Exhibit 4.4
COMMEMORATIVE BRANDS, INC.
AMENDED AND RESTATED STOCKHOLDERS'
AND SUBSCRIPTION AGREEMENT
AMENDED AND RESTATED STOCKHOLDERS' AND SUBSCRIPTION AGREEMENT (this
"Agreement"), dated as of April 29, 1998, by and among Commemorative Brands,
Inc., a Delaware corporation formerly known as Scholastic Brands, Inc. (the
"Company"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners II, L.P., a Delaware limited partnership
("CHP"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ Offshore Partners, L.P., a Delaware limited
partnership ("Offshore"), Dresdner Bank AG, Grand Cayman Branch ("Dresdner"),
each of the other Stockholders listed on EXHIBIT A hereto (each, an
"Individual Stockholder" and collectively, the "Individual Stockholders"),
and ▇▇▇▇ ▇. ▇▇▇▇▇▇, in his capacity as Voting Trustee under the Amended and
Restated Voting Trust Agreement, dated the date hereof (the "Voting Trust
Agreement"), among the Individual Stockholders and ▇▇▇▇ ▇. ▇▇▇▇▇▇, as Voting
Trustee, and each of the persons who shall, after the date hereof, acquire
securities of the Company and join in and become a party to this Agreement by
executing and delivering to the Company an Instrument of Accession in the
form of EXHIBIT B hereto (CHP, Offshore, Dresdner, the Individual
Stockholders, Castle, and each such person who executes and delivers an
Instrument of Accession, as provided in Section 4(a) hereof, are hereinafter
sometimes referred to collectively as the "Stockholders" and individually as
a "Stockholder").
WHEREAS, on December 16, 1996, the Company acquired (the
"Acquisition") substantially all of the assets of the scholastic products and
recognition and affinity products businesses of each of CJC Holdings, Inc., a
Texas corporation ("CJC"), and ▇.▇. ▇▇▇▇▇▇▇ Company ("Balfour"), a Delaware
corporation; and
WHEREAS, in connection with the Acquisition, CHP, Offshore and
Dresdner subscribed for and purchased an aggregate of 375,000 shares of the
Company's Common Stock, 100,000 shares of the Company's Series A Preferred
Stock, 375,000 shares of the Company's Series B Preferred Stock and certain
warrants to purchase the Company's Common Stock pursuant to that certain
Subscription Agreement, dated as of December 16, 1996, by and between CHP,
Offshore, Dresdner and the Company (the "Original Subscription Agreement");
and
WHEREAS, thereafter CHP, Offshore and Dresdner sold an aggregate of
3,544 shares of the Company's Series B Preferred Stock and an aggregate of
3,544 shares of the Company's Common Stock held by them to Branford Castle
Holdings, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇, who
thereupon became parties to the Original Subscription Agreement upon their
execution and delivery of Instruments of Accession thereto on December 17,
1996; and
WHEREAS, the Company has heretofore repurchased from CHP, Offshore
and Dresdner all of the outstanding shares of the Company's Series A
Preferred Stock and warrants of the Company originally acquired by them
pursuant to the Original Subscription Agreement; and
WHEREAS, concurrently herewith, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ is acquiring from
CHP, Offshore, Dresdner, Branford and ▇▇▇▇▇▇ an aggregate of 938 shares of
the Company's Series B Preferred Stock and 938 shares of the Company's Common
Stock, and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is acquiring from CHP, Offshore, Dresdner,
Branford and ▇▇▇▇▇▇, an aggregate of 400 shares of the Company's Series B
Preferred Stock and 400 shares of the Company's Common Stock; and
WHEREAS, the Stockholders and the Company wish to amend and restate
in its entirety the Original Subscription Agreement in the manner set forth
in this Stockholders' Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. CAPITALIZATION. The capitalization of the Company currently
consists of (i) 750,000 shares of preferred stock, par value $.01 per share, of
which 100,000 shares have been designated Series A Preferred Stock (the "Series
A Preferred Stock"), all of which shares are currently outstanding, and of which
375,000 shares have been designated Series B Preferred Stock (the "Series B
Preferred Stock" and, together with the Series A Preferred Stock, the "Preferred
Stock"), of which 375,000 shares have been issued and are currently outstanding,
and (ii) 750,000 shares of Common Stock, par value $.01 per share (the "Common
Stock"), of which 375,000 shares have been issued and are currently outstanding,
21,405 shares are currently reserved for issuance upon exercise of the Company's
outstanding Common Stock Purchase Warrants and 39,101 shares are currently
reserved for issuance upon exercise of certain employee stock options. The terms
of the Common Stock and the Preferred Stock are set forth in the Certificate of
Incorporation, as amended (including, without limitation, by Certificates of
Designations for the Series A Preferred Stock and the Series B Preferred Stock)
of the Company, copies of which have been furnished to each of the Stockholders.
2. OWNERSHIP OF SHARES.
(a) Each of the Stockholders currently beneficially owns or
proposes to acquire such number of shares of Common Stock and Series B
Preferred Stock as is set forth opposite such Stockholder's name on EXHIBIT A
hereto, such shares being all of the securities of the Company currently held
and proposed to be acquired by such Stockholder. The shares of Common Stock
and Series B Preferred Stock beneficially owned by the Stockholders as of the
date hereof, and any shares of Common Stock or Preferred Stock which any such
Stockholder may acquire after the date hereof, or any other shares of capital
stock of the Company or warrants, options, or rights to acquire any shares of
capital stock of the Company (and the shares of capital stock issuable upon
exercise of any such warrants, options or rights) which shall at any time be
issued in exchange for or on account of the Common Stock or the Preferred
Stock or which any such Stockholder may otherwise acquire after the date
hereof, are sometimes collectively referred to herein as the "Company
Securities."
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(b) At any time an Instrument of Accession is delivered to
the Company, EXHIBIT A hereto shall be amended to reflect accurately either
(i) the amount of capital contributed to the Company by each additional
Stockholder, and the number of shares of Common Stock and Preferred Stock
issued to such Stockholder or (ii) in the case of a transfer of Company
Securities by a Stockholder, the number of shares of Common and/or Preferred
Stock owned by such Stockholder and its transferee. The representations set
forth in Section 3 hereof shall be deemed reconfirmed and remade by each such
Stockholder in connection with the issuance or transfer any shares of Common
Stock or Preferred Stock to such Stockholder after the date hereof.
(c) References herein to shares of Common Stock and Preferred
Stock held or owned by any Stockholder shall include the shares of Common
Stock and Preferred Stock issued to or acquired by any Stockholder after the
date hereof, whether by exercise of any warrants or options, purchase or
otherwise.
3. STOCKHOLDERS' REPRESENTATIONS.
(a) Each Stockholder severally represents and warrants
that he, she or it has acquired or will acquire the Company Securities for
investment for his, her or its own account and not with a view to, or for
resale in connection with, the distribution or other disposition thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act").
Each Stockholder severally agrees that he, she or it will not, directly or
indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose
of any Company Securities (or solicit any offers to buy, purchase, or
otherwise acquire or take a pledge of any Company Securities), except in
compliance with the Securities Act, the rules and regulations promulgated
thereunder, applicable state securities laws and the provisions of this
Agreement. Each Stockholder severally represents and warrants that, except to
the extent provided in the Voting Trust Agreement, no other person or entity
has any interest, beneficial or otherwise, in the Company Securities held or
to be acquired by him, her or it.
(b) Each Stockholder severally acknowledges that he, she
or it has been advised that (i) the Company Securities are not registered
under the Securities Act, and the Company has no obligation to effectuate any
such registration, (ii) the Company Securities must be held indefinitely and
the Stockholder must continue to bear the economic risk of the investment in
the Company Securities unless they are subsequently registered under the
Securities Act or an exemption from such registration is available, (iii)
Rule 144 promulgated under the Securities Act is not currently available with
respect to the sale of any securities of the Company, and the Company has no
obligation nor any intention to make such Rule available, (iv) when and if
any of the Company Securities may be disposed of without registration in
reliance on Rule 144, the amounts that may be disposed of may be limited in
accordance with the terms and conditions of such Rule, (v) if the Rule 144
exemption is not available, public sale without registration will require
compliance with Regulation D or some other exemption under the Securities
Act, (vi) restrictive legends will be placed on the certificates representing
the Company Securities and (vii) a notation will be made in the appropriate
records of the Company indicating that the Company Securities are subject to
restrictions on transfer and, if the Company
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should at some time in the future engage the services of a stock transfer
agent, appropriate stop-transfer restrictions will be issued to such transfer
agent with respect to the Company Securities.
(c) Each Stockholder agrees with each other Stockholder and
the Company that if any Company Securities are disposed of by him, her or it
(i) in reliance upon Rule 144 under the Securities Act, he, she or it shall
deliver to the Company at or prior to the time of such disposition an
executed copy of Form 144 (if required by Rule 144) and such other
documentation as the Company may reasonably require in connection with such
disposition or (ii) in reliance on Rule 144 or pursuant to another exemption
from registration under the Securities Act, he, she or it shall deliver to
the Company a legal opinion, reasonably satisfactory to the Company, as to
the availability of and compliance with such exemption.
(d) Each Stockholder severally represents and warrants that
(i) he, she or it can afford to hold the Company Securities for an indefinite
period and to suffer the complete loss of his, her or its investment in the
Company Securities, (ii) he, she or it understands and has taken cognizance
of all the risk factors related to his, her or its acquisition of the Company
Securities and (iii) his, her or its knowledge and experience in financial
and business matters is such that he, she or it is capable of evaluating the
merits and risks of acquiring the Company Securities.
(e) Each Stockholder severally represents and warrants that
(i) he, she or it has full power and authority to execute and deliver this
Agreement and to perform such Stockholder's obligations hereunder, (ii) this
Agreement has been duly authorized, executed, and delivered by such
Stockholder and is valid and binding and enforceable in accordance with its
terms; (iii) the execution and delivery of this Agreement and the performance
of such Stockholder's obligations hereunder will not violate or conflict
with, or cause a breach of or a default under, any provision of any governing
instrument or any law, decree or regulation applicable to such Stockholder or
any contract or instrument to which such Stockholder is a party or by which
such holder or any of his, her or its properties or assets is bound, and (iv)
no consent, approval, or authorization of or any filing with any authority or
other person which has not been obtained or made is required to be obtained
or made in connection with the execution and delivery of this Agreement by
such Stockholder.
4. RESTRICTIONS ON TRANSFER.
(a) Except as provided in Sections 4, 5 and 6 hereof, no
Stockholder shall transfer or otherwise dispose of any Company Securities
owned by such Stockholder, or any interest therein, and any attempt by such
Stockholder to effect a transfer or disposition in violation of this Section
4 or Sections 5 or 6 hereof shall be void and ineffective for all purposes.
The words "transfer" and "dispose" include the making of any sale, exchange,
assignment, gift, security interest, pledge or other encumbrance, or any
contract therefor, any voting trust or other agreement or arrangement with
respect to the transfer of voting rights or any other beneficial interest in
the Company Securities, the creation of any other claim thereto or any other
transfer or disposition whatsoever, whether voluntary or involuntary,
affecting the right, title, interest or possession in or to the Company
Securities.
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Subject to the last sentence of this paragraph, nothing in
this Section 4 or in Sections 5 or 6 hereof shall prevent the transfer or
other disposition of the Company Securities: (i) to a personal representative
or to one or more members of any Stockholder's family or to trusts or similar
entities established for their benefit, (ii) to any other Stockholder or to
any person or entity controlling, controlled by, or under common control
with, any Stockholder, (iii) upon any liquidation or any other distribution
to the partners or any other holders of a beneficial interest in any
Stockholder, or (iv) between or among CHP and/or any related account or fund
managed by ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. and/or any person or entity directly or
indirectly controlling, controlled by, or under common control with, CHP or
any such account or fund; PROVIDED, HOWEVER, that such transferee(s) shall
take such Company Securities subject to, and shall be fully bound by, this
Agreement with the same effect as if he, she or it were a party hereto and
shall execute and deliver to the Company an Instrument of Accession in the
form of EXHIBIT B hereto and references herein to Company Securities held or
owned by any Stockholder shall be deemed to include Company Securities held
or owned by any such transferee(s) (and the transferee shall be deemed a
Stockholder for purposes of this Agreement). As used in this Agreement, the
term "personal representative" shall mean the executor or executors of the
will or administrator or administrators of the estate, the heirs, legatees or
other beneficiaries thereunder and all other legal representatives (by
operation of law or otherwise) of a holder of Company Securities.
Notwithstanding the foregoing, however, no such transfer shall be made,
unless consented to by the Company, to any person, group or entity that may
be deemed to be a competitor of the Company (as reasonably determined by the
Board of Directors).
(b) Whenever this Agreement shall terminate as to any Company
Securities pursuant to Section 7(b) hereof, the Stockholder owning such
shares shall be entitled to receive, promptly upon presentment to the Company
of the certificate or certificates evidencing the same, a certificate or
certificates not bearing the restrictive legend provided for in Section 4(c)
hereof, PROVIDED, HOWEVER, that if such termination occurs as a result of a
transfer pursuant to Rule 144A as permitted by Section 7(b)(ii) hereof, only
the first two sentences of such legend shall be removed.
(c) The parties hereto agree that each stock certificate
representing Common Stock or Preferred Stock issued to any holder bound by
the terms hereof shall bear the following legend:
SHARES OF THE COMPANY REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS' AND
SUBSCRIPTION AGREEMENT DATED AS OF APRIL 29, 1998, WHICH
CONTAINS PROVISIONS REGARDING THE RESTRICTIONS ON THE TRANSFER
OF SUCH SHARES AND OTHER MATTERS. A COPY OF SUCH AGREEMENT IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
COMPANY. THE SHARES REPRESENTED BY THIS CERTIFICATE WERE NOT
REGISTERED UNDER, AND ARE SUBJECT TO, THE SECURITIES ACT OF
1933, AS
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AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE
SECURITIES ACT OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT.
(d) The parties hereto agree that any Company Securities
other than the Common Stock or the Preferred Stock which may at any time be
issued to any holder bound by the terms hereof shall bear a similar legend or
such other the legend as may be required by the terms of such securities.
5. CERTAIN PURCHASE RIGHTS.
(a) DRAG-ALONG RIGHT. (i) If, before the consummation of
an Initial Public Offering (as hereinafter defined), CHP, alone or together
with one or more of the other Stockholders (collectively, the "Majority
Stockholders"), proposes to sell any or all of the shares of Common Stock
and/or Preferred Stock owned by them in a bona fide transaction to an
unaffiliated third party (regardless of whether such disposition is by means
of a sale of such shares of Common Stock and/or Preferred Stock, a merger of
the Company in which the shares of Common Stock and/or Preferred Stock are
converted into the right to receive cash, or a sale of all or substantially
all of the assets of the Company and a subsequent distribution of the
proceeds therefrom), the Majority Stockholders shall be entitled, by delivery
of 30 days' prior written notice to all of the other Stockholders, specifying
the name and address of the proposed parties to such transaction and the
terms thereof, to require each such Stockholder to sell the same percentage
of the shares Common Stock and/or Preferred Stock held by him, her or it for
the equivalent consideration per share and otherwise upon the same terms as
such Majority Stockholders in the proposed transaction.
(ii) The closing of any transaction pursuant to
this Section 5(b) shall be held at such time and place as the Majority
Stockholders shall reasonably specify. At such closing, the selling
Stockholders shall deliver stock certificates representing the shares of
Common Stock and/or Preferred Stock to be sold, duly endorsed for transfer
and accompanied by all requisite stock transfer taxes, if any, against
payment of the purchase price therefor, and the shares of Common Stock and/or
Preferred Stock to be transferred shall be free and clear of any liens,
charges, claims or encumbrances (other than restrictions imposed pursuant to
applicable federal and state securities laws), and each selling Stockholder
shall so represent and warrant. Each selling Stockholder shall further
represent and warrant that he, she or it is the beneficial owner of such
shares of Common Stock and/or Preferred Stock and shall make such additional
representations and warranties as shall be customary in transactions of a
similar nature.
(b) TAG ALONG RIGHTS. If, before the consummation of an
Initial Public Offering, CHP proposes to sell, in a single transaction or a
series of related transactions (to the same purchaser or affiliated
purchasers) either (i) more than 30% of the shares of Common Stock and/or 30%
of the shares of Preferred Stock held by it on the date hereof or (ii) any
other percentage of the shares of Common Stock or Preferred Stock held by it
if as a result of such
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proposed sale of Common Stock and/or Preferred Stock CHP, together with any
related account or fund managed by ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., and any person or
entity that directly or indirectly controls or is controlled by or is under
direct or indirect common control with CHP or any such account or fund, shall
no longer have the right to vote shares of Common and Preferred Stock
representing in the aggregate more than 50% of the total voting power of the
Company, in a transaction in which the Majority Stockholders have not
exercised their rights under Section 5(b) hereof, the other Stockholders
shall be offered, as provided below, a single opportunity in connection with
such proposed sale to sell their shares of Common Stock or Preferred Stock
(or combination thereof to the extent such sale by CHP includes both Common
Stock and Preferred Stock) on the same terms and conditions as those received
by CHP. CHP shall give no less than 30 days' prior written notice of the
proposed sale and its terms to the other Stockholders, provided that the
Company shall transmit such offer and perform or cause to be performed such
administrative actions as may be necessary in order to provide for the
processing of the transactions contemplated thereby without charge. Each
Stockholder which elects to accept the offer by written notice to the Company
within 30 days after notice of the transaction is given shall have the
opportunity to sell to the purchaser in such sale that number of shares of
Common Stock and/or Preferred Stock owned by such Stockholder as shall equal
the product of (x) the percentage of all shares of Common Stock and/or
Preferred Stock, as applicable, owned by such Stockholder as of the last day
of such 30 day period, multiplied by (y) the number of shares of Common Stock
and/or Preferred Stock, as applicable, which the purchaser has offered to
acquire from CHP. The number of shares of Common Stock or Preferred Stock to
be sold by CHP shall be reduced proportionately to the extent necessary to
provide for the sale of shares of Common Stock and/or Preferred Stock by the
other Stockholders.
(c) CERTAIN DEFINITIONS. For purposes of this
Agreement, the terms: (i) "Fully-Diluted Basis" shall mean the sum of,
without duplication, (A) all shares of voting equity securities of the
Company outstanding at the time of determination, plus (B) all shares of
voting equity securities of the Company issuable upon the exercise of any
option, warrant or similar right outstanding at the time of determination,
whether or not then exercisable, plus (C) all shares of voting equity
securities of the Company issuable upon the exercise of any conversion or
exchange right contained in any security convertible into or exchangeable for
shares of voting equity securities of the Company; and (ii) "Initial Public
Offering" shall mean the first offering by the Company to the general public
of Common Stock of the Company pursuant to a registration statement filed
with, and declared effective by, the Securities and Exchange Commission (the
"SEC") upon the consummation of which the Common Stock is listed on a United
States securities exchange or included in the NASDAQ Stock Market System,
other than a registration on Form S-4 or S-8 (or its equivalent).
(d) CERTAIN EXEMPT TRANSACTIONS. The provisions of this
Section 5 shall not apply to (i) any transfer between or among CHP and/or any
related account or fund managed by ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. and/or any entity or
person that directly or indirectly controls or is controlled by or is under
direct or indirect common control with CHP or any such related account or
fund at a price not in excess of such person's or entity's original cost or
(ii) any transfer to the partners or other equity holders of CHP or any other
entity to which CHP shall have transferred such shares in accordance with
clause (i) of this Section 5(d) as part of a
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distribution by CHP or such other entity, provided that in each such case,
such transferee agrees to be bound by the provisions of this Agreement.
6. REGISTRATION RIGHTS.
(a) REGISTRATION UPON REQUEST. If the Company shall be
requested in writing at any time or from time to time by any of CHP, Offshore
or Dresdner (hereinafter the "Initiating Stockholder"), to effect the
registration under the Securities Act of a number of shares of Common Stock
or Preferred Stock (which request shall specify the aggregate number of
shares of Common Stock and Preferred Stock intended to be offered and sold by
the Initiating Stockholder, shall describe the nature or method of the
proposed offer and sale thereof and shall contain an undertaking by the
Initiating Stockholder to cooperate with the Company in order to permit the
Company to comply with all applicable requirements of the Securities Act and
the rules and regulations thereunder and to obtain acceleration of the
effective date of the registration statement), the Company shall (i) promptly
notify each of the remaining Stockholders of such proposed registration, and
(ii) use its best efforts to effect, as expeditiously as possible, the
registration (and to keep such registration continuously effective until all
of the shares covered thereby have been distributed) on an appropriate form
under the Securities Act of the Common Stock and Preferred Stock which the
Company has been requested to register by the Initiating Stockholder and each
other Stockholder requesting registration by notice to the Company within 20
days of delivery of the Company's notice, subject to the limitations set
forth in Section 6(c)(1) hereof.
If the Initiating Stockholder so elects, the offering of all
or a portion of such Common Stock and Preferred Stock pursuant to the
registration shall be in the form of an underwritten offering and the
managing underwriter or underwriters selected for such offering shall be
selected by the Initiating Stockholder and reasonably acceptable to the
Company. The Initiating Stockholder shall provide the Company with notice of
the identify of the managing underwriter or underwriters it has selected a
reasonable time prior to the commencement of any such underwritten offering.
(b) PIGGYBACK REGISTRATION.
(1) If the Company at any time proposes to register
any of its shares of Common Stock or Preferred Stock under the Securities Act
(other than a registration effected solely to implement an employee benefit
plan, or a merger, acquisition or exchange offer as to which Rule 145
promulgated under the Securities Act is applicable), whether or not for sale
for its own account, it shall give prompt written notice to the Stockholders
of each such intended registration by the Company and the Stockholders shall
be entitled to request that the Company include in any such registration any
number of shares of Common Stock then owned by the Stockholders subject to
the limitations set forth in Section 6(c)(1) hereof.
(2) Upon the written request of any Stockholder
made within 20 days after the giving by the Company of any such notice of
intention to register (which request shall specify the number of shares of
Common Stock and Preferred Stock intended to be
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disposed of by such Stockholder), the Company shall use its best efforts to
effect the registration under the Securities Act of all shares of Common
Stock and Preferred Stock which the Company has been so requested to register
by such Stockholder (subject to the restrictions set forth in Section 6(c)(1)
hereof); PROVIDED, HOWEVER, that (i) if at any time after giving written
notice of its intention to register any Common Stock or Preferred Stock and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such Common Stock or Preferred Stock, the Company may, at its
election, give written notice of such determination to each such Stockholder
and, thereupon, shall be relieved of its obligation to register any shares of
Common Stock or Preferred Stock on behalf of such Stockholder in connection
with such registration and (ii) if such registration involves an underwritten
offering, such Stockholder shall sell its shares of Common Stock or Preferred
Stock to the underwriters selected by the Company on the same terms and
conditions as apply to the Company.
(c) GENERAL PROVISIONS.
(1) If a registration pursuant to Section 6(a) or
(b) hereof involves an underwritten offering and the managing underwriter
advises the Company in writing that, in its opinion, the number of securities
requested to be included in such registration exceeds the number that can be
sold in such offering, then the Company shall include in such registration
(i) first, the securities the Company proposes to sell, and (ii) second, the
number of shares of Common Stock and Preferred Stock requested by each
Stockholder and any other selling stockholder of the Company to be included
in such registration that, in the opinion of such underwriters, can be sold,
such amount to be allocated PRO RATA among the Stockholders requesting
registration in accordance with the number of shares of Common Stock and
Preferred Stock owned by such Stockholder.
(2) Each Stockholder shall furnish the Company such
information regarding such Stockholder and the distribution of its shares of
Common Stock and Preferred Stock as the Company may from time to time
reasonably request in writing in connection with the registration statement
(and the prospectus contained therein).
(3) In the case of a registration pursuant to
Section 6(a) or (b) hereof, the Company shall have the right to designate the
managing underwriter in any underwritten offering.
(4) All expenses incident to the Company's
performance of or compliance with this Section 6, including all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the shares of Common Stock and Preferred
Stock), rating agency fees, printing expenses, messenger and delivery
expenses, the fees and expenses incurred in connection with the listing of
the securities to be registered on securities exchanges or NASDAQ, fees and
disbursements of counsel for the Company and its independent certified public
accountants, the fees and expenses of any special experts retained by the
Company in connection with such registration and the fees and expenses of
other persons
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retained by the Company (all such expenses being herein called "Registration
Expenses"), will be borne by the Company. Except as provided above, the
Company will not have any responsibility for any of the expenses of any
Stockholder incurred in connection with any registration hereunder,
including, without limitation, underwriting discounts or commissions
attributable to the sale of shares of Common Stock and Preferred Stock and
counsel fees for a Stockholder.
(5) (i) In connection with any registration of shares
of Common Stock or Preferred Stock of any Stockholder pursuant to Section
6(a) or (b) hereof, the Company agrees to indemnify, to the full extent
permitted by law, each Stockholder against all losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees and
disbursements) caused by (i) any untrue or alleged untrue statement of a
material fact contained in any registration statement, prospectus or
preliminary prospectus (including any amendment or supplement thereto) or
(ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
(iii) any act or failure to act or any alleged act or alleged failure to act
by any such person in connection with, or relating in any manner to, the
offering contemplated by such registration statement, prospectus or
preliminary prospectus (including any amendment or supplement thereto), and
which is included as part of or referred to in any loss, claim, damage,
liability or expense arising out of or based upon matters covered by clause
(i) or (ii) above (provided, that the Company shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, liability or
expense resulted directly from such acts or failures to act undertaken or
omitted to be taken by such person through its gross negligence or willful
misconduct) except insofar as the same are caused by or contained in any
information with respect to any Stockholder furnished in writing to the
Company by the Stockholder expressly for use therein or by the Stockholder's
failure to deliver to a prospective purchaser a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished the Stockholder with a sufficient number of copies of
the same.
(ii) In connection with any registration in which
the Stockholders are participating, the Stockholders will furnish to the
Company in writing such information with respect to it as the Company
reasonably requests for use in connection with any such registration
statement, prospectus or preliminary prospectus and each such Stockholder,
severally and not jointly, agrees to indemnify, to the full extent permitted
by law, the Company, its directors and officers and each person who controls
the Company (within the meaning of the Securities Act) and, in connection
with an underwritten offering, each underwriter, its directors and officers
and each person who controls the underwriters (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees and disbursements) caused by (i) any
untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus (including any
amendment or supplement thereto) or (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, or (iii) any act or failure to act or any
alleged act or alleged failure to act by any such person in connection with,
or relating in any manner to, the offering contemplated by such registration
10
statement, prospectus or preliminary prospectus (including any amendment or
supplement thereto), and which is included as part of or referred to in any
loss, claim, damage, liability or expense arising out of or based upon
matters covered by clause (i) or (ii) above (PROVIDED, that the Stockholder
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction, that
such loss, claim, damage, liability or expense resulted directly from such
acts or failures to act undertaken or omitted to be taken by such person
through its gross negligence or willful misconduct) to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information with respect to any Stockholder so furnished in writing by the
Stockholder expressly for use therein.
(iii) Any person entitled to indemnification
hereunder agrees to give prompt written notice to the indemnifying party
after the receipt by such person of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in
writing for which such person will claim indemnification or contribution
pursuant to this Agreement and, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to such indemnified party. If the indemnifying party
is not entitled to, or elects not to, assume the defense of a claim, it will
not be obligated to pay the fees and expenses of more than one counsel with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which event
the indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel or counsels. The indemnifying party will not be
subject to any liability for any settlement made without its consent.
(iv) If the indemnification provided for in this
Section 6(c)(5) from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties
in connection with the actions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party
or indemnified parties, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 6(c)(5)(iii), any legal or
other fees or expenses reasonably incurred by such other party in connection
with any investigation or proceeding.
11
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(c)(5)(iv) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
If indemnification is available under this Section
6(c)(5), the indemnifying parties shall indemnify the indemnified party to
the full extent provided in Sections 6(c)(5)(i) and 6(c)(5)(ii) without
regard to the relative fault of said indemnifying party or indemnified party
or any other equitable consideration provided for in this Section 6(c)(5)(iv).
7. TERMINATION.
(a) TERMINATION AS TO STOCKHOLDER. This Agreement shall
terminate as to any Stockholder at such time as the Stockholder shall not
hold any Company Securities; PROVIDED, HOWEVER, that the provisions of this
Agreement shall continue in effect for the purpose of enforcing all
obligations and undertakings having theretofore become operative.
(b) TERMINATION AS TO SECURITIES. This Agreement shall
terminate as to any particular shares when (i) a registration statement with
respect to the sale of such shares shall have become effective under the
Securities Act and such shares shall have been disposed of in accordance with
such registration statement, (ii) they shall have been distributed to the
public pursuant to Rule 144 (or any successor provision) or to a transferee
in any transaction pursuant to Rule 144A (or any successor provision) under
the Securities Act, (iii) they shall have been otherwise transferred, and
subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any state securities or
blue sky law then in full force and effect or (iv) they shall have ceased to
be outstanding.
(c) TERMINATION OF AGREEMENT. This Agreement shall
remain in effect until the earlier to occur of (i) the Agreement being
terminated as to all Company Securities and Stockholders pursuant to
paragraphs (a) and (b) of this Section 7, (ii) except for the provisions of
Section 6, at a time when CHP, Dresdner and Offshore (together with their
affiliates) shall cease to own more than 10% of the total number of shares of
Common Stock of the Company then outstanding or (iii) except for the
provisions of Section 6 hereof, upon the consummation of an Initial Public
Offering (as defined in Section 5(c) above) by the Company.
8. FURTHER ACTION. Each party hereto agrees to execute and
deliver any instrument and take any action that may reasonably be requested
by any other party for the purpose of effectuating the provisions of this
Agreement.
9. ASSIGNMENT. Except as otherwise provided in this Section
9 or in Section 4 hereof, no right under this Agreement shall be assignable
and any attempted assignment in violation of this provision shall be void.
The Company shall have the right to assign its rights and obligations
hereunder to any successor entity (including any entity acquiring
substantially all of the assets of the Company), whereupon references herein
to the Company shall be deemed to
12
be to such successor. This Agreement, and the rights and obligations of the
parties hereunder, shall be binding upon and inure to the benefit of any and
all transferees of Company Securities subject hereto (except where expressly
provided herein that such transferred Common Stock and Preferred Stock is
free of all rights and restrictions imposed hereby), the successors,
permitted assigns, personal representatives and all other legal
representatives, in whatsoever capacity, by operation of law or otherwise, of
the parties hereto, in each case with the same force and effect as if the
foregoing persons were named herein as parties hereto.
10. ENFORCEMENT. The parties hereto recognize that
irreparable damage will result in the event that this Agreement shall not be
specifically enforced. If any dispute arises concerning the disposition of
any Company Securities hereunder, the parties hereto agree that an injunction
may be issued restraining such disposition pending determination of such
controversy and that no bond or other security may be required in connection
therewith. If any dispute arises concerning the right or obligation of the
Stockholders or the Company to purchase or sell any Company Securities
subject hereto, such right or obligation shall be enforceable by a decree of
specific performance. Such remedies shall, however, not be exclusive and
shall be in addition to any other remedy which the parties may have.
11. MISCELLANEOUS PROVISIONS.
(a) APPLICABLE LAW. This Agreement shall be governed
by, and construed and enforced in accordance with and subject to, the laws of
the State of Delaware applicable to agreements made and to be performed
entirely within such State.
(b) NOTICES. Any notice or other communication required
or which may be given hereunder shall be in writing and shall be delivered
personally, telecopied with confirmed receipt, sent by certified, registered,
or express mail, postage prepaid, or sent by a national next-day delivery
service to the parties at the following addresses or at such other addresses
as shall be specified by the parties by like notice, and shall be deemed
given when so delivered personally or telecopied, or if mailed, two (2) days
after the date of mailing, or, if by national next-day delivery service, on
the day after delivery to such service as follows:
(i) if to the Company, to it:
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
13
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(ii) if to any Stockholder to him, her or it at
his, her or its address set forth on EXHIBIT A hereto.
(c) ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement amends, restates and supersedes in its entirety the Original
Subscription Agreement, dated December 16, 1996, among the Company and the
Stockholders party thereto and sets forth the entire understanding of the
parties with respect to the subject matter hereof, subject to any other
written agreements that may exist as between certain of the Stockholders with
respect to acquisition or disposition of the Company Securities on a pari
passu basis or otherwise. The failure of any party to seek redress for the
violation of or to insist upon the strict performance of any term of this
Agreement shall not constitute a waiver of such term and such party shall be
entitled to enforce such term without regard to such forbearance. This
Agreement may be amended, each party hereto may take any action herein
prohibited or omit to take action herein required to be performed by it, and
any breach of or compliance with any covenant, agreement, warranty or
representation may be waived, only by the written consent or written waiver
of the Company and the Stockholders then owning at least 51% of the Common
Stock then owned by all of the Stockholders, and then such consent or waiver
shall be effective only in the specific instance and for the specific purpose
for which given; PROVIDED, HOWEVER, that the consent of a Stockholder shall
be required if any such amendment or waiver will have a material adverse
effect on the rights or interests of such Stockholder.
(d) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement, or any part thereof, is held by a court of
competent jurisdiction or any foreign federal, state, county or local
government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
(e) 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.
(f) HEADINGS. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretations of the Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
14
STOCKHOLDERS:
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS II, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.,
its Investment Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ OFFSHORE
PARTNERS, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.,
its Investment Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
DRESDNER BANK AG, GRAND
CAYMAN BRANCH
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.,
its Investment Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
BRANFORD CASTLE HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
15
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, as Voting Trustee
COMPANY:
COMMEMORATIVE BRANDS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
16
EXHIBIT A
As of April 29, 1998
---------------------------------------------------------------------------------------------------
Shares of
Stockholder's Name and Address Shares of Common Stock Series B Preferred Stock
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners II, L.P.
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 330,840 330,840
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ Offshore
Partners, L.P.
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. 20,804 20,804
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
Dresdner Bank AG, Grand
Cayman Branch
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. 18,483 18,483
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
Branford Castle Holdings, Inc.
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 1,888 1,888
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
A-1
---------------------------------------------------------------------------------------------------
Shares of
Stockholder's Name and Address Shares of Common Stock Series B Preferred Stock
---------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 234 234
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ 938
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ &
Associates, Inc. 400 400
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
A-2
EXHIBIT B
INSTRUMENT OF ACCESSION
The undersigned, __________________________, as a condition precedent
to becoming the owner or holder of record of (1) __________ (________) shares
of Common Stock, par value $.01 per share, of the Company, and (2)
_____________ (________) shares of Series B Preferred Stock, par value $.01
per share, of the Company, hereby agrees to become a Stockholder party to and
bound by that certain Amended and Restated Stockholders' and Subscription
Agreement, dated as of April , 1998 (the "Stockholders' Agreement"), by and
among the Company and certain stockholders of the Company. This Instrument of
Accession shall take effect and shall become an integral part of the said
Stockholders' Agreement immediately upon execution and delivery to the
Company of this Instrument.
IN WITNESS WHEREOF, this INSTRUMENT OF ACCESSION has been duly
executed by or on behalf of the undersigned as of the date below written.
Signature:
---------------------------
Address:
---------------------------
---------------------------
---------------------------
Date:
---------------------------
Accepted:
By:
---------------------------
Date:
-------------------------
B-1