the
Stockholders so electing on the basis of the respective numbers of shares of
Common Stock (including Warrant Stock) owned by such Stockholders (or in such
other proportion as such other Stockholders may agree). The rights of the
Stockholders and the Company pursuant to this Section 5.1(b) shall be
exercisable by the delivery of notice to the Selling Stockholder (the "Notice
of Exercise"), within 30 calendar days from the date of delivery of the Notice
of Intention. The Notice of Exercise shall state the total number of shares of
the Offered Securities such Stockholder (or the Company) is willing to purchase
without regard to whether or not other Stockholders purchase any shares of the
Offered Securities. A copy of such Notice of Exercise shall also be delivered
by each
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Stockholder to the Company and each other Stockholder. The rights of the
Stockholders and the Company pursuant to this Section 5.1(b) shall terminate if
unexercised 30 calendar days after the date of delivery of the Notice of
Intention.
Notwithstanding the foregoing, no Management Investor, other than
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇ shall be entitled to
purchase any shares of Common Stock or Warrants hereunder unless such shares
shall concurrently be duly assigned, transferred and delivered to the trustee
of the Jaro Voting Trust or ▇▇▇▇▇▇ Voting Trust and such shares shall
thereafter be subject to the Jaro or ▇▇▇▇▇▇ Voting Trust Agreement.
(c) In the event that the Stockholders or the Company exercise their
rights to purchase any or all of the Offered Securities in accordance with
Section 5.1(b), then the Selling Stockholder must sell the Offered Securities
to such Stockholders (or, as the case may be, the Company) within 30 calendar
days from the date of delivery of the Notice of Exercise received by the
Selling Stockholder.
(d) Notwithstanding the foregoing provisions of this Section 5.1,
unless the Selling Stockholder shall have consented to the purchase of less
than all of the Offered Securities, no Stockholder or Stockholders nor the
Company may purchase any Offered Securities hereunder unless all of the Offered
Securities are to be so purchased.
(e) For purposes of this Article V, any Person who has failed to give
notice of the election of an option hereunder within the specified time period
will be deemed to have waived its rights on the day after the last day of such
period.
(f) Each Stockholder agrees and acknowledges that the Company may
purchase or acquire Common Stock pursuant to Section 5.1(b) hereof, and
approves such purchases and acquisitions, and waives any objection or claim
relating thereto, whether against the Company, the Board of Directors or
otherwise.
Section 5.2 Transfer of Offered Shares to Third Parties. If all
notices required to be given pursuant to Section 5.1 have been duly given and
the Stockholders and the Company do not exercise their respective options to
purchase all of the Offered Securities at the First Offer Price and the Selling
Stockholder does not desire to sell less than all the Offered Securities or if
with the consent of the Selling Stockholder the other Stockholders and the
Company purchase less than all of the Offered Securities pursuant to the
provisions hereof, then in either such event the Selling Stockholder shall have
the right, subject to compliance by the Selling Stockholder with the
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provisions of Section 4.3 and Section 4.4(b) hereof, for a period of 120
calendar days from the earlier of (i) the expiration of the option period
pursuant to Section 5.1 with respect to such Sale Proposal or (ii) the date on
which such Selling Stockholder receives notice from the other Stockholders and
the Company that they will not exercise in whole or in part the options granted
pursuant to Section 5.1, to sell to any third party which is not an Affiliate
of, or related by consanguinity or marriage to, the Selling Stockholder the
Offered Securities remaining unsold at a price of not less than 95% of the
First Offer Price, and on the other terms specified in the Sale Proposal.
Section 5.3 Purchase of Offered Shares. The consummation of any
purchase and sale pursuant to Section 5.1 shall take place on such date, not
later than 30 calendar days after the expiration of the option period pursuant
to Section 5.1 with respect to such option, as the Selling Stockholder shall
select. Prior to the consummation of any sale pursuant to Section 5.1, the
Selling Stockholder shall comply with Section 4.3 and Section 4.4(b) hereof.
Upon the consummation of any such purchase and sale, the Selling Stockholder
shall deliver certificates evidencing the Offered Securities sold duly
endorsed, or accompanied by written instruments of transfer in form
satisfactory to the purchaser duly executed by the Selling Stockholder free and
clear of any liens, against delivery of the First Offer Price, payable in the
manner specified in Section 5.1(a).
Section 5.4 Waiting Period with Respect to Subsequent Transfers. In
the event that the Stockholders and the Company do not exercise their options
to purchase all of the Offered Securities, and the Selling Stockholder shall
not have sold the remaining Offered Securities to a third party for any reason
before the expiration, as applicable, of the 120-day period described in
Section 5.2, then such Selling Stockholder shall not give another Notice of
Intention pursuant to Section 5.1 for a period of 90 calendar days after the
last day of such 120-day period.
Section 5.5 Right of First Refusal for New Securities.
(a) The Company hereby grants to each of the Stockholders a right of
first refusal to purchase shares of any New Securities (as defined below) which
the Company may, from time to time, propose to issue and sell. Such right of
first refusal shall allow each Stockholder to purchase a pro rata portion of
the shares of Common Stock, Preferred Stock or Warrants as may be included in
the New Securities proposed to be issued, determined with reference to the
aggregate number of outstanding shares of Common Stock (including all Warrant
Stock) or Preferred Stock (as the case may be) held by such Stockholder before
the proposed
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issuance of New Securities. In the event a Stockholder does not purchase any or
all of its pro rata portion of New Securities, the remaining Stockholders shall
have the right to purchase such unpurchased New Securities or respective pro
rata portion until all of the New Securities are purchased or until no other
Stockholder desires to purchase any more New Securities. The right of first
refusal granted hereunder shall terminate if unexercised within 30 calendar
days after receipt of the notice described in Section 5.5(c) below.
(b) "New Securities" shall mean any authorized but unissued shares,
and any treasury shares, of capital stock of the Company and all rights,
options or warrants to purchase capital stock, and securities of any type
whatsoever that are, or may become, convertible into capital stock; provided,
however, that the term "New Securities" does not include (i) securities issued
upon conversion of shares of Non-Voting Common Stock into Common Stock, in
accordance with the Certificate of Incorporation and this Agreement; (ii)
securities issued pursuant to the acquisition of another corporation by the
Company by merger, purchase of all or substantially all of the assets or other
reorganization whereby the Company shall become the owner of more than 50% of
the voting power of such corporation; (iii) shares of Common Stock issued in
connection with any stock split or stock dividend of the Company; (iv) any
borrowings, direct or indirect, from financial institutions or other Persons by
the Company, whether or not presently authorized, including any type of loan or
payment evidenced by any type of debt instrument, and any capital stock issued
in connection with such borrowings (other than a borrowing from a Jordan
Party), including warrants, options or other rights to purchase capital stock,
provided that such borrowings are not convertible into or exchangeable for
capital stock of the Company; (v) shares of Common Stock issued pursuant to any
Public Offering; (vi) Warrant Stock; (vii) shares of Preferred Stock issued and
paid as dividends on outstanding Preferred Stock or (viii) shares of capital
stock or rights, options or warrants to purchase capital stock to be issued to
employees of the Company or its Subsidiaries, provided, that no more than two
percent (2%) of the outstanding capital stock on February 7, 1996 shall be
available for issuances after such date.
(c) In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Stockholder written notice of its intention,
describing the class and number of shares of Common Stock or Preferred Stock
(as the case may be) it intends to issue as New Securities, the purchase price
therefor (which shall be payable solely in cash) and the terms upon which the
Company proposes to issue the same. Each Stockholder shall have 30 calendar
days from the date such notice is given to determine whether to purchase all or
any portion of
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the Stockholder's pro rata share of such New Securities for the purchase price
and upon the terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.
Notwithstanding the provisions of this Section 5.5, no Jaro Investor or ▇▇▇▇▇▇
Investor, other than ▇▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall be entitled to
purchase any shares of Common Stock hereunder unless such shares shall
concurrently be made subject to the provisions of Section 8.3, as the case may
be.
Section 5.6 Legally Binding Obligation; Power of Attorney; Personal
Rights.
(a) Subject to Section 5.1(a), making a written offer, giving or
failing to give written notice within the stated period, accepting an offer or
making a decision or election, in each case as provided in Section 5.1 or 5.2,
shall create a legally binding obligation to buy or sell, or an obligation not
to buy or sell, as the case may be, the subject Common Stock as provided in
such Section 5.1 or 5.2.
(b) Subject to Section 5.1(a), each holder of Common Stock hereby
appoints JZCC as an attorney-in-fact for such holder with the power to execute
such documents and take such other actions to provide for the transfer of
Common Stock owned by such holder in accordance with this Article V. JZCC is
hereby authorized (i) to transfer such Common Stock on the books of the Company
at the direction and without regard to the surrender of certificates or
instruments representing such Common Stock held by such holder, and (ii) to
place on all certificates or instruments representing Common Stock a legend
reflecting this authority to transfer such Common Stock.
Section 5.7 Right to Join in Sale.
(a) Anything in this Agreement to the contrary notwithstanding, if any
Stockholder or group of Stockholders proposes, in a single transaction or a
series of transactions during any six-month period (other than transfers to a
Permitted Transferee pursuant to Section 4.2 and transactions subject to
Section 5.9 and transactions pursuant to Section 8 of the Management
Subscription Agreement) to sell, dispose of or otherwise transfer 5% or more of
the outstanding Common Stock and Warrant Stock or, if less than such amount, in
the case of any Stockholder which owns Common Stock or Warrant Stock on the
date hereof, 50% or more of its initial holdings of such interests in Common
Stock or Warrant Stock, as the case may be (each a "Disposing Stockholder"),
such person or group shall refrain from effecting such transaction unless,
prior to the consummation thereof, each other Stockholder, including a Warrant
Stock
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holder, shall have been afforded the opportunity to join in such sale of Common
Stock or Warrant Stock on a pro rata basis, as hereinafter provided.
(b) Prior to consummation of any proposed sale, disposition or
transfer of shares of Common Stock or Warrant Stock described in Section
5.7(a), the Disposing Stockholder shall cause the person or group that proposes
to acquire such shares (the "Proposed Purchaser") to offer (the "Purchase
Offer") in writing to each other Stockholder to purchase shares of Common Stock
or Warrant Stock owned by such Stockholder (regardless of whether the shares of
Common Stock or Warrant Stock proposed to be sold by the Disposing Stockholders
are the same class as the shares of Common Stock or Warrant Stock owned by such
Stockholders), such that the number of shares of such Common Stock or Warrant
Stock so offered to be purchased from such Stockholder shall be equal to the
product obtained by multiplying the total number of shares of such Common Stock
or Warrant Stock then owned by such Stockholder by a fraction, the numerator of
which is the aggregate number of shares of Common Stock and Warrant Stock
proposed to be purchased by the Proposed Purchaser from all Stockholders
(including the Disposing Stockholder or Stockholders) and the denominator of
which is the aggregate number of shares of Common Stock and Warrant Stock or
shares of Common Stock underlying the Warrants then outstanding. Such purchase
shall be made at the highest price per share and on such other terms and
conditions as the Proposed Purchaser has offered to purchase shares of Common
Stock or Warrant Stock to be sold by the Disposing Stockholder or Stockholders.
Each Stockholder shall have 20 calendar days from the date of receipt of the
Purchase Offer in which to accept such Purchase Offer, and the closing of such
purchase shall occur within 30 calendar days after such acceptance or at such
other time as such Stockholder and the Proposed Purchaser may agree. The number
of shares of Common Stock or Warrants to be sold to the Proposed Purchaser by
the Disposing Stockholder or Stockholders shall be reduced by the aggregate
number of shares of Common Stock or Warrant Stock purchased by the Proposed
Purchaser from the other Stockholders pursuant to the acceptance by them of
Purchase Offers in accordance with the provisions of this Section 5.7(b). In
the event of any sale of Warrant Stock pursuant to this Section 5.7, to the
extent that Warrant Stock consists of unexercised Warrants, such sale may be
made either by sale of all or a part of the relevant Warrant, or by exercise of
the Warrant and sale of the applicable Warrant Stock. In the event that a sale
or other transfer subject to this Section 5.7 is to be made to a Proposed
Purchaser who is not a Stockholder, the Disposing Stockholder shall notify the
Proposed Purchaser that the sale or other transfer is subject to this Section
5.7 and shall ensure that no sale or other transfer is consummated without the
Proposed Purchaser first complying with this Section 5.7. It
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shall be the responsibility of each Disposing Stockholder to determine whether
any transaction to which it is a party is subject to this Section 5.7.
Section 5.8 Retention and Sale of Control.
Notwithstanding any other provisions of this Agreement to the
contrary, but subject to the last sentence of this Section 5.8, prior to the
completion of a Public Distribution, except with the specific prior written
consent of the FNBB Affiliate and MCIT, the Jordan Investors shall not effect
or permit any sale or other disposition of Common Stock or Warrants, or cause
or permit any merger, consolidation or other transaction involving the Company
to take place or enter into or permit the Company to enter into any agreement,
arrangement, commitment or understanding with respect to the foregoing, if
immediately after giving effect to such sale, disposition, merger,
consolidation or other transaction, a "Change of Control" (as defined in the
MCIT Purchase Agreement) would occur. For purposes of this Section 5.8, the
term "Jordan Investors" shall not include any Permitted Transferee of any such
Persons other than Permitted Transferees referred to in Section 4.2(b) hereof.
Section 5.9 Take Along.
If at any time both (i) Jordan Investors owning interests representing
a majority of the shares of Common Stock or Warrants beneficially owned by the
Jordan Investors and (ii) the FNBB Affiliate (such Jordan Investors and the
FNBB Affiliate being referred to in this Section 5.9 as the "Selling
Investors") shall determine to sell or exchange (in a business combination or
otherwise) two-thirds or more of their aggregate shares of Common Stock or
Warrants in a bona fide arm's-length transaction to a third party in which the
same price per share shall be payable in respect of all shares of any class of
the Common Stock or Warrants, then, upon the written request of such Selling
Investors, each other Jordan Investor, each Management Investor, each Jaro
Investor and each ▇▇▇▇▇▇ Investor shall be obligated to, and shall, if so
requested by such third party, (a) sell, transfer and deliver or cause to be
sold, transferred and delivered to such third party, all shares of Common Stock
or Warrants owned by them at the same price per share (irrespective of class)
and on the same terms as are applicable to the Selling Investors, and (b) if
stockholder approval of the transaction is required, vote his, her or its
shares of Voting Stock in favor thereof. The provisions of Sections 5.1 through
5.4, inclusive, and Section 5.7 shall not apply to any transactions to which
this Section 5.9 applies.
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ARTICLE VI
Registration Rights
Section 6.1 Demand Registrations.
(a) At any time and from time to time after the earlier of September
1, 1998 or the effectuation of an Initial Public Offering by the Company,
holders of a majority of the shares of Stock held by the Jordan Investors
(other than MCIT) and the FNBB Affiliate may request in writing that the
Company effect the registration under the Securities Act of all or part of such
holders' Registrable Securities, specifying in the request the number and type
of Registrable Securities to be registered by each such holder and the intended
method of disposition thereof (such notice is hereinafter referred to as a
"Holder Request"). Upon receipt of such Holder Request, the Company will
promptly give written notice of such requested registration to all other
holders of Registrable Securities, which other holders shall have the right to
include the Registrable Securities held by them in such registration and
thereupon the Company will, as expeditiously as possible, use its best efforts
to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such requesting Stockholders; and
(ii) all other Registrable Securities which the Company has been
requested to register by any other holder thereof by written request
given to the Company within 30 calendar days after the giving of such
written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities), all to
the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities
so to be registered;
provided, however, that the Company shall not be obligated to file a
registration statement relating to any Holder Request under this
Section 6.1(a):
(x) unless the Company shall have received requests for such
registration with respect to at least 15% of the shares of Common
Stock then outstanding (including all Warrant Stock) with respect
to the first Holder Request, and unless the Company shall have
received requests for such registration with respect to 10% of
the shares of Common Stock then outstanding with respect to each
Holder Request under this Section 6 thereafter;
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(y) other than a registration statement on Form S-3 or a
similar short form registration statement, within a period of 12
months after the effective date of any other registration
statement relating to any registration request under this Section
6.1(a) that was not effected on Form S-3 (or any similar short
form); or
(z) within a nine-month period immediately following the
effective date of a registration previously effected by the
Company pursuant to this Section 6.1;
provided, further, however, that the Company may postpone for not more
than 90 calendar days, on one occasion only with respect to each
request for registration made under this Section 6.1(a), the filing or
effectiveness of a registration statement under this Section 6.1(a) if
the Company and a majority of the Jordan Investors agree that such
registration might reasonably be expected to have an adverse effect on
any proposal or plan by the Company to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or similar transaction; provided, that in
such event, the holders of Registrable Securities initiating the
request for such registration will be entitled to withdraw such
request, and if such request is withdrawn such registration will not
count as one of the permitted registrations under this Section 6.1. In
any event, the Company will pay all Registration Expenses in
connection with any registration initiated under this Section 6.1.
(b) Intentionally Omitted.
(c) Notwithstanding the foregoing provisions of Section 6.1 (a) the
Company shall not be obligated to effect more than one registration pursuant to
this Section 6.1 at the request of a majority of the Jordan Investors, in any
twelve month period, in each case through a firm commitment underwriting
through a nationally recognized underwriter (an "Underwritten Offering").
(d) If the Company proposes to effect a registration requested
pursuant to this Section 6.1 by the filing of a registration statement on Form
S-3 (or any similar short-form registration statement), the Company will comply
with any request by the Managing Underwriter (as defined in Subsection (g),
below) to effect such registration on another permitted form if such Managing
Underwriter advises the Company that, in its opinion, the use of another form
of registration statement is of material importance of such proposed offering.
-25-
(e) A registration requested pursuant to Section 6.1.(a) will not be
deemed to have been effected unless it has become effective; provided, that if
after it has become effective, the offering of Registrable Securities pursuant
to such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court,
such registration will be deemed not to have been effected.
(f) The Company will pay all Registration Expenses in connection with
each of the registrations of Registrable Securities effected by it pursuant to
this Section 6.1.
(g) The Company shall have the right, with the approval of the Jordan
Investors to select the investment banker (or investment bankers) that shall
manage the offering (collectively, the "Managing Underwriter").
(h) In connection with any offering pursuant to this Section 6.1, the
only shares that may be included in such offering are (i) Registrable
Securities, and (ii) shares of authorized but unissued Common Stock that the
Company elects to include in such offering ("Company Securities").
(i) If in connection with any Underwritten Offering pursuant to this
Section 6.1. the Managing Underwriter shall advise the Company that, in its
judgment, the number of shares proposed to be included in such offering should
be limited due to market conditions, then the Company will promptly so advise
each holder of Registrable Securities that has requested registration, and
shares shall be excluded from such offering in the following order until such
limitation has been met:
(A)
(1) Company Securities, if any, shall be excluded until all of
the Company Securities shall have been so excluded, and,
thereafter,
(2) until the Jordan Investors shall have included in such
offering the lesser of (i) 25% of the aggregate amount of
Securities held by the Jordan Investors as of February 7,
1996 (such amount as adjusted for stock splits,
recapitalizations and similar events and reduced by the
amount of Securities previously sold by the Jordan Investors
pursuant to Section 6.1 or 6.2 ) and (ii) the total amount
of Registrable Securities requested by the Jordan Investors
to be included in such offering, the Registrable Securities
requested to be included in such offering pursuant to
Section 6.1(a) by Persons shall be excluded pro rata, based
on the respective number of Registrable
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Securities as to which registration has been so requested by
such Persons, and, thereafter,
(3) the Registrable Securities requested to be included in such
offering pursuant to Section 6.1(a) by Persons other than
the FNBB Affiliate shall be excluded pro rata, based on the
respective number of Registrable Securities as to which
registration has been so requested by such Persons.
(j) If any shares of Common Stock requested to be included in a sale
pursuant to this Section 6.1. shall not be outstanding but shall be issuable
upon conversion of shares of Non-Voting Common Stock which are outstanding,
then the FNBB Affiliate and the Company shall take all actions necessary in
order to convert such shares of Non-Voting Common Stock into shares of Common
Stock in order to effect such sale.
Section 6.2 Piggyback Registrations.
(a) If the Company at any time proposes to register any of its equity
securities under the Securities Act (other than a registration on Form S-4 or
S-8 or any successor or similar forms thereto and other than pursuant to a
registration under Section 6.1.), whether or not for sale for its own account,
on a form and in a manner that would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will give
written notice to all the holders of Registrable Securities promptly of its
intention to do so, describing such securities and specifying the form and
manner and the other relevant facts involved in such proposed registration
(including, without limitation, (x) whether or not such registration will be in
connection with an underwritten offering of Registrable Securities and, if so,
the identity of the Managing Underwriter and whether such offering will be
pursuant to a "best efforts" or "firm commitment" underwriting and (y) the
price (net of any underwriting commissions, discounts and the like) at which
the Registrable Securities are reasonably expected to be sold). Upon the
written request of any such holder delivered to the Company within 30 calendar
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will use best efforts to
effect the registration under the Securities Act of all of the Registrable
Securities that the Company has been so requested to register; provided,
however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date
of the registration statement filed in
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connection with such registration, the Company shall determine for any
reason not to register such securities, the Company may, at its
election, give written notice of such determination to each holder of
Registrable Securities who made a request as hereinabove provided and
thereupon the Company shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights, of the Jordan
Investors and the FNBB Affiliate to request that such registration be
effected as a registration under Section 6.1.
(ii) If such registration involves an Underwritten Offering, all
holders of Registrable Securities requesting to be included in the
Company's registration must sell their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions
as apply to the Company.
No registration effected under this Section 6.2 shall relieve the Company of
its obligation to effect registration upon request under Section 6.1.
(b) The Company shall not be obligated to effect any registration of
Registrable Securities under this Section 6.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange
offers, dividend reinvestment plans of stock option or other employee benefit
plans.
(c) The Registration Expenses incurred in connection with each
registration of Registrable Securities requested pursuant to this Section 6.2.
shall be paid by the Company.
(d) If in connection with any Underwritten Offering pursuant to this
Section 6.2. the Managing Underwriter shall advise the Company that, in its
judgment, the number of shares proposed to be included in such offering should
be limited due to market conditions, then the Company shall exclude shares from
such offering in the following order until such limitation has been met:
(1) until the Jordan Investors shall have included in such offering
the lesser of (i) 25% of the aggregate amount of Securities held
by the Jordan Investors as of February 7, 1996 (such amount as
adjusted for stock splits, recapitalizations and similar events
and reduced by the amount of Securities previously sold by the
Jordan Investors pursuant to Section 6.1 or 6.2 ) and (ii) the
total amount of Registrable Securities
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requested by the Jordan Investors to be included in such
offering, the Registrable Securities requested to be included in
such offering shall be excluded pro rata, based on the respective
number of Registrable Securities as to which registration has
been so requested by such Persons, and, thereafter
(2) the Registrable Securities requested to be included in such
offering by Persons other than the FNBB Affiliate shall be
excluded pro rata, based on the respective number of Registrable
Securities as to which registration has been so requested by such
Persons.
(e) In connection with any Underwritten Offering with respect to which
holders of Registrable Securities shall have requested registration pursuant to
this Section 6.2, the Company shall have the right to select the Managing
Underwriter with respect to the offering; provided, that such Managing
Underwriter is reasonably acceptable to the holders of a majority of the
Registrable Securities requested to be sold in such Underwritten Offering.
(f) If any shares of Common Stock requested to be included in a sale
pursuant to this Section 6.2. shall not be outstanding but shall be issuable
upon conversion of shares of Non-Voting Common Stock which are outstanding,
then the FNBB Affiliate and the Company shall take all actions necessary in
order to convert such shares of Non-Voting Common Stock into shares of Common
Stock in order to effect such sale.
Section 6.3 Registration Procedures.
(a) If and whenever the Company is required to use its best efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in Section 6.1 or 6.2, the Company will, as
expeditiously as possible:
(i) Prepare and, in any event within 90 calendar days after the
end of the period within which requests for registration may be given
to the Company, file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to
cause such registration statements to become and remain effective;
provided, that in the case of a registration provided for in Section
6.1. or 6.2, before filing a registration statement or prospectus or
any amendments or supplements thereof, the Company will furnish to the
counsel selected by the Jordan Investors copies of all such documents
proposed to be filed, which documents will be subject to the review of
such counsel; and, provided, further, that the Company may discontinue
any registration of its securities that is being
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effected pursuant to Section 6.2 at any time prior to the effective
date of the registration statement relating thereto.
(ii) Prepare and file with the Commission such amendments
(including post-effective 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 as may be requested by the Jordan Investors not exceeding
nine months and to comply with the provisions of the Securities Act
with respect to the disposition of all Common Stock 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.
(iii) 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 a prospectus and
preliminary prospectus for delivery in conformity with the
requirements of the Securities Act, and such other documents, as such
Person may reasonably request, in order to facilitate the public sale
or other disposition of the Registrable Securities.
(iv) 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 each
seller 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 of the Registrable Securities
owned by such seller, in such jurisdictions, except that the Company
shall not for any such purpose be required (A) to qualify to do
business as a foreign corporation in any jurisdiction where, but for
the requirements of this Section 6.3(a)(iv), it is not then so
qualified, or (B) to subject itself to taxation in any such
jurisdiction, or (C) to take any action which would subject it to
general or unlimited service of process in any such jurisdiction where
it is then so subject.
(v) 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 to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities.
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(vi) 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
within the appropriate period mentioned in Section 6.3(a)(ii), if the
Company becomes aware that the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and, at the request of any such seller, deliver a reasonable
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 an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(vii) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and make generally
available to its security holders, in each case as soon as
practicable, but not later than 45 calendar days after the close of
the period covered thereby (90 calendar days in case the period
covered corresponds to a fiscal year of the Company), an earnings
statement of the Company which will satisfy the provisions of Section
11(a) of the Securities Act.
(viii) Use its best efforts in cooperation with the underwriters
to list such Registrable Securities on each securities exchange as
they may reasonably designate.
(ix) In the event the offering is an Underwritten Offering, use
its best efforts to obtain a "cold comfort" letter from the
independent public accountants for the Company in customary form and
covering such matters of the type customarily covered by such letters
as (i) the Jordan Investors or (ii) the sellers of a majority of any
class of such Registrable Securities (excluding shares being sold by
the Jordan Investors) reasonably request.
(x) 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 (i) the Jordan Investors or (ii) sellers
of a majority of any class of such Registrable Securities (excluding
shares being sold by the Jordan Investors) reasonably request in order
to effect an underwritten public offering of such Registrable
Securities.
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(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 6.3(a)(vi), 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 6.3(a)(vi).
(c) If a registration pursuant to Section 6.1 or 6.2 involves an
Underwritten Offering, each holder of Registrable Securities agrees, whether or
not such holder's Registrable Securities are included in such registration, not
to effect any public sale or distribution, including any sale pursuant to Rule
144 under the Securities Act, of any Registrable Securities, or of any security
convertible into or exchangeable or exercisable for any Registrable Securities
(other than as part of such Underwritten Offering), without the consent of the
Managing Underwriter, during a period commencing seven calendar days before and
ending 90 calendar days (or such lesser number as the Managing Underwriter
shall designate) after the effective date of such registration.
(d) If a registration pursuant to Section 6.1 or 6.2 involves an
Underwritten Offering, the Company agrees, if so required by the Managing
Underwriter, not to effect any public sale or distribution of any of its equity
or debt securities, as the case may be, or securities convertible into or
exchangeable or exercisable for any of such equity or debt securities, as the
case may be, during a period commencing seven calendar days before and ending
90 calendar days after the effective date of such registration, except for such
Underwritten Offering or except in connection with a stock option plan, stock
purchase plan, savings or similar plan, or an acquisition, merger or exchange
offer.
(e) If a registration pursuant to Section 6.1 or 6.2 involves an
Underwritten Offering, any holder of Registrable Securities requesting to be
included in such registration may elect, in writing, 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, unless
such holder has agreed with the Company or the Managing Underwriter to limit
its rights under this Section 6.3.
(f) It is understood that in any Underwritten Offering in addition to
any shares of Common Stock (the "initial shares") the underwriters have
committed to purchase, the underwriting agreement may grant the underwriters an
option to purchase up to a number of additional shares of authorized but
unissued shares of Common Stock (the "option shares") equal to 15% of the
initial
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shares (or such other maximum amount as the NASD may then permit), solely to
cover over-allotments. Shares of Common Stock proposed to be sold by the
Company and the other sellers shall be allocated between initial shares and
option securities as agreed or, in the absence of agreement, pursuant to
Section 6.1(i) or 6.2(d), as the case may be. The number of initial shares and
option shares to be sold by requesting holders shall be allocated pro rata
among all such holders on the basis of the relative number of shares of
Registrable Securities each such holder has requested to be included in such
registration.
(g) Notwithstanding anything in this Article VI to the contrary, in
lieu of converting any share of Non-Voting Common Stock into Common Stock prior
to or simultaneously with the filing or the effectiveness of any registration
statement filed pursuant to this Article VI, the holder of such Non-Voting
Common Stock may sell such Non-Voting Common Stock to the underwriter of the
offering being registered upon the undertaking of such underwriter to convert
such Non-Voting Common Stock before making any distribution pursuant to such
registration statement and to include the Common Stock issued upon such
conversion among the securities being offered pursuant to such registration
statement.
Section 6.4 Indemnification.
(a) In the event of any registration of any securities of the Company
under the Securities Act pursuant to Section 6.1 or 6.2, the Company will, and
it hereby agrees to, indemnify and hold harmless, to the extent permitted by
law, each seller of any Registrable Securities covered by such registration
statement, its directors and officers or general and limited partners, each
other Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act, as follows:
(i) against any and all loss, liability, claim, damage or expense
whatsoever arising out of or based upon an untrue statement or alleged
untrue statement of a material fact contained in any registration
statement (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein not misleading;
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(ii) against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense reasonably incurred by them in
connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any such seller or underwriter expressly for use in the preparation
of any registration statement (or any amendment thereto) or any preliminary
prospectus or prospectus (or any amendment or supplement thereto); and
provided, further, that the Company will not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, under the indemnity agreement in this
Section 6.4(a) with respect to any preliminary prospectus or final prospectus
or final prospectus as amended or supplemented, as the case may be, to the
extent that any such loss, claim, damage or liability of such underwriter or
controlling Person results from the fact that such underwriter sold Registrable
Securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus or of the
final prospectus as then amended or supplemented, whichever is most recent, if
the Company has previously furnished copies thereof to such underwriter. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such seller or any such director, officer, general or
limited partner, investment advisor or agent, underwriter or controlling Person
and shall survive the transfer of such securities by such seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed in
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accordance with Section 6.1 or 6.2, that the Company shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities or any underwriter, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in Section 6.4(a)) the
Company 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, 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 by or on behalf of such seller or underwriter specifically stating that
it is for use in the preparation of such registration statement, preliminary,
final or summary prospectus or amendment or supplement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Company or any such director, officer or controlling Person and
shall survive the transfer of such securities by such seller. In that event,
the obligations of the Company and such sellers pursuant to this Section 6.4
are to be several and not joint; provided, however, that with respect to each
claim pursuant to this Section, the Company shall be liable for the full amount
of such claim, and each such seller's liability under this Section 6.4 shall be
limited to an amount equal to the net proceeds (after deducting the
underwriting discount and expenses) received by such seller from the sale of
Registrable Securities held by such seller pursuant to this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding involving a
claim referred to in this Section 6.4, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party, give written
notice to such indemnifying party 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 this
Section 6.4, except to the extent (not including any such notice of an
underwriter) that the indemnifying party is actually 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 (in which case the indemnifying party shall not be liable for the
fees and expenses of more than one firm of counsel for a majority of the
sellers of Registrable Securities and one firm of counsel selected by the
Jordan Investors, or more than one firm of counsel for the underwriters in
connection with any one action or separate but similar or related actions), the
indemnifying party will be entitled to participate in and to assume the defense
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thereof, jointly with any other indemnifying party similar notified, to the
extent that it may wish with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified 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 such indemnifying party in
connection with the defense thereof.
(d) The Company and each seller of Registrable Securities shall
provide for the foregoing indemnity (with appropriate modifications) in any
underwriting agreement with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority.
Section 6.5 Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnity contemplated by Section
6.4 is for any reason not available, the parties required to indemnify by the
terms thereof shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, any seller of Registrable Securities and one or more
of the underwriters, except to the extent that contribution is not permitted
under Section 11(f) of the Securities Act. In determining the amounts which the
respective parties shall contribute, there shall be considered the relative
benefits received by each party from the offering of the Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each), the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable considerations
appropriate under the circumstances. The Company and each Person selling
securities agree with each other that no seller of Registrable Securities shall
be required to contribute any amount in excess of the amount such seller would
have been required to pay to an indemnified party if the indemnity under
Section 6.4(b) were available. The Company and each such seller agree with each
other and the underwriters of the Registrable Securities, if requested by such
underwriters, that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation (even if the underwriters
were treated as one entity for such purpose) or for the underwriters' portion
of such contribution to exceed the percentage that the underwriting discount
bears to the initial public offering price of the Registrable Securities. For
purposes of this Section 6.5, each Person, if any, who controls an underwriter
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such underwriter, and each director and each
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officer of the Company who signed the registration statement, and each Person,
if any, who controls the Company or a seller of Registrable Securities within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company or a seller of Registrable Securities, as the case
may be.
Section 6.6 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 Commission 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 Commission. 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 VII
Termination
Section 7.1 Certain Terminations.
(a) The provisions of Articles III, IV and V shall terminate on the
date on which any of the following events first occurs: (i) a Public
Distribution, (ii) a merger or consolidation of the Company with or into
another Person that is not an Affiliate of the Company, as a result of which
the Stockholders own less than 65% of the outstanding shares of Voting Stock of
the surviving or resulting corporation, (iii) the sale or other disposition in
compliance with Section 2.1 of all or substantially all the assets of the
Company to a Person that is not an Affiliate of the Company, or (iv) ten years
from the date of this Agreement.
(b) The provisions of Section 8.3 shall terminate ten years from the
date of this Agreement.
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(c) Notwithstanding the foregoing, this Agreement shall in any event
terminate with respect to any Stockholder when such Stockholder no longer owns
any Securities or Warrants.
ARTICLE VIII
Miscellaneous
Section 8.1 Other Covenants.
(a) For so long as any Stockholder holds in the aggregate 5% or more
of the Common Stock then outstanding, such Stockholder may upon reasonable
prior notice visit and inspect the properties of the Company and each
Subsidiary of the Company and examine and copy (at their own expense) their
books of record and account, and discuss their affairs, finances and accounts
with their officers and their current and prior independent public accountants
all at such reasonable times as such Stockholder or Stockholders may desire.
All materials and information obtained pursuant to this Section 8.1(a) shall be
kept confidential by the Stockholders and shall not be disclosed to any third
party (other than to their Affiliates) unless expressly agreed to by the
Company or as required pursuant to applicable law, in connection with judicial
or arbitral proceedings or upon request of any governmental or regulatory
authority.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the FNBB Affiliate may, at any time and from time to time, exchange
any number of shares of Non-Voting Common Stock held by them for an equal
number of shares of Common Stock; provided, however, that immediately after
giving effect to any such exchange, the aggregate number of shares of Common
Stock held by the FNBB Affiliate shall not exceed 4.99% of the aggregate number
of shares of Common Stock then outstanding. Such exchange shall be effected in
each case by the delivery by the FNBB Affiliate of certificates representing
such shares, duly endorsed or accompanied by duly executed stock powers, to the
Company at its principal office, together with written notice stating the
number of such shares to be so exchanged, whereupon the Company shall issue to
the FNBB Affiliate new certificates representing a number of shares of Common
Stock equal to the number of shares of Non-Voting Common Stock so exchanged,
which shares of Common Stock when so issued shall be duly and validly issued,
fully paid and non-assessable. The Company shall at all times reserve a
sufficient number of shares of its authorized but unissued Common Stock to
permit compliance with the provisions of this Section 8.1(b). Any shares of
Non-Voting Common Stock acquired by the Company in exchange for shares of
Common Stock pursuant to this Section 8.1(b) shall be cancelled and retired.
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Section 8.2 Financial Information; List of Stockholders.
(a) The Company agrees to furnish to each Stockholder, for so long as
such Stockholder holds any Common Stock, Preferred Stock or Warrant as soon as
available the following financial statements and other information:
(i) copies of the consolidated and consolidating balance sheets
of the Company and its Subsidiaries as of the end of the first, second
and third quarterly accounting periods, and of the related
consolidated and consolidating statements of income and retained
earnings and cash flows for such accounting period and for the portion
of the fiscal year ended with the last day of such accounting period,
all in reasonable detail and stating in comparative form the
consolidated and consolidating figures as of the end of and for the
corresponding date and period in the previous fiscal year, all
certified by its chief financial officer as complete and correct and
as presenting fairly the information contained therein in accordance
with the same accounting practices used in preparing the audited
financial statements for the fiscal year most recently ended required
to be delivered by paragraph (ii) below, subject to recurring
non-material changes resulting from year-end audit adjustments,
absence of the notes required by GAAP and year end accruals; and
(ii) copies of the consolidated and consolidating balance sheets
of the Company and its Subsidiaries as of the end of each fiscal year,
and of the related consolidated and consolidating statements of income
and retained earnings and cash flows for such fiscal year, all in
reasonable detail and stating in comparative form the respective
consolidated and consolidating figures as of the end of and for the
previous fiscal year, and, in the case of such consolidated
statements, accompanied by a report thereon of independent certified
public accountants of recognized national standing selected by the
Company and acceptable to Stockholders (the "Accountants"), which
report shall be unqualified as to going concern and scope of audit and
shall state that such consolidated financial statements present fairly
the consolidated financial position of the Company and its
Subsidiaries as at the dates indicated and their consolidated income
and retained earnings and cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except for such changes with which the Accountants shall concur) and
that the examination by such Accountants in connection with such
consolidated financial statements has been made in accordance with
generally accepted auditing standards; and
-39-
(iii) copies of any proxy statements, financial statements and
reports as the Company or its Subsidiaries shall send or make
available generally to any of their security holders, and copies of
all regular and periodic reports and of all registration statements
(other than on Form S-8 or Form 701 or a similar form) which the
Company or its Subsidiaries may file with the Securities and Exchange
Commission or with any securities exchange.
(b) The Company agrees to furnish to any Stockholder holding in the
aggregate 5% or more of the Common Stock then outstanding, any other
information, including without limitation financial statements and computations
relating to the performance of this Agreement and/or the affairs of the Company
or its Subsidiaries that any such Stockholder may from time to time reasonably
request and which is capable of being obtained, produced or generated without
undue effort or expense by the Company or such Subsidiary or of which any of
them has knowledge (including, without limitation, a brief statement containing
a management discussion and analysis of the financial condition of the Company
and its Subsidiaries and describing the results of operations and significant
events relating to the Company and Subsidiaries for any fiscal period; copies
of all minutes of meetings of Board of Directors; copies of all information
furnished to stockholders at or in connection with all meetings of stockholders
of the Company, a copy of all information furnished to members of the Board of
Directors of the Company, and a copy of a list of shareholders of the Company).
(c) Not less than 30 calendar days after the end of each fiscal year
of the Company, and from time to time upon the request of any Jordan Investor,
the Company shall provide to such Jordan Investor a list of all stockholders of
the Company indicating the respective numbers of shares owned of Common Stock
or Preferred Stock, as the case may be, by them.
(d) The Company agrees to provide all information and make any filings
reasonably requested by any Stockholder that are required by Section 1202 of
the Internal Revenue Code of 1986, as amended, so long as such information and
filings do not have an adverse effect in respect of the Company's business,
operations, results, tax positions, conditions or prospects.
Section 8.3 Covenants of the Jaro and ▇▇▇▇▇▇ Investors.
(a) Each of the ▇▇▇▇▇▇ Investors hereby appoints ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as
their proxy pursuant to the ▇▇▇▇▇▇ Proxy Agreement, with full power of
substitution, to represent and vote, in his sole discretion, all Securities
which they would be entitled to vote at any annual or special meeting of the
Company's stockholders and to execute and deliver, in his sole discretion,
-40-
any written consent by the holders of the Company's Securities in which they
would be entitled to join. Each of the ▇▇▇▇▇▇ Investors acknowledges and agrees
that such proxy is coupled with an interest and cannot be terminated or revoked
until the termination of this Agreement. Any transfer of Securities by the
foregoing persons to a Permitted Transferee will be subject to this proxy and
conditioned upon the Company's receipt of a proxy, in form and substance
identical to this proxy, from such Permitted Transferee. In the event that
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ is no longer employed by Enterprises, the ▇▇▇▇▇▇ Investors
hereby agree that this proxy may be exercised by a majority of the Management
Directors. Each of the ▇▇▇▇▇▇ Investors agrees to execute and deliver to the
Company any instruments or documents which they may reasonably request in order
to effectuate this proxy.
(b) Each of the Jaro Investors hereby appoints ▇▇▇▇▇▇▇▇ ▇▇▇▇ as their
proxy pursuant to the Jaro Proxy Agreement, with full power of substitution, to
represent and vote, in his sole discretion, all Securities which they would be
entitled to vote at any annual or special meeting of the Company's stockholders
and to execute and deliver, in his sole discretion, any written consent by the
holders of the Company's Securities in which they would be entitled to join.
Each of the Jaro Investors acknowledges and agrees that such proxy is coupled
with an interest and cannot be terminated or revoked until the termination of
this Agreement. Any transfer of Securities by the foregoing persons to a
Permitted Transferee will be subject to this proxy and conditioned upon the
Company's receipt of a proxy, in form and substance identical to this proxy,
from such Permitted Transferee. In the event that ▇▇▇▇▇▇▇▇ ▇▇▇▇ is no longer
employed by Enterprises, the Jaro Investors hereby agree that this proxy may be
exercised by a majority of the Management Directors. Each of the Jaro Investors
agrees to execute and deliver to the Company any instruments or documents which
they may reasonably request in order to effectuate this proxy.
Section 8.4 RIGHT OF SETOFF. EACH OF THE JARO INVESTORS AND THE ▇▇▇▇▇▇
INVESTORS (EACH A "SETOFFEE") ACKNOWLEDGES AND AGREES THAT THE COMPANY MAY, IN
ADDITION TO ANY OTHER RIGHTS OR REMEDIES AVAILABLE TO IT UNDER THE JARO
PURCHASE AGREEMENT AND THE ▇▇▇▇▇▇ PURCHASE AGREEMENT, RESPECTIVELY, AND IN ITS
SOLE DISCRETION, SET OFF ITS INDEMNIFICATION RIGHTS AGAINST PAYMENTS OR AMOUNTS
OWED BY THE COMPANY TO A JARO INVESTOR OR AN ▇▇▇▇▇▇ INVESTOR, RESPECTIVELY, IN
RESPECT OF THEIR SECURITIES RECEIVED PURSUANT TO THE JARO PURCHASE AGREEMENT OR
▇▇▇▇▇▇ PURCHASE AGREEMENT, PROVIDED THAT INDEMNIFICATION CLAIMS IN THE
AGGREGATE SHALL BE LIMITED TO THE CONSIDERATION RECEIVED BY A JARO INVESTOR OR
AN ▇▇▇▇▇▇ INVESTOR AND THAT THE COMPANY'S RIGHT TO SETOFF SHALL BE APPLIED TO
THE FOLLOWING PAYMENTS IN ORDER: (I) ANY PRINCIPAL AND THEN INTEREST PAYMENTS
THE COMPANY MAY OWE A SETOFFEE PURSUANT TO ANY OF ITS NOTES, AS DEFINED IN THE
-41-
MANAGEMENT SUBSCRIPTION AGREEMENT; (II) ANY PREFERRED STOCK DIVIDEND,
LIQUIDATION OR REDEMPTION PAYMENT THE COMPANY MAY OWE A SETOFFEE; (III) ANY
COMMON STOCK DIVIDEND, LIQUIDATION OR REDEMPTION PAYMENT THE COMPANY MAY OWE A
SETOFFEE AND THEN (IV) CASH TO THE EXTENT THE CASH RECEIVED PURSUANT TO SUCH
ASSET PURCHASE AGREEMENT HAS NOT BEEN DISTRIBUTED BY THE JARO INVESTOR TO ITS
SHAREHOLDERS AND LIMITED BY THE AMOUNT, IF ANY, THAT THE JARO INVESTOR OR
▇▇▇▇▇▇ INVESTOR HAS PAID FEDERAL OR STATE TAXES THEREIN OR HAS RECEIVED A
NOTICE OR CLAIM ASSESSING ADDITIONAL TAX LIABILITIES UPON THE JARO INVESTOR OR
▇▇▇▇▇▇ INVESTOR AS A RESULT OF NON-COMPLIANCE WITH SECTION 351 AND THE RULES
REGARDING THE INSTALLMENT NOTE REGULATIONS UNDER THE INTERNAL REVENUE CODE OF
1986, AS AMENDED. ANY PERSONAL LIABILITY OF AN INDIVIDUAL JARO INVESTOR OR
▇▇▇▇▇▇ INVESTOR SHALL BE LIMITED TO THE EXTENT THE JARO INVESTOR OR ▇▇▇▇▇▇
INVESTOR PERSONALLY RECEIVED STOCK OR CASH PURSUANT TO THE JARO PURCHASE
AGREEMENT OR THE ▇▇▇▇▇▇ PURCHASE AGREEMENT, OR ACQUIRED SUCH STOCK OR CASH IN A
DISTRIBUTION OR DIVIDEND, NET OF FEDERAL AND STATE INCOME TAXES AS PROVIDED IN
THE PRECEDING SENTENCE. THE COMMON STOCK SHALL BE VALUED AT FAIR MARKET VALUE
(AS DEFINED IN THE MANAGEMENT SUBSCRIPTION AGREEMENT) FOR PURPOSE OF
DETERMINING THE REDEMPTION VALUE OF THE COMMON STOCK.
Section 8.5 Successors and Assigns. Except as otherwise provided
herein, all of the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the respective
successors and assigns of the parties hereto. No Stockholder may assign any of
its rights hereunder to any Person other than a transferee that has complied
with the requirements of Sections 4.2 and 5.3 (if applicable) as provided
therein in all respects. The Company may not assign any of its rights hereunder
to any Person other than an Affiliate of the Company. If any transferee of any
Stockholder shall acquire any Securities or Warrants, in any manner, whether by
operation of law or otherwise, such shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such shares such Person
shall be entitled to receive the benefits of and be conclusively deemed to have
agreed to be bound by and to comply with all of the terms and provisions of
this Agreement.
Section 8.6 Amendment and Modification; Waiver of Compliance;
Conflicts.
(a) This Agreement may be amended only by a written instrument duly
executed by (i) the holders of a majority of the shares of capital stock held
by the Jordan Investors, (ii) to the extent required under Section 11.8 under
the Credit Agreement, or if such proposed amendment would materially adversely
affect the rights of the FNBB Affiliate under this Agreement, the FNBB
Affiliate, and (iii) to the extent that such proposed amendment
-42-
would materially adversely affect the rights of the Management Investors under
this Agreement as a group, the holders of a majority of the shares of Voting
Stock owned by the Management Investors or which may be voted, pursuant to the
provisions of Section 8.3, by either ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or a
majority of the Management Directors. In the event of the amendment or
modification of this Agreement in accordance with its terms, the Stockholders
shall cause the Board of Directors of the Company to meet within 30 calendar
days following such amendment or modification or as soon thereafter as is
practicable for the purpose of adopting any amendment to the Certificate of
Incorporation and By-Laws of the Company that may be required as a result of
such amendment or modification to this Agreement, and, if required, proposing
such amendments to the Stockholders entitled to vote thereon, and the
Stockholders agree to vote in favor of such amendments.
(b) Except as otherwise provided in this Agreement, any failure of any
of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
(c) In the event of any conflict between the provisions of this
Agreement and the provisions of any other agreement, the provisions of this
Agreement shall govern and prevail.
Section 8.7 Notices. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex or telecopy (with such telex or telecopy confirmed promptly in writing
sent by first class mail), or first class mail, or other similar means of
communication, as follows:
(i) If to the Company or any Jordan Investor, addressed to the
Company or to such Jordan Investor c/o The Jordan Company, ▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; or
(ii) If to a Stockholder other than the Jordan Investors, to the
address of such Stockholder set forth in the stock records of the
Company.
or, in each case, to such other address or telex or telecopy number as such
party may designate in writing to each Stockholder
-43-
and the Company by written notice given in the manner specified herein.
All such communications shall be deemed to have been given, delivered
or made when so delivered by hand or sent by telex (answer back received) or
telecopy, or five business days after being so mailed.
Section 8.8 Entire Agreement. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof
contain the entire agreement among the parties hereto with respect to the
subject transactions contemplated hereby and supersede all prior oral and
written agreements and memoranda and undertakings among the parties hereto with
regard to this subject matter. The Company represents to the Stockholders that
the rights granted to the holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted or obligations accepted under any
other agreement (including the Certificate of Incorporation) to which the
Company is a party. Neither the Company nor any Subsidiary of the Company will
hereafter enter into any agreement with respect to its equity or debt
securities which is inconsistent with the rights granted to the holders of
Registrable Securities or any Stockholder under this Agreement without
obtaining the prior written consent of the Stockholder or holder of Registrable
Securities whose rights would be thereby affected.
Section 8.9 Injunctive Relief. The Stockholders acknowledge and agree
that a violation of any of the terms of this Agreement will cause the
Stockholders irreparable injury for which an adequate remedy at law is not
available. Therefore, the Stockholders agree that the Company and each
Stockholder shall be entitled to an injunction, restraining order or other
equitable relief from any court of competent jurisdiction, restraining any
Stockholder from committing any violations of the provisions of this Agreement.
Section 8.10 Inspection. For so long as this Agreement shall be in
effect, this Agreement shall be made available for inspection by any
Stockholder at the principal executive offices of the Company.
Section 8.11 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
-44-
Section 8.12 Recapitalizations, Exchanges, Etc., Affecting the Common
Stock; New Issuances.
(a) The provisions of this Agreement shall apply, to the full extent
set forth herein with respect to the Common Stock and the Preferred Stock and
to any and all equity or debt securities of the Company or any successor or
assign of the Company (whether by merger, consolidation, sale of assets, or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of, such equity or debt securities and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
reclassifications, recapitalizations, reorganizations and the like occurring
after the date hereof.
(b) In the event that the Company enters into an agreement providing
for the merger or consolidation of the Company with another entity or for an
exchange of the equity securities of such entities pursuant to which
Stockholders of the Company would be entitled to receive equity securities of
the surviving or any other corporation, the Company shall cause such agreement
to provide that any holder of shares of Non-Voting Common Stock shall be
entitled to receive non-voting equity securities of such surviving or other
corporation convertible into voting equity securities in the same manner as the
Non-Voting Common Stock.
Section 8.13 Ratification of Prior Acts of Board of Directors of
Company; Right to Negotiate. Each of the Stockholders hereby adopts, ratifies
and confirms all of the actions heretofore taken by the Board of Directors in
all respects, including, without limitation, in respect of the Offerings and
the transactions contemplated thereby. Nothing in this Agreement (apart from
Article V hereof) shall be deemed to restrict or prohibit the Company from
purchasing Stock from any Stockholder at any time upon such terms and
conditions and at such price as may be mutually agreed upon between the Company
and such Stockholder, whether or not at the time of such purchase circumstances
exist which specifically grant the Company the right to purchase, or such
Stockholder the right to sell, Stock pursuant to the terms of this Agreement.
Section 8.14 LITIGATION. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
ILLINOIS. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT
OF ANY BREACH OF THIS AGREEMENT BY A STOCKHOLDER, THE COMPANY WOULD BE
IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT,
IN ADDITION TO ANY OTHER REMEDY TO WHICH IT MAY BE ENTITLED AT LAW OR IN
EQUITY, THE COMPANY SHALL BE ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS
MAY BE APPROPRIATE. EACH PARTY AGREES THAT JURISDICTION AND VENUE WILL BE
PROPER IN CHICAGO, ILLINOIS AND WAIVES ANY OBJECTIONS BASED UPON FORUM NON
CONVENIENS. EACH
-45-
PARTY WAIVES PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND
COMPLAINT COMMENCING AN ACTION OR PROCEEDING SHALL BE PROPERLY SERVED AND SHALL
CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR CERTIFIED MAIL TO THE
PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT, OR AS OTHERWISE PROVIDED BY
THE LAWS OF THE STATE OF ILLINOIS OR THE UNITED STATES. THE CHOICE OF FORUM SET
FORTH IN THIS SECTION 8.14 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF
ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE JURISDICTION.
Section 8.15 ARBITRATION. SUBJECT TO THE RIGHT OF THE COMPANY TO
PURSUE INJUNCTIVE RELIEF PURSUANT TO SECTION 8.15, ANY DISPUTE BETWEEN OR AMONG
THE PARTIES TO THIS AGREEMENT RELATING TO OR IN RESPECT OF THIS AGREEMENT, ITS
NEGOTIATION, EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY COURSE OF CONDUCT
OR DEALING OR ACTIONS UNDER OR IN RESPECT OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION ANY CLAIM UNDER THE SECURITIES ACT, THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, ANY OTHER STATE OR FEDERAL LAW RELATING TO SECURITIES OR
FRAUD OR BOTH, THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, AS
AMENDED, OR FEDERAL OR STATE COMMON LAW, SHALL BE SUBMITTED TO, AND RESOLVED
EXCLUSIVELY PURSUANT TO, ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION
SHALL TAKE PLACE IN CHICAGO, ILLINOIS, AND SHALL BE SUBJECT TO THE SUBSTANTIVE
LAW OF THE STATE OF ILLINOIS. DECISIONS AS TO FINDINGS OF FACT AND CONCLUSIONS
OF LAW PURSUANT TO SUCH ARBITRATION SHALL BE FINAL, CONCLUSIVE AND BINDING ON
THE PARTIES, SUBJECT TO CONFIRMATION, MODIFICATION OR CHALLENGE PURSUANT TO 9
U.S.C. ▇▇.▇▇. 1 ET SEQ. ANY FINAL AWARD SHALL BE ENFORCEABLE AS A JUDGMENT OF A
COURT OF RECORD.
Section 8.16 No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any person.
Section 8.17 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 8.18 Obligations Under the MCIT Purchase Agreement.
(a) The Company, the Jordan Investors and each Jordan Party hereby
agree to use their best efforts to refrain from exercising their voting rights
as required by the Abstention Letter (as defined in the MCIT Purchase
Agreement) for so long as such letter is in full force and effect.
-46-
(b) The Company will use its best efforts to fulfill the terms and
conditions of the Preemption Letter (as defined in the MCIT Purchase Agreement)
for so long as such letter is in full force and effect.
-47-
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
AMERIKING, INC.
By:
-------------------------------
Name:
Title:
MCIT PLC
By:
-------------------------------
Name:
Title:
BANCBOSTON INVESTMENTS, INC.
By:
-------------------------------
Name:
Title:
JORDAN INVESTORS:
Jordan/Zalaznick Capital Company
By:
-------------------------------
Name:
General Partner
Leucadia Investors, Inc.
By:
-------------------------------
Name:
Title:
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ Revocable Trust
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Trustee
-48-
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. Max
▇▇▇▇ ▇. ▇▇▇▇ Profit Sharing Plan
By:
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Trustee
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Profit Sharing Plan
and Trust
By:
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Trustee
▇▇▇▇ ▇▇▇▇▇▇▇▇ Profit Sharing Plan and
Trust
By:
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Trustee
-49-
MANAGEMENT STOCKHOLDERS:
----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
JARO INVESTORS:
▇▇▇▇▇ Restaurants Associates, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
President
Jaro Enterprises, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
President
-50-
Jaro Restaurants Associates, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
President
JB Restaurants, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
President
▇▇▇▇▇▇ INVESTORS:
Osburger, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
Castleking, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
▇▇▇▇▇-▇▇▇▇▇▇ Restaurants, Inc.
By:
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
-51-
TABLE OF CONTENTS
(Not Part of Agreement)
Page
RECITALS.................................................................. 1
ARTICLE I
Certain Definitions
Affiliate........................................................ 2
Agreement........................................................ 2
Bank of Boston................................................... 2
Board of Directors............................................... 2
Burger King...................................................... 2
Burger King Regulations.......................................... 2
By-Laws ........................................................ 3
Certificate of Incorporation..................................... 3
Class A Preferred Stock ......................................... 3
Class B Preferred Stock ......................................... 3
Closing Date .................................................... 3
Commission ...................................................... 3
Common Stock .................................................... 3
Company ........................................................ 3
Credit Agreement................................................. 3
Enterprises...................................................... 3
Exchange Act .................................................... 3
Executive and Advisors Subscription Agreement.................... 4
First Offer Price ............................................... 4
FNBB Affiliate................................................... 4
Franchise Agreements............................................. 4
GAAP ........................................................ 4
Initial Public Offering ......................................... 4
Institutional Lender ............................................ 4
Jaro Investors................................................... 4
Jaro Proxy Agreement............................................. 4
Jordan Investors................................................. 4
Jordan Investors Subscription Agreement ......................... 4
Jordan Party..................................................... 5
JZCC ........................................................ 5
Letter Agreement................................................. 5
Management Agreement ............................................ 5
Management Investors ............................................ 5
Management Stockholders.......................................... 5
Management Subscription Agreement ............................... 5
Managing Underwriter............................................. 5
MCIT ........................................................ 5
MCIT Purchase Agreement.......................................... 5
Non-Voting Common Stock.......................................... 5
Page
Notice of Exercise .............................................. 5
Notice of Intention ............................................. 5
Offered Shares .................................................. 6
Offerings........................................................ 6
▇▇▇▇▇▇ Investors................................................. 6
▇▇▇▇▇▇ Proxy Agreement........................................... 6
Owner ........................................................ 6
Owner Selling Stockholder........................................ 6
Permitted Transferee............................................. 6
Person ........................................................ 6
Preferred Stock.................................................. 6
Public Distribution ............................................. 6
Public Offering.................................................. 6
Purchase and Sale Agreement...................................... 6
Registrable Securities .......................................... 7
Registration Expenses ........................................... 7
Requesting Holder ............................................... 8
Securities....................................................... 8
Securities Act .................................................. 8
Securities Purchase Agreement.................................... 8
Selling Investors ............................................... 8
Selling Stockholder ............................................. 8
Senior Exchangeable Preferred Stock.............................. 8
Senior Preferred Stock........................................... 8
Stock ........................................................ 8
Stock Option Agreements.......................................... 9
Subsidiary ...................................................... 9
Transaction Documents............................................ 9
Underwritten Offering ........................................... 9
Voting Stock .................................................... 9
Voting Stockholder .............................................. 9
Warrant Stock.................................................... 9
Warrants ........................................................ 9
ARTICLE II
Management
2.1 Conduct of Business.............................................. 10
2.2 Registration of Common Stock..................................... 10
2.3 Certificate of Incorporation; No Conflict with
Agreement........................................................ 11
ARTICLE III
Corporate Governance and Issuance of Senior Preferred Stock
3.1 Board of Directors............................................... 11
3.2 Vacancies........................................................ 11
-ii-
Page
3.3 Covenant to Vote................................................. 12
3.4 Issuance of Senior Preferred Stock............................... 12
ARTICLE IV
Transfers of Stock
4.1 Restrictions on Transfer......................................... 13
4.2 Exceptions to Restrictions....................................... 13
4.3 Burger King Authorization........................................ 14
4.4 Endorsement of Certificates...................................... 15
4.5 Improper Transfer................................................ 16
ARTICLE V
Rights of First Offer;
New Securities; Tag Along Sales
5.1 Transfers by a Stockholder....................................... 16
5.2 Transfer of Offered Shares to Third Parties...................... 18
5.3 Purchase of Offered Shares....................................... 19
5.4 Waiting Period with Respect to Subsequent Transfers.............. 19
5.5 Right of First Refusal for New Securities........................ 19
5.6 Legally Binding Obligation; Power of Attorney; Personal
Rights.............................................. 21
5.7 Right to Join in Sale............................................ 21
5.8 Retention and Sale of Control.................................... 23
5.9 Take Along....................................................... 23
ARTICLE VI
Registration Rights
6.2 Piggyback Registrations.......................................... 27
6.3 Registration Procedures.......................................... 29
6.4 Indemnification.................................................. 33
6.5 Contribution..................................................... 36
6.6 Rule 144......................................................... 37
ARTICLE VII
Termination
7.1 Certain Terminations............................................. 37
ARTICLE VIII
Miscellaneous
-iii-
Page
8.1 Other Covenants.................................................. 38
8.2 Financial Information; List of Stockholders...................... 39
8.3 Covenants of the Jaro and ▇▇▇▇▇▇ Investors....................... 41
8.4 RIGHT OF SETOFF.................................................. 41
8.5 Successors and Assigns........................................... 42
8.6 Amendment and Modification; Waiver of Compliance;
Conflicts........................................... 43
8.7 Notices.......................................................... 43
8.8 Entire Agreement................................................. 44
8.9 Injunctive Relief................................................ 44
8.10 Inspection....................................................... 44
8.11 Headings......................................................... 45
8.12 Recapitalizations, Exchanges, Etc., Affecting the
Common Stock; New Issuances......................... 45
8.13 Ratification of Prior Acts of Board of Directors of
Company; Right to Negotiate......................... 45
8.14 LITIGATION....................................................... 45
8.15 ARBITRATION...................................................... 46
8.16 No Strict Construction........................................... 46
8.17 Counterparts..................................................... 46
8.18 Obligations Under the MCIT Purchase Agreement.................... 47
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