Exhibit 10.2
INVESTOR STOCKHOLDERS AGREEMENT
THIS INVESTOR STOCKHOLDERS AGREEMENT, dated as of April 21,
1999 (this "AGREEMENT") is made by and among ▇.▇. ▇▇▇▇▇▇ Automotive Castings,
Inc., a Delaware corporation (the "COMPANY"), Onex American Holdings LLC, a
Delaware limited liability company ("ONEX"), J2R Partners III, a Minnesota
general partnership ("J2R") and the stockholders listed on the signature pages
hereto and such other stockholders of the Company as may, from time to time,
become parties to this Agreement in accordance with the terms and provisions
hereof.
WHEREAS, the authorized capital stock of the Company consists
of 20,000 shares of Class A Common Stock, par value $.01 per share (the "CLASS A
COMMON"), 30,000 shares of Class B Common Stock, par value $0.01 per share (the
"CLASS B COMMON"), 2,000 shares of Class C Common Stock, par value $0.01 per
share (the "CLASS C COMMON"), 15,000 shares of Class D-1 Common Stock, par value
$0.01 per share (the "CLASS D-1 COMMON"), 7,500 shares of Class D-2 Non-Voting
Common Stock, par value $0.01 per share (the "CLASS D-2 COMMON"), and 1,000
shares of Class E Common Stock, par value $0.01 per share (the "CLASS E
COMMON").
WHEREAS, the Company, ▇▇▇▇, ▇▇▇, and certain other
Stockholders are parties to a Recapitalization Agreement, dated as of the date
hereof, the ("RECAPITALIZATION AGREEMENT"), pursuant to which ▇▇▇▇, ▇▇▇, and
such Stockholders have acquired their Common Stock (as defined).
WHEREAS, the Company, ▇▇▇▇, ▇▇▇, and certain other investors
are parties to a Registration Agreement (the "REGISTRATION AGREEMENT"), dated as
of the date hereof.
WHEREAS, in order to provide for the stability of the Company,
the parties wish to enter into this Agreement.
WHEREAS, certain terms used in this Agreement are defined in
Article I of this Agreement.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE 1ARTICLE 1
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. when used in this Agreement the
following terms shall have the respective meanings shown:
"AFFILIATE" shall mean, with respect to any Person, any of (a)
a director or executive officer of such Person, (b) a spouse, parent, sibling or
descendant of such Person (or spouse, parent, sibling or descendant of any
director or executive officer of such Person), and (c) any other Person that,
directly or indirectly, controls or is controlled by or is under common control
with such Person, including, without limitation, investment partnerships or
funds that are sponsored, managed or controlled, directly or indirectly, by such
Person or its Affiliates. For the purpose of this definition and the definition
of Independent Third Party, "control" (including with correlative meanings, the
terms "controlling," "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or agency or otherwise.
"BRIDGE LOAN AGREEMENT" shall mean the Bridge Loan Agreement
dated as of April 21, 1999 among the Company, the Guarantors referred to
therein, Nationsbridge, L.L.C., as an arranger, co-agent, initial lender and
administrative agent, Chase Securities, Inc., as an arranger, the Chase
Manhattan Bank, as a co-agent and initial lender, and the other lenders referred
to therein as such agreement may be amended, restated or otherwise modified from
time to time.
"BUSINESS DAY" means any day which is neither a Saturday or
Sunday nor a legal holiday on which banks are authorized or required to be
closed in New York City.
"CLASS D COMMON" means collectively the Class D-1 Common and
the Class D-2 Common.
"CLOSING" shall mean the closing of the transactions
contemplated by the Recapitalization Agreement.
"CLOSING DATE" means the date on which the transactions
contemplated by the Recapitalization Agreement shall be consummated.
"CO-INVESTMENT AGREEMENT" means that certain Co-Investment
Agreement, dated as of March 30, 1990, between Onex TMB Investments Inc., an
Ontario corporation, and J2R Corporation, a Delaware corporation, as amended
from time to time.
"COMMON STOCK" means (i) any Class A Common, Class B Common,
Class C Common, Class D-1 Common, Class D-2 Common and Class E Common purchased,
issued to or otherwise acquired by any Stockholder, (ii) the Warrants and any
Class A Common issuable pursuant
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to the Warrant held by any Stockholder, and (iii) any equity securities issued
or issuable, directly or indirectly, with respect to the securities referred to
in clause (i) or (ii) above by way of stock dividend or stock split, exchange or
conversion, or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular shares
constituting Common Stock, such shares will continue to be Common Stock in the
hands of any holder of such Common Stock (other than purchasers pursuant to a
Public Sale).
"COMPANY" includes any successor to the Company resulting from
any merger, consolidation or other reorganization of or including the Company.
"ESCROW AGENT" means U.S. Bank Trust National Association or
any subsequent escrow agent who holds the Warrants in an escrow account.
"INDEPENDENT THIRD PARTY" means any Person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Company's common stock on a fully-diluted basis (a "5% Owner") , who is not
controlling, controlled by or under common control with any such 5% Owner and
who is not the spouse or descendent (by birth or adoption) of any such 5% Owner
or a trust for the benefit of such 5% Owner and/or such other Persons.
"INSTITUTIONAL INVESTOR" means a "qualified institutional
buyer" as defined in Rule 144A promulgated under the Securities Act (codified at
17 C.F.R. Section 230.144A (1990)).
"NML" means The Northwestern Mutual Life Insurance Company, a
Wisconsin corporation.
"OTHER STOCKHOLDER" means any holder of Common Stock which is
bound by and subject to this Agreement other than (i) Onex and its Affiliates
and (ii) the transferees of Onex or its Affiliates.
"PERSON" means an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
"PUBLIC COMPANY" means a company which has effected a Public
Offering.
"PUBLIC OFFERING" means a public offering and sale of Common
Stock pursuant to an effective registration statement under the Securities Act.
"PUBLIC SALE" means any sale of Common Stock to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
(or any similar provision then in force) adopted under the Securities Act.
"QUALIFIED PUBLIC OFFERING" means the sale in an underwritten
public offering
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registered under the Securities Act of shares of the Common Stock consisting of
at least 20% of the Common Stock determined on a fully diluted basis.
"SALE OF THE COMPANY" means the sale of the Company to an
Independent Third Party or a group of Independent Third Parties pursuant to
which such party or parties acquire (i) capital stock of the Company possessing
the voting power to elect a majority of the Company's board of directors
(whether by merger, consolidation, recapitalization, reorganization or sale of a
majority of the Company's outstanding Common Stock and Common Stock equivalents)
or (ii) all or substantially all of the Company's consolidated assets.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"STOCKHOLDER" means any holder of Common Stock or Warrant
(other than the Escrow Agent) which is bound by and subject to this Agreement.
"SUBSIDIARY" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control a majority of the managers or general
partners of such limited liability company, partnership, association or other
business entity.
"WARRANTS" shall mean the warrant issued pursuant to the
Warrant Agreement by and between ▇.▇. ▇▇▇▇▇▇ Automotive Castings, Inc. and U.S.
Bank Trust National Association dated on the date hereof.
"WINDWARD" means Windward Capital Associates, L.P.
"WINDWARD GROUP" means Windward/Metropolitan L.L.C. and
Windward/Park WACI, L.L.C. and their respective Affiliates.
ARTICLE 2
Board of Directors of the Company
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2.1 BOARD OF DIRECTORS. (a) From and after the Closing Date
and until the provisions of this Article 2 cease to be effective, each of the
Stockholders will vote all of its voting stock of the Company, and will take,
and will cause any Persons controlled by it to take, all other necessary or
desirable actions within its control (in its capacity as a stockholder of the
Company), and the Company will take all necessary or desirable action within its
control, in order to cause:
(i) the authorized number of directors on the Company's
board of directors (the "Board") to be established at seven (7) directors;
(ii) the election to the Board of:
(A) three (3) representatives designated by J2R (by
written notice to the Company, which shall furnish copies of such
notice to each other party hereto), two of whom shall initially be S.A.
(▇▇▇▇) ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "J2R DIRECTORS");
(B) two (2) representatives designated by Onex (by
written notice to the Company, which shall furnish copies of such
notice to each other party hereto), who shall initially be ▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "ONEX DIRECTORS");
(C) subject to paragraph (v) below, one (1)
representative designated by Windward (by written notice to the
Company, which shall furnish copies of such notice to each other party
hereto), who shall initially be ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "WINDWARD
DIRECTOR"); and
(D) subject to paragraph (vi) below, one (1)
representative designated by NML (by written notice to the Company,
which shall furnish copies of such notice to each other party hereto),
who shall initially be A. ▇▇▇▇ ▇▇▇▇▇▇▇ (the "NML DIRECTOR").
(iii) at the written request of a Stockholder with the right
to designate a Board representative, the removal from the Board (with
or without cause) of any representative designated by such Stockholder,
but only upon such written request and under no other circumstances;
(iv) in the event that any representative designated hereunder
by a Stockholder for any reason ceases to serve as a member of the
Board during his or her term of office, the resulting vacancy on the
Board to be filled by a representative designated by such Stockholder
as provided hereunder;
(v) the rights of Windward to designate a Windward Director
under this Section 2.1(a) shall terminate at such time as the Windward
Group holds in aggregate less than 5% of the total outstanding Common
Stock of the Company; and
(vi) the rights of NML to designate a NML Director under this
Section 2.1(a) shall terminate at such time as the NML holds in
aggregate less than 5% of the total outstanding Common Stock of the
Company.
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(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the meetings of
the Board and any committee thereof.
(c) The provisions of this Article 2 will terminate
automatically and be of no further force and effect upon a Qualified Public
Offering.
ARTICLE 3
Covenants of the Company and Other Matters
3.1 TRANSACTIONS WITH AFFILIATES. Neither the Company nor any
of its Subsidiaries shall enter into any material transaction with a Stockholder
or any of its Affiliates, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, but excluding any dividend
or other distribution to Stockholders in their capacity as such unless either:
(a) the terms of the transaction are no less favorable to the
Company or its Subsidiaries, as the case may be, than are obtainable by it in a
comparable arm's length transaction with a Person not such Stockholder or any of
its Affiliates, or
(b) the Stockholders holding at least a majority of the shares
of Common Stock held by all Stockholders (excluding for purposes of determining
a majority, such Stockholder and its Affiliates) give their written consent
thereto.
The Company shall give notice to the Stockholders at least 20
business days in advance of any such transaction. The Company may, however,
without complying with this Section 3.1, pay an annual management and advisory
fee to Hidden Creek Industries, a New York general partnership ("HCI") (or any
successor thereto), pursuant to the Management Agreement, dated as of the date
hereof, by and between the Company and HCI. Moreover, the Stockholders
acknowledge that the Company or the Company will pay HCI a $3,000,000 closing
fee upon the consummation of the transactions contemplated herein.
3.2 MERGERS, CONSOLIDATIONS, ETC. The Company shall not merge
or consolidate with another corporation, enter into a share exchange, or sell
all or substantially all of its assets to another Person, if pursuant thereto
any Stockholder shall receive securities as full or partial consid eration for
its Common Stock, unless all holders of a class of Common Stock (a) shall have
the right to receive the same securities as each holder of such class of Common
Stock, in each case in propor tion to their respective holdings of Common Stock
(assuming the conversion, exchange or exercise of all securities convertible
into or exchangeable, or exercisable for Common Stock) and on terms consistent
with the rights and preferences set forth in the Company's Certificate of
Incorporation as is reasonably determined by the holders of at least a majority
of the shares of Class A Common and the Class D Common voting as a separate
class, the holders of a majority of the Class B Common voting as a separate
class, and the holders of at least a majority of the shares of Class C Common
voting as a separate class, and if such classes cannot agree, by an investment
banking firm of national
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recognition mutually agreeable to such parties, whose determination shall be
conclusive, and (b) who are parties to this Agreement enter into a stockholders
agreement containing substantially similar rights and preferences as set forth
in this Agreement.
3.3 BY-LAWS. The by-laws of the Company shall at all times
provide, to the extent permitted by law, that:
(a) notice of every meeting of the Board shall be given, in
the same manner as is provided in Section 8.3, to each director not less than
one day prior to the meeting;
(b) a special meeting of the Board may be called, to be held
at the registered office of the Company, by holders of at least 20% of the
Company's Common Stock, upon at least 10 days' notice, given in the same manner
as is provided in Section 8.3;
(c) any director may require the Company, to include in the
business to be discussed at the meeting any one or more proposals submitted by
such director;
(d) directors may participate in directors' meetings by
telephone;
(e) directors may take action by their unanimous written
consent;
(f) notice of any meeting may be waived by any director;
and
(g) any action to be taken by the Board will require at least
a majority of the directors of the Company.
3.4 FINANCIAL INFORMATION. So long as any Stockholder owns any
Common Stock, the Company shall furnish to such Stockholder the following;
provided that with respect to Stockholders who are a member of the Windward
Group, the Company shall furnish to Windward the following:
(a) as soon as available, and in any event within 90 days
after-the end of each fiscal year of the Company, duplicate copies of the
audited financial statements of the Company and its Subsidiaries reported on by
a firm of independent certified public accountants of national recognition,
including a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such fiscal year, and consolidated statements of income and of cash
flow of the Company and its Subsidiaries for such fiscal year and the related
footnotes thereto, and stating in comparative form the figures as of the end of
and for the previous fiscal year, accompanied by a report thereon contain ing an
opinion by such independent certified public accountants that the financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied, except as may be noted otherwise; provided that
with respect to fiscal year 1999, such statements shall only cover a period
beginning on the date hereof;
(b) as promptly as practicable, and in any event within
45 days after the end of
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each fiscal quarter of the Company, duplicate copies of its quarterly, unaudited
financial statements prepared by the Company, including a consolidated balance
sheet of the Company and its Subsidiaries as at the end of such fiscal quarter,
and consolidated statements of income and of cash flow of the Company and its
Subsidiaries for such fiscal quarter and year to date period, and stating in
comparative form the figures as of the end of and for the corresponding fiscal
quarter and year to date period in the previous fiscal year, in all cases such
financial statements shall have been prepared in accordance with generally
accepted accounting principles consistently applied, except as otherwise noted;
(c) copies of all press releases issued by the Company;
(d) except as otherwise required by law or judicial order or
decree or by any governmental agency or authority, each Stockholder entitled to
receive information regarding the Company and its Subsidiaries under this
Section 3.4 shall use its best efforts to maintain the confidentiality of all
nonpublic information obtained by it hereunder which the Company has reasonably
designated as proprietary or confidential in nature; provided that each such
Stockholder may, to the extent required by law, regulatory authority or rating
agency, disclose such information in connection with the sale or transfer of
Common Stock if such Stockholder's transferee agrees in writing to be bound by
the provisions hereof; and
(e) such additional financial information as may be reasonably
requested by any Stockholder who then has a right to designate a member of the
Board pursuant to Section 2.1 hereof.
3.5 ACTION BY STOCKHOLDERS. The Stockholders shall from time
to time vote their Common Stock and take such actions reasonably within their
control as may be required in order to cause the Company:
(a) to comply with the provisions of this Agreement; and
(b) to take all other actions required or permitted to be
taken by the Company in order to permit the Company to purchase Common Stock
pursuant to the terms of this Agreement (which may include the revaluation of
assets), provided such action is not contrary to any applicable law and such
action would not cause a default by the Company or any of its Subsidiaries under
any agreements of the Company or any of its Subsidiaries.
3.6 ACTION BY THE COMPANY TO PURCHASE STOCK. The Company shall
take all actions necessary to permit the purchase of Common Stock pursuant to
this Agreement (which may include the revaluation of assets), provided such
action is not contrary to any applicable law and such action would not cause a
default by the Company or any Subsidiary under any agreements with the Company
or any Subsidiary.
3.7 CONSENTS TO STOCK TRANSFERS PURSUANT TO THIS AGREEMENT.
The Stockholders hereby consent, to the extent required by the Company's
Certificate of Incorporation, to any transfer of Common Stock made as permitted
by this Agreement and shall execute any further formal
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consents which counsel for the Company may determine to be reasonably necessary
for that purpose.
3.8 STOCK ACQUIRED PURSUANT TO WARRANTS AND OPTIONS. The
Stockholders hereby agree that all Common Stock acquired by any of them whether
pursuant to the exercise of all warrants, rights or options granted, or
otherwise issued by the Company to the Stockholders, either prior to or
following the date of this Agreement, shall be subject to the terms of this
Agreement in all respects.
3.9 AMENDMENTS TO CERTIFICATE OF INCORPORATION. No Stockholder
shall, nor shall it permit any of its Affiliates to, vote any Common Stock owned
by it or over which it has the power to vote in favor of any amendment to or
restatement of the Company's Certificate of Incorporation, if such amendment or
restatement would alter the rights and preferences of any class of Common Stock
held by the Stockholders so as to affect them adversely, but shall not so affect
the other classes of Common Stock, without the express consent of the holders of
at least 80% of the shares of the adversely affected class of Common Stock held
by such Stockholders.
ARTICLE 4
Restrictions on Transfer of Common Stock
4.1 TRANSFER OF STOCKHOLDER STOCK. No Other Stockholder shall
sell, transfer, assign, pledge, exchange or otherwise dispose of (a "TRANSFER")
any interest in Common Stock except pursuant to the provisions of this Article
4, Article 5, Article 7, or pursuant to a Public Sale; provided that as between
Onex and J2R, the provisions of the Co-Investment Agreement will govern any
"transfer" (as defined for this purpose in the Co-Investment Agreement) and the
provisions of Article 4 and Article 5 of this Agreement will not apply. Each
Other Stockholder agrees not to consummate any Transfer pursuant to the
provisions of Section 4.2 until at least the minimum number of days required by
Section 4.2 after the delivery of such Other Stockholder's Offer Notice (as
hereinafter defined), unless the parties to the Transfer have been finally
determined pursuant to this Article 4 prior to the expiration of such period.
4.2 FIRST OFFER RIGHT.
(a) In addition to Transfers pursuant to Article 5, Article 7,
or a Public Sale, any Other Stockholder may Transfer an interest in Common Stock
by complying with this Section 4.2. At least 45 days prior to making any
Transfer by any Other Stockholder of any Common Stock pursuant to a bona fide
offer from an Independent Third Party (other than Pursuant to Article 5 and
Article 7 or a Public Sale), the transferring Other Stockholder (the
"TRANSFERRING STOCKHOLDER") will deliver a written notice (the "OFFER NOTICE")
to the Stockholders and to the Company. The Offer Notice will disclose the
proposed number of shares of Common Stock (the "SUBJECT SHARES") to be
transferred, identity of the proposed purchasers, and, in reasonable detail, the
proposed terms and conditions of the Transfer. First, Onex may elect to purchase
all (but not less than all) of the Common Stock specified in the Offer Notice at
the price in cash and on the terms specified therein
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by delivering written notice of such election to the Transferring Stockholder as
soon as practical but in any event within 20 days after the delivery of the
Offer Notice. If Onex has not elected to purchase all of the Subject Shares
within such 20-day period, the Company may elect to purchase all (but not less
than all) of the Subject Shares at the price in cash and on the terms specified
therein by delivering written notice of such election to the Transferring
Stockholder as soon as practicable, but in any event within 30 days after
delivery of the Offer Notice. If neither Onex nor the Company has elected to
purchase all of the Subject Shares within such 30-day period, the Stockholders
other than Onex and the Transferring Stockholder (collectively, the "FIRST OFFER
STOCKHOLDERS") may elect to purchase all (but not less than all) of the Subject
Shares at the price in cash and on the terms specified therein, on a pro rata
basis determined by the number of shares of Common Stock then held by the First
Offer Stockholders electing to make such purchase, by delivering written notice
of such election to the Transferring Stockholder as soon as practicable, but in
any event within 45 days after delivery of the Offer Notice; provided that if
less than all of the First Offer Stockholders elect to make such purchase, the
remaining Subject Shares shall be reoffered to those Stockholders who have
elected to make such purchase until an election to purchase all of the Subject
Shares has been made. If Onex, the Company or the First Offer Stockholders have
elected to purchase all (but not less than all) of the Subject Shares from the
Transferring Stockholder, the transfer of such shares will be consummated as
soon as practical after the delivery of the election notice, but in any event
within 75 days after delivery of the Offer Notice (the "CONSUMMATION PERIOD").
If any of the Subject Shares to be purchased by any holder of any Class D-2
Common are voting securities, at the request of any holder of Class D-2 Common
the Company will exchange for such securities other securities which are
non-voting, convertible into such securities on the same terms as those on which
the Class D-2 Common is convertible into Class D-1 Common and otherwise
identical to such securities in all respects. If neither Onex , the Company nor
the First Offer Stockholders have elected to purchase all of the Subject Shares
being offered or if Onex, the Company or the First Offer Stockholders elect to
purchase all of the Subject Shares but do not consummate the purchase within the
Consummation Period, the Transferring Stockholder may, within 45 days after the
expiration of the Consummation Period, transfer the Subject Shares to one or
more third parties at a price in cash and on other terms no more favorable to
the transferees than offered to Onex, the Company and the First Offer
Stockholders in the Offer Notice; provided that prior to such Transfer, such
transferees shall have agreed in writing to be bound by the provisions of this
Agreement. Any Subject Shares not transferred within such 45-day period will be
subject to the provisions of this Section 4.2(a) upon subsequent transfer and
the Transferring Stockholder will not be entitled to deliver another Offer
Notice for 90 days after the Transferring Stockholder has again become subject
to this Section 4.2(a).
(b) The Stockholders may transfer any of its rights to
purchase the Subject Shares under Section 4.2(a) to any of its Affiliates;
provided that prior to such transfer, such Affiliate shall have agreed in
writing to be bound by the provisions of this Agreement.
4.3 PERMITTED TRANSFERS.
(a) The restrictions contained in this Article 4 and in
Article 5 shall not apply with respect to (i) any Transfer of Common Stock by
any Stockholder to or among its Affiliates or (ii) any Transfer of Common Stock
by any Stockholder to any other Stockholder or (iii) any Transfer of a
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Warrant or of Common Stock issued thereto to a lender under the Bridge Loan
Agreement or any Affiliate thereof; provided that the restrictions contained in
this Article 4 and in Article 5 shall continue to be applicable to the Common
Stock after any such Transfer and provided further that the transferees of such
Common Stock shall have agreed in writing to be bound by the provisions of this
Agreement affecting the Common Stock so Transferred.
(b) In the case of any Transfer pursuant to Section 4.3(a)(i)
above, a transferee may at any time, and shall forthwith in the event that such
transferee ceases to be an Affiliate of the transferor (other than a transferee
pursuant to Section 4.3(a)(ii) above), transfer back to such transferor all of
the Common Stock held by it.
ARTICLE 5
Tag-Along and Drag-Along Rights
5.1 TAG-ALONG RIGHT.
(a) Except as provided in Section 5.3, if at any time Onex or
its Affiliate proposes to Transfer (other than a pledge) any or all of its
Common Stock to any person other than an Affiliate (a "DISPOSITION"), Onex or
its Affiliates, as the case may be (the "DISPOSING STOCKHOLDER"), shall, at
least 30 days prior to the consummation of the Disposition, give notice (a
"DISPOSITION NOTICE") to the Other Stockholders (the "NONDISPOSING
STOCKHOLDERS") describing the terms and conditions of the Disposition in
reasonable detail, including the proposed price per share, the method of
payment, the anticipated closing date and the identity of the proposed
purchaser, and stating that each of the Nondisposing Stockholders may elect to
participate in such Disposition, at a price per share and on other terms
consistent with the rights and preferences of the Common Stock set forth in the
Company's Certificate of Incorporation (but in any case determined without
consideration of voting rights or lack thereof) as is reasonably determined by
the holders of at least a majority of the shares of Class A Common and Class D
Common voting as a separate class, the holders of at least a majority of the
shares of Class B Common voting as a separate class, and the holders of at least
a majority of the shares of Class C Common voting as a separate class, and if
such classes cannot agree, by an investment banking firm of national recognition
mutually agreeable to such parties, whose determination shall be conclusive.
(b) The election pursuant to subsection (a) shall be exercised
by notice to the Disposing Stockholder given within the time period specified in
the Disposition Notice, which time period shall not be less than 10 Business
Days after such Disposition Notice is given. If any Nondisposing Stockholder
gives notice of its election to sell, it shall be obligated to sell the Common
Stock specified in its notice upon the terms and subject to the conditions
specified in subsection (a) to the proposed purchaser, conditional upon the
closing of the Disposition.
(c) If the purchaser pursuant to the Disposition has a
specified limited number of shares of Common Stock which it is willing to
purchase in the aggregate, each of the Nondisposing Stockholders shall have the
right to sell to the purchaser up to that number of shares
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of Common Stock owned by such Nondisposing Stockholder which is in the same
proportion to its total ownership of Common Stock as the number of shares of the
Common Stock being sold by the Disposing Stockholder is to the Disposing
Stockholder's total ownership of Common Stock (in each case, assuming the
conversion, exchange or exercise of all securities convertible into or
exchangeable or exercisable for Common Stock).
(d) If any Nondisposing Stockholder does not elect to sell the
full number of shares of Common Stock which it is entitled to sell pursuant to
this Section 5.1, or if the aggregate number of shares of the Company's Common
Stock which the Nondisposing Stockholders and any other stockholders of the
Company are entitled to sell is less than the number of shares of the Company's
Common Stock which the purchaser is willing to purchase, the remaining
Nondisposing Stockholders shall be entitled to sell additional shares of Common
Stock pro rata (as described in subparagraph (c) above) to the number of shares
of Common Stock owned by each of them to make up the aggregate number of shares
of Common Stock the purchaser is willing to purchase.
(e) Prior to transferring its Common Stock pursuant to this
Section 5.1, the Disposing Stockholder shall cause the prospective transferee to
be bound by this Agreement.
5.2 DRAG-ALONG RIGHT.
(a) If the Board approves a Sale of the Company (the "APPROVED
SALE"), the Stockholders will consent to and raise no objections to the Approved
Sale of the Company and (i) if the Approved Sale of the Company is structured as
a sale of stock, the Stockholders will agree to sell all of their Common Stock
and rights to acquire Common Stock on the terms and conditions approved by the
Board, (ii) if the Approved Sale of the Company is structured as a merger,
consolidation or other reorganization, the Stockholders will vote in favor
thereof (to the extent they are entitled to vote) and will not exercise any
dissenters' rights of appraisal they may have under Delaware law, and (iii) if
the Approved Sale of the Company is structured as a sale of all or substantially
all of the Company's consolidated assets, the Stockholders will vote in favor
thereof (to the extent they are entitled to vote). The Stockholders will use
their best efforts to cooperate in the Approved Sale of the Company and will
take all necessary and desirable actions in connection with the consummation of
the Approved Sale of the Company as are reasonably requested by the Board,
including, but not limited to, the provision of representations and warranties
or indemnifications; provided that the Stockholders shall not be required to
incur any out-of-pocket expenses in connection with such Approved Sale of the
Company which are not reimbursed by the Company; and provided further that no
Stockholder shall be required to provide substantively different representations
and warranties or indemnification than any other Stockholder and that each
Stockholder's obligations thereunder shall be several and limited to the
proceeds received by such Stockholder in connection with such Approved Sale.
(b) The obligations of the Stockholders with respect to the
Approved Sale of the Company are also subject to the satisfaction of the
following conditions: (i) upon the consummation of the Approved Sale of the
Company, all of the holders of each class of Common Stock will receive the same
form and amount of consideration for their Common Stock as all other holders of
the same
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class of Common Stock, or if any Stockholders are given an option as to the form
and amount of consideration to be received, all holders of the same class of
Common Stock will be given the same option; and (ii) the price per share of
Common Stock will be payable in cash or publicly traded securities and will be
on terms consistent with the rights and preferences set forth in the Company's
Certificate of Incorporation as is reasonably determined by the holders of at
least a majority of the shares of Class A Common and the Class D common voting
as a separate class, the holders of at least a majority of the Class B Common
voting as a separate class, and the holders of at least a majority of the shares
of Class C Common voting as a separate class, and if such classes cannot agree,
by an investment banking firm of national recognition mutually agreeable to such
parties, whose determination shall be conclusive.
(c) If the Company enters into any negotiation or transaction
for which Rule 506 (or any similar rule then in effect) promulgated by the
Securities and Exchange Commission may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), the Stockholders will, at the request of the Board, and to the
extent required to comply with Rule 501, appoint a purchaser representative (as
such term is defined in Rule 501) reasonably acceptable to the Board. If any
Stockholder appoints the purchaser representative designated by the Board, the
Company will pay the fees of such purchaser representative, but if any
Stockholder declines to appoint the purchaser representative designated by the
Board, such holder will appoint another purchaser representative (reasonably
acceptable to the Board), and such holder will be responsible for the fees of
the purchaser representative so appointed.
(e) The provisions of this Section 5.2 shall terminate
automatically and be of no further force and effect upon the consummation of a
Public Offering.
5.3 EXCEPTIONS TO THE TAG-ALONG RIGHT.
(a) At any time when the Company is a Public Company, Onex and
Affiliates shall be entitled during any 90-day period to sell collectively up to
5% of the Common Stock held by Onex and its Affiliates collectively at the
beginning of such period through the facilities of any securities exchange on
which the Common Stock is then listed or quoted in the NASDAQ System or the
over-the-counter market, subject to compliance with applicable law and with the
by-laws and regulations of such exchange or the NASD, if applicable. Any such
sale shall not be subject to the provisions of Section 5.1.
(b) Section 5.1 and Section 4.2 shall not apply to any
sale as part of a Public Offering.
(c) Section 5.1 shall not apply to any Transfer of Common
Stock pursuant to a drag-along right exercised in connection with an Approved
Sale.
5.4 PURCHASER SUBJECT TO THIS AGREEMENT. No Stockholder nor
its Affiliates shall sell any of their Common Stock to any purchaser unless the
purchaser assumes in writing, pro rata with such Stockholder and its Affiliates,
in accordance with the purchaser's and such Stockholder's
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and its Affiliates' (taken together) respective share holdings, all of such
Stockholder's and its Affiliates' obligations under, and agrees to be bound by
(to the extent of such Stockholder's and its Affiliates' obligations), this
Agreement. This Section shall not, however, apply in the case of transfers by
each Stockholder and its Affiliates (a) through the facilities of any securities
exchange on which the shares of Common Stock are then listed or quoted in the
NASDAQ System or the over-the-counter market, or (b) by way of a Public
Offering.
ARTICLE 6
Limited Pre-Emptive Rights
6.1 PRE-EMPTIVE RIGHTS.
(a) Except for issuances of Offered Securities (as defined)
(i) as full or partial consideration in connection with the acquisition of
another business or company, (ii) to the Company's or its Subsidiaries'
employees and directors, (iii) pursuant to a Public Offering, (iv) in connection
with financing arrangements with independent third party lenders, until the
Company effects an initial Public Offering, the Company shall not issue any
shares of stock that have a right to participate generally in dividends or the
distribution of assets upon liquidation, dissolution or the winding up of the
Company ("PARTICIPATING SECURITIES"), any shares of Common Stock or any
securities possessing voting power with respect to the election of directors of
the Company ("VOTING SECURITIES"), or any securities containing or consisting of
options or rights to acquire any shares of Participating Securities, Common
Stock or Voting Securities or any securities exchangeable into Participating
Securities, Voting Securities or Common Stock (other than a dividend on any
outstanding Common Stock or Participating Securities) (collectively, "OFFERED
SECURITIES") to any Person unless the Company shall have first offered such
Offered Securities pro rata to all Stockholders, on the same price, terms and
conditions, pursuant to a written offer (the "OFFER"). The Offer shall specify
the number of Offered Securities proposed to be issued by the Company, the price
per Offered Security and shall limit the time within which the Offer, if not
accepted, will be deemed to be declined (which time shall be not less than 20
days notice or more than 40 days after the date of the Offer). Each Stockholder
shall then have the right, exercisable by notice to the Company within the time
period specified in the Offer, to purchase its "Pro Rata Share" of the Offered
Securities at the price per Offered Security referred to in the Offer. As used
in this Section 6.1, the term "PRO RATA SHARE" of each Stockholder shall mean
the product of (i) the total number of Offered Securities referred to in the
Offer and (ii) a fraction, the numerator of which is the number of shares of
Common Stock held by such Stockholder on the date the Offer is made and the
denominator of which is the aggregate number of the Company's shares of Common
Stock owned by such Stockholder and such other stockholders who are entitled to
purchase a pro rata portion of the Offered Securities (in each case, assuming
the conversion, exchange or exercise of all securities convertible into or
exchangeable or exercisable for Common Stock). In the event the Offered
Securities consist of shares of Class A Common, Class B Common, Class C Common,
, Class D-1 Common, Class D-2 Common or Class E Common, then (i) any shares
offered to the holders of Class A Common pursuant to this Section 6.1 shall be
shares of Class A Common, (ii) any shares
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offered to the holders of Class B Common pursuant to this Section 6.1 shall be
shares of Class B Common, (iii) any shares offered to the holders of Class C
Common pursuant to this Section 6.1 shall be shares of Class C Common, (iv) any
shares offered to holders of Class D-1 Common pursuant to this Section 6.1 shall
be shares of Class D-1 Common, (v) any shares offered to holders of Class D-2
Common pursuant to this Section 6.1 shall be shares of Class D-2 Common, and
(vi) any shares offered to holders of Class E Common pursuant to this Section
6.1 shall be shares of Class E Common. In the event the Offered Securities
consist of any other securities which are voting securities, then the securities
offered to the holders of Class D-2 Common pursuant to this Section 6.1 shall be
non-voting, convertible into such Offered Securities on the same terms as those
on which the Class D-2 Common is convertible into Class D-1 Common and otherwise
identical to such Offered Securities in all respects.
(b) If any Offered Securities shall not be capable of being
offered to or being divided among the Stockholders in proportion to their
holdings of Common Stock at the date of the Offer without division into
fractions, the same shall be offered to or divided among the Stockholders as
nearly as may be in proportion to the number of shares of Common Stock held by
them respectively at the date of the Offer without division into fractions, as
may be determined in good faith by the Board.
(c) The closing of a purchase and sale pursuant to this
Section 6.1 shall be held at the registered office of the Company on the date
specified in the Offer, which date shall be not less than 15 or more than 30
days after the time at which the Offer, if not accepted, will be deemed to be
declined.
(d) If any Stockholder does not elect to purchase the full
number of Offered Securities which it is entitled to purchase pursuant to this
Section 6.1, the balance shall be reoffered pro rata to the remaining
Stockholders that did elect to purchase their full entitlement at the same price
per Offered Security as specified in the Offer and otherwise on such terms as
the Board may in good faith determine until either (i) all of such Offered
Securities shall have been elected to be purchased or (ii) all of the
Stockholders have elected to not purchase such remaining Offered Securities. In
the event any Offered Securities remain the Company may issue such Offered
Securities in compliance with Section 6.1(c) above to such Person or Persons as
the Board may in good faith determine, but, in any event, at the same price per
Offered Security as specified in the Offer.
6.2 NO ADDITIONAL PRE-EMPTIVE RIGHTS. No Stockholder shall
have any preemptive right to acquire Common Stock from the Company except
pursuant to Section 6.1 and, without limiting the generality of the foregoing,
shall have no preemptive rights on a Public Offering of Common Stock by the
Company.
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ARTICLE 7
Transfers of Common Stock and
Appointment of Proxy
7.1 TRANSFERS IN ACCORDANCE WITH THIS AGREEMENT. No
Stockholder shall transfer or suffer to be transferred any or all of its Common
Stock, except as permitted or required by this Agreement. The Company may refuse
to register any transfer of Common Stock on its transfer books if such transfer
is not in accordance with this Agreement and state and federal securities laws.
7.2 LEGENDING OF SHARES CERTIFICATES. All certificates
representing Common Stock held by any Person subject to this Agreement (and by
any permitted or required transferees who are bound by or subject to this
Agreement) shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND CERTAIN
RESTRICTIONS ON THE VOTING OF SUCH SECURITIES CONTAINED IN THE
INVESTOR STOCKHOLDERS AGREEMENT, DATED AS OF APRIL 21, 1999,
AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND
CERTAIN OF THE COMPANY'S STOCKHOLDERS. A COPY OF SUCH INVESTOR
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
7.3 DEFAULT OF DELIVERY.
(a) In the event that any Stockholder, the Company, or any
Stockholder's transferees or assignees (each, a "REQUIRING PARTY") have the
right to acquire Common Stock from any other Stockholder or the right to require
any such other Stockholder to sell its Common Stock to any other Person,
pursuant to the terms of this Agreement (such selling Stockholder hereinafter
referred to as the "Transferor" and such Requiring Party or any other Person to
whom the Transferor is required to transfer Common Stock, as applicable,
hereinafter referred to as the "TRANSFEREE") and the Transferor is not present
at the closing, or is present but for any reason fails to produce and deliver to
the Transferee the certificates or other instruments representing any of the
Common Stock being transferred, then the cash purchase price, as and when
payable, may be deposited into a special account in the name of the Company at a
branch of the Company's bankers and any other consideration permitted or
required to be delivered in satisfaction of the purchase price shall be
deposited with the Company. Such deposits shall constitute valid and effective
payment to the Transferor of the purchase price for the Common Stock being
transferred notwithstanding the fact that the Transferor may have voluntarily
attempted to encumber or dispose of any of the Common Stock contrary to the
terms hereof, or that one or more certificates or other evidences of ownership
of such Common Stock may have been delivered to any other Person. From and after
the date of such deposits (even though the share certificates in the name of the
Transferor have not been
- 16 -
delivered to the Transferee), the purchase and transfer of the Common Stock
shall be deemed to have been fully completed and all right, title, benefit and
interest of the Transferor in and to all such Common Stock, both at law and in
equity, shall be conclusively deemed to have been transferred and assigned to
and become vested in the Transferee and the Transferee will have the right to
request that the Company enter the transfer into the stock register and the
Company shall be entitled to so enter the transfer.
(b) Where the Transferee has made a deposit in accordance with
subsection (a), the Transferor shall be entitled to receive the cash purchase
price of the Common Stock deposited with the Company's bankers, and to receive
any other consideration deposited with the Company, upon delivery to the Company
of (i) the certificates or other instruments representing the Common Stock duly
endorsed for transfer and (ii) any other document required to be delivered by
the Transferor at closing, including, without limitation, the release or
discharge of any encumbrance relating to the Common Stock and stock transfer
stamps, if necessary.
7.4 DISTRIBUTIONS UPON SALE OF THE COMPANY. In the event of a
sale or exchange by the Stockholders of all or substantially all of the Common
Stock held by the Stockholders, the Stockholders shall receive the same portion
of the aggregate consideration from such sale or exchange that such Stockholders
would have received if such aggregate consideration had been distributed by the
Company in complete liquidation.
ARTICLE 8
Representations and Warranties
of the Company.
The Company hereby represents and warrants to the Stockholders
that as of the Closing:
8.1 ORGANIZATION, ETC. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to carry
on its businesses as now conducted and presently proposed to be conducted and to
carry out the transactions contemplated by this Agreement, except where the
failure to have such power and authority would not have a material adverse
effect upon the business or financial condition of the Company.
8.2 CAPITAL STOCK AND RELATED MATTERS.
(i) Immediately following the Closing, (a) the authorized
capital stock of the Company will consist of 20,000 shares of Class A Common,
30,000 shares of Class B Common, 2,000 shares of Class C Common, 15,000 shares
of Class D-1 Common, 7,500 shares of Class D-2 Common, and 1,000 shares of Class
E Common and (b) the Company will have issued, and there will be outstanding,
6,998.4380 shares of Class A Common, 21,367.6964 shares of Class B
- 17 -
Common, 7.1700 shares of Class C Common, 6,885.1466 shares of Class D-1 Common,
7,122.5655 shares of Class D-2 Common, and 4.7009 shares of Class E Common.
(ii) Immediately following the Closing, except for the
Warrants, the Company will not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock, nor will it
have outstanding any rights, subscriptions, warrants, agreements, commitments or
options to subscribe for or to purchase any capital stock or any stock or
securities convertible into or exchangeable for any capital stock, except as
contemplated in the Certificate of Incorporation. Immediately following the
Closing, all of the outstanding shares of the Company's capital stock will have
been duly authorized, and upon payment therefore will be validly issued and will
be fully paid and nonassessable.
8.3 AUTHORIZATION; NO BREACH. The execution, delivery and
performance of this Agreement, and all other agreements and transactions
contemplated hereby and thereby have been duly authorized by the Company. This
Agreement constitutes a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to the availability of equitable remedies
and to the laws of bankruptcy and other similar laws affecting creditors' rights
generally. The execution and delivery by the Company of this Agreement and all
other agreements and instruments contemplated hereby and thereby to be executed
by the Company do not and will not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon the Company's capital stock or assets pursuant to, (iv) give any third
party the right to accelerate any obligation under, (v) result in a violation
of, or (vi) require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court or administrative or
governmental body (other than in connection with certain state and federal
securities laws) or any other third party pursuant to, the Certificate of
Incorporation or the Bylaws, or any law, statute, rule, regulation, instrument,
order, judgment or decree to which the Company is subject or any agreement or
instrument to which the Company is a party, or by which its assets are bound,
except where the existence of any such conflict, breach, default, right to
accelerate or violation, or the creation of any such lien, security interest,
charge or encumbrance, or the failure to obtain, take or make any such
authorization, consent, approval, exemption, other action, notice or filing,
could not reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the financial condition, operating results, assets,
operations or business prospects of the Company and its Subsidiaries taken as a
whole.
ARTICLE 9
Miscellaneous
9.1 VOTING AGREEMENT.
(a) The Other Stockholders (other than Stockholders who are
members of the Windward Group) shall at all times vote their Common Stock (to
the extent they are entitled to vote the same) as directed by Onex, or in the
same manner as the Common Stock held by Onex is voted, on the designation of
director representatives, on the election of directors and, with the exception
- 18 -
of NML, on all other matters which are submitted to a vote (or consent in lieu
of voting) of the Company's stockholders and on which such Common Stock is
entitled to vote, and for this purpose, shall execute and deliver to Onex (or
its designees) proxies to make such designations and to vote such Common Stock
in the same manner as directed by Onex or as the Common Stock held by Onex is
voted. To the extent permitted by law and for all purposes of this Agreement,
each Other Stockholder (other than Stockholders who are members of the Windward
Group), by its execution of this Agreement, irrevocably constitutes and appoints
the Person who is at any time the president of Onex, its proxy to vote all of
its Common Stock at any meeting of stockholders of the Company, or to give
consent in lieu of voting on the designation of directors, representatives, or
the election of directors and, with the exception of NML, on any matter which is
submitted for a vote or consent to the stockholders and on which such Common
Stock is entitled to vote (except to the extent such vote or consent would
violate any applicable law and except with respect to stockholder voting on the
merger or consolidation of the Company with another corporation or the sale of
all or substantially all of the Company's assets), provided that such Common
Stock is voted or consent is given with respect to it in the same manner as the
Common Stock held by Onex. The proxies and powers granted by such Other
Stockholder pursuant to this Article 9 are coupled with an interest.
Notwithstanding anything contained in this paragraph, such Stockholder's Common
Stock shall not, except with the express consent of such Stockholder, be voted
in favor of any resolution the effect of which will be to change such
Stockholder's Common Stock or Onex's Common Stock, or convert or exchange such
Stockholder's Common Stock or Onex's Common Stock into or for different
securities, unless in every such case such Stockholder's Common Stock and Onex's
Common Stock are thereby changed identically or converted into or exchanged for
the same type of securities pro rata (except in no event shall the Class D-2
Common or any other nonvoting securities issued as contemplated by this
Agreement to holders of Class D-2 Common be amended to become voting securities
and in no event shall the terms on which Class D-2 Common or any such securities
are convertible into voting securities be amended, except with the consent of
the holders of a majority of the outstanding shares of Class D-2 Common
originally issued pursuant to the Recapitalization Agreement).
(b) Each Other Stockholder represents that he has not granted
and is not a party to any proxy, voting trust or other agreement which is
inconsistent with or conflicts with the provisions of this Agreement, and no
such holder of Common Stock shall grant any proxy or become party to any voting
trust or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement.
(c) The voting agreement set forth in this Section 9.1 shall
terminate upon the occurrence of a Qualified Public Offering.
9.2 ACKNOWLEDGMENT. The parties hereto acknowledge that,
pursuant to the Company's Certificate of Incorporation, and except as expressly
set forth in this Agreement, the Class A Common, Class B Common, Class C Common,
Class D-1 Common and Class E Common will vote together as a single class, the
Class D-2 Common shall not vote, and none of the classes of Common Stock will be
entitled to a separate class vote, except as required by law.
- 19 -
9.3 NOTICES. All notices, consents and other communications
required or permitted to be given under or by reason of this Agreement shall be
in writing, shall be delivered personally or by telex or telecopy as described
below or by reputable overnight courier, and shall be deemed given on the date
on which such delivery is made. If delivered by telex or telecopy, such notices
or communications shall be confirmed by a registered or certified letter (return
receipt requested), postage prepaid. Any such delivery shall be addressed to the
intended recipient at the following addresses (or at such other address for a
party as shall be specified by such party by like notice to the other parties):
(a) if to J2R or the Company:
c/o Hidden Creek Industries
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Onex:
Onex Investment Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to Windward:
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Windward Capital Partners
1177 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(d) The Northwestern Mutual Life Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any other person which becomes a party to this
Agreement in accordance with the terms hereof, at the address for delivery of
notices or communications given to all other parties by such party at such time.
Notices to any director of the Company shall be given:
(i) by telephone or delivery in person to such director at the
address (or telephone number) designated by him from time to time by notice to
Onex and the Company (in the case of directors designated by any Other
Stockholder) or to the Other Stockholders and the Company (in the case of
directors designated by Onex), confirmed by letter to such address; or
(ii) by registered mail with postage prepaid. If a director
has not designated an address, notice to such director may be given to his
address last known to the Company.
9.4 EXTENDED MEANINGS. In this Agreement, words importing the
singular number include the plural and vice versa and words importing gender
include all genders.
9.5 CAPTIONS. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.
9.6 APPLICABLE LAW. The corporate law of Delaware will govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity and interpretation of
this Agreement will be governed by the internal law, and not the law of
conflicts, of the State of New York.
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9.7 TIME. Time shall be of the essence of this Agreement.
9.8 SEVERABILITY. The provisions of this Agreement are
intended to be and shall be deemed severable. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.
9.9 CURRENCY. References in this Agreement to monetary amounts
shall be in United States currency unless otherwise expressly stated.
9.10 ARBITRATION PROCEDURE.
(a) The parties hereto agree that the arbitration procedure
set forth below shall be the sole and exclusive method for resolving and
remedying claims or disputes arising out of the provisions of this Agreement
(the "DISPUTES"). Nothing in this Section 9.10 shall prohibit a party hereto
from instituting litigation to enforce any Final Determination (as defined
below) or the provisions of this Section 9.10. The parties hereto hereby agree
and acknowledge that, except as otherwise provided in this Section 9.10 or in
the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA") as in effect from time to time, the arbitration procedures and any Final
Determination hereunder shall be governed by, and shall be enforced pursuant to
the Uniform Arbitration Act.
(b) In the event that any party hereto asserts that there
exists a Dispute, such party shall deliver a written notice to each other party
hereto involved therein specifying the nature of the asserted Dispute and
requesting a meeting to attempt to resolve the same. If no such resolution is
reached within ten business days after such delivery of such notice, the party
delivering such notice of Dispute (the "DISPUTING PARTY") may, within 45
business days after delivery of such notice, commence arbitration hereunder by
delivering to each other party hereto involved therein (collectively, the "OTHER
PARTIES") a notice of arbitration (a "NOTICE OF ARBITRATION"). Such Notice of
Arbitration shall specify the matters as to which arbitration is sought, the
nature of any Dispute, the claims of each party to the arbitration and shall
specify the amount and nature of any damages, if any, sought to be recovered as
a result of any alleged claim, and any other matters required by the Commercial
Arbitration Rules of the American Arbitration Association as in effect from time
to time to be included therein, if any.
(c) The Disputing Party, on the one hand, and the Other
Parties, on the other hand, each shall select one non-neutral arbitrator expert
in the subject matter of the Dispute (the arbitrators so selected shall be
referred to herein as the "DISPUTING PARTY'S ARBITRATOR" and the "OTHER PARTIES'
ARBITRATOR," respectively). In the event that either such party fails to select
an arbitrator as set forth herein within 20 days from the delivery of a Notice
of Arbitration, then the matter shall be resolved by the arbitrator selected by
the other party. The Disputing Party's Arbitrator and the Other Parties'
Arbitrator shall select a third independent, neutral arbitrator expert in the
subject matter of the dispute, and the three arbitrators so selected shall
resolve the matter according to the procedures
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set forth in this Section 9.10. If the Disputing Party's Arbitrator and the
Other Parties' Arbitrator are unable to agree on a third arbitrator within 20
days after their selection, the third arbitration shall be chosen by the
President of the AAA.
(d) The arbitrator(s) selected pursuant to Section 9.10(c)
above will determine the allocation of the costs and expenses of arbitration
based upon the percentage which the portion of the contested amount not awarded
to each party to the arbitration bears to the amount actually contested by such
party. For example, if the Disputing Party submits a claim for $1,000 and if the
Other Parties contest only $500 of the amount claimed by the Disputing Party,
and if the arbitrator(s) ultimately resolves the dispute by awarding the
Disputing Party $300 of the $500 contested, then the costs and expenses of
arbitration will be allocated 60% (i.e., 300 / 500) to the Other Parties and 40%
(i.e., 200 / 500) to the Disputing Party.
(e) The arbitration shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association as in effect from time
to time, except as modified by the agreement of all of the parties to the
arbitration. The arbitrator(s) shall so conduct the arbitration that a final
result, determination, finding, judgment and/or award (the "FINAL
DETERMINATION") is made or rendered as soon as practicable, but in no event
later than 90 business days after the delivery of the Notice of Arbitration nor
later than 10 days following completion of the arbitration. The Final
Determination must be agreed upon and signed by the sole arbitrator or by at
least two of the three arbitrators (as the case may be). The Final Determination
shall be final and binding on all parties and there shall be no appeal from or
reexamination of the Final Determination, except for fraud, perjury, evident
partiality or misconduct by an arbitrator prejudicing the rights of any party to
the arbitration and to correct manifest clerical errors.
(f) The Disputing Party and the Other Parties may enforce any
Final Determination in any state or federal court having jurisdiction over the
Dispute. For the purpose of any action or proceeding instituted with respect to
any Final Determination, each party hereto hereby irrevocably submits to the
jurisdiction of such courts, irrevocably consents to the service of process by
registered mail or personal service and hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may have or hereafter
have as to personal jurisdiction, the laying of the venue of any such action or
proceeding brought in any such court and any claim that any such action or
proceeding brought in any court has been brought in an inconvenient forum.
(g) Any party hereto required to make a payment pursuant to
this Section 8.10 shall pay the party entitled to receive such payment within
three days of the delivery of the Final Determination to such responsible party.
If any party hereto shall fail to pay the amount of any damages, if any,
assessed against it within such three day period, the unpaid amount shall bear
interest from the date of such delivery at the lesser of (i) the prime rate of
interest published by the Board of Governors of the Federal Reserve System as
the "Bank Prime Loan" rate, in effect from time to time (which rate shall be
adjusted on the effective date of each change in such prime rate) plus 2.00% and
(ii) the maximum rate permitted by applicable usury laws. Interest on any such
unpaid amount shall be compounded semi-annually, computed on the basis of a
360-day year consisting of twelve 30-day months and shall be payable on demand.
In addition, such party shall
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promptly reimburse the other party to the arbitration for any and all costs and
expenses of any nature or kind whatsoever (including but not limited to all
attorneys' fees) incurred in seeking to collect such damages or to enforce any
Final Determination.
9.11 ASSIGNMENT. This Agreement shall be binding upon the
parties hereto, all Stockholders and, to the extent expressly provided elsewhere
in this Agreement, their respective permitted transferees and assigns (other
than purchasers of Common Stock pursuant to a Public Sale), together with in
each case all successors, heirs, executors and administrators thereof, and shall
inure to the benefit of the parties hereto, all Stockholders and, to the extent
expressly provided elsewhere in this Agreement, assigns of the Stockholders,
together, in each case, with all successors, heirs, executors and administrators
thereof; provided that a Stockholder may assign its rights to purchase Common
Stock hereunder to one of its Affiliates so long as such Affiliate is, or agrees
to become, a party hereto. The parties hereto agree that the rights of each
Stockholder contained in this Agreement are personal to such Stockholder and may
not be assigned to, and will not inure to the benefit of any transferees of such
Stockholder other than its Affiliates or, as expressly provided herein, the
Company. Except as otherwise provided herein, no party may assign any of its
rights or delegate any of its duties under this Agreement.
9.12 AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
will be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company and the
holders of at least a majority of the shares of voting Common Stock and, to the
extent that any modification, amendment or waiver adversely affects the rights
of the holders of any class, series or sub-class of Common Stock, by the holders
of at least a majority of shares of such adversely affected class, series or
sub-class of Common Stock; provided that no modification, amendment or waiver of
any provision of Section 2.1 above that adversely affects the rights of any
Stockholder shall be effective unless such modification, amendment or waiver is
approved in writing by such Stockholder. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right there after to insist
upon strict adherence to that term or any other term of this Agreement. No
purported waiver shall be effective unless in writing. The waiver by any party
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent or other breach.
9.13 REMEDIES. The Stockholders shall be entitled to enforce
their rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any Stockholder may in its sole discretion apply to any court
of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
9.14 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same
- 24 -
instrument.
9.15 COMPLETE AGREEMENT. This Agreement, the documents
expressly referred to herein (including the Registration Agreement) and other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understanding, agreements
or representations by or among the parties, written or oral, that may be related
to the subject matter hereof in any way, except for the Co-Investment Agreement
which will not be superseded or preempted as between ▇▇▇▇, ▇▇▇ and their
Affiliates.
9.16 WINDWARD AGENCY.
(a) Each member of the Windward Group hereby irrevocably
(subject to the provisions of paragraph (c) below) designates and appoints
Windward as its attorney-in-fact, agent and representative, to act on its behalf
(i) in connection with exercising any of its rights hereunder, performing any of
its duties or obligations hereunder or enforcing any claims or rights on its
behalf under this Agreement, (ii) to investigate, contest, litigate, demand, ▇▇▇
for, collect, recover and receive all claims, debts, monies and other amounts
whatsoever which may hereafter become due to the members of the Windward Group
in connection with this Agreement (including, without limitation, instituting
any action, suit or legal proceeding to enforce any of its rights hereunder) and
to make, execute and deliver receipts, releases, settlements, adjustments and
other discharges therefor, (iii) to defend, settle, adjust, submit to
arbitration or compromise all actions, suits, accounts, reckonings, claims and
demands that may be brought against the members of the Windward Group in
connection with this Agreement, (iv) to amend, supplement or grant any waiver
under this Agreement or any other agreement or document contemplated hereby, (v)
to vote at any annual or special meeting of shareholders, or to take action by
written consent in lieu of such meeting with respect to, all of the shares of
Common Stock owned or held of record by such Stockholder, but only for (vi) in
executing, acknowledging, verifying and/or delivering any and all agreements,
certificates and instruments in connection with taking any of the actions
referred to in clauses (i), (ii), (iii), (iv) and (v) above, and (vii) in doing,
executing and performing any other act, deed, matter or thing, of any kind or
nature whatsoever, that is necessary, appropriate or advisable to enforcing any
claims or rights under this Agreement or performing any of its duties or
obligations hereunder or otherwise representing its interest hereunder; all of
the foregoing actions may be taken in such manner as Windward determines in its
sole discretion to be appropriate, advisable or necessary.
(b) The designation and appointment of Windward referred to in
the previous paragraph (a) shall be deemed to be irrevocable (subject to the
provisions of paragraph (c) below) and coupled with an interest and shall
survive the death, dissolution, bankruptcy, incompetency or legal disability of
any member of the Windward Group. Without limitation to the foregoing and
notwithstanding anything to the contrary in this Agreement, if any payments or
other amounts are received by Windward on behalf of the members of the Windward
Group in connection with this Agreement, Windward shall, after deducting any
expense reimbursement amount with which it may be entitled, distribute such
amounts to the various members of the Windward Group in such manner as Windward
deems reasonably appropriate in light of each member's relevant interests and
the particular circumstances.
- 25 -
(c) Windward (or any successor thereof appointed pursuant to
this subsection (c)) may resign from the performance of all its functions and
duties as agent on behalf of the Windward Group under this Agreement at any time
by giving at least 10 days business days' prior written notice to the other
parties to this Agreement. Such resignation shall take effect upon the
acceptance by a successor agent of its appointment pursuant to this subsection
(c). Upon any such notice of resignation by Windward (or any successor thereof),
the Requisite Member shall appoint a successor agent. If a successor agent shall
not have been appointed within said 10 business day period, Windward (or any
duly appointed successor thereof) shall then appoint a successor who shall serve
as agent on behalf of the Windward Group under this Agreement until such time,
if any, as the Requisite Members appoint a successor agent as provided in this
subsection (c). Windward (or any successor thereof appointed pursuant to this
subsection (c)) may be removed by the Requisite Members and replaced with
another person, at any time and for any reason, upon ten days prior written
notice given by the Requisite Members to the agent then in effect and all other
parties to this Agreement. Upon the appointment of a successor agent hereunder,
references in this Agreement to Windward, acting in its role as agent for the
Windward Group, shall, for all purposes of this Agreement, thereafter mean such
successor agent.
* * * * *
- 26 -
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto, all as of the date first above written.
▇.▇. ▇▇▇▇▇▇ AUTOMOTIVE CASTINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its:
---------------------------------
ONEX American Holdings LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Its:
---------------------------------
J2R PARTNERS III
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:
---------------------------------
BANCAMERICA CAPITAL INVESTORS II, L.P.
By: BancAmerica Capital Management II,
L.P.
Its: General Partner
By: BACM II, GP, LLC
Its: General Partner
By: Signature Illegible
Its: Authorized Member
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its:
---------------------------------
NORWEST EQUITY CAPITAL, L.L.C.
By: Itasca NEC, L.L.C., Managing Member
By: Signature Illegible
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
By: Signature Illegible
Its:
---------------------------------
- 27 -
BCP II AFFILIATES FUND LIMITED
PARTNERSHIP
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
Its: General Partner
By: Signature Illegible
Its:
---------------------------------
▇▇▇▇▇ CAPITAL PARTNERS II LIMITED
PARTNERSHIP
By: ▇▇▇▇▇ Capital Partners Management
Company,L.L.C.
Its: General Partner
By: Signature Illegible
Its:
---------------------------------
▇▇▇▇▇▇▇▇ STREET PARTNERS II
By: Signature Illegible
Its:
---------------------------------
WINDWARD/METROPOLITAN, L.L.C.
By: Signature Illegible
Its:
---------------------------------
WINDWARD/PARK WACI, L.L.C.
By: Signature Illegible
Its:
---------------------------------
---------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
/s/ ▇.▇. ▇▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---- ----------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
U.S. BANK TRUST NATIONAL ASSOCIATION
By: Signature Illegible
Its:
--------------------------------