EXHIBIT 10.1
DESA HOLDINGS CORPORATION
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
Dated as of October 9, 1998
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement") is
entered into as of October 9, 1998, by and among Desa Holdings Corporation, a
Delaware corporation (the "Company"), those persons identified as the JWC
Holders on the signature pages hereof (the "JWC Holders"), those persons
identified as the Management Holders on the signature pages hereof (the
"Management Holders") and those persons identified as the Other Holders on the
signature pages hereof (the "Other Holders").
RECITALS
A. The Company has heretofore issued certain shares of Common Stock (as
hereinafter defined) and certain warrants and options to acquire from the
Company shares of Common Stock.
B. All of the Stockholders desire to enter into this Agreement for the
purpose of regulating certain aspects of the Stockholders' relationships with
one another and with the Company.
C. This Agreement amends in part and restates in its entirety the
Stockholders Agreement dated as of November 26, 1997 among the Company, the JWC
Holders named therein, the Management Holders named therein and the Other
Holders named therein.
AGREEMENT
In consideration of the foregoing recitals and the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement mutually agree as follows:
ARTICLE 1
Definitions
1.1 Definitions. For the purposes of this Agreement, the following
terms shall be defined as follows:
The "1933 Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute thereto, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to time.
The "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute thereto, and the rules and regulations
of the SEC promulgated thereunder, all as the same shall be in effect from time
to time.
-2-
This "Agreement" shall mean this Amended and Restated Stockholders
Agreement, dated as of October 9, 1998, together with all schedules and exhibits
hereto, all as from time to time in effect.
An "Affiliate" of a specified Person (a) shall mean (i) a Person who,
directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with such specified Person, (ii) a
director or executive officer of such specified Person, (iii) a general partner
of such specified Person if such specified Person is a partnership, and (iv) a
manager of such specified Person if such specified Person is a limited liability
company, and, (b) when used with respect to the Company or any Subsidiary of the
Company, shall include any holder of capital stock or any officer or director of
the Company or any Subsidiary of the Company.
"Business Day" shall mean any day, other than a Saturday, Sunday or
legal holiday, on which banks in both New York, New York and Boston,
Massachusetts are permitted to be open for business.
"Common Stock" shall mean shares of Voting Common Stock or Nonvoting
Common Stock.
"Common Stock Equivalents" shall mean, as of any date, (a) all shares
of Common Stock outstanding as of such date and (b) all shares of Common Stock
that may be acquired as of such date pursuant to Vested Options.
The "Company" shall mean Desa Holdings Corporation, a Delaware
corporation, and its successors and assigns.
"Company Notice Period" shall have the meaning set forth in Section
2.4.
"Company Securities" shall have the meaning set forth in Section 4.17.
"Demand Registration" shall have the meaning set forth in Section 3.2.
"Dragalong Group" shall have the meaning set forth in Section 2.3.
"Election Period" shall have the meaning set forth in Section 4.17.
"Equity Partners Agreement" shall have the meaning set forth in Section
4.8.
"First Refusal Offer" shall have the meaning set forth in Section 2.4.
"First Refusal Offer Notice" shall have the meaning set forth in
Section 2.4.
"HMTF Attendee" shall have the meaning set forth in Section 2.5.
-3-
"HMTF Holders" shall mean HMTF Inc. and those other persons who are
identified as HMTF Holders on the signature pages hereto and (a) shall also
include (i) any other Person not at the time a party hereto (other than any
director, officer or employee of the Company or any of its Subsidiaries) who,
after the date hereof, (A) acquires from the Company or any of its Subsidiaries
any shares of Common Stock or options, warrants, securities and other rights to
acquire from the Company, by exercise, conversion, exchange or otherwise, shares
of Common Stock or securities convertible into Common Stock and, (B) with the
written consent of the Company, the JWC Representative and the Stockholder Group
comprised of the HMTF Holders, hereafter becomes a party to this Agreement as an
HMTF Holder, (ii) any Permitted Transferee of the HMTF Holders (except as
otherwise provided in clause (b) of this definition) unless immediately prior to
such Transfer such transferee was already a Management Holder, a JWC Holder or
an Other Holder (other than an HMTF Holder) and (iii) any Permitted Transferee
in a Permitted Transfer permitted under clause (e)(iii) or (j) or (k) of the
definition of "Permitted Transfer" herein if, immediately prior to any such
Transfer, such transferee was already a HMTF Holder, but (b) shall not include
any Permitted Transferee of the HMTF Holders in a Permitted Transfer permitted
under clause (e)(iii) of the definition of "Permitted Transfer" herein if,
immediately prior to such Transfer, such Permitted Transferee was not already an
HMTF Holder.
"HMTF Inc." shall mean Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, a
Delaware corporation.
"Holder" shall have the meaning set forth in Section 3.1.
"Initiating Stockholder" shall have the meaning set forth in Section
2.2.
"JWC Equity Funding" shall mean JWC Equity Funding, Inc., a Delaware
corporation.
"JWC Equity Partners" shall mean ▇.▇. Childs Equity Partners, L.P., a
Delaware limited partnership.
"JWC Equity Partners Agreement" shall have the meaning set forth in
Section 4.8(b).
"JWC Holders" shall have the meaning set forth in the preamble
preceding the recitals to this Agreement and
(a) shall also include:
(i) any other Person not at the time a party hereto
(other than (A) any director, officer or employee of
the Company or any of its Subsidiaries who is not
also associated with JWC Equity Partners or (B) any
officer, employee or consultant of JWC Inc.) who,
after the date hereof, (I) acquires from the Company
or any of its Subsidiaries any shares of Common Stock
or options, warrants, securities and other rights to
-4-
acquire from the Company, by exercise, conversion,
exchange or otherwise, shares of Common Stock or
securities convertible into Common Stock and, (II)
with the written consent of the Company, the JWC
Representative, the Stockholder Group comprised of
the UBS Holders and the Stockholder Group comprised
of the PPM/ReliaStar Holders, hereafter becomes a
party to this Agreement as a JWC Holder,
(ii) any other Person not at the time a party hereto who
is an officer, employee or consultant of JWC Inc.
who, after the date hereof, acquires from the Company
or any of its Subsidiaries any shares of Common Stock
or options, warrants, securities and other rights to
acquire from the Company, by exercise, conversion,
exchange or otherwise, shares of Common Stock or
securities convertible into Common Stock,
(iii) any Permitted Transferee of the JWC Holders (except
as otherwise provided in clause (b) of this
definition) unless immediately prior to such Transfer
such transferee was already a Management Holder or an
Other Holder, and
(iv) any Permitted Transferee in a Permitted Transfer
permitted under clause (e)(iii) or (j) or (k) of the
definition of "Permitted Transfer" herein if,
immediately prior to any such Transfer, such
transferee was already a JWC Holder,
but
(b) shall not include any Permitted Transferee of the JWC Holders
in a Permitted Transfer permitted under clause (e)(iii) or (j)
or (k) of the definition of "Permitted Transfer" herein if,
immediately prior to such Transfer, such Permitted Transferee
was not already a JWC Holder.
"JWC/UBS Holders Notice Period" shall have the meaning set forth in
Section 2.4.
"JWC Inc." shall mean ▇.▇. Childs Associates, Inc., a Delaware
corporation.
"JWC L.P." shall mean ▇.▇. Childs Associates, L.P., a Delaware limited
partnership.
"JWC Representative" shall have the meaning set forth in Section 4.8.
"Junior Security" shall have the meaning set forth in Section 4.17(c).
"Management Agreement" shall mean that Management Agreement dated as of
November 26, 1997 among the Company, the Operating Company and JWC L.P.
"Management Holders" shall have the meaning set forth in the preamble
preceding the recitals to this Agreement and (a) shall also include (i) any
director, officer or employee of the
-5-
Company or any of its Subsidiaries (other than any director, officer or employee
of the Company or any of its Subsidiaries who is also associated with JWC Equity
Partners or any of its Affiliates or UBS Capital or any of its Affiliates) who,
after the date hereof, (A) acquires from the Company or any of its Subsidiaries
any shares of Common Stock or options, warrants, securities and other rights to
acquire from the Company, by exercise, conversion, exchange or otherwise, shares
of Common Stock or securities convertible into Common Stock and, (B) with the
written consent of the Company and the JWC Representative, hereafter becomes a
party to this Agreement as a Management Holder,, (ii) any Permitted Transferee
of the Management Holders (except as otherwise provided in clause (b) of this
definition) unless immediately prior to such Transfer such transferee was
already a JWC Holder or an Other Holder, and (iii) any Permitted Transferees in
a Permitted Transfer permitted under clause (e)(iii) or (j) or (k) of the
definition of "Permitted Transfer" herein if, immediately prior to any such
Transfer, such transferee was already a Management Holder, but (b) shall not
include (i) any Permitted Transferee of the HMTF Holders in a Permitted Transfer
permitted under clause (e)(iii) of the definition of "Permitted Transfer" herein
if, immediately prior to such Transfer, such Permitted Transferee was not
already a Management Holder
"Nonvoting Common Stock" shall mean shares of Nonvoting Common Stock,
par value $.01 per share, of the Company.
"Offered Securities" shall have the meaning set forth in Section 2.4.
"Operating Company" shall mean Desa International, Inc., a Delaware
corporation, in its capacity as a Subsidiary of the Company.
"Other Holders" shall have the meaning set forth in the preamble
preceding the recitals to this Agreement and (a) shall also include (i) the UBS
Holders, (ii) the HMTF Holders, (iii) the PPM/ReliaStar Holders, (iv) the
Warrant Holders, (v) any other Person not at the time a party hereto (other than
any director, officer or employee of the Company or any of its Subsidiaries)
who, after the date hereof, (A) acquires from the Company or any of its
Subsidiaries any shares of Common Stock or options, warrants, securities and
other rights to acquire from the Company, by exercise, conversion, exchange or
otherwise, shares of Common Stock or securities convertible into Common Stock
and, (B) with the written consent of the Company and the JWC Representative,
hereafter becomes a party to this Agreement as an Other Holder, (vi) any
Permitted Transferee of the Other Holders (except as otherwise provided in
clause (b) of this definition) unless immediately prior to such Transfer such
transferee was already a Management Holder or a JWC Holder, and (vii) any
Permitted Transferee in a Permitted Transfer permitted under clause (e)(iii) or
(j) or (k) of the definition of "Permitted Transfer" herein if, immediately
prior to any such Transfer, such transferee was not already a Management Holder
or a JWC Holder but (b) shall not include any Permitted Transferee of the Other
Holders in a Permitted Transfer permitted under clause (e)(iii) of the
definition of "Permitted Transfer" herein if, immediately prior to such
Transfer, such Permitted Transferee was already a Management Holder or a JWC
Holder.
"Participating Offerees" shall have the meaning set forth in Section
2.2.
-6-
"Participation Notice" shall have the meaning set forth in Section 2.2.
"Participation Securities" shall have the meaning set forth in Section
2.2.
"Permitted Transfer" shall mean:
(a) a Transfer of any Subject Securities between any JWC Holder or
Other Holder or Management Holder who is a natural person and
such Stockholder's spouse, children, parents or siblings
(whether natural, step or by adoption) or to a trust solely
for the benefit of one or more of any of such Persons,
provided that with respect to any such Transfer, the
Stockholder retains, as trustee or by some other means, the
sole authority to vote such Subject Securities (including any
Common Stock that may be acquired pursuant to any Vested
Options);
(b) a Transfer of Subject Securities by a JWC Holder to JWC Inc.
or to the officers, employees or consultants of JWC Inc. or to
a corporation or corporations or to a partnership or
partnerships (or other entity for collective investment, such
as a limited liability company or a fund) which is (and
continues to be) controlled by, controlling or under common
control with JWC Inc.;
(c) a Transfer of Subject Securities (i) between or among the
Management Holders, (ii) between or among the JWC Holders,
(iii) between or among the UBS Holders, (iv) between or among
the HMTF Holders or (v) between or among the PPM/ReliaStar
Holders;
(d) a Transfer of Subject Securities between any Stockholder who
is a natural person and such Stockholder's estate, executors,
legal representative, guardian or conservator, or the Transfer
of Subject Securities between the estate of any Stockholder
and such Stockholder's spouse, children, parents or siblings
(whether natural, step or by adoption) or to a trust solely
for the benefit of one or more of any of such Persons;
(e) (i) a bona fide pledge of Subject Securities by a JWC Holder
or a UBS Holder or an HMTF Holder to a bank or financial
institution or (ii) any pledge of Subject Securities by a
Management Holder (A) existing at November 26, 1997 or (B) to
the Company or any of its Subsidiaries or (iii) a Transfer by
a pledgee upon any bona fide foreclosure on any pledge
permitted under clause (e)(i) or (ii) of this definition;
(f) a Transfer of Subject Securities between any Other Holder or
any JWC Holder and any Affiliate of such holder, provided that
such Affiliate (i) shall remain at all times an Affiliate of
such Stockholder and (ii) is an Accredited Investor at the
time of such transfer;
(g) a Transfer of Subject Securities between any Other Holder or
any JWC Holder and any shareholder, member, officer, director
or direct or indirect general or
-7-
limited partner (or officer or director of such general or
limited partner) of such holder;
(h) a Transfer of Subject Securities by a HMTF Holder to HMTF Inc.
or to the officers or employees of HMTF Inc. or to a
corporation or corporations or to a partnership or
partnerships (or other entity for collective investment, such
as a limited liability company or a fund) which is (and
continues to be) controlled by, controlling or under common
control with HMTF Inc.;
(i) a Transfer of Subject Securities by a UBS Holder to UBS
Capital or to the officers, employees or consultants of UBS
Capital or to a corporation or corporations or to a
partnership or partnerships (or other entity for collective
investment, such as a limited liability company or a fund)
which is (and continues to be) controlled by, controlling or
under common control with UBS Capital;
(j) a Transfer of "Warrants" or "Warrant Shares" (each as defined
in the Tagalong/Dragalong Agreement) by a JWC Holder or a UBS
Holder pursuant to the terms of Article II of the
Tagalong/Dragalong Agreement; and
(k) a Transfer by a JWC Holder or a UBS Holder of any of those
576,287.8200 shares of Voting Common Stock (with such number
of shares to be adjusted from time to time to reflect any
split or combination of shares of Common Stock) issued by the
Company to JWC Equity Funding on November 26, 1997.
No Permitted Transfer shall be effective unless and until the transferee of the
Subject Securities so transferred executes and delivers to the Company an
executed counterpart of this Agreement in accordance with Section 4.12 hereof.
"Permitted Transferee" shall mean any Person who shall have acquired
and who shall hold any Subject Securities pursuant to a Permitted Transfer.
"Person" means an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or other entity.
"PPM/ReliaStar Holders" shall mean those persons who are identified as
PPM/ReliaStar Holders on the signature pages hereto and shall also include (a)
any other Person not at the time a party hereto (other than any director,
officer or employee of the Company or any of its Subsidiaries) who, after the
date hereof, (A) acquires from the Company or any of its Subsidiaries any shares
of Common Stock or options, warrants, securities and other rights to acquire
from the Company, by exercise, conversion, exchange or otherwise, shares of
Common Stock or securities convertible into Common Stock and, (B) with the
written consent of the Company, the JWC Representative and the Stockholder Group
comprised of the PPM/ReliaStar Holders, hereafter becomes a party to this
Agreement as a PPM/ReliaStar Holder, (b) any Permitted Transferee of the
PPM/ReliaStar Holders unless
-8-
immediately prior to such Transfer such transferee was already a Management
Holder, a JWC Holder or an Other Holder (other than a PPM/ReliaStar Holder) and
(c) any Permitted Transferee in a Permitted Transfer permitted under clause
(e)(iii) or (j) or (k) of the definition of "Permitted Transfer" herein if,
immediately prior to any such Transfer, such transferee was already a
PPM/ReliaStar Holder.
"PPM/ReliaStar Preferred Holder" shall have the meaning set forth in
Section 4.17(a).
"Preemptive Rights Notice" shall have the meaning set forth in Section
4.17.
"Preemptive Stockholder" shall mean any of the Stockholders identified
on Exhibit B hereto and any Permitted Transferee of such Stockholders who
hereafter becomes a party to this Agreement pursuant to Section 4.12 hereof.
"Preferred Securities" shall mean the Series C Preferred Stock or any
of the 12% Junior Subordinated Notes due December 31, 2009 of the Company that
may be issued by the Company in exchange for the Series C Preferred Stock
pursuant to the terms of the Series C Preferred Stock.
"Preferred Stock" shall mean shares of any class or series of preferred
stock of the Company, whether now authorized and existing or hereafter
authorized and existing.
"Public Float Date" shall mean the date on which (a) shares of Common
Stock shall have been sold pursuant to one or more Public Offerings in which the
aggregate proceeds (before deducting underwriter discounts and commissions) to
the Company and the selling stockholders, if any, of such shares equal or exceed
$50 million or (b) the Company shall have merged into or consolidated or entered
into another business combination transaction with a Person in which the Company
is not the surviving person, and the surviving person (the "Successor") from
such merger, consolidation or other transaction shall (i) have a class of common
stock (or similar equity securities of a limited liability company or
partnership) that is registered under ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, (▇▇) have sold
shares of such common stock (or similar equity securities) pursuant to one or
more public offerings and, (iii) as of the close of business on the date such
merger, consolidation or other business combination transaction becomes
effective, the aggregate fair market value of all of the issued and outstanding
shares of such common stock (or similar equity securities) of the Successor,
excluding all such shares that are received in such merger, consolidation or
other transaction by any Person who was a beneficial owner of shares of Common
Stock immediately prior to the consummation of such merger, consolidation or
other transaction, shall be at least $50 million. For purposes of this
definition, "fair market value" of such common stock (or similar equity
securities) of the Successor, on any date specified herein, shall mean (A) the
last reported sales price, regular way, or, in the event that no sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in either case (I) as reported on the New York Stock Exchange
Composite Tape, or (II) if such security is not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities exchange on
which such security is listed or admitted to trading, or (III) if not then
listed or admitted to trading on any
-9-
national securities exchange, on the NASDAQ National Market System; or (B) if
such security is not quoted on such National Market System, (I) the average of
the closing bid and asked prices on each such day in the over-the-counter market
as reported by NASDAQ, or (II) if bid and asked prices for such security on each
such day shall not have been reported through NASDAQ, the average of the bid and
asked prices for such day as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for such purpose by the
Board of Directors of the Successor or a committee thereof.
A "Public Offering" shall mean (a) the completion of a sale of shares
of Common Stock pursuant to a registration statement which has become effective
under the 1933 Act, excluding registration statements on Form S-4 or Form S-8 or
similar limited purpose forms or or (b) the merger or consolidation of the
Company with, or other business combination transaction involving the Company
with, a Person in which the Company is not the surviving person, where the
surviving person from such merger, consolidation or other transaction shall have
a class of common stock (or similar equity securities of a limited liability
company or partnership) that is registered under Section 12 of the 1934 Act.
"Registrable Securities" shall mean, as of any date, with respect to
any Stockholder, (a) all shares of Common Stock held by such Stockholder as of
such date and (b) all shares of Common Stock that may be acquired as of such
date by such Stockholder upon exercise of Vested Options; provided that, as to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a registration statement (other than a
registration statement on Form S-8) with respect to the sale or exchange of such
securities shall have become effective under the 1933 Act and such securities
shall have been disposed of in accordance with such registration statement, (ii)
a registration statement on Form S-8 with respect to such securities shall have
become effective under the 1933 Act, (iii) such securities shall have been sold
or acquired under a Rule 144 Transaction, or (iv) such securities have ceased to
be outstanding.
"Rule 144 Transaction" means a transfer of Common Stock (a) complying
with Rule 144 under the 1933 Act as such rule or a successor thereto is in
effect on the date of such transfer (but not including a sale other than
pursuant to a "brokers transaction" as defined in clauses (i) and (ii) of
paragraph (g) of Rule 144 as in effect on the date hereof) and (b) occurring at
a time when the Common Stock is registered pursuant to Section 12 of the 1934
Act.
"Sale Request" shall have the meaning set forth in Section 2.3.
"Schedule of Stockholders" shall refer to the Schedule of Stockholders
attached hereto as Exhibit A as from time to time amended pursuant to Section
4.2.
"Series C Preferred Stock" shall mean the Company's Series C 12% Senior
Redeemable Exchangeable Pay-in-Kind Preferred Stock, par value $.01 per share.
"Stockholder" shall mean any party hereto other than the Company,
including any Person who hereafter becomes a party to this Agreement pursuant to
Section 4.12 hereof.
-10-
"Stockholder Group" shall mean any of (a) the Other Holders (including
the HMTF Holders, the UBS Holders, the PPM/ReliaStar Holders and the Warrant
Holders) taken as a group, (b) the JWC Holders taken as a group, (c) the
Management Holders taken as a group, (d) the HMTF Holders taken as a group, (e)
the UBS Holders taken as a group, (f) the PPM/ReliaStar Holders taken as a
group, and (g) the Warrant Holders taken as a group. The Company and its
Subsidiaries shall not in any case be deemed to be a member of any Stockholder
Group (whether or not the Company or any of its Subsidiaries holds or
repurchases any Common Stock Equivalents). Where provisions of this Agreement
contemplate that actions be taken or notices be given by a Stockholder Group,
actions taken or notices given by the holders of a majority of the Common Stock
Equivalents held in the aggregate by a Stockholder Group shall be deemed to be
actions taken or notices given by such Stockholder Group, and the other parties
hereto are and will be entitled to rely on any action so taken or any notice so
given by such majority holders of a Stockholder Group.
"Subject Securities" shall mean any Common Stock or Vested Options or
other options, warrants, securities and other rights to acquire from the
Company, by exercise, conversion, exchange or otherwise, shares of Common Stock
or securities convertible into Common Stock, whether now or hereafter held by
any Stockholder.
"Subsidiary" with respect to any Person (the "parent") shall mean any
Person of which such parent, at the time in respect of which such term is used,
(a) owns directly or indirectly more than fifty percent (50%) of the equity or
beneficial interest, on a consolidated basis, or (b) owns directly or controls
with power to vote, indirectly through one or more Subsidiaries, shares of
capital stock or beneficial interest having the power to cast at least a
majority of the votes entitled to be cast for the election of directors,
trustees, managers or other officials having powers analogous to those of
directors of a corporation. Unless otherwise specifically indicated, when used
herein the term Subsidiary shall refer to a direct or indirect Subsidiary of the
Company.
"Tagalong/Dragalong Agreement" shall mean the Tagalong/Dragalong
Agreement dated as of November 26, 1997 among JWC Equity Funding, Inc. and UBS
Capital.
"Third Party" means any Person other than the Company.
"Third Party Offer" shall have the meaning set forth in Section 2.4.
"Third Party Offeror" shall have the meaning set forth in Section 2.4.
"Transfer" shall mean to transfer, sell, assign, pledge, hypothecate,
give, grant or create a security interest in or lien on, place in trust (voting
or otherwise), assign an interest in or in any other way encumber or dispose of,
directly or indirectly and whether or not by operation of law or for value, any
of the Subject Securities.
"UBS Attendee" shall have the meaning set forth in Section 2.5.
"UBS Capital" shall mean UBS Capital LLC, a Delaware limited liability
company.
-11-
"UBS Holders" shall mean UBS Capital and (a) shall also include (i) any
other Person not at the time a party hereto (other than any director, officer or
employee of the Company or any of its Subsidiaries who is not also associated
with UBS Capital or any of its Affiliates) ) who, after the date hereof, (A)
acquires from the Company or any of its Subsidiaries any shares of Common Stock
or options, warrants, securities and other rights to acquire from the Company,
by exercise, conversion, exchange or otherwise, shares of Common Stock or
securities convertible into Common Stock and, (B) with the written consent of
the Company, the JWC Representative and the Stockholder Group comprised of the
UBS Holders, hereafter becomes a party to this Agreement as a UBS Holder, (ii)
any Permitted Transferee of the UBS Holders (except as otherwise provided in
clause (b) of this definition) unless immediately prior to such Transfer such
transferee was already a Management Holder, a JWC Holder or an Other Holder
(other than a UBS Holder) and (iii) any Permitted Transferee in a Permitted
Transfer permitted under clause (e)(iii) or (j) or (k) of the definition of
"Permitted Transfer" herein if, immediately prior to any such Transfer, such
transferee was already a UBS Holder, but (b) shall not include any Permitted
Transferee of the UBS Holders in a Permitted Transfer permitted under clause
(e)(iii) or (j) or (k) of the definition of "Permitted Transfer" herein if,
immediately prior to such Transfer, such Permitted Transferee was not already a
UBS Holder.
"Vested Options" shall mean, as of any date, options, warrants,
securities and other rights to acquire from the Company, by exercise,
conversion, exchange or otherwise, shares of Common Stock or securities
convertible into Common Stock, but only to the extent that such options,
warrants, securities and other rights are both, as of such date, (a) vested
under the terms thereof or under any plan, agreement or instrument pursuant to
which such options, warrants, securities and other rights were issued, and (b)
so exchangeable, exercisable or convertible.
"Voting Common Stock" shall mean shares of Common Stock, par value $.01
per share, of the Company.
"Warrant Holders" shall mean any Permitted Transferees in a Permitted
Transfer permitted under clause (j) or (k) of the definition of "Permitted
Transfer" herein if, immediately prior to any such Transfer, such transferee was
not already a Management Holder, a JWC Holder or an Other Holder, and shall also
include (a) any other Person not at the time a party hereto (other than any
director, officer or employee of the Company or any of its Subsidiaries) who,
after the date hereof, (A) acquires from the Company or any of its Subsidiaries
any shares of Common Stock or options, warrants, securities and other rights to
acquire from the Company, by exercise, conversion, exchange or otherwise, shares
of Common Stock or securities convertible into Common Stock and, (B) with the
written consent of the Company, the JWC Representative and the Stockholder Group
comprised of the Warrant Holders, hereafter becomes a party to this Agreement as
a Warrant Holder, (b) any Permitted Transferee of the Warrant Holders, unless
immediately prior to such Transfer such transferee was a Management Holder, a
JWC Holder or an Other Holder (other than a Warrant Holder) and (c) any
Permitted Transferee in a Permitted Transfer permitted under clause (e)(iii) or
(j) or (k) of the definition of "Permitted Transfer" herein if, immediately
prior to any such Transfer, such transferee was already a Warrant Holder.
-12-
ARTICLE 2
Transferability and Voting
2.1 Restrictions on Transfers
(a) Without the written consent of the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders, no
Management Stockholder shall Transfer all or any part of the Subject Securities
at the time held by such Management Stockholder to any Person other than in
accordance with the provisions of Section 2.3 or in accordance with and as a
Participating Offeree (as defined in Section 2.2 hereof) under the provisions of
Section 2.2 hereof. Without the written consent of the holders of a majority of
the Common Stock Equivalents at the time held by the JWC Holders, no Other
Holder shall Transfer all or any part of the Subject Securities at the time held
by such Other Holder to any Person other than in accordance with the provisions
of Section 2.3 or 2.4 hereof or in accordance with and as a Participating
Offeree under the provisions of Section 2.2 hereof. Without the written consent
of the holders of a majority of the Common Stock Equivalents at the time held by
the Other Holders, no JWC Holder shall Transfer all or any part of the Subject
Securities at the time held by such JWC Holder to any Person other than in
accordance with the provisions of Section 2.3 hereof or in accordance with and
as an Initiating Stockholder (as defined in Section 2.2 hereof) or a
Participating Offeree under the provisions of Section 2.2 hereof.
(b) The provisions of this Section 2.1 shall not apply to a
Transfer which is (i) a Permitted Transfer, (ii) pursuant to a Public Offering,
or (iii) after the Public Float Date, pursuant to a Rule 144 Transaction.
2.2 Tagalong. No JWC Holder (unless such JWC Holder shall be
participating in a Transfer as a Participating Offeree under and in accordance
with the provisions of this Section 2.2) shall Transfer any Subject Securities
to a Third Party without complying with the terms and conditions set forth in
this Section 2.2, as applicable.
(a) Any JWC Holder (the "Initiating Stockholder") desiring to
Transfer such Subject Securities shall give not less than 15 days prior written
notice of such intended Transfer to each other Stockholder ("Participating
Offerees") and to the Company. Such notice (the "Participation Notice") shall
set forth terms and conditions of such proposed Transfer, including the name of
the prospective transferee, the number of Common Stock Equivalents proposed to
be transferred (the "Participation Securities") by the Initiating Stockholder,
the purchase price per share proposed to be paid therefor and the payment terms
and type of Transfer to be effectuated. Within 10 days following the delivery of
the Participation Notice by the Initiating Stockholder to each Participating
Offeree and to the Company, each Participating Offeree shall, by notice in
writing to the Initiating Stockholder and to the Company, have the opportunity
and right to sell to the purchasers in such proposed Transfer (upon the same
terms and conditions as the Initiating Stockholder) up to that number of Subject
Securities representing Common Stock Equivalents at the time held by such
Participating Offeree that constitutes the same percentage of the aggregate
number of Common
-13-
Stock Equivalents owned by such Participating Offeree as of the date of such
proposed Transfer as the number of Subject Securities representing Common Stock
Equivalents to be sold in such proposed Transfer by the Initiating Stockholder
(after giving effect to the provisions of this and the following sentence)
constitutes of the aggregate number of Common Stock Equivalents owned as of the
date of such proposed Transfer by the Initiating Stockholder. As contemplated by
the preceding sentence, the amount of Participation Securities to be sold by an
Initiating Stockholder and the amount of Subject Securities to be sold by any
Participating Offerees shall be adjusted to the extent necessary to provide for
sales by the Initiating Stockholder and Participating Offerees of an aggregate
number of Subject Securities (i) which is not greater than the number of
Participation Securities originally proposed to be transferred by the Initiating
Stockholder and (ii) such that the number of Subject Securities representing
Common Stock Equivalents at the time held by each Participating Offeree to be
sold in such proposed Transfer constitutes the same percentage of the aggregate
number of Common Stock Equivalents owned by such Participating Offeree as of the
date of such proposed Transfer as the number of Subject Securities representing
Common Stock Equivalents to be sold in such proposed Transfer by the Initiating
Stockholder (after giving effect to the provisions of this Section 2.2)
constitutes of the aggregate number of Common Stock Equivalents owned as of the
date of such proposed Transfer by the Initiating Stockholder.
For example: if (i) an Initiating Stockholder gives a
Participation Notice with respect to the proposed Transfer of 200 Common Stock
Equivalents by the Initiating Stockholder, (ii) the Initiating Stockholder at
the time of such proposed Transfer owns 500 Common Stock Equivalents, (iii)
Stockholder A elects to participate in such proposed Transfer and at the time
thereof owns 200 Common Stock Equivalents, and (iv) Stockholder C elects to
participate in such proposed Transfer and at the time thereof owns 100 Common
Stock Equivalents, then the aggregate number of Common Stock Equivalents to be
sold would remain at 200 Common Stock Equivalents, of which the Initiating
Stockholder would be entitled to sell 125 Common Stock Equivalents (25% of the
500 total Common Stock Equivalents owned by the Initiating Stockholder),
Stockholder A would be entitled to sell 50 Common Stock Equivalents (25% of the
200 total Common Stock Equivalents owned by Stockholder A) and Stockholder B
would be entitled to sell 25 Common Stock Equivalents (25% of the 100 total
Common Stock Equivalents owned by Stockholder B).
(b) At the closing of any proposed Transfer in respect of
which a Participation Notice has been delivered, the Initiating Stockholder,
together with all Participating Offerees so electing to sell Subject Securities
pursuant to this Section 2.2 shall deliver to the proposed transferee
certificates and/or other instruments representing the Subject Securities to be
sold, free and clear of all liens and encumbrances, together with stock or other
appropriate powers duly endorsed therefor, and shall receive in exchange
therefor the consideration to be paid or delivered by the proposed transferee in
respect of such Subject Securities as described in the Participation Notice. If
the prospective transferee does not purchase any of the Subject Securities of
any Participating Offeree required to be included in such proposed Transfer
pursuant to this Section 2.2 (otherwise than due to (i) the failure of such
Participating Offeree to comply with the provisions of the first sentence of
this Section 2.2(b) or (ii) any other fault
-14-
of such Participating Offeree), then the Initiating Stockholder shall not
Transfer any of its Subject Securities in such proposed Transfer.
(c) The provisions of this Section 2.2 shall not apply to (i)
any Transfer pursuant to a Public Offering or, following the Public Float Date,
pursuant to a Rule 144 Transaction or (ii) any Permitted Transfer or (iii) any
Transfers pursuant to Section 2.3 or 2.4 hereof.
2.3 Dragalong.
(a) If, at the time a Sale Request (as hereinafter defined) is
given, both (i) the JWC Holders hold more Common Stock Equivalents than the UBS
Holders and (ii) JWC Holders holding at least a majority of Common Stock
Equivalents at the time held by such JWC Holders (the Dragalong Group) determine
to sell or exchange (in a sale or exchange of securities of the Company or in a
merger, consolidation or other business combination or any similar transaction),
in one or a series of bona fide arms-length transactions to an unrelated and
unaffiliated Third Party fifty percent (50%) or more of the Subject Securities
at the time held by them then, upon 30 days' prior written notice from the
Dragalong Group to the other Stockholders, which notice shall include reasonable
details of the proposed sale or exchange including the proposed time and place
of closing and the consideration to be received by the Stockholders (such notice
being referred to as the "Sale Request"), each other Stockholder shall be
obligated to, and shall, (i) sell, transfer and deliver, or cause to be sold,
transferred and delivered, to such Third Party an equivalent percentage of such
Stockholder's Subject Securities in the same transaction at the closing thereof
and shall (A) execute and deliver such agreements for the purchase of such
Subject Securities and other agreements, instruments and certificates as the
members of the Dragalong Group shall execute and deliver in connection with such
proposed transaction (provided that no Holder shall be required to make any
representations or warranties in connection with such sale or transfer other
than representations and warranties as to (x) such Holder's ownership of his or
its Subject Securities to be sold or transferred free and clear of all liens,
claims, and encumbrances, (y) such Holder's power and authority to effect such
transfer without violation of any agreements, instruments or laws, and (z) such
matters pertaining to compliance with securities laws as the transferee may
reasonably require) and (B) deliver certificates and/or other instruments
representing such percentage of such Stockholder's Subject Securities, together
with stock or other appropriate powers therefor duly executed, at the closing,
free and clear of all claims, liens and encumbrances), and each Stockholder
shall receive upon the closing of such transaction the same per share
consideration (including terms of payment) to be paid or delivered by the
proposed transferee in respect of such Stockholder's Subject Securities as shall
be payable to the members of the Dragalong Group in respect of their Subject
Securities (including any consideration payable to the members of the Dragalong
Group in respect of noncompetition or similar covenants made by them or for
consulting services to be rendered by them, but only to the extent that such
consideration is unreasonable in amount) and, if any members of the Dragalong
Group are given an option as to the form or amount of consideration per share to
be received, each Stockholder shall be given the same option, and (ii) if
stockholder approval of the transaction is required, vote such Stockholder's
Common Stock in favor thereof.
-15-
(b) The provisions of this Section 2.3 shall not apply to any
Transfer (i) pursuant to a Public Offering or (ii) pursuant to a Permitted
Transfer.
2.4 Right of First Refusal. If at any time prior to the Public Float
Date, any Other Holder shall receive a bona fide written offer (a "Third Party
Offer") from a Third Party (the "Third Party Offeror") to purchase any Subject
Securities and such Other Holder desires to accept such Third Party Offer, such
Other Holder shall, prior to accepting the Third Party Offer, offer (the "First
Refusal Offer") to sell such Subject Securities (the "Offered Securities") in
accordance with the procedures, and upon the terms, set forth below.
(a) (i) The Other Holder shall send a written notice
of the First Refusal Offer (a "First Refusal
Offer Notice") to the Company, which First
Refusal Offer Notice shall state that such
Other Holder proposes to effect a sale to a
Third Party Offeror, the number and class or
type of Subject Securities subject to the
Third Party Offer and the name and address
of the Third Party Offeror, together with a
copy of all writings between the Third Party
Offeror and such Other Holder necessary to
establish the terms of the Third Party
Offer.
(ii) Subject to Section 2.4(b), the right of
first refusal may be exercised by the
Company by delivery of a written notice to
the Other Holder making the First Refusal
Offer within 20 days after receipt by the
Company of the applicable First Refusal
Offer Notice (the "Company Notice Period"),
which notice shall state the number of
Offered Securities the Company intends to
purchase pursuant to this paragraph (ii). If
the Company fails to respond to the Other
Holder making the First Refusal Offer within
the Company Notice Period, the failure shall
be deemed a rejection of the First Refusal
Offer.
(iii) If the Company has not exercised the right
of first refusal with respect to all of the
Offered Securities pursuant to this Section
2.4, the Other Holder shall send a First
Refusal Offer Notice to the JWC Holders, the
UBS Holders and the PPM/ReliaStar Holders
(other than the Other Holder making the
First Refusal Offer) and the Management
Holders with respect to those Offered
Securities as to which the Company has not
exercised its right of first refusal.
Subject to Section 2.4(b), the right of
first refusal may be exercised by the JWC
Holders, such UBS Holders and PPM/ReliaStar
Holders and the Management Holders, pro rata
in accordance with the respective Common
Stock Equivalents at the time held by the
JWC Holders, such UBS Holders and
PPM/ReliaStar Holders and the Management
Holders so exercising their rights under
this Section 2.4, by delivery of a written
notice to the Other Holder making the First
-16-
Refusal Offer within 20 days after receipt
by the JWC Holders, such UBS Holders and
PPM/ReliaStar Holders and the Management
Holders of the applicable First Refusal
Offer Notice (the "JWC/UBS Holders Notice
Period"), which notice shall state the
number of Offered Securities each of the JWC
Holders, such UBS Holders and PPM/ReliaStar
Holders and the Management Holders intend to
purchase pursuant to this paragraph (iii).
If the JWC Holders or such UBS Holders or
PPM/ReliaStar Holders or the Management
Holders, as the case may be, fail to respond
to the Other Holder making the First Refusal
Offer within the JWC/UBS Holders Notice
Period, the failure shall be deemed a
rejection of the First Refusal Offer by the
JWC Holders or such UBS Holders or
PPM/ReliaStar Holders or the Management
Holders, as the case may be.
(iv) The purchase of the Offered Securities by
the Company and/or the JWC Holders, such UBS
Holders and PPM/ReliaStar Holders and the
Management Holders pursuant to this Section
2.4 shall be effected at the offices of JWC
Equity Partners within 30 days after the
expiration of the Company Notice Period (or,
if the JWC Holders or such UBS Holders or
PPM/ReliaStar Holders or the Management
Holders are exercising their right of first
refusal with respect to any of the Offered
Securities, within 30 days after the
expiration of the JWC/UBS Holders Notice
Period) on those terms and conditions of the
Third Party Offer. The price per Offered
Security payable by the Company and/or the
JWC Holders, such UBS Holders and
PPM/ReliaStar Holders and the Management
Holders shall be equal to the price per
Offered Security set forth in the Third
Party Offer. The purchase price for the
Offered Securities purchased by the Company
and/or the JWC Holders, such UBS Holders and
PPM/ReliaStar Holders and the Management
Holders shall be paid by certified checks
payable, or wire transfer, to the Other
Holder making the First Refusal Offer
against receipt of a certificate or
certificates representing all Offered
Securities so purchased, properly endorsed
for transfer to the Company and/or the JWC
Holders, such UBS Holders and PPM/ReliaStar
Holders and the Management Holders, as the
case may be.
(v) Any purchase of the Offered Securities by
the Company and/or the JWC Holders, such UBS
Holders and PPM/ReliaStar Holders and the
Management Holders pursuant to this Section
2.4 shall be conditioned (by the Other
Holder making the First Refusal Offer) upon
the Company's and/or the JWC Holders', such
UBS Holders' and PPM/ReliaStar Holders' and
the Management
-17-
Holders' exercising in the aggregate the
right of first refusal with respect to all
the Offered Securities.
(b) Notwithstanding anything to the contrary contained herein,
if the Company and/or the JWC Holders, such UBS Holders and PPM/ReliaStar
Holders and the Management Holders have not exercised the right of first refusal
with respect to all of the Offered Securities pursuant to this Section 2.4, then
such Other Holder may transfer to the Third Party Offeror on the terms and
conditions of the Third Party Offer all but not less than all of the Offered
Securities; provided that such sale is consummated within 60 days from the
expiration of the JWC/UBS Holders Notice Period; and provided, further, that
such Third Party Offeror shall agree in writing in advance with the Company to
be bound by and to comply with all applicable provisions of this Agreement to
the same extent as if such Third Party Offeror were such Other Holder. If such
sale is not consummated within such 60-day period, the restrictions provided for
in this Section 2.4 shall again become effective, and no transfer of such
Offered Securities may be made thereafter without again offering the same to the
Company and/or the JWC Holders, such UBS Holders and PPM/ReliaStar Holders and
the Management Holders in accordance with the terms and conditions of this
Agreement.
(c) The provisions of this Section 2.4 shall not apply to (i)
any Transfer pursuant to a Public Offering or, following a Public Offering,
pursuant to a Rule 144 Transaction or (ii) any Permitted Transfer or (iii) any
Transfers pursuant to Section 2.2 or 2.3 hereof.
2.5 Corporate Governance.
(a) The Company and each of the JWC Holders, the Other Holders
and the Management Holders shall take all action (including but not limited to
such Stockholder's voting, or executing proxies or written consents with respect
to, the Common Stock at the time held by such Stockholder as may be from time to
time requested by holders of a majority of the Common Stock Equivalents at the
time held by the JWC Holders) so that the Company's Board of Directors shall
include such number of members as may be from time to time designated by the
holders of a majority of the Common Stock Equivalents at the time held by the
JWC Holders (or the JWC Representative). The holders of a majority of the Common
Stock Equivalents at the time held by the JWC Holders (or the JWC
Representative) shall also be entitled to require that any member of the
Company's Board of Directors so designated pursuant to this Section 2.5 be
removed or replaced by another designee of the holders of a majority of the
Common Stock Equivalents at the time held by the JWC Holders (or the JWC
Representative), in which event the Company and each such Stockholder shall take
all action, including but not limited to such Stockholder's voting, or executing
written consents with respect to, the Common Stock at the time held by such
Stockholder as may be necessary to effect such removal or replacement.
(b) Notwithstanding the provisions of Section 2.5(a), the
Company and each of the JWC Holders, the Other Holders and the Management
Holders shall take all action, including but not limited to such Stockholder's
voting, or executing proxies or written consents with respect to, the Common
Stock at the time held by such Stockholder as may be from time
-18-
to time requested by holders of a majority of the Common Stock Equivalents at
the time held by the UBS Holders, so that the Company's Board of Directors shall
include one (1) member designated by the holders of a majority of the Common
Stock Equivalents at the time held by the UBS Holders which one (1) member shall
initially be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; provided that the number of members of the
Company's Board of Director's that the UBS Holders shall be entitled to
designate pursuant to this Section 2.5(b) shall be permanently reduced from one
(1) member to zero (0) members at such time as the UBS Holders shall hold less
than 770,000 shares of Voting Common Stock (with such number of shares to be
adjusted from time to time to reflect any split or combination of shares of
Common Stock). The holders of a majority of the Common Stock Equivalents at the
time held by the UBS Holders shall also be entitled to require that any member
of the Company's Board of Directors so designated pursuant to this Section
2.5(b) be removed or replaced by another designee of the holders of a majority
of the Common Stock Equivalents at the time held by the UBS Holders, in which
event the Company and each such Stockholder shall take all action, including but
not limited to such Stockholder's voting, or executing written consents with
respect to, the Common Stock at the time held by such Stockholder as may be
necessary to effect such removal or replacement.
(c) Notwithstanding the provisions of Section 2.5(a) or
2.5(b), the Stockholders shall vote their shares of Common Stock to elect each
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to the Company's Board of Directors
until such person is no longer employed by the Company or any of its
Subsidiaries.
(d) The HMTF Holders shall have the right to have an
individual appointed by them (the "HMTF Attendee") in attendance at all regular
and special meetings of the Company's Board of Directors to observe, but not to
vote on any matters before the Board of Directors at, such meetings; provided,
however, that the HMTF Attendee shall recuse himself or herself from any such
meeting during the Board of Directors' discussions, deliberations and voting on
matters with respect to which the Board of Directors determines, in the good
faith exercise of its business judgment, the HMTF Attendee's presence presents a
conflict of interest. The HMTF Attendee shall be provided with all information
prepared and delivered to board members in general, at the same time and by the
same means as such information is provided to members of the board.
2.6 Restrictions on Other Agreements. Except as provided in Section 4.8
and clause (a) of the definition of "Permitted Transfer" herein, no Stockholder
shall grant any proxy or enter into or agree to be bound by any voting trust or
voting agreement with respect to any Subject Securities nor shall any
Stockholder enter into any stockholders agreements or arrangements of any kind
with any Person with respect to any of the Subject Securities on terms which
conflict with the provisions of this Agreement (whether or not such agreements
and arrangements are with other Stockholders or holders of Common Stock
Equivalents that are not parties to this Agreement), including, but not limited
to, agreements or arrangements with respect to the acquisition, disposition or
voting of Subject Securities inconsistent herewith.
2.7 Stockholder Action. Each Stockholder agrees that, in such
Stockholder's capacity as a stockholder of the Company, such Stockholder shall,
subject to delivery of the Sale
-19-
Request pursuant to Section 2.3 hereof, vote, or grant proxies relating to the
Common Stock at the time held by such Stockholder to vote, all of such
Stockholder's Common Stock in favor of any sale or exchange of securities of the
Company or any merger, consolidation or other business combination or any
similar transaction pursuant to Section 2.3 hereof (other than a transaction
with an Affiliate) if, and to the extent that, approval of the Company's
stockholders is required in order to effect such transaction.
ARTICLE 3
Registration Rights
3.1 General. For purposes of this Article 3: (a) the terms "register",
"registered" and "registration" refer to a registration effected by preparing
and filing a registration statement on Form ▇-▇, ▇-▇ or S-3 in compliance with
the 1933 Act and the declaration or ordering of effectiveness of such
registration statement; and (b) the term "Holder" means any Stockholder.
3.2 Demand and Piggyback Registration.
(a) Demand Registration of the UBS Holders and PPM/ReliaStar
Holders.
(i) Demand Registration of the UBS Holders.
(A) UBS Holders' Demand Right.
Subject to the provisions of this Agreement
(including Sections 3.2(b) and 3.9 hereof),
at any time after the Public Float Date,
upon the written request of any UBS Holders
requesting that the Company effect the
registration under the 1933 Act of
Registrable Securities, which request shall
specify in reasonable detail the number of
Registrable Securities to be registered and
the intended method of distribution thereof,
the Company shall use its reasonable
commercial efforts to register under the
1933 Act (a "Demand Registration") the
Registrable Securities which the Company has
been requested to register by such UBS
Holders, all to the extent requisite to
permit the disposition of such Registrable
Securities in accordance with the plan of
distribution set forth in the applicable
registration statement. In the case of such
Demand Registration, such UBS Holders must
request registration of Registrable
Securities representing not less than such
number of Registrable Securities the
expected gross proceeds of which, on the
date of the aforementioned written request,
would equal at least $5 million unless such
registration request is for all remaining
Registrable Securities held by such UBS
Holders.
(B) Registration Statement Form. Any
Demand Registration under this Section shall
be on Form S-3, if and to the
-20-
extent that the Company is eligible under
the 1933 Act to use such form at the time of
the written request for such Demand
Registration.
(ii) Demand Registration of the PPM/ReliaStar
Holders.
(A) PPM/ReliaStar Holders' Demand
Right. Subject to the provisions of this
Agreement (including Sections 3.2(b) and 3.9
hereof), at any time after one (1) year
after the Public Float Date, upon the
written request of any PPM/ReliaStar Holders
requesting that the Company effect the
registration under the 1933 Act of
Registrable Securities, which request shall
specify in reasonable detail the number of
Registrable Securities to be registered, the
Company shall use its reasonable commercial
efforts to effect a Demand Registration of
the Registrable Securities which the Company
has been requested to register by such
PPM/ReliaStar Holders, all to the extent
reasonably requisite to permit the
disposition of the Registrable Securities in
accordance with an at the market offering of
the Registrable Securities. In the case of
such Demand Registration, such PPM/ReliaStar
Holders must request registration of
Registrable Securities representing not less
than such number of Registrable Securities
the expected gross proceeds of which, on the
date of the aforementioned written request,
would equal at least $5 million unless such
registration request is for all remaining
Registrable Securities held by such
PPM/ReliaStar Holders.
(B) Registration Statement Form. Any
Demand Registration under this Section shall
be on Form S-3, if and to the extent that
the Company is eligible under the 1933 Act
to use such form at the time of the written
request for such Demand Registration.
(iii) Limitations on Demand Registrations.
Anything herein to the contrary
notwithstanding, the Company shall not be
required to effect more than (A) one (1)
Demand Registration pursuant to Section
3.2(a)(i) hereof or (B) one (1) Demand
Registration pursuant to Section 3.2(a)(ii)
hereof.
(iv) Effective Registration Statement. Except as
otherwise provided in Section 3.2(a)(vii)
hereof, a Demand Registration requested
pursuant to this Section 3.2(a) shall not be
deemed to have been effected (A) unless a
registration statement with respect thereto
has become effective, (B) if after it has
become effective, such registration is
materially interfered with by any stop
order, injunction or similar order or
requirement of the Commission or
-21-
other governmental agency or court for any
reason not attributable to any UBS Holder
(in the case of a Demand Registration
pursuant to Section 3.2(a)(i) hereof) or any
PPM/ReliaStar Holder (in the case of a
Demand Registration pursuant to Section
3.2(a)(ii) hereof) and has not thereafter
become effective, or (C) if the conditions
to closing specified in the underwriting
agreement, if any, entered into in
connection with such registration are not
satisfied or waived, other than by reason of
a failure on the part of any UBS Holder (in
the case of a Demand Registration pursuant
to Section 3.2(a)(i) hereof) or any
PPM/ReliaStar Holder (in the case of a
Demand Registration pursuant to Section
3.2(a)(ii) hereof).
(v) Selection of Underwriters. In the case of
such a Demand Registration by UBS Holders
pursuant to Section 3.2(a)(i)(A) hereof, the
selection of any managing and other
underwriter(s) shall be made by the Company,
with the consent of UBS Capital (which
consent shall not be unreasonably withheld).
(vi) Certain Requirements in Connection with
Registration Rights. In the case of such
Demand Registration by UBS Holders pursuant
to Section 3.2(a)(i) hereof, if the Holder
has determined to enter into one or more
underwriting agreements in connection
therewith, no Person may participate in such
Demand Registration unless such Person
agrees to sell his or its securities on the
basis provided in the underwriting
arrangements and completes all
questionnaires, powers of attorney,
indemnities, underwriting agreements and
other documents which are reasonable and
customary under the circumstances.
(vii) Certain Other Matters. Should a Demand
Registration not become effective due to the
failure of any of the UBS Holders (in the
case of a Demand Registration pursuant to
Section 3.2(a)(i) hereof) or any of the
PPM/ReliaStar Holders (in the case of a
Demand Registration pursuant to Section
3.2(a)(ii) hereof) requesting such Demand
Registration to perform its obligations
under this Agreement or the inability of
such UBS Holders (in the case of a Demand
Registration pursuant to Section 3.2(a)(i)
hereof) to reach agreement with the
underwriters on price or other customary
terms for such transaction, or in the event
such UBS Holders (in the case of a Demand
Registration pursuant to Section 3.2(a)(i)
hereof) or such PPM/ReliaStar Holders (in
the case of a Demand Registration pursuant
to Section 3.2(a)(ii) hereof) withdraw or do
not pursue the request for such Demand
Registration (in any of the foregoing cases,
provided that at such time the Company is in
compliance in all material respects with
-22-
its obligations under this Agreement), then
such Demand Registration shall be deemed to
have been effected.
(viii) Shelf Registration. The Company shall be
permitted to satisfy its obligations under
this Section 3.2(a) by filing (if and to the
extent that the Company is eligible to do so
at the time of the written request for any
Demand Registration) a "shelf" registration
statement on Form S-3 (or any successor form
thereto that may be adopted by the SEC)
pursuant to Rule 415 under the 1933 Act (or
any successor rule thereto that may be
adopted by the SEC) (a"Shelf Registration"),
or amending a previously filed Shelf
Registration by the Company under the 1933
Act, so that such Shelf Registration shall
permit the disposition (in accordance with
the intended methods of disposition
specified for the Registrable Securities to
be included in such Demand Registration) of
all of the Registrable Securities for which
a request for registration has been made
under this Section 3.2(a).
(b) Piggyback Registration. If at any time the Company
determines to register any Public Offering of any of the Common Stock
Equivalents for the account of any JWC Holder under the 1933 Act in connection
with the public offering of such securities or pursuant to a request for a
Demand Registration pursuant to Section 3.2(a) hereof, the Company shall, at
each such time, promptly give each Holder written notice of such determination
no later than 30 days before its intended filing with the SEC. Upon the written
request of any Holder received by the Company within 10 days after the giving of
any such notice by the Company, the Company shall use all commercially
reasonable efforts to cause to be registered under the 1933 Act all of the
Registrable Securities of such Holder that such Holder has requested be
registered. If the total amount of Registrable Securities that are to be
included by the Company in such registration exceeds the amount of securities
that the underwriters reasonably believe compatible with the success of the
offering, then the Company will include in such registration only the number of
securities which in the opinion of such underwriters can be sold, in the
following order:
(i) first, all securities of the Company to be
offered for the account of the Company; and
(ii) second, the Registrable Securities, pro rata
based on the number of Registrable
Securities held by each Holder seeking to
have Registrable Securities included in such
registration (including any UBS Holders and
PPM/ReliaStar Holders seeking to have
Registrable Securities included in such
registration pursuant to a Demand
Registration requested under Section 3.2(a)
hereof).
-23-
3.3 Obligations of the Company.
(a) Whenever required under Section 3.2 hereof to use all
commercially reasonable efforts to effect the registration of Registrable
Securities, the Company shall:
(i) prepare and file with the SEC a registration
statement with respect to such Registrable
Securities and use all commercially
reasonable efforts to cause such
registration statement to become and remain
(for a period of 90 days after the effective
date of such registration statement (unless
all securities covered by such registration
statement are sooner disposed of))
effective, including, without limitation,
filing of post-effective amendments and
supplements to any registration statement or
prospectus necessary to keep the
registration statement current; provided,
however, that if the Company shall furnish
to Holders requesting a Demand Registration
pursuant to Section 3.2(a) hereof a
certificate signed by the Chairman of the
Board or the President of the Company
stating that, in the good faith judgment of
the Board of Directors of the Company, it
would be seriously detrimental to the
Company and its stockholders for such
registration statement to be filed because
such registration would require premature
disclosure of any acquisition, corporate
reorganization, proposed public offering or
other material transaction involving the
Company and that it is therefore essential
to defer taking action with respect to the
filing of such registration statement, then
the Company may direct that the Demand
Registration be delayed for a period not to
exceed one hundred eighty (180) days in the
aggregate;
(ii) as expeditiously as reasonably possible,
prepare and file with the SEC such
amendments and supplements to such
registration statement and the prospectus
used in connection with such registration
statement as may be necessary to comply with
the provisions of the 1933 Act with respect
to the disposition of all securities covered
by such registration statement and to keep
each registration and qualification under
this Agreement effective (and in compliance
with the 1933 Act) by such actions as may be
necessary or appropriate for a period of 90
days after the effective date of such
registration statement (unless all
securities covered by such registration
statement are sooner disposed of), all as
requested by such Holder or Holders;
(iii) as expeditiously as reasonably possible
furnish to the Holders such numbers of
copies of a prospectus, including a
preliminary prospectus, in conformity with
the requirements of the 1933 Act, and such
other documents as they may reasonably
request in
-24-
order to facilitate the disposition of
Registrable Securities owned by them in
accordance with the plan of distribution
provided for in such registration statement;
(iv) as expeditiously as reasonably possible use
all commercially reasonable efforts to
register and qualify the securities covered
by such registration statement under such
securities or "blue sky" laws of such
jurisdictions as shall be reasonably
appropriate for the distribution of the
securities covered by the registration
statement, provided that the Company shall
not be required in connection therewith or
as a condition thereto to qualify to do
business, subject itself to taxation, or to
file a general consent to service of process
in any such jurisdiction, and further
provided that (anything in this Agreement to
the contrary notwithstanding with respect to
the bearing of expenses) if any jurisdiction
in which the securities shall be qualified
shall require that expenses incurred in
connection with the qualification of the
securities in that jurisdiction be borne by
selling stockholders, then such expenses
shall be payable by selling stockholders pro
rata, to the extent required by such
jurisdiction;
(v) 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 1933
Act, upon discovery that, or upon the
happening of any event as a result of which,
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 under which they
were made (each Holder hereby covenanting
that, upon receipt of any such notice, it
shall forthwith cease using any such
prospectus unless and until it shall have
received from the Company a supplement to or
amendment of such prospectus as hereinafter
referred to in this Section 3.3(a)(v)), and
at the request of any such seller or Holder
promptly prepare to furnish to such seller
or Holder a reasonable number of copies of a
supplement to or an amendment of such
prospectus as may be necessary so that, as
thereafter delivered to the purchasers of
such 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
under which they were made;
(vi) otherwise use all commercially reasonable
efforts to comply with all applicable rules
and regulations of the SEC, and make
-25-
available to its security holders, as soon
as reasonably practicable, an earnings
statement covering the period of at least 12
months but not more than 18 months,
beginning with the first full calendar month
after the effective date of such
registration statement, which earnings
statement shall satisfy the provisions of
Section 11(a) of the 1933 Act, and will
furnish to each such seller at least 2
Business Days prior to the filing thereof a
copy of any amendment or supplement to such
registration statement or prospectus and
shall not file any thereof to which any such
seller shall have reasonably objected,
except to the extent required by law, on the
grounds that such amendment or supplement
does not comply in all material respects
with the requirements of the 1933 Act or of
the rules or regulations thereunder;
(vii) provide and cause to be maintained a
transfer agent and registrar for all
Registrable Securities covered by such
registration statement from and after a date
not later than the effective date of such
registration statement; and
(viii) use all commercially reasonable efforts to
list all Registrable Securities covered by
such registration statement on any
securities exchange on which any class of
Registrable Securities is then listed.
(b) The Company will furnish to each Holder on whose behalf
Registrable Securities have been registered pursuant to this Agreement a signed
counterpart, addressed to such Holder, of (i) an opinion of counsel for the
Company dated the effective date of such registration statement, and (ii) a
so-called "cold comfort" letter signed by the independent public accountants who
have certified the Company's financial statements included in such registration
statement, and such opinion of counsel and accountants' letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in connection with underwritten public offerings of securities.
(c) If the Company at any time proposes to register any of its
securities under the 1933 Act subject to the piggyback registration rights of
the Holders under Section 3.2(b) hereof or pursuant to a Demand Registration
under Section 3.2(a) hereof, and such securities are to be distributed by or
through one or more underwriters, then the Company will make reasonable efforts,
if requested by any Holder of Registrable Securities who requests registration
of Registrable Securities in connection therewith pursuant to Section 3.2
hereof, to arrange for such underwriters to include such Registrable Securities
among the securities to be distributed by or through such underwriters.
(d) In connection with the preparation and filing of each
registration statement registering Registrable Securities under this Agreement,
the Company will give the Holders of Registrable Securities on whose behalf such
Registrable Securities are to be so registered and
-26-
their underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the SEC, and each amendment
thereof or supplement thereto, and will give each of them such access to its
books and records and such opportunities to discuss the business of the Company
with its officers, its counsel and the independent public accountants who have
certified its financial statements, as shall be reasonably necessary, in the
opinion of such Holders or such underwriters or their respective counsel, in
order to conduct a reasonable and diligent investigation within the meaning of
the 1933 Act. Without limiting the foregoing, each registration statement,
prospectus, amendment, supplement or any other document filed with respect to a
registration under this Agreement shall be subject to review and reasonable
approval by the Holders registering Registrable Securities in such registration
and by their counsel.
3.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article 3 that
each Holder shall furnish to the Company such information regarding such Holder,
the Registrable Securities held by such Holder, and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.
3.5 Expenses of Registration. All expenses incurred in connection with
a registration pursuant to Section 3.2 hereof (excluding underwriters' discounts
and commissions, which shall be borne by the Holders), including without
limitation all registration and qualification fees, printers' and accounting
fees, fees and disbursements of counsel for the Company, and the reasonable fees
and disbursements of one counsel for the selling Holders (which counsel shall be
selected by the holders of a majority of the Registrable Securities to be
included in such registration) shall be borne by the Company.
3.6 Underwriting Requirements. In connection with any registration of
Registrable Securities under this Agreement, the Holders shall, if requested by
the Company or the underwriters for any Registrable Securities included in such
registration, enter into an underwriting agreement with such underwriters for
such offering, such agreement to contain such representations and warranties by
the Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, provisions relating to indemnification and contribution
provided, that no Holder shall be required to make any representations or
warranties, or provide any indemnity, with respect to any matter other than (a)
such Holder's ownership of his or its Subject Securities to be sold or
transferred free and clear of all liens, claims and encumbrances and (b)
information regarding such Holder appearing in the registration statement,
preliminary or final prospectus or amendments or supplements thereto that has
been provided in writing by such Holder. The Holders on whose behalf Registrable
Securities are to be distributed by such underwriters shall be parties to any
such underwriting agreement, and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall be also made to and for the benefit of such Holders of
Registrable Securities. Such underwriting agreement shall comply with Section
3.7.
-27-
3.7 Indemnification. In the event any Registrable Securities are
included in a registration statement pursuant to this Article 3:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder joining in a registration, any
underwriter (as defined in the ▇▇▇▇ ▇▇▇) for it, and each Person, if any, who
controls such Holder or such underwriter within the meaning of the 1933 Act,
from and against any losses, claims, damages, expenses (including reasonable
attorneys' fees and expenses and reasonable costs of investigation) or
liabilities, joint or several, to which they or any of them may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages,
expenses or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such registration
statement including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements made therein not
misleading in light of the circumstances under which they were made or arise out
of any violation by the Company of any rule or regulation promulgated under the
1933 Act applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, provided that the
indemnity agreement contained in this Section 3.7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable to anyone for any
such loss claim, damage, liability or action to the extent that it arises out of
or is based upon an untrue statement or omission made in connection with such
registration statement, preliminary prospectus, final prospectus or amendments
or supplements thereto in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, underwriter or control person. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Holder, underwriter or control person and shall survive the transfer of such
securities by such Holder.
(b) To the fullest extent permitted by law, each Holder
joining in a registration shall indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement,
each Person, if any, who controls the Company within the meaning of the 1933
Act, and each agent and any underwriter for the Company and any Person who
controls any such agent or underwriter and each other Holder and any Person who
controls such Holder (within the meaning of the ▇▇▇▇ ▇▇▇) against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, control person, agent, underwriter or other Holder may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon an untrue statement of any
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or omission was made in such registration
statement,
-28-
preliminary or final prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished by such
Holder with respect to such Holder expressly for use in connection with such
registration, and such Holder shall reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, control
person, agent, underwriter or other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action, provided that the
indemnity obligation of each such Holder hereunder shall be limited to and shall
not exceed the proceeds actually received by such Holder upon a sale of
Registrable Securities pursuant to a registration statement hereunder, and
provided, further that the indemnity agreement contained in this Section 3.7(b)
shall not apply to amounts paid in settlements effected without the consent of
such Holder (which consent shall not be unreasonably withheld). 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, Holder, underwriter or
control person and shall survive the transfer of such securities by such Holder.
(c) Any Person seeking indemnification under this Section 3.7
will (i) give prompt notice to the indemnifying party of any claim with respect
to which it seeks indemnification, but the failure to give such notice will not
affect the right to indemnification hereunder (except to the extent the
indemnifying party is prejudiced by such failure), and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest may exist between
such indemnified and indemnifying parties with respect to such claim, permit
such indemnifying party, and other indemnifying parties similarly situated,
jointly to assume the defense of such claim with counsel reasonably satisfactory
to the parties. In the event that the indemnifying parties cannot mutually agree
as to the selection of counsel, each indemnifying party may retain separate
counsel to act on its behalf and at its expense. The indemnified party shall in
all events be entitled to participate in such defense at its expense through its
own counsel. If such defense is not assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the reasonable fees and expenses of such additional counsel.
(d) If for any reason the foregoing indemnification is
unavailable to any party or insufficient to hold it harmless as and to the
extent contemplated by the preceding paragraphs of this Section 3.7, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage expense or liability
in such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the applicable indemnified party, as the
case may be, on the
-29-
other hand, and also the relative fault of the Company and any applicable
indemnified party, as the case may be, as well as any other relevant equitable
considerations.
3.8 Rule 144. With a view to making available to the Holders and their
transferees the benefits of Rule 144 and Rule 144A under the 1933 Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company agrees
to use all commercially reasonable efforts to take all action that may be
required as a condition to the availability after a Public Offering of Rule 144,
Rule 144A or such other rules or regulations, including without limitation to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times subsequent to 90 days after
the effective date of the first registration statement covering an underwritten
public offering filed by the Company;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act
(including, without limitation, under Section 13 or Section 15 of the ▇▇▇▇ ▇▇▇);
and
(c) furnish to any Holder forthwith upon request a written
statement by the Company that it has complied with the reporting requirements of
Rule 144 (at any time after 90 days after the effective date of said first
registration statement filed by the Company), and of the 1933 Act and the 1934
Act (at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC permitting
the selling of any such securities without registration.
3.9 Market Stand-Off Agreement. Each Stockholder agrees not to sell or
otherwise transfer or dispose of any Common Stock (or other securities) of the
Company at the time held by such Stockholder (other than securities included in
the applicable registration statement or shares purchased in the public market
after the effective date of registration) or any interest or future interest
therein during the 15-day period prior to and such period (not to exceed 180
days) as is mutually acceptable to a majority in interest of Stockholders and
the underwriter following the effective date of the registration statement of
the Company filed under the 1933 Act which includes securities of the Company to
be sold to the public in an underwritten offer.
ARTICLE 4
Certain Miscellaneous Other Provisions
4.1 Remedies. The parties to this Agreement acknowledge and agree that
the covenants of the Company and the Stockholders set forth in this Agreement
may be enforced in equity by a decree requiring specific performance. Without
limiting the foregoing, if any dispute arises concerning the sale or other
disposition of any of the securities of the Company subject to this Agreement or
concerning any other provisions hereof or the obligations of the parties
hereunder, the parties to this Agreement agree that an injunction may be issued
in
-30-
connection therewith. Such remedies shall be cumulative and non-exclusive and
shall be in addition to any other rights and remedies the parties may have under
this Agreement or otherwise.
4.2 Entire Agreement; Amendment; Termination.
(a) This Agreement sets forth the entire understanding of the
parties, amends in part and restates in its entirety the Stockholders Agreement,
dated as of November 26, 1997, among the Company, the JWC Holders, the
Management Holders and the Other Holders party thereto, and supersedes all other
agreements and all other arrangements and communications, whether oral or
written, with respect to the subject matter hereof.
(b) The Schedule of Stockholders may be amended in writing by
the Company to reflect changes in the composition of the Stockholders and
changes in their addresses or telecopy numbers that may occur from time to time
as a result of Permitted Transfers, Transfers permitted under Article 2 hereof
or issuances contemplated by Section 4.12. Amendments to the Schedule of
Stockholders reflecting Permitted Transfers, Transfers permitted under Article 2
hereof or issuances contemplated by Section 4.12 shall become effective when the
amended Schedule of Stockholders, and a copy of this Agreement as executed by
any new transferee or other new party hereto in accordance with Section 4.12,
are filed with the Company. Upon written request of any Stockholder, the Company
will promptly provide to such Stockholder a copy of the Schedule of Stockholders
as in effect at the date of such request therefor.
(c) Any other amendment to this Agreement shall be in writing
and shall require the written consent of (i) the Company, (ii) either the JWC
Representative or the holders of a majority of Common Stock Equivalents at the
time held by the JWC Holders, (iii) if adverse to the interests of the
Stockholder Group comprised of the Other Holders, (A) the holders of a majority
of the Common Stock Equivalents at the time held by the Other Holders, (B) the
holders of a majority of the Common Stock Equivalents at the time held by the
UBS Holders, and (C) the holders of a majority of the Common Stock Equivalents
at the time held by the PPM/ReliaStar Holders, and (iv) if adverse to the
interests of a particular Stockholder or any Stockholder Group (other than the
Stockholder Group comprised of the Other Holders), that Stockholder or the
holders of a majority of the Common Stock Equivalents at the time held by that
Stockholder Group, as the case may be.
(d) Notwithstanding the foregoing provisions of this Section
4.2, this Agreement may be terminated at any time upon the written consent of
(i) the Company and (ii) the holders of a majority of the Common Stock
Equivalents at the time held by the Management Holders, the Other Holders, the
UBS Holders, the PPM/ReliaStar Holders and the JWC Holders (or the JWC
Representative), each voting separately as a group; provided that the provisions
of Sections 3.7 and 4.20 shall survive any termination of this Agreement.
4.3 Severability. 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 the invalid or
unenforceable provision were omitted.
-31-
4.4 Notices. All notices, consents and other communications required,
or contemplated under this Agreement shall be in writing and shall be delivered
in the manner specified herein or, in the absence of such specification, shall
be deemed to have been duly given (i) three (3) Business Days after mailing by
first class certified mail, postage prepaid, (ii) when delivered by hand, (iii)
upon confirmation of receipt by telecopy, or (iv) one day after sending by
overnight delivery service, to the respective addresses of the parties set forth
below:
For notices and communications to the Company:
c/o ▇.▇. Childs Associates, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. Childs
Telecopy: 617-753-1101
with a copy to:
Desa International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
For notices and communications to the Stockholders, to the
respective addresses set forth in the Schedule of
Stockholders.
With a copy in the case of the JWC Holders to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: 617-338-2880
By notice complying with the foregoing provisions of this Section 4.4, each
party shall have the right to change the mailing address or telecopy number for
future notices and communications to such party.
4.5 Binding Effect; Assignment. This Agreement shall binding upon and
inure to the benefit of the parties hereto and to their respective transferees,
successors, assigns, heirs and administrators, provided that the rights under
this Agreement may not be assigned except as expressly provided herein. No such
assignment shall relieve an assignor of its obligations hereunder.
-32-
4.6 Termination. Without affecting any other provision of this
Agreement requiring termination of any rights in favor of any Stockholder,
Permitted Transferee or any other transferee of Subject Securities, the
provisions of Articles 2 and 3 (other than Section 3.7, which in any event shall
survive any termination of this Agreement or the termination of this Agreement
as to any Stockholder, Permitted Transferee or other transferee when such
Stockholder, Permitted Transferee or other transferee no longer owns any Subject
Securities) and Sections 4.17, 4.18 and 4.19 of this Agreement shall terminate
as to such Stockholder, Permitted Transferee or other transferee, when, pursuant
to and in accordance with this Agreement, such Stockholder, Permitted Transferee
or other transferee, as the case may be, no longer owns any Subject Securities.
4.7 Recapitalizations, Exchanges, etc. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to Common Stock
Equivalents and to any and all shares of capital stock 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 the Common Stock Equivalents, by reason of a stock dividend,
stock split, stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. Upon the occurrence of any
such events, amounts hereunder shall be appropriately adjusted.
4.8 JWC Representative.
(a) Each JWC Holder hereby designates and appoints (and each
Permitted Transferee of each such JWC Holder shall be deemed to have so
designated and appointed) ▇▇▇▇ ▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them
acting singly, with full power of substitution (the "JWC Representative"), the
representative of each such Person to perform all such acts as are required,
authorized or contemplated by this Agreement to be performed by any such Person
and hereby acknowledges that the JWC Representative shall be the only Person
authorized to take any action so required, authorized or contemplated by this
Agreement by each such Person. Each such Person further acknowledges that the
foregoing appointment and designation shall be deemed to be coupled with an
interest and shall survive the death or incapacity of such Person. Each such
Person hereby authorizes (and each Permitted Transferee shall be deemed to have
authorized) the other parties hereto to disregard any notice or other action
taken by such Person pursuant to this Agreement except for the JWC
Representative. The other parties hereto are and will be entitled to rely on any
action so taken or any notice given by the JWC Representative and are and will
be entitled and authorized to give notices only to the JWC Representative for
any notice contemplated by this Agreement to be given to any such Person. A
successor to the JWC Representative may be chosen by the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders, provided
that written notice thereof is given by the successor JWC Representative to the
Company, the Other Holders, the Management Holders and the other JWC Holders.
(b) Each of the JWC Holders agrees to be bound by all of the
provisions of paragraph 3.07 of the First Amended and Restated Agreement of
Limited Partnership of ▇.▇. Childs Equity Partners, L.P. dated as of December
20, 1995 (the "JWC Equity Partners Agreement") including without limitation, the
provisions of paragraph 3.07(b) thereof, and
-33-
further agrees to be bound by the confidentiality provisions set forth in
paragraph 14.08 of the JWC Equity Partners Agreement as if such JWC Holder were
a limited partner under the JWC Equity Partners Agreement.
4.9 Action Necessary to Effectuate the Agreement. The parties hereto
agree to take or cause to be taken all such corporate and other action as may be
necessary to effect the intent and purposes of this Agreement.
4.10 Purchase for Investment; Legend on Certificate. Each Stockholder
acknowledges that all of the securities of the Company held by such Stockholder
are being (or have been) acquired for investment and not with a view to the
distribution thereof and that no transfer, hypothecation or assignment of any
such securities (including the Common Stock for which such securities may be
exercisable or exchangeable or into which such securities may be convertible)
may be made except in compliance with applicable federal and state securities
laws. All the certificates or other instruments representing any of such
securities (including the Common Stock for which such securities may be
exercisable or exchangeable or into which such securities may be convertible)
which are now or hereafter held by any Stockholder shall be subject to the terms
of this Agreement and shall have endorsed in writing, stamped or printed,
thereon either of the following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
DATED AS OF OCTOBER 9, 1998, AS AMENDED FROM TIME TO TIME, A COPY OF
WHICH IS ON FILE WITH AND AVAILABLE FROM THE SECRETARY OF THE COMPANY."
or
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
PROVISIONS REGARDING THE VOTING OF SUCH SECURITIES AND CERTAIN TRANSFER
RESTRICTIONS SET FORTH IN THE AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT DATED AS OF OCTOBER 9, 1998, AS AMENDED FROM TIME TO TIME, A
COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES."
4.11 Effectiveness of Transfers. Any Subject Securities transferred by
a Stockholder (other than pursuant to an effective registration statement under
the 1933 Act or a Rule 144 Transaction) shall be held by the transferee thereof
pursuant to this Agreement. Such transferee shall, except as otherwise expressly
stated herein, have all the rights and be subject to all of the obligations of a
Stockholder under this Agreement automatically and without requiring any further
act by such transferee or by any parties to this Agreement. Without affecting
the preceding sentence, if such transferee is not a Stockholder on the dates of
such transfer, then such transferee, as a condition to such transfer, shall
confirm such transferee's obligations hereunder in accordance with Section 4.12
hereof. No Subject Securities shall be
-34-
transferred on the Company's books and records, and no transfer of thereof shall
be otherwise effective, unless any such transfer is made in accordance with the
terms and conditions of this Agreement, and the Company is hereby authorized by
all of the Stockholders to enter appropriate stop transfer notations on its
transfer records to give effect to this Agreement.
4.12 Additional Stockholders. Any Person acquiring any Subject
Securities (except for any acquisition thereof (a) in an offering registered
under the 1933 Act or (b) in a Rule 144 Transaction) shall on or before the
transfer or issuance to it of such Subject Securities, sign a counterpart
signature page hereto in form reasonably satisfactory to the Company and the JWC
Representative and shall thereby become a party to this Agreement; provided that
a transferee which is a pledgee and within the definition of a Permitted
Transferee shall not be obligated so to agree until foreclosure on its pledge.
The Company shall require each Person acquiring any restricted stock under a
restricted stock plan or an option, warrant or other right to purchase shares of
Common Stock under any option or other equity participation plan to execute a
counterpart signature page hereto as a JWC Holder, a Management Holder or Other
Holder, as may be appropriate.
4.13 No Waiver. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies. No single or partial exercise of any rights, powers
or remedies conferred by this Agreement shall preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
4.14 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, and all signatures need not appear
on any one counterpart.
4.15 Headings, etc. All headings and captions in this Agreement are for
purposes of references only and shall not be construed to limit or affect the
substance of this Agreement. Words used in this Agreement, regardless of the
gender and number used, will be deemed and construed to include any other
gender, masculine, feminine, or neuter, and any other number, singular or
plural, as the context requires. As used in this Agreement, the words
"including", "includes" and "included" are not limiting, and the word "or" is
not exclusive. The words "this Agreement", "hereto", "herein", "hereunder",
"hereof", and words or phrases of similar import refer to this Agreement as a
whole, together with any and all Schedules and Exhibits hereto, and not to any
particular article, section, subsection, paragraph, clause or other portion of
this Agreement.
4.16 Governing Law. This Agreement shall be construed under and
governed by the substantive and procedural laws of the State of Delaware
applicable to a contract executed in and wholly performed within Delaware.
-35-
4.17 Preemptive Right Provisions. The Company hereby agrees, so long as
both (i) the Preemptive Stockholders hold any Common Stock Equivalents, and (ii)
a Public Offering shall not have occurred, as follows:
(a) Preemptive Rights. Except as otherwise provided in Section
4.17(b) hereof, if the Company proposes to issue or sell in an offering any
shares of its capital stock or any security convertible into, exchangeable or
exercisable for or having rights to purchase any shares of capital stock of the
Company (the "Company Securities") to any person, the Company shall deliver to
the Preemptive Stockholders at the time holding any Subject Securities at least
20 days' prior written notice in respect of such proposed offering (the
"Preemptive Rights Notice") stating its desire to issue or sell such Company
Securities. The Preemptive Rights Notice must specify the class of and the
amount of such Company Securities that the Company desires so to issue or sell
in such proposed offering and the price, payment terms and other material terms
and conditions at and on which it is willing to sell such Company Securities and
the material terms, provisions and conditions of such Company Securities. Within
10 days after the Company's delivery of a Preemptive Rights Notice in respect of
a proposed offering (the "Election Period"), each Preemptive Stockholder at the
time holding any Subject Securities shall have the right to elect to purchase,
at the designated offering price and on other terms and conditions specified in
the Preemptive Rights Notice, and in the priority and amounts specified below in
this Section 4.17(a), such Company Securities as follows:
(i) First, solely in the case of Company
Securities which are not Junior Securities
(as hereinafter defined), so long as any
PPM/ReliaStar Holder shall hold any of the
Preferred Securities (such a holder being
hereinafter sometimes referred to as a
"PPM/ReliaStar Preferred Holder"), such
PPM/ReliaStar Preferred Holder shall have
the right to acquire up to its pro rata
portion of such Company Securities (based on
the respective holdings of Preferred
Securities, at the time of the Preemptive
Rights Notice, of each PPM/ReliaStar
Preferred Holder electing to exercise its
preemptive rights under this Section
4.17(a)(i) in respect of such Company
Securities); provided that, notwithstanding
anything to the contrary contained herein,
if the PPM/ReliaStar Preferred Holders do
not exercise their preemptive rights with
respect to all of such Company Securities
pursuant to this Section 4.17(a)(i), then
this Section 4.17(a)(i) shall cease to apply
to such Company Securities and the
PPM/ReliaStar Preferred Holders shall not be
entitled to acquire any of such Company
Securities (other than in their respective
capacities as a Stockholder pursuant to
Section 4.17(a)(ii) hereof); and
(ii) Second, in the case of Company Securities
(A) which are Junior Securities or (B) in
respect of which Section 4.17(a)(i) hereof
shall cease to apply pursuant to the proviso
contained in said
-36-
Section 4.17(a)(i), each Preemptive
Stockholder shall have the right to acquire
up to that number of such Company Securities
so that, after giving effect to such
purchase, such Preemptive Stockholder shall
continue to maintain in the aggregate his,
her or its same proportionate ownership of
Common Stock Equivalents of the Company as
of the date of the Preemptive Rights Notice.
For purposes of determining the ownership of
Common Stock Equivalents of the Company as
of the date of the Preemptive Rights Notice
under the preceding sentence, each holder
(including but not limited to each
Stockholder) of Vested Options shall be
treated as though he, she or it had fully
converted, exchanged or exercised all Vested
Options at the time held by him, her or it
at the then existing conversion, exchange or
exercise price or ratio.
Each Preemptive Stockholder at the time holding any Subject Securities may
exercise his, her or its rights under this Section 4.17(a) solely by delivering
a notice to the Company during the Election Period. Should such Preemptive
Stockholder elect to purchase any such Company Securities pursuant to this
Section 4.17(a), such Preemptive Stockholder shall purchase such Company
Securities at the closing and on the closing date set forth in the Preemptive
Rights Notice. The provisions of this Section 4.17(a) shall apply similarly to
successive proposed offerings by the Company of Company Securities.
(b) Exclusions. The provisions of Section 4.17(a) hereof shall
not apply to the issuance or sale of (i) Junior Securities issued or issuable to
officers, directors or employees of the Company or any subsidiary of the Company
who are not affiliated with ▇.▇. Childs Associates, L.P., (ii) shares of capital
stock of the Company Securities issued or issuable upon the exercise, exchange
or conversion of any Company Security or other securities, options, warrants and
other rights issued by the Company and outstanding as of the date hereof, after
giving effect to the closing of certain transactions that are closing
concurrently with the issuance of the Subject Securities pursuant to this
Agreement, (iii) Company Securities issued or issuable in connection with any
pro rata stock split, stock dividend or recapitalization by or reorganization of
the Company, (iv) Company Securities issued or issuable as a pro rata dividend
on the Common Stock, (v) Company Securities issued or issuable by the Company in
connection with and as consideration for the acquisition of another business or
entity by the Company or any of its subsidiaries, (vi) shares of Series C
Preferred Stock issued or issuable as a pro rata dividend on the Series C
Preferred Stock and (vii) Company Securities issued or issuable to any person or
entity who (A) is neither an Affiliate of JWC Equity Partners nor a financial
buyer and (B) is either (I) directly or indirectly through its subsidiaries a
significant actual or prospective supplier of goods to or customer of the
Company or any of its subsidiaries, to whom such Company Securities are issued
or issuable for the purpose of establishing or enhancing the business
relationship between such supplier or customer and the Company and its
subsidiaries or (II) engaged in, and having a principal business unit engaged
in, manufacturing or marketing tools, specialty tools, decorative, indoor,
outdoor or other heating products, lighting products, security products, home
improvement or decorative products or other accessories or products for the
home.
-37-
(c) For purposes of this Section 4.17, the term "Junior
Security" shall mean (i) any shares of the Voting Common Stock and the Nonvoting
Common Stock of the Company and any other class or series of stock of the
Company which, by the terms of the Certificate of Incorporation of the Company
or of the instrument by which the Board of Directors of the Company, acting
pursuant to authority granted in such Certificate of Incorporation, shall fix
the relative rights, preferences and limitations thereof, shall be junior to the
Series C Preferred Stock in respect of the right to receive dividends or to
participate in any distribution of assets (including but not limited to any
distribution of assets in connection with the liquidation of the Company) other
than by way of dividends, and (ii) any options or warrants or similar securities
or rights to acquire from the Company any securities described in clause (i) of
this definition.
4.18 Transactions with Affiliates. Other than the Management Agreement
and other agreements entered into on or prior to the date hereof and arms-length
agreements entered into in the ordinary course of business after the date hereof
on terms no less favorable to the Company than would be available in agreements
entered into with Persons who are not Affiliates of JWC Equity Partners, the
Company shall not enter into any transaction with any Affiliate of JWC Equity
Partners without the consent of the holders of a majority of the Common Stock
Equivalents at the time held in the aggregate by the Management Holders and the
Other Holders, unless such transaction shall (a) have been approved by a
majority of the directors of the Company who are not affiliated or associated
with JWC Equity Partners and (b) be on terms no less favorable to the Company
than would be available in agreements entered into with Persons who are not
Affiliates of JWC Equity Partners.
4.19 Certain Covenants of the Company. The Company hereby agrees, for
the benefit of the UBS Holders, the HMTF Holders and the PPM/ReliaStar Holders
for so long as the Public Float Date shall not have occurred, the Company will
comply with and will cause its subsidiaries to comply with the following
covenants:
(a) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company ending after
the date of this Agreement, the Company will deliver to each of UBS Capital,
HMTF Inc., PPM America, Inc. and ReliaStar Financial Corp. a balance sheet of
the Company and its subsidiaries and statements of income and of cash flows of
the Company and its subsidiaries, audited by any "big six" independent public
accounting firm selected by the Company (or other independent public accounting
firm selected by the Company and reasonably acceptable to the UBS Holders and
the HMTF Holders), showing the financial position of the Company and its
subsidiaries as of the close of such fiscal year and the results of the
operations of the Company and its subsidiaries during such fiscal year, all on a
consolidated basis. Each of the financial statements delivered pursuant to this
Section 4.19(a) will be accompanied by a report, without material qualification,
of such accounting firm to the effect that such financial statements have been
prepared, except as may be otherwise noted therein, in accordance with generally
accepted accounting principles consistently applied.
-38-
(b) Monthly Statements. Within 30 days after the end of each
of the first eleven months in each fiscal year of the Company, the Company will
deliver to each of UBS Capital, HMTF Inc., PPM America, Inc. and ReliaStar
Financial Corp. a consolidated unaudited balance sheet of the Company and its
subsidiaries and statements of income and of cash flows of the Company and its
subsidiaries as of the end of each such month, all on a consolidated basis, with
(i) a comparison of such month's results to the budgeted results for such month
and to the corresponding month of the prior fiscal year and, (ii) a comparison
of the results for the period from the beginning of the then current fiscal year
to the end of such month to the budgeted results for such period and to the
corresponding period of the prior fiscal year, certified by the chief financial
officer of the Company to be true and correct in all material respects and to
have been prepared, except as may be otherwise noted therein, in accordance with
generally accepted accounting principles consistently applied, subject to normal
year-end adjustments and the addition of footnotes.
(c) Other Financial Information. The Company will deliver to
each of UBS Capital, HMTF Inc., PPM America, Inc. and ReliaStar Financial Corp.,
within 90 days after the commencement of each fiscal year, projected monthly
balance sheets and statements of income for such fiscal year prepared by
management of the Company.
(d) Notice of Litigation, Defaults, Etc. The Company will
promptly give notice to each of UBS Capital, HMTF Inc., PPM America, Inc. and
ReliaStar Financial Corp. of any litigation or administrative proceeding to
which the Company or any of its subsidiaries may hereafter become a party which
has or, in the good faith business judgment of senior management of the Company,
is reasonably likely to have a material adverse effect on the business, assets
or financial condition of the Company and its subsidiaries, taken as a whole.
Promptly upon any executive officer of the Company obtaining knowledge of any
default with respect to indebtedness for borrowed money involving in excess of
$25,000,000 in principal amount, the Company will furnish a notice to each of
UBS Capital, HMTF Inc., PPM America, Inc. and ReliaStar Financial Corp.
specifying the nature and period of existence and the action the Company or any
of its subsidiaries has taken, is taking or proposes to take with respect
thereto. Promptly after the receipt thereof, the Company will provide each of
UBS Capital, HMTF Inc., PPM America, Inc. and ReliaStar Financial Corp. copies
of any reports as to adequacies in accounting controls submitted by independent
accountants with respect to the Company and its subsidiaries.
(e) Other Information. From time to time upon the written
request of UBS Capital, HMTF Inc., PPM America, Inc. or ReliaStar Financial
Corp., the Company will furnish such information regarding the business,
affairs, prospects and financial condition of the Company and its subsidiaries
as the representatives of any UBS Holder or HMTF Holder or PPM/ReliaStar Holder
may reasonably request; provided that, upon the request and as a condition to
the delivery of such information, each of the UBS Holders, HMTF Holders and the
PPM/ReliaStar Holders who is to receive such information shall execute and
deliver a confidentiality and nondisclosure agreement in form and substance
reasonably satisfactory to the Company. Each such representative shall have the
right during normal business hours to examine the financial books and records,
and the certificate of incorporation, bylaws, minutes of meetings of
stockholders, boards of directors and committees thereof, stockholders records
-39-
and similar corporate records, of the Company and its subsidiaries and to make
copies, notes and abstracts therefrom, all at such reasonable times and
intervals as such UBS Holder or HMTF Holder or PPM/ReliaStar Holder may
reasonably request.
4.20 Confidentiality Covenant.
(a) Each of the UBS Holders, the HMTF Holders and the
PPM/ReliaStar Holders agrees to keep confidential any information or materials
provided by or on behalf of the Company hereunder, except (i) as may be
otherwise required by law and (ii) such information and materials as (A) are or
become generally available to the public other than as a result of a disclosure
in violation of this Agreement, (B) was independently acquired or developed by
such Stockholder without violating any of its obligations under this Agreement,
or (C) becomes available to such Stockholder on a nonconfidential basis from a
person who is not and was not to such Stockholder's knowledge bound by a
confidentiality obligation to the Company, or is not and was not otherwise
prohibited from transmitting such information or materials to such Stockholder.
Notwithstanding the foregoing, each of the UBS Holders, the HMTF Holders and the
PPM/ReliaStar Holders shall have the right to disclose such information or
materials to any prospective purchaser of securities of the Company owned by
such Stockholder, provided that such prospective purchaser shall have executed
and delivered a confidentiality and nondisclosure agreement in form and
substance reasonably satisfactory to the Company.
(b) Each of the UBS Holders, HMTF Holders and the
PPM/ReliaStar Holders acknowledges that securities laws prohibit any person who
has received material non-public information regarding the Company or its
subsidiaries from purchasing or selling securities of the Company or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities. Each of the UBS Holders, HMTF Holders and the PPM/ReliaStar Holders
agrees that it will not, at any time that it has received material non-public
information regarding the Company or its subsidiaries, purchase or sell
securities of the Company in violation of such securities laws or communicate
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities in violation of such securities laws.
4.21 Restatement of Stockholders Agreement. This Agreement amends in
part and restates in its entirety the Stockholders Agreement, dated as of
November 26, 1997, among the Company, the JWC Holders, the Management Holders
and the Other Holders party thereto.
[Signatures on Following Pages]
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE COMPANY:
DESA HOLDINGS CORPORATION
By:/s/____________________________
Name:
Title:
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE MANAGEMENT HOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE MANAGEMENT HOLDERS, continued:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE MANAGEMENT HOLDERS, continued:
/s/ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE MANAGEMENT HOLDERS, continued:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇ Ko
▇▇▇ ▇▇▇▇▇ Ko
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE JWC HOLDERS:
/s/ ▇▇▇▇ ▇. Childs
▇▇▇▇ ▇. Childs
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By executing above, each of the foregoing JWC Holders acknowledges
that, pursuant to Section 4.8 of this Amended and Restated Stockholders
Agreement, each of the foregoing JWC Holders has designated and appointed ▇▇▇▇
▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them acting singly, as its
representative to perform all acts as are required, authorized or contemplated
by this Amended and Restated Stockholders Agreement.
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE JWC HOLDERS, continued:
/s/ ▇▇▇▇▇▇▇ ▇. Childs /s/ ▇▇▇▇▇ ▇. Childs
▇▇▇▇▇▇▇ ▇. Childs ▇▇▇▇▇ ▇. Childs
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 1995 SGS-III FAMILY LIMITED PARTNERSHIP
IRREVOCABLE TRUST
By:/s/_____________________ By:/s/______________________
Title: Title:
SUTTIN FAMILY TRUST SGS 1995 FAMILY
LIMITED PARTNERSHIP
By:/s/_____________________ By:/s/_____________________
Title: Title:
By executing above, each of the foregoing JWC Holders acknowledges
that, pursuant to Section 4.8 of this Amended and Restated Stockholders
Agreement, each of the foregoing JWC Holders has designated and appointed ▇▇▇▇
▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them acting singly, as its
representative to perform all acts as are required, authorized or contemplated
by this Amended and Restated Stockholders Agreement.
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE JWC HOLDERS, continued:
OFS INVESTMENT PARTNERS ▇▇▇▇ FAMILY TRUST
By:/s/_________________________ By:/s/________________________
Title: Title:
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/G. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ G. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
By executing above, each of the foregoing JWC Holders acknowledges
that, pursuant to Section 4.8 of this Amended and Restated Stockholders
Agreement, each of the foregoing JWC Holders has designated and appointed ▇▇▇▇
▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them acting singly, as its
representative to perform all acts as are required, authorized or contemplated
by this Amended and Restated Stockholders Agreement.
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE JWC HOLDERS, continued:
▇.▇. CHILDS EQUITY PARTNERS, L.P.
By: ▇.▇. Childs Advisors, L.P.,
its General Partner
By: ▇.▇. Childs Associates, L.P.,
its General Partner
By: ▇.▇. Childs Associates, Inc.,
its General Partner
By:/s/____________________________
Title:
JWC EQUITY FUNDING, INC.
By:/s/____________________________
Name:
Title:
By executing above, each of the foregoing JWC Holders acknowledges
that, pursuant to Section 4.8 of this Amended and Restated Stockholders
Agreement, each of the foregoing JWC Holders has designated and appointed ▇▇▇▇
▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them acting singly, as its
representative to perform all acts as are required, authorized or contemplated
by this Amended and Restated Stockholders Agreement.
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE JWC HOLDERS, continued:
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By executing above, each of the foregoing JWC Holders acknowledges
that, pursuant to Section 4.8 of this Amended and Restated Stockholders
Agreement, each of the foregoing JWC Holders has designated and appointed ▇▇▇▇
▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them acting singly, as its
representative to perform all acts as are required, authorized or contemplated
by this Amended and Restated Stockholders Agreement.
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE JWC HOLDERS, continued:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By executing above, each of the foregoing JWC Holders acknowledges
that, pursuant to Section 4.8 of this Amended and Restated Stockholders
Agreement, each of the foregoing JWC Holders has designated and appointed ▇▇▇▇
▇. Childs and ▇▇▇▇ ▇. ▇▇▇▇▇▇, and each of them acting singly, as its
representative to perform all acts as are required, authorized or contemplated
by this Amended and Restated Stockholders Agreement.
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE OTHER HOLDERS:
THE UBS HOLDERS:
UBS Capital LLC
By:/s/_________________________
Title:
By:/s/_________________________
Title:
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE OTHER HOLDERS, continued:
THE HMTF HOLDERS:
CCC/OMNI INVESTMENT
PARTNERS, L.P.
By:/s/________________________
Title:
JDF FAMILY TRUST
By:/s/________________________
Title:
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
HICKS, MUSE, ▇▇▇▇ & ▇▇▇▇▇ EQUITY
FUND II, L.P.
By: HM2/GP PARTNERS, L.P., its
general partner
By: ▇▇▇▇▇, MUSE GP PARTNERS, L.P.,
its general partner
By: ▇▇▇▇▇ MUSE FUND II,
INCORPORATED, its
general partner
By:/s/________________________
Title:
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE OTHER HOLDERS, continued:
THE HMTF HOLDERS, continued:
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
MUSE CHILDREN GS TRUST
By:/s/_________________________
Title:
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE OTHER HOLDERS, continued:
THE HMTF HOLDERS, continued:
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE OTHER HOLDERS, continued:
THE PPM/RELIASTAR HOLDERS:
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE
COMPANY
By: PPM America, Inc., as attorney in fact,
on behalf of ▇▇▇▇▇▇▇ National Life
Insurance Company
By:/s/______________________________
Title:
OLD HICKORY FUND I, LLC
By: PPM America, Inc., its manager
By:/s/______________________________
Title:
RELIASTAR FINANCIAL CORP.
By:/s/________________________
Title:
Desa Holdings Corporation
Amended and Restated Stockholders Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE OTHER HOLDERS, continued:
CERTAIN OTHER OTHER HOLDERS:
BT INVESTMENT PARTNERS, INC.
By:/s/_________________________
Name:
Title:
EXHIBIT A
SCHEDULE OF STOCKHOLDERS
As of October 9, 1998
[Schedule of stockholders has not been
included and is available upon request]
EXHIBIT B
SCHEDULE OF PREEMPTIVE STOCKHOLDERS
[Schedule of preemptive stockholders has not been
included and is available upon request]