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EXHIBIT 4.6
GOVERNANCE AGREEMENT
This Governance Agreement (this "Agreement"), dated as of ______, 200_
among ▇▇▇▇▇▇▇▇, Inc., a Minnesota corporation (the "Company"), and the
individuals and entities listed on the signature page of this Agreement under
the caption "Stockholders" (the "Stockholders").
WHEREAS, (i) certain of the Stockholders have acquired from the Company
pursuant to the Stock Purchase Agreement 4,944,132 shares of Common Stock and
11,303 shares of Series G Preferred Stock convertible into 4,079, 682 shares of
Common Stock, (ii) certain Stockholders and Molex have acquired from the Company
pursuant to the Subordinated Notes and Warrant Purchase Agreement $6,500,000
principal amount of the Company's 12% subordinated debt due on the fifth
anniversary of the Closing Date and Warrants to purchase 988,202 shares of
Common Stock, and certain Stockholders and other parties may acquire from the
Company up to an additional $8,500,000 principal amount of the Company's 12%
subordinated debt due on the fifth anniversary of the Closing Date and Warrants
to purchase 1,292,264 shares of Common Stock, and (iii) certain Stockholders
have acquired from the Company pursuant to the Merger Agreement 6,835,243 shares
of Common Stock; and
WHEREAS, certain Stockholders have sought Board approval of their
acquisition of shares of Common Stock, Series G Preferred Stock and/or Warrants
(i) pursuant to the Merger Agreement, the Stock Purchase Agreement or the
Subordinated Notes and Warrant Purchase Agreement, (ii) upon conversion of
shares of Series G Preferred Stock, (iii) upon exercise of the Warrants and (iv)
as dividends on the Series G Preferred Stock, in all cases as adjusted for stock
splits, dividends, recapitalization and the like and any other events requiring
adjustment under the anti-dilution provisions of applicable governing
instruments (collectively, the "Shares") for purposes of Section 302A.673 of the
Minnesota Business Corporation Act and under the Rights Agreement dated June 16,
1996, as amended, by and between the Company and Norwest Bank Minnesota, N.A.
(the "Rights Agreement") and have requested that the Company amend the Rights
Agreement so that neither IFT nor any of the Stockholders shall become an
Acquiring Person (as such term is defined in the Rights Agreement) and so that
none of a Distribution Date, a Stock Acquisition Date or an Acquisition Event
(as such terms are defined in the Rights Agreement) shall occur as a result of
the transactions contemplated by the Merger Agreement, the Subordinated Notes
and Warrant Purchase Agreement and the Stock Purchase Agreement; and
WHEREAS, as a condition to such approval, a special committee formed by
the Board and the Board (i) have required that certain arrangements be put in
place relating to the acquisition and disposition of Securities by the
Stockholders and related provisions concerning the Stockholders' relationship
with the Company, (ii) have
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negotiated the terms of this Agreement, (iii) have concluded that, subject to
execution and delivery of this Agreement, giving its approval under Section
302A.673 of the Minnesota Business Corporation Act, amending the Rights
Agreement as provided above and implementing the arrangements contemplated by
this Agreement are in the best interests of the Company and its stockholders and
(iv) subject to execution and delivery of this Agreement, have given such
approval and put such amendment into effect; and
WHEREAS, in consideration of such approvals, the Stockholders desire to
establish in this Agreement certain terms and conditions concerning the
acquisition and disposition of Securities by the Stockholders and their
Affiliates and Associates, and related provisions concerning the Stockholders'
relationship with the Company; and
WHEREAS, the Stockholders required as a condition to their willingness
to enter into and consummate the transactions contemplated by the Merger
Agreement, the Stock Purchase Agreement and the Subordinated Notes and Warrant
Purchase Agreement that the Company agree to the provisions of sections 2 and 4
hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the Company and the Stockholders hereby agree as follows:
1. STANDSTILL AND VOTING.
a. Acquisition of Securities.
i. Each Stockholder covenants and agrees that, until the
Standstill Termination Date, it will not, and will
not permit its Affiliates or Associates (other than
its partners or members) to, Beneficially Own any
Securities in excess of the Number of Permitted
Shares applicable to such Stockholder; provided that:
(1) this Agreement shall not restrict any
acquisition of Securities in a transaction
directly with the Company and approved in
accordance with the provisions of Section
2(c) hereof (including, without limitation,
the acquisition of Securities by any
director serving at the direction or request
of a Stockholder by reason of the grant of
stock options by the Company); and
(2) if a Business Combination Proposal is made
by any Person (other than the Company, a
Stockholder or an Affiliate of a
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Stockholder, or any Person acting in concert
with a Stockholder or any Affiliate
thereof), then any Stockholder may make a
Business Combination Proposal and this
Agreement shall not prohibit the making of
such Business Combination Proposal, the
acquisition of Securities pursuant to such
Business Combination Proposal or any other
action reasonably connected therewith;
provided, however, that, if a Person who has
not theretofore communicated a Business
Combination Proposal to the Company makes a
Business Combination Proposal to the to the
Board, however communicated, and the Board
unconditionally rejects such Business
Combination Proposal by written notice
delivered to the proposing party (with a
copy to each Stockholder) within five
business days of the date on which the
Business Combination Proposal was first
communicated to the Board, the restrictions
of this section 1(a)(i) shall again apply to
the Stockholders and provided, further, that
the preceding proviso will cease to apply if
such Person delivers to the Board any
further Business Combination Proposal or
modification of any earlier Business
Combination Proposal. If any Business
Combination Proposal made by any Stockholder
in accordance with this section 1(a)(i)(2)
is not consummated prior to nine months
after the Business Combination Proposal made
by such other Person has been effectively
withdrawn, the restrictions of this section
1(a)(i) shall again be applicable to the
Stockholders, subject to any further
Business Combination Proposal being made by
any Person.
ii. Subject to the proviso in Section 1(a)(i) hereof and
any waiver or approval in accordance with the
provisions of Section 2(c) hereof, if at any time on
or prior to the Standstill Termination Date any
Stockholder, alone or as part of any group acting
together, Beneficially Owns more than the Number of
Permitted Shares applicable to such Stockholder,
inadvertently or otherwise, then such Stockholder
shall promptly take action not inconsistent with
applicable law to reduce the amount of Securities
Beneficially Owned by such Persons to an amount not
greater than the Number of Permitted Shares
applicable to such Stockholder.
iii. No Stockholder shall, on or prior to the Standstill
Termination Date, permit any Affiliate thereof to
Beneficially Own any Securities
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unless such Affiliate becomes a Stockholder party to
this Agreement, which any such Affiliate may
unilaterally do by delivering to the Company an
instrument executed by or on behalf of such Affiliate
pursuant to which such Affiliate assumes the
obligations of a Stockholder hereunder; provided that
any partner or member of a Stockholder who becomes a
Beneficial Owner of Securities after the date that is
one year from the date of this Agreement shall not be
obligated to become a party to this Agreement.
b. Restrictions on Transfer. For a period of one year from the
date of this Agreement, each Stockholder agrees not to
Transfer any of the Shares, unless such Transfer is to an
Affiliate or Associate and is in compliance with the terms of
this Agreement, or is to be effected for the Stockholder's
personal estate planning purposes and is in compliance with
the terms of this Agreement. After the one-year period, any
Stockholder may distribute its Shares to its partners or
members. In addition, except as allowed under the immediately
preceding sentence, prior to the Standstill Termination Date,
the Stockholders, and each Affiliate thereof which acquires
Securities in accordance with the terms of this Agreement,
will not Transfer Beneficial Ownership of any Securities to
any of their Affiliates (other than a partner or member of
such Stockholder) unless each such Person becomes a signatory
to this Agreement as a "Stockholder" hereunder as provided in
section 1(a)(iii) hereof. Each Stockholder agrees to inclusion
of the following legend on certificates representing its
Shares:
The shares represented by this certificate and any
transfer thereof are subject to a restriction on
transfer as set forth in a Governance Agreement
between the holder and the Company dated as of
__________________, 200_, a copy of which is on file
at the principal executive office of the Company.
Such legend shall be placed on all certificates held by a
Stockholder during the continuance of this Agreement.
c. Further Restrictions on Conduct. Unless waived or approved in
advance in accordance with Section 2(c) hereof, and except for
a Business Combination Proposal made by a Stockholder in
conformity with the requirements of Section 1(a)(i)(2) hereof
and any action taken by such Stockholder that is reasonably
connected therewith, each Stockholder covenants and agrees
that, until the Standstill Termination Date, neither the
Stockholder nor any Affiliate or Associate thereof shall:
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i. initiate, propose, make, or in any way participate
in, directly or indirectly, any "solicitation" of
"proxies" to vote, or seek to influence any Person
with respect to the voting of, any Voting Securities,
or become a "participant" in a "solicitation" or
"election contest" (as such terms are defined or used
in Regulation 14A under the Exchange Act, as in
effect on the date hereof), in any election contest
with respect to the election or removal of any
director whose name appears in Exhibit 2 hereof or
any replacement thereof, any director of the Board
proposed by the specified committee in accordance
with Section 2 (other than any individual whose name
appears on exhibit 1 hereof or any replacement
thereof) or the Molex Director;
ii. solicit, offer, seek or propose to any other Person
(including without limitation the Company) any form
of merger with, tender or exchange offer for
securities of, sale or liquidation of assets of, or
similar business combination transaction with or
involving the Company or its Affiliates or
Associates; provided, however, that the foregoing
shall not restrict any such action relating to a
merger or similar business combination with the
purpose and effect of the Company or its Affiliates
and Associates acquiring the business, voting
securities or assets of another Person; or
iii. take any other action inconsistent with the foregoing
or this Agreement;
provided, however, that nothing in this Section 1(c) shall
inhibit the free exercise of judgment by any member of the
Board in his capacity as such.
d. Reports. Until the Standstill Termination Date, each
Stockholder shall deliver to the Company, promptly after any
acquisition or Transfer of Securities, an accurate written
report specifying the amount and class of Securities acquired
or Transferred in such transaction and the amount of each
class of Securities owned by the Stockholder or any Affiliate
or Associate thereof after giving effect to such transaction;
provided, however, that no such report need be delivered with
respect to any such acquisition or Transfer of Securities by
the Stockholder that is reported in a statement on Schedule
13D filed with the Commission and delivered to the Company by
the Stockholder or any Affiliate or Associate thereof in
accordance with Section 13(d) of the Exchange Act and the
rules
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thereunder. The Company shall be entitled to rely on such
reports and statements on Schedule 13D for all purposes of
this Agreement.
2. BOARD OF DIRECTORS.
a. Initial Composition of Board of Directors.
i. The number of directors comprising the Board of
Directors, effective upon Closing, shall be seven.
ii. The Company shall use its best efforts to cause the
by-laws of the Company to be amended at the next
meeting of stockholders of the Company so as to set
the size of the board of directors of the Company at
seven.
iii. Concurrently with the Closing, the Board shall take
such action as is required under applicable law to
cause to be elected to the Board, effective upon the
Closing, the individuals whose names are set forth on
Exhibit 1 hereto.
iv. The remaining directors comprising the Board,
effective upon the Closing, shall consist of the
Molex Director and the individuals whose names are
listed on Exhibit 2 hereto.
v. The Company shall use its best efforts to cause the
individuals serving as directors of the Company prior
to the effective date of the Merger whose names are
not listed on Exhibit 2 hereto to resign as of the
effective date of the Merger.
b. Board Representation; Nominating Committee of the Board.
Sections 2(b)(i) and (ii) shall apply until the Applicable
Number is zero.
i. Board Representation. At least fifteen (15) days
prior to each meeting of the Board at which the Board
intends to take action to approve nominees for
election to the Board at the next annual meeting of
shareholders of the Company, the Company shall
provide each of the Stockholders with a notice of
such meeting, which notice shall indicate that the
Board will take such action at such meeting . Prior
to the date of each such Board meeting, the
Stockholders shall give the nominating committee of
the Board, in writing, the names of the Applicable
Number of director candidates. The Company will cause
such individual or individuals to be
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nominated for election as directors at the next
annual meeting of the shareholders of the Company,
will include such individual or individual's names as
nominees in the proxy or consent statement prepared
by the Company in connection with such annual
meeting, indicating that the election as directors of
such individual or individuals has been recommended
by the Board, and will solicit proxies for the
election of such individual or individuals as members
of the Board at such annual meeting of shareholders.
At the first meeting of the Board after the date of
this Agreement, three designees of the Stockholders
shall be appointed by the Board as Board members. If,
at any time that the Applicable Number is greater
than zero, any individual so designated by the
Stockholders is unable to serve or ceases to serve as
a director for any reason, the Company will cause
another individual designated by the Stockholders to
be appointed to fill the resulting vacancy. Anything
herein to the contrary notwithstanding, after
termination of this Agreement pursuant to Section 4,
the Company shall no longer be obligated to nominate
and solicit proxies for the election of such
designees of the Stockholders as directors of the
Company and such nominees shall, if requested by the
Board, resign from the Board.
ii. Nominating Committee of the Board. Subject to the
rights of Molex and the Stockholders to designate
individuals to serve as directors, the identity of
directors to stand for election to the Board at each
annual meeting of stockholders following the Closing
and until the Standstill Termination Date or to fill
a vacancy on the Board, as the case may be, shall be
determined by the actions of a nominating committee
of the Board. The nominating committee shall have
three members and, for purposes of the first annual
meeting of the Company's stockholders held after
Closing, shall be initially comprised of one director
whose name appears on Exhibit 1 hereto, one director
whose name appears on Exhibit 2 hereto and the Molex
Director.
c. Voting. Until the Applicable Number is zero:
i. the Company shall not enter into any Stockholder
Interested Transaction unless such Stockholder
Interested Transaction has been approved by the
affirmative vote of a majority of the members of the
Board other than any director or directors who is or
are employed by or a partner or a member of the
Stockholder or
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Affiliate or Associate of the Stockholder who is a
party to such Stockholder Interested Transaction, in
addition to any other approvals required by
applicable law or the Company's articles of
incorporation or by-laws.
ii. each Stockholder agrees that such Stockholder shall
not, and shall not take any action which would cause
the Company or its Board to, enter into or
participate in any Stockholder Interested Transaction
which has not been so approved.
3. REPRESENTATIONS AND WARRANTIES.
a. Representations and Warranties of the Company. The Company
represents and warrants to the Stockholders that:
i. the Company is a corporation duly incorporated,
validly existing and in good standing under the laws
of the state of Minnesota and has the corporate power
and authority to enter into this Agreement and to
carry out its obligations hereunder;
ii. the execution and delivery of this Agreement by the
Company and the consummation by the Company of the
transactions contemplated hereby have been duly
authorized by all necessary corporate action on the
part of the Company and no other corporate
proceedings on the part of the Company are necessary
to authorize this Agreement or any of the
transactions contemplated hereby; and
iii. this Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding
obligation of the Company, and, assuming this
Agreement constitutes a valid and binding obligation
of the Stockholders, is enforceable against the
Company in accordance with its terms.
b. Representations and Warranties of the Stockholders. Each of
the Stockholders represents and warrants to the Company that:
i. it is an individual and has the power and authority
to enter into this Agreement and to carry out its
obligations hereunder, or it is an entity and is duly
organized, validly existing and in good standing
under the laws of the state of its organization and
incorporation, and has the corporate power and
authority to enter into this Agreement and to carry
out its obligations hereunder;
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ii. the execution and delivery of this Agreement by such
Stockholder and the consummation by such Stockholder
of the transactions contemplated hereby have been
duly authorized by all necessary action on the part
of such Stockholder and no other proceedings on the
part of such Stockholder are necessary to authorize
this Agreement or any of the transactions
contemplated hereby; and
iii. this Agreement has been duly executed and delivered
by such Stockholder and constitutes a valid and
binding obligation of such Stockholder, and, assuming
this Agreement constitutes a valid and binding
obligation of the Company, is enforceable against
such Stockholder in accordance with its terms.
4. NEGATIVE COVENANTS. So long as ▇▇▇▇▇▇▇▇▇▇▇▇, Ampersand, Ampersand
Companion and Sound Beach and all Affiliates, Associates, partners and
members thereof hold, in aggregate, at least 15% of the Common Stock
Equivalents acquired on the Closing Date by ▇▇▇▇▇▇▇▇▇▇▇▇, Ampersand,
Ampersand Companion and Sound Beach pursuant to the Merger Agreement,
the Stock Purchase Agreement and the Subordinated Notes and Warrant
Purchase Agreement, the Company shall not and shall cause its
Subsidiaries not to, without the consent of whichever of ▇▇▇▇▇▇▇▇▇▇▇▇,
Ampersand and Ampersand Companion (the two Ampersand entities being
considered for this purpose as a single entity), and any Affiliates,
Associates, partners or members thereof, respectively, holds more than
15% of the number of Common Stock Equivalents acquired by it, on the
Closing Date, pursuant to the Merger Agreement, Stock Purchase
Agreement and Subordinated Notes and Warrant Purchase Agreement:
a. authorize any reclassification of the Common Stock, any
merger, consolidation, recapitalization or reorganization of
the Company or approve or effect any plan of liquidation or
dissolution whether statutory or otherwise;
b. authorize, agree to or consummate any sale, lease, exchange or
disposition of all or substantially all of the property or
assets of the Company or the effectuation by the Company of a
transaction or series of related transactions in which more
that 50% of the voting power of the Company is disposed of;
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c. increase the number of directors constituting the Board or,
after such time as the Company's shareholders take such action
as is required to reduce the size of the Board from nine to
seven, set the number of directors constituting the Board at a
number other than seven;
d. repurchase or redeem any equity securities or retire any other
equity capital of the Company or of any of its direct of
indirect Subsidiaries (except for the repurchases of Common
Stock under restricted stock agreements between employees and
the Company previously approved by the Board); or
e. enter into any agreement with respect to the foregoing.
5. DEFINITIONS. For purposes of this Agreement, the following terms shall
have the following meanings:
a. Affiliate" or "Associate" shall mean an affiliate or associate
of a person, as such terms are defined in Section 302A.011,
subdivisions 43 and 45, respectively, of the Minnesota
Business Corporation Act.
b. Agreement" shall have the meaning set forth in the preamble to
this Agreement.
c. "Ampersand" shall mean Ampersand IV Limited Partnership, a
Delaware limited partnership.
d. "Ampersand Companion" shall mean Ampersand IV Companion Fund
Limited Partnership, a Delaware limited partnership.
e. "Applicable Number" shall mean the following:
i. three, so long as ▇▇▇▇▇▇▇▇▇▇▇▇, Ampersand, Ampersand
Companion and Sound Beach and any Affiliate,
Associate, partner or member thereof own, in
aggregate, at least 69% of the Common Stock
Equivalents acquired by them on the Closing Date
pursuant to the Merger Agreement, Stock Purchase
Agreement and Subordinated Notes and Warrant Purchase
Agreement.
ii. two, so long as ▇▇▇▇▇▇▇▇▇▇▇▇, Ampersand, Ampersand
Companion and Sound Beach and any Affiliate,
Associate, partner or member thereof own, in
aggregate, at least 50% but less than 69% of the
Common Stock Equivalents acquired by them on the
Closing Date pursuant to the Merger Agreement, Stock
Purchase Agreement and Subordinated Notes and Warrant
Purchase Agreement.
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iii. one, so long as ▇▇▇▇▇▇▇▇▇▇▇▇, Ampersand, Ampersand
Companion and Sound Beach and any Affiliate,
Associate, partner or member thereof own, in
aggregate, at least 15% but less than 50% of the
Common Stock Equivalents acquired by them on the
Closing Date pursuant to the Merger Agreement, Stock
Purchase Agreement and Subordinated Notes and Warrant
Purchase Agreement.
iv. zero, so long as ▇▇▇▇▇▇▇▇▇▇▇▇, Ampersand, Ampersand
Companion and Sound Beach and any Affiliate,
Associate, partner or member thereof own, in
aggregate, less than 15% of the Common Stock
Equivalents acquired by them on the Closing Date
pursuant to the Merger Agreement, Stock Purchase
Agreement and Subordinated Notes and Warrant Purchase
Agreement.
f. "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of
such securities (as determined pursuant to Rule 13d-3 under
the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing; but
shall not include any securities that would otherwise be
Beneficially Owned pursuant to this definition solely by
virtue of the existence of this Agreement and/or any voting
agreement solely among the Stockholders with respect to the
election of directors of the Company.
g. "Board" shall mean the board of directors of the Company.
h. "Business Combination Proposal" shall mean:
i. any bona fide business combination proposal however
communicated, including without limitation a "bear
hug" letter or other similar communication directed
to the Board or any member of the Board, any merger
proposal involving the Company or any Subsidiary, any
purchase of all or a material portion of the assets
of the Company or any Subsidiary, or any tender or
exchange offer directed to security holders of the
Company, and
ii. any proposal to purchase more than 25% of the Total
Voting Power;
but shall not include any proposal that intentionally has been
induced, in whole or in part and directly or indirectly, by
one or more Stockholders in order to cause the termination of
the restrictions set forth in section 1(a)(i) hereof.
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i. "Closing" shall mean the closing of the transactions
contemplated by the Merger Agreement.
j. "Closing Date" shall mean the Closing Date as defined in the
Merger Agreement.
k. "Commission" shall mean the Securities and Exchange
Commission.
l. "Common Stock" shall mean the Common Stock, par value $0.25
per share, of the Company.
m. "Common Stock Equivalent" shall mean the following:
i. with respect to shares of Common Stock, each share of
Common Stock shall be one Common Stock Equivalent.
ii. with respect to Series G Preferred Stock, each share
of Series G Preferred Stock shall be a number of
Common Stock Equivalents equal to the number of
shares of Common Stock issuable on conversion of such
share of Series G Preferred Stock as of the date of
determination.
iii. with respect to Warrants, each Warrant shall be a
number of Common Stock Equivalents equal to the
number of shares of Common Stock issuable on exercise
of such Warrant as of the date of determination.
n. "Company" shall have the meaning set forth in the preamble of
this Agreement.
o. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
p. "IFH" shall mean International Flex Holdings, Inc., a Delaware
corporation.
q. "Merger Agreement" shall mean the agreement and plan of
merger, dated as of November 10, 2000 among the Company, IFT
West Acquisition Company, a wholly owned Subsidiary of the
Company, IFH and all of the stockholders of IFH.
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r. "Merger" shall mean the merger effected pursuant to the Merger
Agreement.
s. "Molex" shall mean Molex Incorporated, a Delaware corporation.
t. "Molex Director" shall mean the individual nominated by Molex
under the terms of the Agreement Relating to ▇▇▇▇▇▇▇▇, dated
as of November 18, 1998, between the Company and Molex, as
amended as of November 10, 2000.
u. "▇▇▇▇▇▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇▇▇▇▇▇ Venture Partners V,
L.P., a Delaware limited partnership.
v. "Number of Permitted Shares" applicable to any Stockholder
shall mean the number of shares of Common Stock, shares of
Series G Preferred Stock and/or Warrants (i) received by such
Stockholder pursuant to the Merger Agreement, the Stock
Purchase Agreement or the Subordinated Notes and Warrant
Purchase Agreement, (ii) issuable upon conversion of the
shares of Series G Preferred Stock acquired by such
Stockholder on the Closing Date, (iii) issuable on exercise of
the Warrants acquired by such Stockholder on the Closing Date
and (iv) received as dividends on the Series G Preferred Stock
held by such Stockholder, in all cases as adjusted for stock
splits, dividends, recapitalization and the like and any other
events requiring adjustment under the anti-dilution provisions
of applicable governing instruments.
w. "Person" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization,
government or department or agency of a government.
x. "Rights Agreement" shall have the meaning set forth in the
recitals of this Agreement.
y. "Securities" shall mean at any time shares of any class of
capital stock of the Company, including, without limitation,
securities convertible into such shares.
z. "Series G Preferred Stock" shall mean the shares of Series G
Preferred Stock, par value $1.00 per share, of the Company.
aa. "Shares" shall have the meaning set forth in the recitals of
this Agreement.
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bb. "Sound Beach" shall mean Sound Beach Technology Partners, LLC,
a Delaware limited liability company.
cc. "Standstill Termination Date" shall mean the third anniversary
of the Closing.
dd. "Stockholders" shall have the meaning set forth in the
preamble of this Agreement.
ee. "Stockholder Interested Transaction" shall mean:
i. any transaction between the Company or any of its
Subsidiaries and any Stockholder or any Affiliates or
Associates of a Stockholder, or
ii. any amendment, modification, consent or waiver to, of
or under, or the enforcement of the terms of this
Agreement, the Stock Purchase Agreement, the
Subordinated Notes and Warrant Purchase Agreement or
the Merger Agreement, other than any amendment or
modification to the Merger Agreement to affect
adjustments to the conversion ratios set forth
therein.
ff. "Stock Purchase Agreement" shall mean the stock purchase
agreement, dated as of November 10, 2000 among the Company and
certain Stockholders.
gg. "Subordinated Notes and Warrant Purchase Agreement" shall mean
the Subordinated Notes and Warrant Purchase Agreement, dated
as of November 10, 2000 among the Company, certain
Stockholders and Molex.
hh. "Subsidiary" shall mean, as to any Person, any corporation at
least a majority of the shares of stock of which having
general voting power under ordinary circumstances to elect a
majority of the Board of such corporation (irrespective of
whether or not at the time stock of any other class or classes
shall have or might have voting power by reason of the
happening of any contingency) is, at the time as of which the
determination is being made, owned by such Person, or one or
more of its Subsidiaries or by such Person and one or more of
its Subsidiaries.
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ii. "Total Voting Power" at any time shall mean the total combined
voting power in the general election of directors of all the
Voting Securities then outstanding.
jj. "Transfer" shall mean any sale, transfer, pledge, encumbrance
or other disposition, and to "Transfer" shall mean to sell,
transfer, pledge, encumber or otherwise dispose of.
kk. "Voting Securities" shall mean at any time any Securities
(other than the shares of Series G Preferred Stock) which are
entitled to vote generally in the election of directors of the
Company.
ll. "Warrants" shall mean the warrants issued to certain
Stockholders under the Subordinated Notes and Warrant Purchase
Agreement.
6. MISCELLANEOUS.
a. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including telecopy) and
shall be given, if to the Company, to:
If to the Company: Sheldahl, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto.
Each such notice, request or other communication shall be
effective when delivered personally, telegraphed or
telecopied, or, if mailed, five business days after the date
of the mailing.
b. Amendments; No Waivers.
i. Any provision of this Agreement may be amended or
waived if, and
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only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the
Stockholders and the Company, or in the case of a
waiver, by the party against whom the waiver is to be
effective.
ii. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further
exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
c. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns;
provided, however, that no party may assign this Agreement
without the other party's prior written consent; and provided
further that the rights of the Stockholders under sections 2
and 4 hereof shall not be assignable other than to Affiliates
and Associates of the assigning Person.
d. Governing Law. This Agreement shall he construed in accordance
with and governed by the internal laws of the State of
Minnesota.
e. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall
become effective when each party hereto shall have received
counterparts thereof signed by the other party hereto.
f. Specific Performance. The Company and the Stockholders each
acknowledge and agree that the parties' respective remedies at
law for a breach or threatened breach of any of the provisions
of this Agreement would be inadequate and, in recognition of
that fact, agrees that, in the event of a breach or threatened
breach by the Company or the Stockholders of the provisions of
this Agreement, in addition to any remedies at law, the
Stockholders and the Company, respectively, without posting
any bond shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable
remedy which may then be available.
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g. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction
to be invalid, void or unenforceable, 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, provided that the
parties hereto shall negotiate in good faith to attempt to
place the parties in the same position as they would have been
in had such provision not been held to be invalid, void or
unenforceable.
h. Termination. This Agreement shall terminate on the later of:
i. the first date as of which the Applicable Number is
zero, and
ii. the Standstill Termination Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
▇▇▇▇▇▇▇▇, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
STOCKHOLDERS:
▇▇▇▇▇▇▇▇▇▇▇▇ VENTURE PARTNERS V, L.P.
By:
---------------------------------------
Name:
Title:
AMPERSAND IV LIMITED PARTNERSHIP
By: AMP-IV MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY, its General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Member
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AMPERSAND IV COMPANION FUND LIMITED
PARTNERSHIP
By: AMP-IV MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY, its General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Member
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SOUND BEACH TECHNOLOGY PARTNERS, LLC
By:
---------------------------------------
Name:
Title:
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EXHIBIT 1
NAMES OF INDIVIDUALS DESIGNATED BY THE HOLDERS OF THE SERIES G PREFERRED STOCK
TO BE ELECTED TO THE COMPANY'S BOARD OF DIRECTORS
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
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EXHIBIT 2
NAMES OF INDIVIDUALS WHO HAVE SERVED ON THE COMPANY'S BOARD OF DIRECTORS PRIOR
TO THE EFFECTIVE DATE OF THE MERGER AND WHO ARE TO CONTINUE TO SERVE ON THE
COMPANY'S BOARD OF DIRECTORS FOLLOWING THE EFFECTIVE DATE OF THE MERGER
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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