Exhibit 10.2
MANAGEMENT SUBSCRIPTION
AND STOCKHOLDERS AGREEMENT
This Management Subscription and Stockholders Agreement (the
"Agreement") is entered into as of March 31, 1998 by and among Diamond Triumph
Auto Glass, Inc., a Delaware corporation (the "Company"), Green Equity Investors
II, L.P., a Delaware limited partnership ("GEI"), and the person identified on
Annex A attached hereto (hereinafter referred to as the "Management Investor"),
with reference to the following facts:
WHEREAS, GEI is the principal shareholder of the Company;
WHEREAS, Management Investor is a key executive of the Company or one
of its subsidiaries and, accordingly, as an incentive to the Management
Investor, the Company desires to issue uncertificated shares of the Company's
common stock (the "Common Stock") to the Management Investor as set forth
herein; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Management Investor Representations.
(a) Investment Risk. The Management Investor represents and
acknowledges that (i) as a result of the Management Investor's (A) existing
relationship with the Company and by virtue of being a key executive of the
Company or one of its subsidiaries, and (B) experience in financial matters, the
Management Investor is properly able to evaluate the capital structure of the
Company, the business of the Company and its subsidiaries and the risks inherent
therein; (ii) the Management Investor has been given the opportunity to obtain
any additional information or documents from and to ask questions, and receive
answers of, the officers and representatives of the Company and its subsidiaries
to the extent necessary to evaluate the merits and risks related to an
investment in the Company; (iii) the Management Investor has been and will be,
to the extent the Management Investor deems necessary, advised by legal counsel
of the Management Investor's choice at Management Investor's expense in
connection with this Agreement and the issuance and sale of Common Stock
hereunder and (iv) the purchase of Common Stock hereunder will be consistent, in
both nature and amount, with the Management Investor's overall investment
program and financial condition, and the Management Investor's financial
condition will be such that the Management Investor will be able to bear the
economic risk of holding unregistered Common Stock for which there is no market
and to suffer a complete loss of the Management Investor's investment therein.
The Management Investor further acknowledges that investment in the Common Stock
hereunder involves significant risks and that these risks include, without
limitation, the fact that the Company will have a leveraged financial structure.
(b) Purchase for Investment.
(i) The Management Investor represents and warrants
that: (A) the Common Stock acquired by the Management Investor hereunder will be
acquired for the Management Investor's own account for investment, without any
present intention of selling or further distributing the same and the Management
Investor does not have any reason to anticipate any change in the Management
Investor's circumstances or any other particular occasion or event which would
cause the Management Investor to desire to sell any of such Common Stock and (B)
the Management Investor is fully aware that in agreeing to sell or issue such
Common Stock to the Management Investor the Company will be relying upon the
truth and accuracy of these representations and warranties. The Management
Investor agrees that the Management Investor will not sell or otherwise dispose
of any Common Stock except in compliance with the Securities Act of 1933, as
amended (the "Act"), the rules and regulations of the Securities and Exchange
Commission thereunder, the relevant state securities laws applicable to the
Management Investor's action and the terms of this Agreement.
(ii) Subject to Section 6 below, in addition to the
other restrictions provided in
this Agreement, the Management Investor agrees that prior to making any
disposition of any Common Stock acquired hereunder (other than a disposition to
the Company), the Management Investor will give not less than 10 days' advance
written notice to the Company describing the manner of such proposed
disposition. The Management Investor further agrees that the Management Investor
will not effect such proposed disposition until either (A) the Management
Investor has provided to the Company, if so requested by the Company, an opinion
of counsel reasonably satisfactory in form and substance to the Company that
such proposed disposition is exempt from registration under the Act and any
applicable state securities laws or (B) a registration statement under the Act
covering such proposed disposition has been filed by the Company under the Act
and has become effective and compliance with applicable state securities laws
has been effected.
(iii) The Management Investor acknowledges that no
trading market for the Common Stock exists currently or is expected to exist at
any time in the foreseeable future and that, as a result, the Management
Investor may be unable to sell any of the Common Stock acquired hereunder for an
indefinite period. Further, the Company has no obligation to register any of the
Common Stock, except as expressly provided in Section 7 of this Agreement.
(iv) The Management Investor acknowledges and agrees
that nothing herein, including the opportunity to make any equity investment in
the Company, shall be deemed to create any implication concerning the adequacy
of the Management Investor's services to the Company or any of its subsidiaries
or shall be construed as an agreement by the Company or any of its subsidiaries,
express or implied, to employ the Management Investor or contract for the
Management Investor's services, to restrict the right of the Company or any of
its subsidiaries to discharge the Management Investor or cease contracting for
the Management Investor's services or to modify, extend or otherwise affect in
any manner whatsoever the terms of any employment agreement or contract for
services which may exist between the Management Investor and the Company or any
of its subsidiaries.
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2. Grant of Management Shares and Legend on Certificates.
(a) Grant of Management Shares. The Company hereby grants to
the Management Investor the right to purchase, on the terms and conditions set
forth in this Agreement, all or any part of the number of shares indicated on
Annex A hereto at the purchase price of $20.00 (the "Purchase Price") per share.
All shares of Common Stock issued hereunder shall be subject to all of the terms
and restrictions contained in this Agreement, including, without limitation,
those in Sections 1(b), 3, 4, 8 and 9, and shall be uncertificated shares.
Subject to the limitations set forth in Section 2(b), the Management Investor
shall be entitled, upon written request to the Company, to have a certificate
issued to him or her representing Common Stock issued hereunder.
(b) Legend on Certificates. Each stock certificate issued to
the Management Investor upon written request to the Company representing Common
Stock issued hereunder shall bear the following (or substantially equivalent)
legends on the face or reverse side thereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 OR ANY SUCCESSOR RULE UNDER
THE ACT OR DIAMOND TRIUMPH AUTO GLASS, INC. (THE "COMPANY")
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
MANAGEMENT SUBSCRIPTION AND STOCKHOLDERS AGREEMENT DATED AS OF
MARCH 31, 1998, AMONG THE PURCHASER PARTY THERETO, GREEN
EQUITY INVESTORS II, L.P., AND THE COMPANY, A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY, AND THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF SUCH
AGREEMENT.
Any stock certificate issued at any time in exchange or substitution for any
certificates bearing such legends (except a new certificate issued upon the
completion of a public distribution of Common Stock represented thereby) shall
also bear such (or substantially equivalent) legends, unless the Common Stock
represented by such certificate is no longer subject to the provisions of
Sections 1(b)(ii), 3(a), 3(b), 4, 8 and 9 of this Agreement and, in the opinion
of counsel for the
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Company, the Common Stock represented thereby need no longer be subject to
restrictions pursuant to the Act or applicable state securities law. The Company
shall not be required to transfer on its books any certificate for Common Stock
in violation of the provisions of this Agreement.
3. Transfer of Stock.
(a) Prohibition on Transfer. Subject to the provisions of
Section 6, neither the Management Investor nor any other Holder (as defined in
Section 7(a)) shall, on or prior to the fifth anniversary of this Agreement,
directly or indirectly, sell, pledge, give, bequeath, transfer, assign or in any
other way whatsoever encumber or dispose of (a "transfer") any Covered Shares
(as defined in Section 7(a)) (or any interest therein), except for transfers (i)
pursuant to this Section 3 or Sections 4, 7, 8, or 9 of this Agreement or (ii)
as may be specifically authorized by the Board of Directors of the Company in
its sole discretion (either of (i) or (ii), a "Permitted Transfer").
(b) Transfer Procedure; Right of First Refusal. Neither the
Management Investor nor any other Holder shall, prior to the lapse of the
restriction in clause (a) of this Section 3, transfer any Covered Shares (or any
interest therein), except for Permitted Transfers or transfers in accordance
with the following:
(i) If any Holder shall have received a bona fide
arms' length written offer (a "Bona Fide Offer") which such Holder
desires to accept from an independent party unrelated to such Holder
(the "Outside Party") for the purchase of Covered Shares for
consideration consisting entirely of cash, then such Holder shall give
a notice in writing (the "Option Notice") to GEI setting forth such
desire, which notice shall set forth at least the name and address of
the Outside Party and the price and terms of the Bona Fide Offer and be
accompanied by a copy of the Bona Fide Offer.
(ii) Upon the giving of such Option Notice, GEI shall
have an option (transferable, in the sole discretion of GEI, to an
Affiliate (as defined in Section 7(b)) of GEI or to the Company or a
subsidiary of the Company) to purchase all of the Covered Shares
specified in the Option Notice, said option to be exercised within
thirty (30) days after the giving of such Option Notice, by giving a
counter-notice (the "Election Notice") to the Holder.
(iii) If GEI (or an Affiliate of GEI, the Company or
a subsidiary of the Company, if applicable) elects to purchase all of
such Covered Shares, it shall be obligated to purchase, and the Holder
shall be obligated to sell, such Covered Shares at the cash price and
terms indicated in the Bona Fide Offer, except that the closing of the
purchase by GEI (or an Affiliate of GEI, the Company or a subsidiary of
the Company, if applicable) shall be held on a business day within
sixty (60) days after the giving of the Election Notice at 10:30 a.m.,
Eastern Standard Time, at the principal executive office of the
Company, or at such other time and place as may be mutually agreed to
by GEI (or an Affiliate of GEI, the Company or a subsidiary of the
Company, if applicable) and the Holder.
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(iv) If an Election Notice is not delivered by GEI
(or an Affiliate of GEI, the Company or a subsidiary of the Company, if
applicable) within the period specified above, the Holder thereafter,
at any time within a period of sixty (60) days from the giving of said
Option Notice, may transfer all (but not less than all) of such Covered
Shares to the Outside Party at the cash price and terms contained in
the Bona Fide Offer, and the Outside Party shall thereafter be subject
to and bound by all of the provisions of this Agreement and, as a
condition precedent to the completion of such transfer of Covered
Shares to such Outside Party, such Outside Party shall execute and
deliver to the Company and GEI a written consent to such effect in form
and substance satisfactory to the Company and GEI; provided, however,
that in the event the Holder has not so transferred said Covered Shares
to the Outside Party within said sixty (60) day period, then said
Covered Shares thereafter shall continue to be subject to all of the
restrictions contained in this Agreement.
(c) No Waiver by GEI. Any election in any instance by
GEI (or an Affiliate of GEI, the Company or a subsidiary of the Company, if
applicable) not to exercise its rights of first refusal under this Section 3
shall not constitute a waiver of such rights with respect to any other proposed
transfer of Covered Shares.
(d) Transfer to Related Transferees. Notwithstanding
anything to the contrary contained in clauses (a) through (c) of this Section 3,
the Management Investor or any other Holder may transfer Covered Shares without
restriction to the Management Investor's Related Transferees (as defined below)
provided that each such Related Transferee shall first (i) execute a written
consent in form and substance satisfactory to the Company and GEI to be bound by
all of the provisions of this Agreement and (ii) give a duplicate original of
such consent to the Company and GEI. The "Related Transferees" of the Management
Investor shall consist of the Management Investor's spouse, the Management
Investor's adult lineal descendants, the adult spouses of such lineal
descendants, trusts solely for the benefit of the Management Investor's spouse
or the Management Investor's minor or adult lineal descendants and, in the event
of death, the Management Investor's personal representatives (in their
capacities as such), estate and named beneficiaries. In the event of any
transfer by the Management Investor to his Related Transferees of all or any
part of the Covered Shares (or in the event of any subsequent transfer by any
such Related Transferee to another Related Transferee of the Management
Investor), such Related Transferees shall receive and hold said Covered Shares
subject to and be bound by the terms of this Agreement. There shall be no
further transfer of such Covered Shares by a Related Transferee except as
permitted by this Agreement.
4. "Call" Option.
(a) Upon the termination of the Management Investor's
employment with, or cessation of services as a director of, the Company or any
of its subsidiaries for any reason (including without limitation Voluntary
Termination, a Just Cause Dismissal, Involuntary Termination Without Cause or
the Retirement, death or Permanent Disability of the Management Investor (as
such terms are defined in Section 5 below)) (a "Call Purchase Event"), subject
to the provisions of Section 6 and this Section 4, the Company shall give prompt
written notice of such termination or cessation to GEI and GEI (or an Affiliate
of GEI designated by GEI) may, at its
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option exercisable by written notice (a "Purchase Notice") delivered to the
Management Investor and each other Holder within ninety (90) days after the
applicable Call Purchase Event (or, in the event the applicable Call Purchase
Event is the death of the Management Investor, within thirty (30) days after the
appointment and qualification of the deceased Management Investor's personal
representative, if later), elect to purchase and, upon the giving of such
notice, GEI (or an Affiliate of GEI designated by GEI) shall be obligated to
purchase and the Management Investor and each other Holder (each a "Seller")
shall be obligated to sell, all, or any lesser portion indicated in the Purchase
Notice, of the Covered Shares held by such Holder at a per share price equal to:
(i) in the case of Voluntary Termination or a Just
Cause Dismissal, the lower of the Adjusted Purchase Price or the Fair Market
Value (as each such term is defined in Section 5 below); or
(ii) in the case of any other termination (including
without limitation Involuntary Termination Without Cause, death, Retirement or
Permanent Disability), the Fair Market Value.
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Notwithstanding the foregoing provisions of this Section 4(a), in the event that
the applicable Call Purchase Event occurs more than one year after the date
hereof, in the case of Voluntary Termination or a Just Cause Dismissal, the
price per share for the Applicable Percentage of the Covered Shares held by each
Holder shall be the Fair Market Value and the price per share for the remaining
Covered Shares held by such Holder shall be the lower of the Adjusted Purchase
Price or the Fair Market Value. The "Applicable Percentage" shall be determined
from the following table, based upon the period during which the applicable Call
Purchase Event occurs.
Period during which Call
Purchase Event Occurs Applicable Percentage
--------------------- ---------------------
12 months commencing on the
first anniversary of the
date of this Agreement 33-1/3%
12 months commencing on the
second anniversary of the
date of this Agreement 66-2/3%
On or after the third anniversary
of the date of this Agreement 100%
If, as a result of the provisions of the two preceding sentences, there are two
different prices per share applicable to the Covered Shares held by each Holder
and less than all Covered Shares held by each Holder are to be purchased
pursuant to this Section 4, the Covered Shares not purchased from such Holder
shall be those having the higher price per share.
(b) If GEI (or an Affiliate of GEI designated by GEI) does not
elect to exercise its option set forth in paragraph (a) of this Section 4, GEI
shall give written notice that it is not so electing to the Company within the
time periods specified in paragraph (a) of this Section 4 for the giving of the
Purchase Notice. Upon receipt of such notice from GEI, the Company shall have
the option, exercisable by written notice (a "Company Purchase Notice")
delivered to the Management Investor and each other Holder within fifteen (15)
days after receipt of such notice from GEI, to purchase from each Seller (and,
upon the giving of the Company Purchase Notice, the Company shall be obligated
to purchase and each Seller shall be obligated to sell) all, or any lesser
portion indicated in the Company Purchase Notice, of the Covered Shares held by
such Seller at the per share price set forth in paragraph (a) of this Section 4.
(c) In the event a purchase of Covered Shares pursuant to this
Section 4 by the Company shall be prohibited by law or would cause a default
under the terms of any indenture or loan agreement or other instrument to which
the Company or any of its subsidiaries may be a party, the obligations of each
Seller and the Company pursuant to this Section 4 shall be suspended until such
time as such prohibition first lapses or is waived and no such default would be
caused; provided, however, that (x) the purchase price to be paid by the Company
for the Covered Shares shall accrue interest at the lowest rate necessary to
prevent the imputation of interest or original issue discount under the Internal
Revenue Code of 1986, as amended, reduced
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by any dividends or distributions on such Covered Shares during the period of
such suspension, which interest shall likewise be paid when such prohibition
first lapses or is waived and no such default would be caused and (y) in the
event of any such suspension, if GEI so elects and no violation of law would be
caused and no default under the terms of any indenture or loan agreement or
other instrument to which the Company or any of its subsidiaries may be a party
would result, the Company shall transfer its obligations under this Section 4 to
GEI or to an Affiliate of GEI, in which case GEI or the Affiliate (as the case
may be) and the Seller(s) shall be obligated to complete the purchase of such
Covered Shares pursuant to this Section 4.
5. Purchase Price, Closing and Terms of Payment for "Call" Sales.
(a) (i) For purposes of this Agreement, the "Fair Market
Value" of each share of Common Stock shall be determined as of the time of the
Call Purchase Event by the Board of Directors of the Company in the exercise of
its reasonable discretion; provided, however, that such determination shall be
based upon the Company as a going concern and shall not discount the value of
such shares either because they are subject to the restrictions set forth in
this Agreement or because they constitute only a minority interest in the
Company. Upon delivery of notice of such Fair Market Value to GEI and to the
Seller(s) of Common Stock pursuant to Section 4 (which shall indicate, in a
general fashion, the factors considered by the Board of Directors in determining
such amount), the Management Investor shall have ten (10) business days in which
to notify the Company in writing of any disagreement. If no written notice of
disagreement is given by the Management Investor, the Fair Market Value as
determined by the Board of Directors of the Company shall be conclusive and
binding on each Seller and on GEI or any Affiliate of GEI. If written notice is
given by the Management Investor of a disagreement, GEI and the Management
Investor shall mutually agree upon an independent appraiser experienced in
making valuations of such sort which shall make a determination of the Fair
Market Value. Such determination shall be final, binding and nonappealable upon
GEI (or an Affiliate of GEI or the Company, as applicable) and each Seller. The
costs and expenses incurred in connection with the determination made by the
independent appraiser shall be borne equally by GEI (or an Affiliate of GEI or
the Company, as applicable) and by the Management Investor.
(ii) For purposes of this Agreement, the "Adjusted
Purchase Price" of each share of Common Stock shall be determined as of the time
of the Call Purchase Event and shall equal (A) $20.00, plus (or minus in the
case of a loss) (B) an amount equal to the quotient of (1) the aggregate net
income (loss) of the Company applicable to the Common Stock, determined in
accordance with generally accepted accounting principles consistently applied,
for the period (treated as one accounting period) beginning on April 1, 1998 to
the end of the most recent fiscal quarter ending prior to the date of the Call
Purchase Event, divided by (2) the number of outstanding shares of Common Stock
(determined on a fully diluted basis) as of the end of such most recent fiscal
quarter, less (C) an amount equal to the aggregate dividends per share of Common
Stock paid during the period from April 1, 1998 to the date of the Call Purchase
Event.
(b) For purposes of this Agreement, the Management Investor
shall be deemed to be "Permanently Disabled" if the Management Investor becomes
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental
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impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12) months.
The Company, at its option and expense, shall be entitled to retain a physician
to confirm the existence of such incapacity or disability and the determination
of such physician shall be binding upon the Company (or GEI or an Affiliate of
GEI, as applicable) and each Seller; provided, however, that if the Management
Investor disagrees with such determination of Permanent Disability within
fifteen (15) days of being notified of it, the Management Investor and the
Company shall jointly agree upon an independent physician (or, if they are
unable to agree upon such physician, they shall each select a physician and
those two physicians shall select the independent physician) who shall make the
determination, whose decision shall be binding upon the Company (or GEI or an
Affiliate of GEI, as applicable) and each Seller.
(c) For the purposes of this Agreement, the Management
Investor shall be deemed to be "Involuntarily Terminated Without Cause" upon the
later of the termination of the Management Investor's employment by, or removal
or failure to be reelected as a director of, the Company or any of its
subsidiaries, unless such termination, removal or failure to be reelected is due
to Retirement, death, Permanent Disability or a Just Cause Dismissal.
"Retirement" shall mean retirement in accordance with the retirement policies or
practices of the Company or its subsidiaries applicable to executives or
directors, as the case may be, but in no event at an age of less than seventy
(70). "Voluntary Termination" shall mean the termination by the Management
Investor of his employment with, or his resignation or refusal to stand for
reelection as a director of, the Company or any of its subsidiaries, for any
reason other than death, Permanent Disability, or Retirement. A "Just Cause
Dismissal" shall mean termination of the Management Investor's employment with,
or service as a director of, the Company or any of its subsidiaries as a result
of any of the following (each, a "Cause"):
(i) the Management Investor commits any act of fraud,
intentional misrepresentation or serious misconduct in connection with
the business of the Company or its subsidiaries, including but not
limited to, falsifying any documents or agreements (regardless of
form); or
(ii) the Management Investor materially violates any
rule or policy of the Company or its subsidiaries (A) for which
violation an employee may be terminated pursuant to the written
policies of the Company or its subsidiaries reasonably applicable to a
key employee, or (B) which violation results in material damage to the
Company or its subsidiaries, or (C) which, after written notice to do
so, the Management Investor fails to correct within a reasonable time;
or
(iii) the Management Investor wilfully breaches or
habitually neglects any material aspect of the Management Investor's
duties (A) as described in the Management Investor's employment
contract, or (B) in the ordinary course of the Management Investor's
employment or service as a director, or (C) assigned to the Management
Investor by the Company or its subsidiaries, which assignment was
reasonable in light of the Management Investor's position with the
Company or its subsidiaries (all of the foregoing duties, "Duties"); or
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(iv) the Management Investor fails, after written
notice, adequately to perform any Duties and such failure is reasonably
likely to have an adverse impact upon the Company, its subsidiaries or
the operations of any of them; or
(v) the Management Investor materially fails to
comply with a direction from the Board of Directors of the Company or
its subsidiaries with respect to a material matter, which direction was
reasonable in light of the Management Investor's position with the
Company or its subsidiaries; or
(vi) while employed by the Company or its
subsidiaries, and without the written approval of the Chief Executive
Officer of the Company (or, in case the Management Investor is such
Chief Executive Officer, approval of the Company's Board of Directors),
the Management Investor performs services for any other corporation or
person which competes with the Company or its subsidiaries; or
(vii) the Management Investor is convicted by a court
of competent jurisdiction of a felony (other than a traffic or moving
violation) or any crime involving dishonesty; or
(viii) the Management Investor engages in any conduct
which is materially injurious or damaging to the Company or any of its
subsidiaries or the reputation of the Company or any of its
subsidiaries; or
(ix) any willful breach by the Management Investor of
his or her fiduciary duties as a director of the Company or any of its
subsidiaries.
In the event that there is a dispute between the Seller(s) and the Company (or
GEI or an Affiliate of GEI, as applicable) as to whether "Cause" for termination
exists: (x) such termination shall nonetheless be effective, (y) such dispute
shall be subject to arbitration pursuant to Section 12 (f) hereof and (z) the
payments or deliveries, if any, to be made by the Company (or GEI or an
Affiliate of GEI, as applicable) in connection with a purchase of Covered Shares
held by the Seller(s) pursuant to Section 4 shall be delayed until the final
resolution of such dispute in such arbitration.
(d) The closing for all purchases and sales of
Covered Shares provided for in Section 4 hereof (the "Call Closing") shall be at
the principal executive offices of the Company at 10:30 a.m., Eastern Standard
Time, on the later of (A) the sixtieth day after the giving of the applicable
Purchase Notice or Company Purchase Notice and (B), if the per share price is
the Fair Market Value, the thirtieth day after the final determination of the
Fair Market Value of the Common Stock as set forth above; provided, however,
that if any Seller is deceased on the closing date and such deceased person's
personal representative shall not have been appointed and qualified by such
date, then the closing in respect of such Seller shall be postponed until the
tenth day after the appointment and qualification of such personal
representative. If the aforesaid closing date falls on a day which is not a
business day, then the closing shall be held on the next succeeding business
day.
(e) The purchase price for the purchase and sale of
Covered Shares pursuant to the provisions hereof shall be paid in cash, by
certified or by official bank check.
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(f) On the date of the Call Closing, each Seller
authorizes the Company (or the Company's transfer agent, if any) to record in
the Company's books and records the transfer of all of such Seller's Covered
Shares to be sold at the Call Closing, which are not represented by one or more
certificates issued by the Company, from such Seller to the purchaser at the
Call Closing. On the date of the Call Closing, each Seller shall also deliver
all certificates, if any, issued by the Company which represent Covered Shares
to be sold at the Call Closing by such Seller, duly endorsed for transfer with
signatures guaranteed, to the purchaser at the Call Closing. In addition, each
Seller shall take all actions as the Company or any other purchaser at the Call
Closing shall request as necessary to vest in the purchaser at the Call Closing
all shares sold by such Seller pursuant to Section 4 hereof, whether in
certificated or uncertificated form, free and clear of all liens, charges and
encumbrances of any kind.
6. Termination and Lapse of Rights and Restrictions; Application to
Other Stock.
(a) The provisions of Sections 1(b)(ii), 3(a), 3(b), 4, 8 and
9 of this Agreement shall lapse and be of no further effect with respect to
Covered Shares upon the commencement of the public trading of the Company's
Common Stock (or any capital stock exchanged for or distributed upon such Common
Stock as described in paragraph (b) of this Section 6) on any national
securities exchange, on the NASDAQ National Market System or on the NASDAQ
"Small Cap" Issues System; provided, however, that nothing in this Section 6(a)
shall affect any options to purchase, or any obligations to purchase and sell,
Covered Shares which arose prior to the commencement of such public trading.
(b) In the event any capital stock of the Company or any other
corporation shall be distributed on, with respect to, or in exchange for shares
of Common Stock of the Company as a stock dividend, stock split, spin-off,
reclassification or recapitalization in connection with any merger or
reorganization, the restrictions, rights and options set forth in Sections 3, 4,
7, 8 and 9 shall apply with respect to such other capital stock to the same
extent as they are, or would have been applicable, to the Covered Shares on, or
with respect to, which such other capital stock was distributed.
7. Piggyback Registration Rights.
(a) As used in this Agreement:
(i) the term "Holder" means the Management Investor,
any Related Transferee of the Management Investor and/or any Outside
Party that, at the time, owns Covered Shares; provided, however, that,
unless the Company is otherwise notified, the record owner of Covered
Shares shall be deemed to be the Holder of such Covered Shares;
(ii) the term Covered Shares means the shares of
Common Stock acquired by the Management Investor pursuant to this
Agreement.
(b) Subject to the provisions herein, if the Company at any
time proposes to include all or any part of GEI's Common Stock in a public
offering of Common Stock registered under the Act (other than registration (x)
on Forms S-4 or S-8 or any successor forms thereto or (y) filed in connection
with an exchange offer), the Company shall give written notice of the
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proposed registration to each Holder at least thirty (30) days prior to the
filing thereof, and each Holder shall have the right to request that all or any
part of its Covered Shares be included in such registration by giving written
notice to the Company within fifteen (15) days after the giving of such notice
by the Company (any Holder giving the Company a notice requesting that Covered
Shares owned by it be included in such proposed registration being hereinafter
referred to in this Section 7 as a "Registering Holder"); provided, however,
that (i) if the registration is in whole or in part an underwritten primary
registration on behalf of the Company and the managing underwriters of such
offering determine that the aggregate amount of securities of the Company which
all Registering Holders and all other security holders of the Company, pursuant
to contractual rights to participate in such registration ("Other Holders"),
propose to include in such registration statement exceeds the maximum amount of
securities that should be included therein, the Company will include in such
registration, first, the shares which the Company proposes to sell and, second,
the shares of such Registering Holders and other securities to be sold for the
account of Other Holders, pro rata among all such Registering Holders and Other
Holders, taken together, on the basis of the relative equity interests in the
Company of all Registering Holders and Other Holders who have requested that
securities owned by them be so included (it being agreed and understood,
however, that such underwriters shall have the right to eliminate entirely the
participation in such registration of all Registering Holders and Other
Holders), (ii) if the registration is an underwritten secondary registration on
behalf of any of the Other Holders pursuant to demand registration rights (other
than such right of GEI or its Affiliates) and the managing underwriters
determine that the aggregate amount of securities which all Registering Holders
and all Other Holders propose to include in such registration exceeds the
maximum amount of securities that should be included therein, the Company will
include in such registration, first, the securities to be sold for the account
of the Other Holders demanding registration (but only to the extent such Other
Holders are entitled to demand inclusion thereof) second, any securities to be
sold for the account of the Company, and, third, the shares of such Registering
Holders and other securities to be sold for the account of the Other Holders
electing to include (but not being entitled to demand inclusion of) securities
in such registration, pro rata among all such Registering Holders and Other
Holders, taken together, on the basis of relative equity interests in the
Company of all Registering Holders and such Other Holders who have requested
that securities owned by them be included (it being agreed and understood,
however, that such underwriters shall have the right to eliminate entirely the
participation therein of all such Registering Holders and Other Holders not
entitled to demand inclusion of securities in such registration). Shares of
Common Stock proposed to be registered and sold for the account of any
Registering Holder shall be sold to prospective underwriters selected or
approved by the Company on the terms and subject to the conditions of one or
more underwriting agreements negotiated between the Company and/or Other Holders
demanding registration and the prospective underwriters, and (iii) if the
registration is an underwritten secondary registration on behalf of GEI or any
of its Affiliates pursuant to demand registration rights and the managing
underwriters determine that the aggregate amount of securities which all
Registering Holders and GEI and its Affiliates propose to include in such
registration exceeds the maximum amount of securities that should be included
therein, the Company will include in such registration the shares of such
Registering Holders and other securities to be sold for the account of GEI and
its Affiliates pro rata among all such Registering Holders and GEI and its
Affiliates, taken together, on the basis of the relative equity interests in the
Company of all Registering Holders and GEI and its Affiliates who have requested
that securities owned by them be
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included. For the purposes hereof, an "Affiliate" of any person or entity means
any other person or entity controlling, controlled by or under common control
with such person or entity; provided, however, that none of the Management
Stockholders (defined below) or any of their Affiliates shall be deemed to be an
Affiliate of GEI. "Management Stockholders" means, collectively, all holders of
capital stock or other securities issued by the Company who are also employees
of the Company or its subsidiaries.
In the event the Company proposes to register any of its Common Stock
under the Act on Form S-8 (or any successor thereto), if the Company determines
that it is permissible to do so and will not result in material added costs to
the Company from such registration, the Company shall, at a Registering Holder's
request, include in such registration a percentage of such Registering Holder's
Covered Shares equal to the percentage, if any, of GEI's shares of Common Stock
held as of the date of this Agreement sold by GEI in private transactions from
the date hereof to the date of such request.
The Registering Holders shall be permitted to withdraw all or a part of
the Covered Shares held by such Registering Holders which were to be included in
such registration at any time prior to the effective date of such registration.
The Company shall not be required to maintain the effectiveness of the
registration statement for such registration beyond the earlier to occur of 120
days after the effective date thereof or consummation of the distribution by the
Registering Holders included in such registration statement. The Company may
withdraw any registration statement at any time before it becomes effective, or
postpone the offering of securities, without obligation or liability to any
Holder.
(c) The registration rights set forth in this Section 7 shall
terminate and be of no further effect with respect to the Covered Shares held by
a Holder: (i) at such time as the Company has filed, and there has become
effective, one registration statement in which all Holders have been afforded
the opportunity to include all Covered Shares held by them or (ii) if earlier,
after an initial public offering, at such time as all Covered Shares owned by
such Holder are eligible for sale pursuant to the provisions of Rule 144 under
the Act.
(d) In connection with any registration of shares under the
Act pursuant to this Section 7, the Company will furnish each Holder whose
Covered Shares are registered thereunder with a copy of the registration
statement and all amendments thereto and will supply each such Holder with
copies of any prospectus included therein (including a preliminary prospectus
and all amendments and supplements thereto), in such quantities as may be
reasonably necessary for the purpose of the proposed sale or distribution
covered by such registration. The Company shall not, however, be required to
maintain the registration statement and to supply copies of a prospectus for a
period beyond 120 days after the effective date of such registration statement
and, at the end of such period, the Company may deregister any shares of Common
Stock covered by such registration statement and not then sold or distributed.
In connection with any such registration of shares of Common Stock, the Company
will, at the request of the managing underwriter with respect thereto, use its
best efforts to qualify such registered shares for sale under the securities
laws of such states as is reasonably required to permit the distribution of such
registered shares; provided, however, that the Company shall not be required in
connection therewith or as condition thereof to qualify as a foreign corporation
or
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to execute a general consent to service of process in any jurisdiction or become
subject to taxation in any jurisdiction.
(e) Notwithstanding any other provision of this Section 7, in
the event of an underwritten public offering of Common Stock for the account of
the Company, no Holder shall offer for public sale (other than as part of such
underwritten public offering) any shares of Common Stock during the ten (10)
days prior to, and such number of days (not in excess of 180) after, the
effective date of the registration statement in connection with such pubic
offering as the underwriters and the Company may request in writing, without the
consent of the underwriters; provided, however, that, in the case of death of a
Holder, if consented to by the underwriters, a Holder shall be permitted to
offer for public sale prior to the expiration of such period shares of Common
Stock reasonably necessary to generate funds for the payment of estate taxes.
(f) Except as otherwise required by state securities laws or
the rules and regulations promulgated thereunder, all expenses, disbursements
and fees incurred by the Company in connection with carrying out its obligations
under this Section 7 shall be borne by the Company; provided, however, that each
Holder shall pay (i) all costs and expenses of counsel for such Holder, if such
counsel is not also counsel for the Company, (ii) all underwriting discounts,
commissions and expenses and all transfer taxes with respect to the shares of
Common Stock sold by such Holder and (iii) all other expenses incurred by such
Holder and incidental to the sale and delivery of the shares of Common Stock to
be sold by such Holder.
(g) It shall be a condition of each Holder's rights hereunder
to have Covered Shares owned by such Holder registered that:
(i) such Holder shall cooperate with the Company by
supplying information and executing documents relating to such Holder
or the securities of the Company owned by such Holder in connection
with such registration;
(ii) such Holder shall enter into any undertakings
and take such other action relating to the conduct of the proposed
offering which the Company or the underwriters may reasonably request
as being necessary to insure compliance with federal and state
securities laws and the rules or other requirements of the National
Association of Securities Dealers, Inc. or which the Company or the
underwriters may reasonably request to otherwise effectuate the
offering; and
(iii) such Holder shall execute and deliver an
agreement to indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration
statement, any underwriter (as defined in the Act) and each person, if
any who controls the Company or such underwriter within the meaning of
the Act, against such losses, claims, damages or liabilities (including
reimbursement for legal and other expenses) to which the Company or any
such director, officer, underwriter or controlling person may become
subject under the Act or otherwise, in such manner as is customary for
registration of the type then proposed and, in any event, equivalent in
scope to indemnities given by the Company in connection with such
registration, but only with respect to written information furnished by
such Holder in his or her capacity as a selling shareholder in
connection with such registration.
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(h) In the event of any registration under the Act of any
Covered Shares pursuant to this Section 7, the Company hereby agrees to
indemnify and hold harmless each Holder disposing of such shares against such
losses, claims, damages or liabilities (including reimbursement for legal and
other expenses) to which such Holder may become subject under the Act or
otherwise, in such manner as is customary for registrations of the type then
proposed, but not with respect to written information furnished by such Holder
in his capacity as a selling shareholder in connection with such registration.
8. Tag-Along Rights.
(a) Right to Participate in Sale. If GEI enters into an
agreement to transfer, sell or otherwise dispose of for value (such transfer,
sale or other disposition being referred to as a "Tag-Along Sale") a majority of
its shares of Common Stock of the Company held on the date hereof, then GEI
shall afford each Holder the opportunity to participate proportionately in such
Tag-Along Sale in accordance with this Section 8. Each Holder shall have the
right, but not the obligation (except as provided in Section 9), to participate
in such Tag-Along Sale. The number of shares of Common Stock that each Holder
will be entitled to include in such Tag-Along Sale (such Holder's "Allotment")
shall be determined by multiplying (i) the number of Covered Shares owned by
such Holder as of the close of business on the day immediately preceding the
Tag-Along Notice Date (as defined below), by (ii) a fraction, the numerator or
which shall equal the number of shares of Common Stock proposed by GEI to be
sold or otherwise disposed of pursuant to the Tag-Along Sale and the denominator
of which shall equal the total number of shares of Common Stock that are
beneficially owned as of the close of business on the day immediately preceding
the Tag-Along Notice Date by (a) GEI and (b) all holders of shares of Common
Stock (including the Holders) to the extent that such holders have the right to
"tag-along" in the Tag-Along Sale. The "Tag Along Notice Date" shall be the date
that the Tag-Along Sale Notice (as defined below) is first delivered, mailed or
sent by courier, Telex or telecopy to the Holders.
(b) Terms of Tag-Along Sale. Any sales of Covered Shares by a
Holder as a result of the "Tag-Along Rights" granted to the Holder pursuant to
this agreement shall be on the same terms and conditions as the proposed
Tag-Along Sale by GEI.
(c) Sale Notice. GEI shall provide each Holder with written
notice (the "Tag-Along Sale Notice") not more than sixty (60) nor less than
twenty (20) days prior to the proposed date of the Tag-Along Sale (the
"Tag-Along Sale Date"). Each Tag-Along Sale Notice shall set forth: (i) the
number of shares proposed to be transferred or sold by GEI; (ii) the proposed
amount and form of consideration to be paid for such shares and the terms and
conditions of payment offered by each proposed transferee or purchaser; (iii)
the aggregate number of shares of Common Stock held of record as of the close of
business on the day immediately preceding the Tag-Along Notice Date by GEI; (iv)
such Holder's Allotment assuming such Holder elected to sell the maximum number
of Covered Shares possible; (v) confirmation that the proposed purchaser or
transferee has been informed of the "Tag-Along Rights" provided for herein and
has agreed to purchase Covered Shares in accordance with the terms hereof; and
(vi) the Tag-Along Sale Date.
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(d) Tag-Along Notice. If a Holder wishes to participate in the
Tag-Along Sale, such Holder shall provide written notice (the "Tag-Along
Notice") to GEI no less than ten (10) days prior to the Tag-Along Sale Date. The
Tag-Along Notice shall set forth the number of Covered Shares that such Holder
elects to include in the Tag-Along Sale, which shall not exceed such Holder's
Allotment. The Tag-Along Notice shall also specify the aggregate number of
additional Covered Shares owned of record as of the close of business on the day
immediately preceding the Tag-Along Notice Date by such Holder, if any, which
such Holder desires also to include in the Tag-Along Sale ("Additional Shares")
in the event there is any under-subscription for the entire amount of all
Holders' Allotments and of all shares that may be included by persons having,
pursuant to agreements of even date herewith in form substantially similar to
this Agreement (the "Other Agreements"), tag-along rights relative to GEI
(collectively, the "Management Investors' Allotments"). In the event there is an
under-subscription by all holders of Management Investors' Allotments for the
entire amount of the Management Investors' Allotments, GEI shall apportion the
unsubscribed Management Investors' Allotments to such holders on a pro rata
basis in accordance with the number of Additional Shares (as such term is
defined in this Agreement and the Other Agreements) specified by all such
holders in their Tag-Along Notices (as such term is defined in this Agreement
and the Other Agreements). The Tag-Along Notice given by each Holder shall
constitute such Holder's binding agreement to sell the Covered Shares specified
in such Tag-Along Notice (including any Additional Shares to the extent such
Additional Shares are to be included in the Tag-Along Sale pursuant to the
apportionment described in the preceding sentence) on the terms and conditions
applicable to the Tag-Along Sale, subject to the provisions of Section 8 (b)
above; provided, however, that in the event that there is any material change in
the terms and conditions of such Tag-Along Sale applicable to any Holder after
such Holder gives its Tag-Along Notice, then, notwithstanding anything herein to
the contrary, such Holder shall have the right to withdraw from participation in
the Tag-Along Sale with respect to all of its Covered Shares affected thereby.
If the purchaser does not consummate the purchase of all of such shares on the
same terms and conditions applicable to GEI (except as otherwise provided
herein) then GEI shall not consummate the Tag-Along Sale of any of its shares to
such transferee or purchaser, unless the shares of each Holder and GEI are
reduced or limited pro rata in proportion to the respective number of shares
actually sold in such Tag-Along Sale.
If a Tag-Along Notice is not received by GEI from any Holder prior to
the ten-day period specified above, GEI shall have the right to sell or
otherwise transfer the number of shares specified in the Tag-Along Notice to the
proposed purchaser or transferee without any participation by such Holder, but
only on terms and conditions which are no more favorable in any material respect
to GEI than as stated in the Tag-Along Notice to such Holder and only if such
Tag-Along Sale occurs on a date within sixty (60) business days of the Tag-Along
Sale Date.
(e) Authority to Record Transfer/Delivery of Certificates. On
the Tag-Along Sale Date, each Holder, if a participant in the applicable
Tag-Along Sale, authorizes the Company (or the Company's transfer agent, if any)
to record in the Company's books and records the transfer of all of such
Holder's Covered Shares included in such Tag-Along Sale which are not
represented by one or more certificates issued by the Company, from the Holder
to the purchaser in the Tag-Along Sale. On the Tag-Along Sale Date, each Holder,
if a participant in the applicable Tag-Along Sale, shall also deliver all
certificates, if any, issued by the
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Company which represent Covered Shares owned by such Holder included in such
Tag-Along Sale, duly endorsed for transfer with signatures guaranteed, to the
purchaser in the Tag-Along Sale, in the manner and at the address indicated in
the Tag-Along Notice against delivery of the purchase price for such shares. In
addition, each Holder, if a participant in the applicable Tag-Along Sale, shall
take all action as GEI or the purchaser in the Tag-Along Sale shall request as
necessary to vest in the purchaser in the Tag-Along Sale all Covered Shares
owned by such Holder included in such Tag-Along Sale, whether in certificated or
uncertificated form, free and clear of all liens, charges and encumbrances of
any kind.
(f) Exempt Transfers. The provisions of this Section 8 shall
not apply to (i) any sale of Common Stock by GEI in a bona fide underwritten
offering of Common Stock pursuant to an effective registration statement under
the Act or any bona fide public distribution of Common Stock by GEI pursuant to
Rule 144 thereunder; (ii) any bona fide pledge by GEI of Common Stock to a
commercial bank, savings and loan institution or any other similar lending
institution as security for any indebtedness to such lender or any sale upon
foreclosure of any such pledge; (iii) any transfer, sale or other disposition of
Common Stock by GEI to one of its Affiliates (except that (A) prior to any such
disposition, the party receiving such shares of Common Stock shall agree in
writing to be bound by the terms of this Agreement applicable to GEI as if such
transferee were an original party hereto and (B) any such shares of Common Stock
shall continue to be subject to this Agreement); (iv) any redemption by the
Company of its Common Stock; or (v) any GEI Distribution (as defined in Section
13). In the event of any transfer, sale or other disposition of Common Stock by
GEI to one of its Affiliates, to the extent provided in any agreement between
GEI and such Affiliate, such Affiliate shall have any or all of the rights of
GEI under this Agreement and references in this Agreement to GEI shall be deemed
to be references to such Affiliate.
9. Drag-Along Sales.
(a) Right to Require Sale. Notwithstanding any other provision
hereof, if GEI agrees to sell 100% of the shares of Common Stock held by it to a
third person who is not an Affiliate of GEI (a "Third Party") or if GEI agrees
to sell a portion of its shares pursuant to a transaction in which more than 50%
of the total Common Stock of the Company will be sold to a Third Party (either
of such sales, a "Drag-Along Sale"), then, upon the demand of GEI, each Holder
hereby agrees to sell to such Third Party the same percentage of the total
number of Covered Shares held by such Holder on the date of the Drag-Along
Notice (as defined below), as the number of shares GEI is selling in the
Drag-Along Sale bears to the total number of shares held by GEI as of the date
of the Drag-Along Notice (the "Sale Percentage"), at the same price and on the
same terms and conditions as GEI has agreed to with such Third Party.
(b) Drag-Along Notice. Prior to making any Drag-Along Sale, if
GEI elects to exercise the option described in this Section 9, GEI shall provide
each Holder with written notice (the "Drag-Along Notice") not more than sixty
(60) nor less than twenty (20) days prior to the proposed date of the Drag-Along
Sale (the "Drag-Along Sale Date"). The Drag-Along Notice shall set forth: (i)
the proposed amount and form of consideration to be paid per share of Common
Stock and the terms and conditions of payment offered by the Third Party; (ii)
the aggregate number of shares of Common Stock held by GEI as of the date that
the Drag-Along Notice is first delivered, mailed or sent by courier, telex or
telecopy to the Holder(s); (iii) the
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Sale Percentage; (iv) the Drag-Along Sale Date and (v) confirmation that the
proposed Third Party has agreed to purchase the Holder's Covered Shares in
accordance with the terms hereof.
(c) Authority to Record Transfer/Delivery of Certificates. On
the Drag-Along Sale Date, each Holder, if a participant in the applicable
Drag-Along Sale, authorizes the Company (or the Company's transfer agent, if
any) to record in the Company's books and records the transfer of all of such
Holder's Covered Shares included in such Drag-Along Sale which are not
represented by one or more certificates issued by the Company, from such Holder
to the purchaser in the Drag-Along Sale. On the Drag-Along Sale Date, each
Holder, if a participant in the applicable Drag-Along Sale, shall also deliver
all certificates, if any, issued by the Company which represent Covered Shares
owned by such Holder included in such Drag-Along Sale, duly endorsed for
transfer with signatures guaranteed, to the purchaser in the Drag-Along Sale, in
the manner and at the address indicated in the Drag-Along Notice against
delivery of the purchase price for such shares. In addition, each Holder, if a
participant in the applicable Drag-Along Sale, shall take all action as GEI or
the purchaser in the Drag-Along Sale shall request as necessary to vest in the
purchaser in the Drag-Along Sale all Covered Shares owned by such Holder
included in such Drag-Along Sale, whether in certificated or uncertificated
form, free and clear of all liens, charges and encumbrances of any kind.
(d) Consideration. The provisions of this Section 9 shall
apply regardless of the form of consideration received in the Drag-Along Sale.
10. Notices. All notices or other communications under this Agreement
shall be given in writing and shall be deemed duly given and received on the
third full business day following the day of the mailing thereof by registered
or certified mail or when delivered personally or sent by facsimile transmission
as follows:
(a) if to the Company, at its principal executive offices at
the time of the giving of such notice, or at such other place as the Company
shall have designated by notice as herein provided to GEI and to the Management
Investor and any other Holders, Attention: Chief Executive Officer;
(b) if to the Management Investor, at the address of the
Management Investor as it appears in Annex A or at such other place as the
Management Investor shall have designated by notice as herein provided to the
Company and GEI;
(c) if to any Holder other than the Management Investor, at
the address of such Holder as set forth in the stock records of the Company or
at such other place as such Holder shall have designated by notice as herein
provided to the Company and GEI; and
(d) if to GEI, at its principal executive offices at the time
of the giving of such notice, or at such other place as GEI shall have
designated by notice as herein provided to the Company and to the Management
Investor and any other Holders, Attention: ▇▇▇▇▇▇▇ ▇. Annick.
11. Specific Performance. Due to the fact that the securities of the
Company cannot be readily purchased or sold in the open market and for other
reasons, the parties will be irreparably damaged in the event that this
Agreement is not specifically enforced. In the event of a breach or threatened
breach of the terms, covenants and/or conditions of this Agreement by any
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of the parties hereto, the other parties shall, in addition to all other
remedies, be entitled (without any bond or other security being required) to a
temporary and/or permanent injunction, without showing any actual damage or that
monetary damages would not provide an adequate remedy, and/or a decree for
specific performance, in accordance with the provisions hereof.
12. Miscellaneous.
(a) This writing constitutes the entire agreement of the
parties with respect to the subject matter hereof and may not be modified or
amended except by a written agreement signed by the Company, GEI and the
Holders; provided, however, that any of the provisions of this Agreement (except
as hereinafter provided) may be modified, amended or eliminated by agreement of
the Company, GEI and a majority in interest (on the basis of the number of
"covered shares" of Common Stock then owned of all of the Holders and all
holders of securities pursuant to agreements in forms substantially similar to
this Agreement, which agreement shall bind each Holder whether or not such
Holder has agreed thereto; provided further, that no modification or amendment
which would materially adversely affect the rights of any Holder under Sections
3, 4, 5, 6, 7, 8, 9 or 12(a) of this Agreement shall be effective as to such
Holder if such Holder shall not have consented in writing thereto. Anything in
this Agreement to the contrary notwithstanding, any modification or amendment of
this Agreement by a written agreement signed by, or binding upon, any Holder
shall be valid and binding upon any and all persons or entities who may, at any
time, have or claim any rights under or pursuant to this Agreement in respect of
Covered Shares acquired from such Holder.
(b) No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature. Anything in
this Agreement to the contrary notwithstanding, any waiver, consent or other
instrument under or pursuant to this Agreement signed by, or binding upon, the
Management Investor or any other Holder shall be valid and binding upon any and
all persons or entities (other than the Company, GEI or any Affiliate of GEI)
who may, at any time, have or claim any rights under or pursuant to this
Agreement in respect of Covered Shares acquired from such Holder.
(c) Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company and GEI,
their respective successors and assigns and the Management Investor and the
other Holders and their respective heirs, personal representatives, successors
and assigns; provided, however, that nothing contained herein shall be construed
as granting to any Holder the right to transfer any Covered Shares except in
accordance with this Agreement and any transferee shall hold such Covered Shares
having only those rights and being subject to the restrictions provided for in
this Agreement.
(d) If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
(e) The provisions of this Agreement shall apply to all
Covered Shares.
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(f) Except as set forth in Section 11, arbitration shall be
the exclusive remedy for resolving any dispute or controversy between the
Company, any of its subsidiaries or GEI and any Management Investor or other
Holder. Such arbitration shall be conducted in accordance with the then most
applicable rules of the American Arbitration Association. The arbitrator shall
be empowered to grant only such relief as would be available in a court of law.
In the event of any conflict between this Agreement and the rules of the
American Arbitration Association, the provisions of this Agreement shall be
determinative. If the parties are unable to agree upon an arbitrator, they shall
select a single arbitrator from a list of seven arbitrators designated by the
office of the American Arbitration Association having responsibility for the
city in which the Management Investor last resided while employed by the Company
or its subsidiaries, all of whom shall be retired judges who are actively
involved in hearing private cases or members of the National Academy of
Arbitrators. If the parties are unable to agree upon an arbitrator from such
list, they shall each strike names alternatively from the list, with the first
to strike being determined by lot. After each party has used three strikes, the
remaining name on the list shall be the arbitrator. The fees and expenses of the
arbitrator shall initially be borne equally by the parties; provided, however,
that each party shall initially be responsible for the fees and expenses of its
own representatives and witnesses. If the parties cannot agree upon a location
for the arbitration, the arbitrator shall determine the location. Judgment may
be entered on the award of the arbitrator in any court having jurisdiction. The
prevailing party in the arbitration proceeding, as determined by the arbitrator,
and in any enforcement or other court proceedings, shall be entitled to the
extent provided by law to reimbursement from the other party for all of the
prevailing party's costs (including but not limited to the arbitrator's
compensation), expenses and reasonable attorneys' fees.
(g) Should any party to this Agreement be required to commence
any litigation concerning any provision of this Agreement or the rights and
duties of the parties hereunder, the prevailing party in such proceeding shall
be entitled, in addition to such other relief as may be granted, to the
reasonable attorneys' fees and court costs incurred by reason of such
litigation.
(h) The section headings contained herein are for the purposes
of convenience only and are not intended to define or limit the contents of said
sections.
(i) Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be
reasonably requested by any other party in order to carry out the provisions and
purposes of this Agreement.
(j) The Management Investor represents that, if the Management
Investor is married and resides in a community property state, the Management
Investor's spouse has signed the Acknowledgment and Agreement of Spouse relating
to the Management Investor at the end of this Agreement.
(k) Words in the singular shall be read and construed as
though in the plural and words in the plural shall be read and construed as
though in the singular in all cases where they would so apply.
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(l) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.
(m) The Management Investor and each other Holder hereby
irrevocably and unconditionally consents to the jurisdiction of any New York
State court or federal court of the United States sitting in the State of New
York in any action or proceeding relating to this Agreement and consents to
service of process in connection therewith by the delivery of notice to such
Management Investor's or Holder's address at the address for notices to such
Holder pursuant to this Agreement.
(n) This Agreement shall be deemed to be a contract under the
laws of the State of New York and for all purposes shall be construed and
enforced in accordance with the internal laws of said state without regard to
the principles of conflicts of law.
13. GEI Distributions Exempt.
It is expressly understood and agreed that GEI may distribute
to its partners or other equity participants, in accordance with the terms of
its limited partnership agreement, all or any part of the shares of the
Company's capital stock or other Company securities held by it (any such
distribution, a "GEI Distribution"). Notwithstanding anything to the contrary
contained in this Agreement, any GEI Distribution shall not constitute a "sale,"
"transfer" or "disposition" for any purpose under this Agreement and shall be
exempt in all respects from the terms and conditions of this Agreement. As an
example, and without limiting the generality of the foregoing, it is expressly
understood and agreed that a GEI Distribution shall not constitute a Tag-Along
Sale for the purposes of Section 8 hereof. Further, it is also expressly
understood and agreed that, following a GEI Distribution, (i) the shares of the
Company's capital stock or other Company securities distributed to the partners
or equity participants of GEI shall in no way be subject to this Agreement and
(ii) any partner or equity participant of GEI which receives shares of the
Company's capital stock or other Company securities pursuant to a GEI
Distribution shall not be required or deemed to become a party to this Agreement
or otherwise be subject to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
first date written above.
DIAMOND TRIUMPH AUTO GLASS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Co-Chairman & Co-Chief
Executive Officer
GREEN EQUITY INVESTORS II, L.P.
By: Grand Avenue Capital Partners, L.P.
By: Grand Avenue Capital Corporation, its
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Management Investor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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