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EXHIBIT 8
SHARE PURCHASE AGREEMENT
dated as of
January 12, 2001
between
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
and
HEARTLAND INDUSTRIAL PARTNERS, L.P.
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions..........................................................................1
ARTICLE 2
PURCHASE AND SALE; CLOSING
SECTION 2.01. Purchase and Sale of the Primary Shares..............................................9
SECTION 2.02. Closing.............................................................................10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power.......................................................10
SECTION 3.02. Corporate Authorization; Opinion of Financial Advisor...............................10
SECTION 3.03. Governmental Authorization..........................................................11
SECTION 3.04. Non-contravention...................................................................11
SECTION 3.05. Capitalization; Reservation of Shares...............................................12
SECTION 3.06. Subsidiaries; Equity Investments....................................................12
SECTION 3.07. SEC Filings.........................................................................13
SECTION 3.08. Financial Statements................................................................14
SECTION 3.09. No Undisclosed Material Liabilities.................................................14
SECTION 3.10. Disclosure Documents................................................................14
SECTION 3.11. Absence of Certain Changes..........................................................14
SECTION 3.12. Compliance with Laws and Court Orders...............................................16
SECTION 3.13. Litigation..........................................................................16
SECTION 3.14. Finders' Fees.......................................................................16
SECTION 3.15. Taxes...............................................................................16
SECTION 3.16. Employee Benefit Plans..............................................................17
SECTION 3.17. Environmental Matters...............................................................19
SECTION 3.18. Antitakeover Statutes...............................................................20
SECTION 3.19. Private Offering....................................................................20
SECTION 3.20. Existing Investor Agreements........................................................20
SECTION 3.21. Disclaimer of Other Representations and Warranties..................................20
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE NEW INVESTOR
SECTION 4.01. Existence and Power.................................................................21
SECTION 4.02. Authorization.......................................................................21
SECTION 4.03. Governmental Authorization..........................................................21
SECTION 4.04. Non-contravention...................................................................21
SECTION 4.05. Purchase for Investment.............................................................22
SECTION 4.06. Restrictions on Transfer............................................................22
SECTION 4.07. Sophistication; Access to Information...............................................22
SECTION 4.08. Disclosure Documents................................................................22
SECTION 4.09. Finders' Fees.......................................................................23
SECTION 4.10. Section 203.........................................................................23
SECTION 4.11. Financing...........................................................................23
SECTION 4.12. Disclaimer of Other Representations and Warranties..................................23
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of the Company..............................................................23
SECTION 5.02. Access to Information...............................................................25
SECTION 5.03. Shareholder Meeting; Proxy Material; Debt Consents..................................25
SECTION 5.04. No Solicitation.....................................................................26
SECTION 5.05. Reports.............................................................................27
SECTION 5.06. Further Assurances..................................................................27
SECTION 5.07. Stock Exchange Listing..............................................................28
ARTICLE 6
COVENANTS OF THE NEW INVESTOR AND THE COMPANY
SECTION 6.01. Commercially Reasonable Efforts.....................................................28
SECTION 6.02. Certain Filings.....................................................................29
SECTION 6.03. Public Announcements................................................................29
SECTION 6.04. Notices of Certain Events...........................................................29
SECTION 6.05. Confidentiality.....................................................................30
SECTION 6.06. Consummation of Agreement...........................................................30
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ARTICLE 7
CONDITIONS TO THE TRANSACTIONS
SECTION 7.01. Conditions to the Obligations of Each Party.........................................30
SECTION 7.02. Conditions to the Obligations of the New Investor...................................31
SECTION 7.03. Conditions to the Obligations of the Company........................................33
ARTICLE 8
TERMINATION
SECTION 8.01. Termination.........................................................................34
SECTION 8.02. Effect of Termination...............................................................35
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices.............................................................................36
SECTION 9.02. Survival of Representations and Warranties..........................................37
SECTION 9.03. Amendments; No Waivers..............................................................37
SECTION 9.04. Expenses............................................................................38
SECTION 9.05. Successors and Assigns..............................................................38
SECTION 9.06. Governing Law.......................................................................38
SECTION 9.07. Jurisdiction........................................................................38
SECTION 9.08. Waiver of Jury Trial................................................................39
SECTION 9.09. Counterparts; Effectiveness; Third Parties..........................................39
SECTION 9.10. Entire Agreement....................................................................39
SECTION 9.11. Captions............................................................................39
SECTION 9.12. Severability........................................................................39
SECTION 9.13. Specific Performance................................................................40
ANNEXES
Annex A - Terms of Non-Voting Convertible Preferred Stock
Annex B - Form of Profit Participation Agreement
Annex C - Form of New Registration Rights Agreement
Annex E - Form of New Master Shareholder Agreement
Annex F - Form of Secondary Share Purchase Agreement
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SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT (this "AGREEMENT") dated as of
January 12, 2001 between ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, a Delaware corporation
(the "COMPANY") and Heartland Industrial Partners, L.P., a Delaware limited
partnership ("HEARTLAND" or the "NEW INVESTOR").
W I T N E S S E T H :
WHEREAS, the New Investor seeks to acquire from the Company
(x) 8,600,000 shares (the "TREASURY SHARES") of Common Stock, par value $0.01
per share (the "COMMON STOCK"), of the Company and (y) 1,000,000 shares of
Non-Voting Convertible Preferred Stock, par value $0.01 per share (the
"CONVERTIBLE PREFERRED SHARES"), of the Company, having the terms set forth in
Annex A, convertible into an aggregate of 16,400,000 shares of Common Stock (the
"CONVERTED SHARES") upon the occurrence of the Charter Amendment Effective Date
(as defined below);
WHEREAS, the board of directors of the Company (the "BOARD OF
DIRECTORS") (i) has approved the sale of the Treasury Shares and the Convertible
Preferred Shares (together, the "PRIMARY SHARES") to the New Investor, (ii) has
determined that the sale of the Primary Shares to the New Investor is advisable
and in the best interests of the holders of the Company's capital stock (the
"COMPANY SHAREHOLDERS"), and (iii) has approved and recommended the approval of
this Agreement; and
WHEREAS, simultaneously with the execution of this Agreement,
the New Investor will enter into an agreement dated as of the date hereof (the
"SECONDARY SHARE PURCHASE AGREEMENT") to purchase 27,000,000 shares of Common
Stock from each of Blackstone Capital Company II, L.L.C., Blackstone Capital
Partners L.P., Blackstone Advisory Directors Partnership, L.P., Blackstone
Family Investment Partnership I L.P. (collectively "BLACKSTONE") and
▇▇▇▇▇▇▇▇▇▇▇/C&A Holdings, L.L.C. ("▇▇▇▇▇▇▇▇▇▇▇" and together with Blackstone,
the "SELLERS").
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as
used herein, have the following meanings:
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"ACQUISITION PROPOSAL" means any offer or proposal for, or any
indication of interest in, (i) any acquisition or purchase of 10% or more of the
consolidated assets of the Company and its Subsidiaries, (ii) any acquisition or
purchase of an equity interest in the Company representing in excess of 10% of
the power to vote for the election of a majority of the directors of the
Company, or any tender offer or exchange offer for equity securities of the
Company as a result of which the offeror would hold such an equity interest in
the Company or (iii) any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company, or any of its Subsidiaries whose assets,
individually or in the aggregate, constitute more than 30% of the consolidated
assets of the Company and its Subsidiaries, in each case other than the
transactions contemplated by this Agreement.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common control
with such Person.
"ANTITRUST LAWS" means the ▇▇▇▇▇▇▇ Act, as amended, the
▇▇▇▇▇▇▇ Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, and all other federal, state and foreign statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening of
competition through merger or acquisition.
"BANK AMENDMENTS" means (1) the waiver of any event of default
caused by or resulting from the transactions contemplated hereby and by the
Secondary Share Purchase Agreement, including, without limitation, any event of
default arising from a change of control, (2) the amendment of the definitions
of "Change in Control" and "Designated Person" in the Credit Agreement, the
Receivables Agreement and the Master Lease Agreement to provide for the control
and beneficial ownership of capital stock by the New Investor and its Affiliates
contemplated to occur as a result of the transaction contemplated hereby and by
the Secondary Share Purchase Agreement without any breach or default thereunder,
and (3) such other changes as may be requested by the New Investor that are
reasonably acceptable to the Credit Agreement Parties (other than the Company
and its affiliates).
"BENEFIT PLAN" means any Plan, other than a Multiemployer Plan
or a Foreign Plan, existing at the Closing Date established or to which
contributions have at any time been made by the Company or any Subsidiary
thereof, or any predecessor of the Company or any Subsidiary thereof, or with
respect to which the Company or any Subsidiary is a party, under which any
employee, former employee or director of the Company or any Subsidiary thereof,
or any beneficiary thereof, is covered, is eligible for coverage or has benefit
rights in respect of service to the Company or any Subsidiary thereof and any
other Plan with respect to which the Company or any Subsidiary has liability.
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"BUSINESS DAY" means a day other than Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close.
"CHARTER AMENDMENT EFFECTIVE DATE" means the earliest date on
which each of the following events has occurred:
(a) approval by the Company Shareholders of the
Shareholder Matters;
(b) filing and effectiveness of the New Charter with the
Secretary of State of the State of Delaware;
(c) increase in the size of the Board of Directors to 11
and appointment of designees of Heartland to the two added seats and,
if the Board of Directors appoints a third director meeting the
independence requirements of the New York Stock Exchange, increase in
the size of the Board of Directors to 13 and appointment of a designee
of Heartland to a third additional seat.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY BALANCE SHEET" means the unaudited consolidated
balance sheet of the Company as of September 30, 2000 and the notes thereto set
forth in the Company's quarterly report on Form 10-Q for the period ending on
that date.
"COMPANY BALANCE SHEET DATE" means September 30, 2000.
"COMPANY 10-K" means the Company's annual report on Form 10-K
for the fiscal year ended December 25, 1999.
"CONSENT COSTS" means the direct and indirect financial cost
(whether through the payment of consent, waiver or other fees, the reimbursement
of out-of-pocket costs and expenses of any person or any change in financial
terms of the Indenture or the Credit Agreement, as applicable) to the New
Investor or its Affiliates or the Company or any of its subsidiaries incurred or
payable in connection with obtaining requisite approval of the Indenture
Amendments and the Bank Amendments, as applicable; provided that Consent Costs
shall not include (1) the reasonable fees and expenses of any dealer
manager/solicitation agent for the consent solicitation in respect of the
Indenture Amendments, (2) reimbursement of the reasonable out-of-pocket expenses
of the Credit Agreement Parties (other than the Company and its affiliates)
payable pursuant to the terms of the Credit Agreement, as in effect on the date
hereof, (3) the reimbursement of the reasonable out-of-pocket expenses of the
Trustee incurred in connection with the Indenture Amendments, (4) the payment of
reasonable fees and expenses of the New Investor in connection with the
transactions contemplated hereby or by the Secondary Share Purchase Agreement
and (5) the payment of reasonable fees and expenses for counsel to the Company,
the Special Committee of the Company, Blackstone and
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▇▇▇▇▇▇▇▇▇▇▇ in connection with the transactions contemplated hereby or by the
Secondary Share Purchase Agreement.
"CREDIT AGREEMENT" means the Credit Agreement dated as of May
28, 1998 among the Credit Agreement Parties, as amended and modified by the
waivers, amendments and supplement thereto dated as of October 27, 1998,
December 22, 1998, March 8, 1999 and May 12, 1999.
"CREDIT AGREEMENT PARTIES" means collectively (1) ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ Products Co., ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics,
Ltd., as Borrowers, (2) the Company, as Guarantor, (3) Bank of America National
Trust and Savings Association, as Documentation Agent, (4) The Chase Manhattan
Bank, as Administrative Agent, and The Chase Manhattan Bank, as Canadian
Administrative Agent, and (5) the Lenders (as defined under the Credit
Agreement) necessary for the Bank Amendments to be approved and effective under
the terms of the Credit Agreement.
"ENVIRONMENTAL CLAIM" means any notice, claim, demand or other
communication alleging liability for cost, cleanup, response, corrective action
or other costs, or damages to natural resources or other property, personal
injuries, fines or penalties arising out of or resulting from (i) the presence,
Release or threatened Release in or into the environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and includes,
without limitation, any claim seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from the presence of
Hazardous Material or arising from alleged injury or threat of injury to health,
safety or the environment.
"ENVIRONMENTAL LAWS" means any law, statute, ordinance,
regulation, rule, decree, order, judgment, consent order, consent decree or
other binding requirement and the common law relating to protection of public
health or the environment, the Release or threatened Release of Hazardous
Material, natural resources damages, or occupational safety and health.
"ENVIRONMENTAL PERMITS" means any permit, license, approval,
consent or other authorization required by a federal, state, local or foreign
government or regulatory entity pursuant to Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA AFFILIATE" of any entity means any other Person that,
together with such Person, would be treated as a single employer under Section
414 of the Code.
"EXISTING INVESTOR AGREEMENTS" means each of the following:
(a) the Amended and Restated Stockholders Agreement dated as of June 29, 1994,
among Blackstone Capital Partners L.P., ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners, L.P., the
Company and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc.; (b) the Voting Agreement dated as of
June 29, 1994, among Blackstone Capital
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Partners L.P. and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners, L.P.; and (c) any agreements
providing for the payment of monitoring fees by the Company to Blackstone,
▇▇▇▇▇▇▇▇▇▇▇ or any of their affiliates.
"GOVERNMENTAL AUTHORITY" means any federal, state or local
government or any court, administrative agency or commission or other
governmental or regulatory agency, authority or official, whether domestic,
foreign or supranational.
"HAZARDOUS MATERIAL" means any material, substance, waste,
constituent, compound, pollutant or contaminant including, without limitation,
petroleum (including, without limitation, crude oil or any fraction thereof or
any petroleum product) subject to regulation or which can give rise to liability
under Environmental Law.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"INDEBTEDNESS" means, of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than trade liabilities incurred in the
ordinary course of business and payable in accordance with customary practices),
(b) any other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all leases the obligations of such Person
in respect of which are required in accordance with GAAP to be capitalized, (d)
all obligations of such Person in respect of acceptances issued or created for
the account of such Person, and (e) all indebtedness or obligations of the types
referred to in the preceding clauses (a) through (d) secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"INDENTURE" means the Indenture dated as of June 1, 1996, as
amended by the first supplemental indenture thereto dated as of June 1, 1996
(the "FIRST SUPPLEMENTAL INDENTURE"), among the Indenture Parties.
"INDENTURE AMENDMENTS" means an amendment to the definition of
"Permitted Holder" in Section 5.14 of the First Supplemental Indenture to add
the New Investor and its affiliates and such related changes so that the
transactions contemplated hereby and by the Secondary Share Purchase Agreement
do not cause a "change in control" under such First Supplemental Indenture.
"INDENTURE PARTIES" means collectively ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Products Co. as issuer, the Company as Guarantor, and First Union National Bank
of North Carolina as Trustee.
"KNOWLEDGE" of the Company or the "Company's knowledge" or
"known by the Company" means the actual knowledge of the executive officers of
the Company.
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"LIEN" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such property or asset.
"MASTER LEASE AGREEMENT" means the Master Equipment Lease
Agreement dated as of September 30, 1994, between NationsBanc Leasing
Corporation of North Carolina and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co.
"MATERIAL ADVERSE EFFECT" means an event, circumstance or
condition which is reasonably likely to result in either (a) a material adverse
effect on the condition (financial or otherwise), business or results of
operations of the Company and its Subsidiaries, taken as a whole, or (b) an
effect which is materially adverse to the ability of the Company to consummate
the Transactions; provided that with respect to subclause (a) of this
definition, any such effect resulting or arising from (i) the triggering of
change of control provisions of the agreements governing the Indebtedness of the
Company and its Subsidiaries resulting from the transactions contemplated by
this Agreement, (ii) changes in circumstances or conditions affecting the
industry in which the Company and its Subsidiaries operate, (iii) changes in
general economic, regulatory or political conditions or in financial markets in
the United States or Europe or (iv) changes in GAAP shall not be considered a
Material Adverse Effect, and with respect to subclause (b) of this definition,
any such effect resulting from subclause (ii), (iii) or (iv) above shall not be
considered a Material Adverse Effect.
"MULTIEMPLOYER PLAN" means a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA with respect to which the Company has an
obligation to contribute or has or could have withdrawal liability under Section
4201 of ERISA other than a Foreign Plan.
"NEW CHARTER" means the amended and restated Certificate of
Incorporation of the Company in the form attached hereto as Annex C.
"NEW MASTER SHAREHOLDER AGREEMENT" means the shareholder
agreement to be entered into on or prior to the Closing Date by and among the
Company, the New Investor and the Sellers pursuant hereto and to the Secondary
Share Purchase Agreement in the form attached hereto as Annex E with such
changes as are necessary to accommodate the co-investors of Heartland that are
reasonably acceptable to the Company.
"NEW REGISTRATION RIGHTS AGREEMENT" means the registration
rights agreement to be entered into on or prior to the Closing Date by and among
the Company, the New Investor and the Sellers pursuant hereto and to the
Secondary Share Purchase Agreement in the form attached hereto as Annex D with
such changes as are necessary to accommodate the co-investors of Heartland that
are reasonably acceptable to the Company.
"1934 ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
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"1933 ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"OPTION PLANS" means, collectively, the 1993 Employee Stock
Option Plan, as amended and restated; the 1994 Employee Stock Option Plan, as
amended to date; the 1994 Directors Stock Option Plan, as amended and restated;
and the 2000 Employee Stock Option Plan.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"PERSON" means an individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a Governmental Authority.
"PLAN" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, cafeteria, life,
health, accident, disability, workmen's compensation or other insurance,
severance, separation, other employee benefit, employment, consulting or change
of control agreement, plan, practice, policy or arrangement of any kind, whether
written or oral, or whether for the benefit of a single individual or more than
one individual, including, without limitation, any "employee benefit plan"
within the meaning of Section 3(3) of ERISA (whether or not subject thereto).
"PROFIT PARTICIPATION AGREEMENT" means the profit
participation agreement to be entered into on or prior to the Closing Date by
and among the Company, the New Investor and the Sellers pursuant hereto and to
the Secondary Share Purchase Agreement substantially in the form attached hereto
as Annex B.
"RECEIVABLES AGREEMENT" means the Receivables Transfer
Agreement dated as of December 27, 1999, among Carcorp, Inc. as Transferor,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co. as Guarantor and as Collection Agent, Park Avenue
Receivables Corporation and Redwood Receivables Corporation as Initial
Purchasers, the several financial institutions party thereto from time to time
as Liquidity Banks, the several agent banks party thereto from time to time as
Funding Agents and The Chase Manhattan Bank, as Administrative Agent.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migrating.
"SEC" means the Securities and Exchange Commission.
"SHAREHOLDER MATTERS" means the following matters requiring
the approval of holders of the Common Stock:
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(a) the issuance by the Company of the Converted Shares to the
New Investor; and
(b) the amendment and restatement of the Certificate of
Incorporation of the Company effecting the changes set forth in Annex C.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, limited liability company or other
organization, whether incorporated or unincorporated, of which the securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions with
respect to such corporation, partnership, association, limited liability company
or other organization are at any time directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries.
"THIRD PARTY" means any Person as defined in Section 13(d) of
the 1934 Act, other than the New Investor or any of its Affiliates.
"TRANSACTION DOCUMENTS" means this Agreement, the Secondary
Share Purchase Agreement, the New Charter, the New Monitoring Agreement, the New
Registration Rights Agreement, the New Master Shareholder Agreement and the
Profit Participation Agreement.
Any reference in this Agreement to a statute shall be to such
statute as amended from time to time and to the rules and regulations
promulgated thereunder.
(a) Each of the following terms is defined in the Section
set forth opposite such term:
TERM SECTION
Agreement.................................................. Recitals
Blackstone................................................. Recitals
Board of Directors......................................... Recitals
Closing.................................................... 2.02
Closing Date............................................... 2.02
Common Stock............................................... Recitals
Company.................................................... Recitals
Company Proxy Statement.................................... 3.10
Company Representatives.................................... 5.02
Company SEC Documents...................................... 3.07(a)
Company Securities......................................... 3.05(b)
Company Shareholder Meeting................................ 5.03(a)
Company Shareholders....................................... Recitals
Company Subsidiary Securities.............................. 3.06(b)
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TERM SECTION
Confidentiality Agreement.................................. 5.02
Contingent Payment......................................... 2.01
Converted Shares........................................... Recitals
Convertible Preferred Shares............................... Recitals
Disclosure Schedule........................................ Article 3
DOJ........................................................ 6.01(b)
End Date................................................... 8.01(b)
Foreign Plan............................................... 3.16(c)
FTC........................................................ 6.01(b)
GAAP....................................................... 3.08
Heartland.................................................. Recitals
Initial Purchase Price..................................... 2.01
IRS........................................................ 3.15
New Investor Representatives............................... 5.02
New Investor............................................... Recitals
New Monitoring Agreement................................... 7.01(f)
Preferred Stock............................................ 3.05(a)
Primary Shares............................................. Recitals
Purchase Price............................................. 2.01
Secondary Share Purchase Agreement......................... Recitals
Sellers.................................................... Recitals
Tax Return................................................. 3.15
Taxes...................................................... 3.15
Taxing Authority........................................... 3.15
Transactions............................................... 3.02(a)
Transaction Fee............................................ 7.02(h)
Treasury Shares............................................ Recitals
▇▇▇▇▇▇▇▇▇▇▇................................................ Recitals
ARTICLE 2
PURCHASE AND SALE; CLOSING
SECTION 2.01. Purchase and Sale of the Primary Shares. On
the terms and subject to the conditions of this Agreement, the Company shall
sell, transfer and deliver to the New Investor, and the New Investor shall
purchase from the Company, the Primary Shares for a purchase price of (a) (i)
$5.00 per Treasury Share, plus (ii) $82.00 per Convertible Preferred Share, for
an aggregate initial purchase price of $125.0 million (the "INITIAL PURCHASE
PRICE"), payable in cash and (b) a participating interest in profits realized on
the
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Primary Shares by the New Investor on the terms and conditions set forth in
Annex B (the "CONTINGENT PAYMENT" and, together with the Initial Purchase Price,
the "PURCHASE PRICE").
SECTION 2.02. Closing. The closing (the "CLOSING") of the sale
of the Primary Shares shall be held at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
within three Business Days of satisfaction of the conditions set forth in
Article 7 (other than such conditions that by their nature may only be satisfied
at the Closing) or at a date and time to be mutually agreed upon by the parties
(the "CLOSING DATE"). At the Closing, (i) the New Investor shall deliver to the
Company, by wire transfer to a bank account designated in writing by the
Company, immediately available funds in the amount of the Initial Purchase
Price, and (ii) the Company shall deliver to the New Investor certificates
representing the Primary Shares registered in its name.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the New Investor that,
except as set forth in the corresponding section or subsection of the disclosure
schedule (the "DISCLOSURE SCHEDULE") delivered by the Company to the New
Investor immediately prior to the execution of this Agreement:
SECTION 3.01. Corporate Existence and Power. The Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has all corporate powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not have, individually or in the aggregate, a Material
Adverse Effect. The Company has heretofore delivered to the New Investor true
and complete copies of the certificate of incorporation and by-laws of the
Company as currently in effect.
SECTION 3.02. Corporate Authorization; Opinion of Financial
Advisor. (a) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the sale of the Primary Shares
and the other transactions contemplated hereby and (unless the context otherwise
requires) by the Secondary Share Purchase Agreement (the "TRANSACTIONS") to be
performed by the Company are within the Company's corporate powers and, except
for the required approval of the Company Shareholders in connection with the
consummation of the sale of the Primary Shares and the other Shareholder
Matters, have been duly authorized by all necessary corporate action on the part
of the Company. The affirmative votes of the holders of a majority of the shares
of Common Stock
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voting (provided that a majority of the outstanding shares vote) with respect to
the matters referred to in clause (a) of the definition of Shareholder Matters
and of the holders of two-thirds of the Company's outstanding Common Stock with
respect to the matters referred to in clause (b) of such definition are the only
votes of the holders of the Company's capital stock necessary in connection with
the consummation of the Transactions. This Agreement constitutes a valid and
binding agreement of the Company.
(b) At a meeting duly called and held, the Special
Committee of the Board of Directors unanimously approved the Transactions and
this Agreement and the other Transaction Documents, determined that it is
advisable and in the best interests of Company Shareholders to consummate the
sale of the Primary Shares and the other Transactions, including, without
limitation, approval of the New Charter and the Transaction Fee, and resolved to
recommend approval of the Shareholder Matters by Company Shareholders, and
determined that it is advisable and in the best interests of Company
Shareholders to consummate the Transactions.
(c) At a meeting duly called and held, the Board of
Directors unanimously (with one director absent) approved the Transactions and
this Agreement and the other Transaction Documents, determined that it is
advisable and in the best interests of Company Shareholders to consummate the
sale of the Primary Shares and the other Transactions, including without
limitation approval of the New Charter, the New Monitoring Agreement and the
Transaction Fee, and resolved to recommend approval of the Shareholder Matters
by the Company Shareholders, and determined that it is advisable and in the best
interests of the Company Shareholders to consummate the Transactions.
SECTION 3.03. Governmental Authorization. The execution,
delivery and performance by the Company of this Agreement and the consummation
by the Company of the Transactions require no action by or in respect of, or
filing with, or notification or reporting to, any Governmental Authority, other
than (i) compliance with any applicable requirements of the HSR Act and of the
Antitrust Laws of the foreign jurisdictions set forth on Section 3.03 of the
Disclosure Schedule, (ii) compliance with any applicable requirements of the
1933 Act, the 1934 Act and any other applicable securities laws, whether state
or foreign, (iii) the filing with the Delaware Secretary of State of the
Certificate of Designation governing the Convertible Preferred Shares and a
certificate of amendment to the Company's certificate of incorporation and (iv)
any actions or filings the absence of which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.04. Non-contravention. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Transactions do not and will not (i) contravene, conflict with or result in any
violation or breach of any provision of the certificate of incorporation or
by-laws of the Company, (ii) assuming compliance with the matters referred to in
Section 3.03, contravene, conflict with or result in a violation or breach of
any provision of any applicable law, statute, ordinance, rule, regulation,
judgment,
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injunction, order or decree, (iii) assuming compliance with the matters referred
to in Section 5.03, require any consent or other action by any Person under,
constitute a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon the Company or any
of its Subsidiaries or any license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except for such contraventions, conflicts and violations referred to in clause
(ii) and for such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes, losses or Liens referred to
in clauses (iii) and (iv) that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The Company has not
adopted and will not adopt an interpretation of the effect of the consummation
of the Transactions on the Option Plans or on the change of control agreements
to which the Company is a party as in effect on the date hereof.
SECTION 3.05. Capitalization; Reservation of Shares. (a)
The authorized capital stock of the Company consists of 150,000,000 shares of
Common Stock and 16,000,000 shares, par value $0.01 per share, of preferred
stock (the "PREFERRED STOCK"). As of the close of business on December 31, 2000,
(i) 61,879,272 shares of Common Stock were issued and outstanding, (ii) no
shares of Preferred Stock were issued and outstanding and (iii) 8,783,079 shares
of Common Stock were held by the Company in its treasury. All outstanding shares
of Common Stock have been duly authorized and validly issued and are fully paid
and nonassessable. The shares of Common Stock issuable upon conversion of the
Convertible Preferred Shares have been duly authorized and validly reserved for
issuance and, when issued and delivered in accordance with the provisions of the
Certificate of Designation governing the terms of the Convertible Preferred
Shares, will be fully paid and nonassessable.
(b) Other than vested and unvested options of directors,
officers and employees for 4,344,432 shares of Common Stock, there are no
outstanding (i) shares of capital stock or voting securities of the Company,
(ii) securities of the Company convertible into or exchangeable for shares of
capital stock or voting securities of the Company, (iii) options or other rights
to acquire from the Company, or other obligation of the Company to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of the Company or (iv) stock
appreciation, phantom stock or similar rights with respect to the Company (the
items in clauses (i), (ii), (iii) and (iv) being referred to collectively as the
"COMPANY SECURITIES"). There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Securities.
SECTION 3.06. Subsidiaries; Equity Investments. (a) Each
Subsidiary of the Company is a corporation duly incorporated (or other
organization duly formed), validly
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existing and in good standing under the laws of its jurisdiction of
incorporation or organization and has all corporate or organizational powers and
all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Each such Subsidiary is duly qualified to do business as a
foreign corporation or other organization and is in good standing in each
jurisdiction where such qualification is necessary, except for those
jurisdictions where the failure to be so qualified would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) All of the outstanding capital stock of, or other
voting securities or ownership interests in, each Subsidiary of the Company
(other than director qualifying shares) is owned by the Company, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests). All of the outstanding shares of capital stock of each Subsidiary of
the Company have been validly issued and are fully paid and nonassessable. There
are no outstanding (i) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any such Subsidiary or the Company or (ii)
options or other rights to acquire from the Company or any of its Subsidiaries,
or other obligation of the Company or any of its Subsidiaries to issue, any
capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable for any capital stock or other
voting securities or ownership interests in, any Subsidiary of the Company (the
items in clauses (i) and (ii) being referred to collectively as the "COMPANY
SUBSIDIARY Securities"). There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Subsidiary Securities.
SECTION 3.07. SEC Filings. (a) The Company has delivered
or made available to the New Investor (i) the Company's annual reports on Form
10-K for its fiscal years ended December 25, 1999, (ii) its quarterly report on
Form 10-Q for its fiscal quarter ended September 30, 2000, (iii) its proxy
statements relating to meetings of the Company Shareholders held since December
25, 1999, and (iv) all of its other reports, statements, schedules and
registration statements filed with the SEC since December 25, 1999 (the
documents referred to in this Section 3.07(a), collectively, the "COMPANY SEC
DOCUMENTS").
(b) As of its filing date, each Company SEC Document
complied as to form in all material respects with the applicable requirements of
the 1934 Act.
(c) As of its filing date, each Company SEC Document did
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
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SECTION 3.08. Financial Statements. The audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Company included in the Company SEC Documents fairly present,
in conformity with United States generally accepted accounting principles
("GAAP") applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended (subject to normal
year-end adjustments and the absence of notes in the case of any unaudited
interim financial statements).
SECTION 3.09. No Undisclosed Material Liabilities.
There are no liabilities or obligations of the Company or any of its
Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than:
(a) liabilities or obligations disclosed or provided for
in the Company Balance Sheet and the footnotes to the audited
consolidated financial statements included in the Company 10-K;
(b) liabilities or obligations that would not reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect; or
(c) liabilities or obligations under or contemplated by
this Agreement.
SECTION 3.10. Disclosure Documents. The proxy statement of
the Company to be filed with the SEC in connection with the Shareholder Matters
(the "COMPANY PROXY STATEMENT") and any amendments or supplements thereto will,
when filed, comply as to form in all material respects with the applicable
requirements of the 1934 Act. At the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to Company Shareholders, and at
the time the Company Shareholders vote on the Shareholder Matters, the Company
Proxy Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The representations and warranties
contained in this Section 3.10 will not apply to statements or omissions
included in the Company Proxy Statement based upon information furnished to the
Company by or on behalf of the New Investor for use therein.
SECTION 3.11. Absence of Certain Changes. From the Company
Balance Sheet Date to the date of this Agreement, the business of the Company
and its Subsidiaries has been conducted in the ordinary course consistent with
past practices and there has not been:
(a) any event, occurrence or development that has had or
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
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(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or any of its Subsidiaries (other
than ordinary course open market purchases);
(c) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the
Company or any of its Subsidiaries of any indebtedness in excess of
$5.0 million, individually or in the aggregate, other than (i) under
the Credit Agreement in the ordinary course of business consistent with
past practices to fund general corporate purposes, (ii) between the
Company and its Subsidiaries or between two or more of the Company's
Subsidiaries or (iii) trade payables in the ordinary course of
business;
(e) any creation or other incurrence by the Company or
any of its Subsidiaries of any Lien on any asset that is material to
the Company and its Subsidiaries, taken as a whole, other than in the
ordinary course of business consistent with past practices;
(f) any making of any material loan, advance or capital
contribution to or investment in any Person other than loans, advances
or capital contributions to or investments in its wholly-owned
Subsidiaries or by its wholly-owned Subsidiaries to or in the Company
or other Subsidiaries of the Company;
(g) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets
of the Company or any of its Subsidiaries that has had or would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(h) any change in any method of accounting, method of tax
accounting or accounting principles or practice by the Company or any
of its Subsidiaries, except for any such change required by reason of a
concurrent change in GAAP, Regulation S-X under the 1934 Act or other
applicable law or regulation; or
(i) any adoption or amendment in any respect of any
bonus, profit sharing, compensation, severance, termination, stock
option, stock appreciation right, pension, retirement, employment or
other employee benefit agreement, trust, plan or other arrangement for
the benefit or welfare of any director or executive officer of the
Company or increase in any manner of the compensation or fringe
benefits of any director or executive officer of the Company (other
than in the ordinary course of business consistent with past practices
or as required by agreements as in effect on the date
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hereof) or payment of any benefit not required by any existing
agreement or placement of any assets in any trust for the benefit of
any director or executive officer of the Company not required by any
existing agreement.
SECTION 3.12. Compliance with Laws and Court Orders. The
Company and each of its Subsidiaries are, and, since January 1, 2000, have been,
in compliance with any applicable law, statute, ordinance, rule, regulation,
judgment, injunction, order or decree, except for failures to comply or
violations that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.13. Litigation. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the Company,
threatened, against the Company or any of its Subsidiaries or any of their
respective properties before any court or arbitrator, or before or by any
Governmental Authority, except for those that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.14. Finders' Fees. There is no investment
banker, broker, finder or other intermediary that has been retained by or is
authorized to act on behalf of the Company or any of its Subsidiaries who might
be entitled to any fee or commission from the Company or any of its Affiliates
in connection with the Transactions.
SECTION 3.15. Taxes. (a) Each of the Company and its
Subsidiaries has timely filed (or has had timely filed on its behalf), taking
into account any extension of time within which to file, all material Tax
Returns required to be filed by it and all such Tax Returns are true and
complete in all material respects.
(b) Each of the Company and its Subsidiaries has paid (or
has had paid on its behalf), or, where payment is not yet due, has established
in accordance with GAAP an adequate accrual for the payment of, all Taxes
imposed on it or on its assets or activities (whether or not shown on such Tax
Returns).
(c) There are no material Liens or encumbrances for Taxes
on any of the assets of the Company or any of its Subsidiaries except for Taxes
not yet due and payable or with respect to matters contested in good faith for
which adequate reserves have been established.
(d) No material federal, state, local or foreign audits
or administrative proceedings are pending or, to the Company's knowledge,
threatened, with regard to any Taxes or any Tax Return of the Company or any of
its Subsidiaries.
(e) No amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the Transactions by
any employee, officer or director of the Company or any of its Affiliates who is
a "disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance
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or termination agreement, other compensation arrangement or Benefit Plan
currently in effect could be characterized as an "excess parachute payment" (as
such term is defined in Section 280G(b)(1) of the Code).
"TAXES" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added, capital,
net worth, payroll, profits, withholding, franchise, transfer and recording
taxes, fees and charges, and any other taxes, assessments or similar charges
imposed by the Internal Revenue Service (the "IRS") or any taxing authority
(whether domestic or foreign including any state, county, local or foreign
government or any subdivision or taxing agency thereof (including a United
States possession)) (a "TAXING AUTHORITY"), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall include
any interest whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments. "TAX RETURN" shall mean any report, return,
document, declaration or other information or filing required to be supplied to
any taxing authority or jurisdiction (foreign or domestic) with respect to
Taxes, including information returns, any documents with respect to or
accompanying payments of estimated Taxes, or with respect to or accompanying
requests for the extension of time in which to file any such report, return,
document, declaration or other information.
SECTION 3.16. Employee Benefit Plans. (a) Section 3.16 of
the Disclosure Schedule lists (i) all material Benefit Plans currently
maintained or contributed to by the Company or a Subsidiary thereof, and (ii)
all material Multiemployer Plans. Copies of all material written Benefit Plans,
and all summary plan descriptions, trust agreements, actuarial valuation reports
and the most recent annual return and IRS determination letters related to
Benefit Plans have been made available to each New Investor.
(b) Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect:
(i) each Benefit Plan has at all times been maintained
and administered in all respects in accordance with its terms and with
the requirements of all applicable law, including ERISA and the Code.
Each Benefit Plan intended to qualify under Section 401(a) of the Code
has been determined by the IRS to be qualified under Section 401(a) of
the Code, and the Company knows of no fact or circumstance giving rise
to a material likelihood that the IRS would revoke such determination;
(ii) all required contributions to any Benefit Plans and
Multiemployer Plans that are "defined benefit pension plans" required
to be made by the Company or any Subsidiary in accordance Section 302
of ERISA or Section 412 of the Code within the last six years, have
been timely made; within the last six years there has been no
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application for or waiver of the minimum funding standards imposed by
Section 412 of the Code with respect to any Benefit Plan; and within
the last six years no Benefit Plan has incurred any "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or
Section 412 of the Code;
(iii) no "reportable event" which is subject to Section
4043 of ERISA and for which the requirement of notice has not been
waived by regulation by the PBGC has occurred with respect to any
Benefit Plan or any single employer plan (within the meaning of Section
4001(a)(15) of ERISA) maintained by an ERISA Affiliate within the last
six years;
(iv) no liability has been incurred or is expected to be
incurred by the Company or any Subsidiary thereof under Title IV of
ERISA (other than PBGC premiums) with respect to any Benefit Plan or
Multiemployer Plan, or, to the Company's knowledge, with respect to any
other Plan presently or heretofore maintained or contributed to during
the 5 year period prior to the Closing Date by any ERISA Affiliate;
(v) with respect to each Multiemployer Plan, (i) no
withdrawal liability (within the meaning of Section 4201(b) of ERISA)
has been incurred by the Company or any ERISA Affiliate, and the
Company has no reason to believe that any such withdrawal liability
will be incurred, (ii) no such Multiemployer Plan is in
"reorganization" (within the meaning of Section 4241 of ERISA), (iii)
no notice has been received that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, or that such Multiemployer Plan is or may become
"insolvent" (within the meaning of Section 4241 of ERISA), (iv) to the
knowledge of the Company, no proceedings have been instituted by the
PBGC against such Multiemployer Plan, (v) neither the Company nor any
Subsidiary thereof has sold assets in a transaction intended to satisfy
the requirements of Section 4204 of ERISA, and (vi) if the Company or
any ERISA Affiliate were to have a complete or partial withdrawal under
Section 4203 of ERISA as of the Closing Date, no withdrawal liability
would exist on the part of the Company or any ERISA Affiliate;
(vi) neither the Company nor, to the Company's knowledge,
any ERISA Affiliate has incurred any liability for any tax imposed
under Sections 4971 through 4980E of the Code or civil liability under
Section 502(i) or (l) of ERISA;
(vii) no Tax has been incurred under Section 511 of the
Code with respect to any Benefit Plan (or trust or other funding
vehicle pursuant thereto); and
(viii) no action (excluding claims for benefits incurred in
the ordinary course of Plan activities) has been brought or, to the
knowledge of the Company, threatened against or with respect to any
Benefit Plan and there are no facts or circumstances known to the
Company or any Subsidiary thereof that could reasonably be expected to
give rise to any such action.
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(c) Except as would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect, (i) all
contributions required to be made by the Company or any Subsidiary with respect
to a Foreign Plan have been timely made, (ii) each Foreign Plan has been
maintained in substantial compliance with its terms and with the requirements of
any and all applicable laws and has been maintained, where required, in good
standing with the applicable Governmental Authority, and (iii) neither the
Company nor any Subsidiary has incurred any obligation in connection with the
termination or withdrawal from any Foreign Plan. Section 3.16 of the Disclosure
Schedule lists all material Foreign Plans that are defined benefit pension
plans. Copies of the actuarial valuation reports or FAS 87 reports for such
plans have been made available to the New Investor. For purposes hereof, the
term "FOREIGN PLAN" shall mean any plan, program, policy, arrangement or
agreement maintained or contributed to by, or entered into with, the Company or
any Subsidiary with respect to employees (or former employees) employed outside
the United States.
SECTION 3.17. Environmental Matters. (a) The Company and
its business, operations and real properties are in compliance in all material
respects with, and the Company has no material liability under, Environmental
Law. The Company has obtained all material Environmental Permits currently
required for the conduct of its business and operations, and the ownership,
operation and use of its assets under Environmental Law. All such Environmental
Permits are valid and in good standing.
(b) (i) There is no material Environmental Claim pending or,
to the knowledge of the Company, threatened, against the Company or relating to
the real property or operations of the Company, and (ii) no Lien has been
recorded under Environmental Law against any properties, assets or facilities
owned, leased or operated by the Company.
(c) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
affect the validity or require the transfer of any Environmental Permit held by
the Company, and will not require any notification, disclosure, registration,
reporting, filing, investigation or remediation under Environmental Law.
(d) (i) No property or facility presently owned, leased or
operated by the Company and (ii) to the knowledge of the Company, no property or
facility formerly owned, leased or operated by the Company is currently listed
or proposed for listing on the National Priorities List or the Comprehensive
Environmental Response, Compensation, and Liability Information System, both
promulgated under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(e) The Company is not obligated to perform any action or
otherwise incur any expense under Environmental Law pursuant to any order,
decree, judgment or agreement by which it is bound or has assumed by contract or
agreement, in each case, which could rea-
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sonably be expected to result in material liability under Environmental Law or
affect the operations of the Company in any material respect.
SECTION 3.18. Antitakeover Statutes. Assuming the accuracy
of the New Investor's representation contained in Section 4.10, the Company has
taken all action necessary to exempt the sale of the Primary Shares to the New
Investor, this Agreement and the Transactions from the restrictions on "business
combinations" contained in Section 203 of the Delaware General Corporation Law,
and, accordingly, neither the restrictions of such Section nor any other
antitakeover or similar statute or regulation applies or purports to apply to
any such Transactions.
SECTION 3.19. Private Offering. Neither the Company nor
anyone acting on behalf of the Company has offered the Primary Shares for sale
to, or solicited offers to buy from, or otherwise approached or negotiated with,
any individual or entity in connection with the sale of such securities other
than a limited number of investors, including the New Investor. Assuming the
accuracy of the New Investor's representations contained in Article 4 of this
Agreement, the offer, issuance and delivery of the Primary Shares are, and the
offer, issuance and delivery of the Converted Shares will be, exempt from
registration under the 1933 Act, and all action required to be taken prior to
the offer or sale of the Primary Shares has been taken under applicable state
securities laws.
SECTION 3.20. Existing Investor Agreements. The Existing
Investor Agreements and the Transaction Documents to which the Company is a
party are the only agreements between the Company or any of its Subsidiaries, on
the one hand, and either Seller or its Affiliates, on the other hand.
SECTION 3.21. Disclaimer of Other Representations and
Warranties. The Company does not make, and has not made, any representations or
warranties in connection with the Transactions other than those expressly set
forth herein. It is understood that any data, any financial information or any
memoranda or offering materials or presentations (including but not limited to
the Information Memorandum dated September 2000, as the same may have been
amended or supplemented) are not and shall not be deemed to be or to include
representations or warranties of the Company. Except as expressly set forth
herein, no Person has been authorized by the Company to make any representation
or warranty relating to the Company or any Subsidiary thereof or their
respective businesses, or otherwise in connection with the Transactions and, if
made, such representation or warranty may not be relied upon as having been
authorized by the Company.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE NEW INVESTOR
The New Investor represents and warrants to the Company that:
SECTION 4.01. Existence and Power. The New Investor is a
limited partnership duly formed, validly existing and in good standing under the
laws of its jurisdiction of organization and has all limited partnership powers
and all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted.
SECTION 4.02. Authorization. The execution, delivery and
performance by the New Investor of this Agreement and the Secondary Share
Purchase Agreement and the consummation by the New Investor of the Transactions
are within the powers of the New Investor and have been duly authorized by all
necessary limited partnership action. Each of this Agreement and the Secondary
Share Purchase Agreement constitutes a valid and binding agreement of the New
Investor.
SECTION 4.03. Governmental Authorization. The execution,
delivery and performance by the New Investor of this Agreement and the Secondary
Share Purchase Agreement and the consummation by the New Investor of the
Transactions require no action by or in respect of, or filing with, or
notification or reporting to, any Governmental Authority, other than compliance
with any applicable requirements of the HSR Act and of the Antitrust Laws of the
foreign jurisdictions set forth on Section 3.03 of the Disclosure Schedule.
SECTION 4.04. Non-contravention. The execution, delivery
and performance by the New Investor of this Agreement and the Secondary Share
Purchase Agreement and the consummation of the Transactions do not and will not
(i) contravene, conflict with or result in any violation or breach of any
provision of the limited partnership agreement or similar organizational
documents, (ii) assuming compliance with the matters referred to in Section
4.03, contravene, conflict with or result in a violation or breach of any
provision of any applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree, (iii) require any consent or other action by any
Person under, constitute a default under, or cause or permit the termination,
cancellation, acceleration or other change of any right or obligation or the
loss of any benefit to which the New Investor is entitled under any provision of
any agreement or other instrument binding upon the New Investor or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the New Investor
or (iv) result in the creation or imposition of any Lien on any asset of the New
Investor, except for such contraventions, conflicts and violations referred to
in clause (ii) and for such failures to obtain any such consent or other action,
defaults, terminations, cancellations, accelerations, changes, losses or Liens
referred to in clauses (iii) and (iv) that would not reasonably be expected to
have, individually or in the aggregate, a material adverse effect on the New
Investor.
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SECTION 4.05. Purchase for Investment. The Primary Shares
are being acquired by the New Investor for its own account, not as a nominee or
agent, for investment and not with a view to resale or distribution within the
meaning of the 1933 Act, and the New Investor will not distribute the shares in
violation or contravention of the 1933 Act. The New Investor is not aware of any
facts or circumstances that contradict the representation of the Company in the
first sentence of Section 3.19.
SECTION 4.06. Restrictions on Transfer. The New Investor
acknowledges that (a) the Primary Shares will not be registered under the 1933
Act as of the Closing Date, (b) the Primary Shares will not be transferable
unless so registered or unless an exception for such registration is applicable
and (c) certificates representing the Primary Shares will bear a legend
substantially in the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
DISPOSED OF, AND NO TRANSFER OF THE SECURITIES MAY BE MADE BY THE
COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM."
SECTION 4.07. Sophistication; Access to Information. (a)
The New Investor and each member of the New Investor (i) is an "accredited
investor" as defined in the 1933 Act and is financially able to purchase the
Primary Shares, (ii) is fully capable of understanding the type of investment
being made pursuant to this Agreement, and the risks involved in connection
therewith, (iii) believes that the nature of the Primary Shares is consistent
with its overall investment programs and financial position, (iv) recognizes
that there are substantial risks involved in their purchase of the Primary
Shares, (v) is capable of bearing the economic risk of its investment for an
indefinite period of time and can afford a complete loss of its investment, (vi)
has adequate means of providing for its current liquidity needs, (vii) has no
need for liquidity of its investment, (viii) is not expecting any short term
income from its investment and (ix) has no reason to anticipate any change in
circumstances, financial or otherwise, which may cause or require any sale of
the Primary Shares.
(b) The New Investor has had the opportunity to ask
questions of and receive answers from the Company's officers and directors
concerning the terms and conditions of the (i) purchase and delivery of the
Primary Shares and (ii) business and financial condition of the Company; and the
New Investor has received to its satisfaction such additional information about
the business and financial condition of the Company and the terms and conditions
of the purchase and delivery of the Primary Shares as it has requested.
SECTION 4.08. Disclosure Documents. None of the
information provided by the New Investor for inclusion in the Company Proxy
Statement or any amendment or
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supplement thereto, at the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to the Company Shareholders and at the time
the Company Shareholders vote on the Shareholder Matters, will contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 4.09. Finders' Fees. There is no investment
banker, broker, finder or other intermediary that has been retained by or is
authorized to act on behalf of the New Investor who might be entitled to any fee
or commission from the Company or any of its Affiliates in connection with the
Transactions.
SECTION 4.10. Section 203. Neither the New Investor nor
any of its "affiliates" or "associates" is or has been within the last three
years an "interested stockholder" of the Company without the approval of the
Board of Directors within the meaning of Section 203 of the Delaware General
Corporation Law.
SECTION 4.11. Financing. The New Investor has the funds
available to consummate the purchase by it of the Primary Shares.
SECTION 4.12. Disclaimer of Other Representations and
Warranties. The New Investor does not make, nor has it made, any representations
or warranties in connection with the Transactions other than those expressly set
forth herein. Except as expressly set forth herein, no Person has been
authorized by the New Investor to make any representation or warranty relating
to itself or its business, or otherwise in connection with the Transactions and,
if made, such representation or warranty may not be relied upon as having been
authorized by the New Investor.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that, except as set forth in the
corresponding section or subsection of the Disclosure Schedule:
SECTION 5.01. Conduct of the Company. Except as
contemplated by this Agreement or as expressly agreed to in writing by the New
Investor (which agreement shall not be unreasonably withheld), during the period
from the date of this Agreement to the earlier of the Charter Amendment
Effective Date and the End Date, the Company shall, and shall cause each of its
Subsidiaries to, conduct its operations according to its ordinary and usual
course of business and consistent with past practice and use commercially
reasonable efforts to preserve intact their current business organizations, keep
available the services of their current officers and employees and preserve
their relationships with customers, suppliers, licensors, licensees,
advertisers, distributors and others having business dealings with them and to
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preserve goodwill. Without limiting the generality of the foregoing and except
as (x) otherwise expressly provided in this Agreement or the other Transaction
Documents or (y) required by law, prior to the earlier of the Charter Effective
Amendment Date and the End Date, the Company shall not, and shall cause its
Subsidiaries not to:
(a) expend funds for capital expenditures that in the
aggregate would cause total capital expenditures for the period from
the Company Balance Sheet Date to the Closing Date to exceed $80.0
million;
(b) sell, lease, license or otherwise dispose of any
Subsidiary or any material amount of assets, securities or property of
the Company and its Subsidiaries, taken as a whole, except pursuant to
existing contracts or commitments or otherwise in the ordinary course
consistent with past practice;
(c) amend its certificate of incorporation, by-laws or
equivalent organizational documents or alter through merger,
liquidation, reorganization, restructuring or in any other fashion the
corporate structure or ownership of any Subsidiary of the Company; or
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock;
(d) except for issuances upon exercise of presently
outstanding options and awards under any Plan, authorize for issuance,
issue, deliver, sell or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), pledge or
otherwise encumber any shares of its capital stock or the capital stock
of any of its Subsidiaries, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
or any other securities or equity equivalents (including, without
limitation, stock appreciation rights);
(e) make or agree to make any acquisition of equity
interest (whether through a purchase of stock, establishment of a joint
venture or otherwise) or assets which is material to the Company and
its Subsidiaries, taken as a whole, except for (i) purchases of
inventory and supplies in the ordinary course of business, or (ii)
pursuant to purchase orders entered into in the ordinary course of
business;
(f) settle or compromise any material litigation (whether
or not commenced prior to the date of this Agreement) or settle, pay or
compromise any claims not required to be paid, other than, in each
case, in consultation and cooperation with the New Investor and, with
respect to any such settlement, with the prior written consent of the
New Investor (which consent shall not be unreasonably withheld);
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(g) (i) take any action that would make any
representation and warranty of the Company hereunder inaccurate in any
material respect at, or as of any time prior to, the Closing Date or
(ii) omit to take any action necessary and reasonably available to the
Company to prevent any such representation or warranty from being
materially inaccurate in any respect at any such time;
(h) incur, assume or guarantee any additional
indebtedness other than (i) under the Credit Agreement in the ordinary
course of business consistent with past practices to fund general
corporate purposes, (ii) between the Company and its Subsidiaries or
between two or more of the Company's Subsidiaries or (iii) trade
payables in the ordinary course of business;
(i) enter into any agreement or take any action in
violation of the terms of this Agreement or any other Transaction
Document; or
(j) authorize, or commit or agree to take, any of the
foregoing actions.
SECTION 5.02. Access to Information. From the date of this
Agreement until the Closing Date, the Company shall, and shall cause its
Subsidiaries, and each of their respective officers, directors, employees,
counsel, advisors and representatives (collectively, the "COMPANY
REPRESENTATIVES") to, give the New Investor and its members, managers,
employees, counsel, advisors, representatives (collectively, the "NEW INVESTOR
REPRESENTATIVES") and representatives of co-investors identified by the New
Investor reasonable access, upon reasonable notice and during normal business
hours, to the offices and other facilities and to the books and records of the
Company and its Subsidiaries and will cause the Company Representatives and the
Company's Subsidiaries to furnish the New Investor and the New Investor
Representatives and representatives of co-investors identified by the New
Investor with such financial and operating data and such other information with
respect to the business and operations of the Company and its Subsidiaries as
the New Investor and representatives of co-investors identified by the New
Investor may from time to time reasonably request. The New Investor for itself,
and on behalf of the co-investors, agrees that any information furnished
pursuant to this Section 5.02 shall be subject to the provisions of the letter
agreement dated August 11, 2000 between Heartland and the Company (the
"CONFIDENTIALITY AGREEMENT").
SECTION 5.03. Shareholder Meeting; Proxy Material; Debt
Consents. (a) The Company shall use its commercially reasonable efforts to cause
the Charter Amendment Effective Date to occur as soon as reasonably practicable.
In furtherance of the foregoing, the Company shall cause a meeting of the
Company Shareholders (the "COMPANY SHAREHOLDER MEETING") to be duly called and
held as soon as reasonably practicable for the purpose of voting on the
Shareholder Matters. Subject to Section 5.04, the Board of Directors shall
recommend approval of the Transactions and adoption of this Agreement and the
other Transaction Documents by the Company Shareholders. In connection with such
meeting, the Company will (i) promptly prepare and file with the SEC, use
commercially reasonable ef-
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forts to have cleared by the SEC and thereafter mail to the Company Shareholders
as promptly as practicable the Company Proxy Statement and all other proxy
materials for such meeting, (ii) promptly prepare and file with the SEC and
thereafter mail to the Company Shareholders as promptly as practicable the
information required to be provided on Schedule 14f-1 and related materials,
(iii) subject to Section 5.04, use commercially reasonable efforts to obtain the
necessary approvals by the Company Shareholders of the Shareholder Matters and
(iv) otherwise comply with all legal requirements applicable to such proxy
material and such meeting.
(b) The Company shall cooperate in seeking such
modifications to the Credit Agreement and the Indenture as the New Investor
shall request. The dealer manager/solicitation agent or dealer
managers/solicitation agent for the consent solicitation in respect of the
Indenture Amendments shall be selected by the New Investor and shall be
reasonably acceptable to the Company and Sellers and engaged pursuant to
documentation that is reasonably acceptable to the New Investor, the Company and
the Sellers. The New Investor shall have the right to direct the strategy and
manner in which the consent solicitation in respect of the Indenture is
conducted and in which the Bank Amendments are sought, but only after
consultation with the Company and Sellers. All costs and expenses incurred in
connection with such consent solicitation and in seeking and securing such Bank
Amendments shall be borne by the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co.
SECTION 5.04. No Solicitation. (a) From the date of this
Agreement until the Closing Date, the Company agrees that it will not, directly
or indirectly through any officer, Subsidiary, Affiliate, director, employee,
stockholder, representative, agent or other person, (i) seek, initiate, solicit
or encourage any Person to make an Acquisition Proposal, (ii) engage in
negotiations or discussions concerning an Acquisition Proposal with any person
or group, (iii) disclose any non-public information relating to the Company or
give access to the properties, employees, books or records of the Company or any
of its subsidiaries to any person or group in connection with any Acquisition
Proposal or (iv) approve or recommend or agree to approve or recommend any
Acquisition Proposal; provided that nothing herein shall prevent the Board of
Directors or a committee thereof from (A) furnishing information to any person
that has made an Acquisition Proposal not solicited in violation of this
paragraph or (B) subject to the other provisions of this paragraph, entering
into or participating in discussions or negotiations concerning an Acquisition
Proposal not solicited in violation of this paragraph so long as, in any case,
(x) the Board of Directors or such committee shall have concluded in good faith
(after receiving and considering the advice of its outside legal counsel) that
failing to participate in such discussions or negotiations or furnishing such
information would cause the Board of Directors or such committee to be in breach
of its fiduciary duties to the Company Shareholders under applicable law, and
(y) prior to participating in such discussions or negotiations or furnishing any
such information, the Company and the party making such offer agrees to a
confidentiality agreement on terms that are, in the aggregate, no less favorable
to the Company than those of the Confidentiality Agreement (other than the
standstill provisions thereof) and the New Investor is given concurrent or
advance written no-
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▇▇▇▇ thereof unless the Board of Directors or such committee shall have
concluded in good faith, after receiving and considering the advice of its
outside counsel, that doing so would cause it to be in breach of its fiduciary
responsibilities to the Company Shareholders under applicable law. The Board of
Directors or such committee may (x) fail to make, withdraw or modify in a manner
adverse to the New Investor its recommendation to its stockholders referred to
in Section 5.03, (y) take and disclose to the Company Shareholders a position
contemplated by Rule 14e-2 under the 1934 Act or otherwise complying with its
disclosure obligations and/or (z) take any non-appealable, final action ordered
to be taken by the Company by any court of competent jurisdiction, but in the
case of clause (x) or (y) only if the Board of Directors or such committee
determines, in good faith after consultation with outside legal counsel to the
Company, that such action is consistent with the exercise of its fiduciary
duties under applicable law.
(b) The Company shall notify the New Investor in writing
no later than the end of the next business day after receipt thereof of the
receipt of any Acquisition Proposal (including a copy thereof if in writing),
the terms and conditions of such Acquisition Proposal and the identity of the
person making it. The Company also shall promptly notify the New Investor no
later than the end of the next Business Day of any change to or modification of
such Acquisition Proposal.
(c) The Company shall, and shall cause its Subsidiaries
and the advisors, employees and other agents of the Company and any of its
Subsidiaries to, cease immediately and cause to be terminated any and all
existing activities, discussions or negotiations, if any, with any Third Party
conducted prior to the date hereof with respect to any Acquisition Proposal and
shall use commercially reasonable efforts to cause any such Party (or its agents
or advisors) in possession of confidential information about the Company that
was furnished by or on behalf of the Company to return or destroy all such
information.
SECTION 5.05. Reports. During the period from the date of
this Agreement to the Closing Date, the Company shall provide the New Investor
with monthly financial statements in the existing reporting format (balance
sheet, cash flow statement, income statement and, if available, notes thereto),
broken out by operating unit, no later than the twentieth Business Day following
the end of each calendar month following the date of this Agreement; provided
that for calendar months that are also the end of a calendar quarter, the
Company may provide such financial information to the New Investor on the same
date such information is publicly released in accordance with the past practice
of the Company.
SECTION 5.06. Further Assurances. Following the Closing
Date, the Company shall, and shall cause each of the Subsidiaries to, from time
to time, execute and deliver such additional instruments, documents, conveyances
or assurances and take such other actions as shall be necessary, or otherwise
reasonably be requested by the New Investor, to confirm and assure the rights
and obligations provided for in this Agreement and the other
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Transaction Documents and render effective the consummation of the transactions
contemplated hereby and thereby.
SECTION 5.07. Stock Exchange Listing. The Company shall
use commercially reasonable efforts to cause the New Investor to receive
assurance from the New York Stock Exchange in a form reasonably satisfactory to
the New Investor that: (a) in accordance with the rules of the New York Stock
Exchange, all Treasury Shares and, when issued, all Converted Shares will be
eligible for listing on the New York Stock Exchange; and (b) consummation of the
Transactions will not cause any securities of the Company already listed on the
New York Stock Exchange to lose their listing privileges.
ARTICLE 6
COVENANTS OF THE NEW INVESTOR AND THE COMPANY
The parties hereto agree that:
SECTION 6.01. Commercially Reasonable Efforts. (a) Subject
to the terms and conditions of this Agreement and to the fiduciary duties of the
Board of Directors (as determined by such directors in good faith), the Company
and the New Investor will use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
Transactions (including those contemplated by the Secondary Share Purchase
Agreement). In furtherance and not in limitation of the foregoing, the New
Investor and the Company agree to make, if required, an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and in any event
within seven Business Days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and to take all other actions necessary to
cause the expiration or termination of the applicable waiting periods under the
HSR Act as soon as practicable. For the avoidance of doubt, notwithstanding any
provision of this Agreement to the contrary, the Company shall not be required
to make any significant change in the operations or activities of the business
(or any material assets employed therein) of the Company or any of its
Affiliates, including any divestiture of its businesses (or assets) or other
extraordinary measures, in satisfaction of the HSR Act requirements.
(b) In connection with the efforts referenced in Section
6.01(a) to obtain all requisite approvals and authorizations for the
Transactions under any other Antitrust Law, the New Investor and the Company
shall each use commercially reasonable efforts to (i) cooperate in all respects
with each other in connection with any filing or submission and in connection
with any investigation or other inquiry, including any proceeding initiated by a
private party, (ii) keep the other party informed in all material respects of
any material communication received by such party from, or given by such party
to, the Federal Trade Com-
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mission (the "FTC"), the Antitrust Division of the Department of Justice (the
"DOJ") or any other Governmental Authority and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the Transactions and (iii) permit the other party to
review any material communication given by it to, and consult with each other in
advance of any meeting or conference with, the FTC, the DOJ or any other
Governmental Authority or, in connection with any proceeding by a private party,
with any other Person.
SECTION 6.02. Certain Filings. The Company and the New
Investor shall cooperate with one another (i) in connection with the preparation
of the Company Proxy Statement, (ii) in determining whether any action by or in
respect of, or filing with, any Governmental Authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
Transactions and the achievement of the Charter Amendment Effective Date, and
(iii) in taking such actions or making any such filings, furnishing information
required in connection therewith or with the Company Proxy Statement and seeking
timely to obtain any such actions, consents, approvals or waivers.
SECTION 6.03. Public Announcements. The New Investor and
the Company will consult with each other before issuing any press release or
making any public statement with respect to this Agreement or the Transactions
and, except as may be required by applicable law or any listing agreement with
any national securities exchange, will not issue any such press release or make
any such public statement prior to such consultation.
SECTION 6.04. Notices of Certain Events. From the date of
this Agreement until the Closing Date, each of the Company and the New Investor
shall promptly notify the other of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the Transactions;
(b) any notice or other communication from any
Governmental Authority in connection with the Transactions;
(c) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against,
relating to or involving or otherwise affecting the Company or any of
its Subsidiaries that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 3.12 or
3.13, or that relate to or affect the consummation of the Transactions;
(d) the occurrence or non-occurrence of any fact or event
which would be reasonably likely:
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(i) to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the
Closing Date, or
(ii) to cause any covenant, condition or
agreement under this Agreement not to be complied with or
satisfied; and
(e) any failure of the Company or the New Investor, as
the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided,
however, that no such notification shall affect the representations or
warranties of any party or the conditions to the obligations of any
party hereunder.
SECTION 6.05. Confidentiality. Prior to the Closing Date
and after any termination of this Agreement, each of the New Investor and the
Company will hold, and will use its reasonable best efforts to cause its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence, all confidential documents and information
concerning the other party furnished to it or its Affiliates in connection with
the Transactions in accordance with the terms of the Confidentiality Agreement.
SECTION 6.06. Consummation of Agreement. Subject to the
provisions of Section 8.01 of this Agreement, each party hereto shall use all
commercially reasonable efforts to fulfill and perform all conditions and
obligations on its part to be fulfilled and performed under this Agreement and
the other Transaction Documents to which it is a party, and to cause the
transactions contemplated by this Agreement and the other Transaction Documents
to which it is a party to be fully carried out. Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ are
intended third party beneficiaries of this Section 6.06.
ARTICLE 7
CONDITIONS TO THE TRANSACTIONS
SECTION 7.01. Conditions to the Obligations of Each Party.
The obligations of the Company and the New Investor to consummate the
Transactions are subject to the satisfaction of the following conditions:
(a) the sale of shares of Common Stock by the Sellers to
the New Investor in accordance with the terms of the Secondary Share
Purchase Agreement in the form attached hereto as Annex F shall be
consummated simultaneously with the Closing;
(b) any applicable waiting period under the HSR Act shall
have expired or been terminated;
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(c) no court, arbitrator or Governmental Authority shall
have issued any injunction, order or decree still in effect, and there
shall not be in effect any statute, rule or regulation, restraining or
prohibiting the consummation of the Transactions or the effective
operation of any material portion of the business of the Company and
its Subsidiaries after the Closing Date;
(d) all actions by or in respect of, or filings with, any
Governmental Authority required to permit the consummation of the
Transactions, shall have been taken, made or obtained, except where the
failure to take, make or obtain such actions or filings, individually
or in the aggregate with all other such failures, would not be
reasonably expected to have a Material Adverse Effect; and
(e) all licenses, permits, qualifications, consents,
waivers, approvals, authorizations or orders required to have been
obtained or made by the Company in connection with the Transactions
shall have been obtained and made by the Company, except where the
failure to receive such licenses, permits, qualifications, consents,
waivers, approvals, authorizations or orders, individually or in the
aggregate with all other such failures, would not be reasonably
expected to have a Material Adverse Effect (either before or after
giving effect to the Transactions); and
(f) the Company and Heartland shall have entered into a
monitoring fee agreement (the "NEW MONITORING AGREEMENT") in form and
substance satisfactory to each of them providing for the payment to
Heartland of an annual monitoring fee of $4.0 million.
SECTION 7.02. Conditions to the Obligations of the New
Investor. The obligations of the New Investor to consummate the Transactions are
subject to the satisfaction of the following further conditions:
(a) (i) the Company shall have performed in all material
respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date, (ii) the representations and
warranties of the Company contained in this Agreement and in any
certificate or other writing delivered by the Company pursuant hereto
shall be true without regard to any materiality qualifications, other
than those failures to be true that would not have, individually or in
the aggregate, a Material Adverse Effect, in each case at and as of the
Closing Date (except as to such representations made as of a particular
date, which shall be true as of such date) as if made at and as of such
time and (iii) the New Investor shall have received a certificate
signed by a duly authorized officer of the Company to the foregoing
effect;
(b) the Company, the Sellers and the New Investor (and
any of its assigns pursuant to Section 9.05) shall have entered into
the New Registration Rights Agreement and the New Master Shareholder
Agreement, and such agreements shall be in full force and effect;
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(c) the Board of Directors shall consist of nine
individuals, at least four of whom are designees of the New Investor;
(d) each of the Existing Investor Agreements shall have
been canceled pursuant to documentation in form and substance
satisfactory to the New Investor;
(e) each of the Indenture Parties shall have entered into
a second supplemental indenture to the Indenture providing for the
Indenture Amendments. By the terms of such second supplemental
Indenture, the Indenture Amendments shall become effective without any
further action by any person upon the Closing Date. The Indenture
Amendments shall have been irrevocably consented to by the requisite
Holders (as defined under the Indenture) of Notes for the second
supplemental indenture containing the Indenture Amendments to be
entered into by the Indenture Parties and to become effective in
accordance with their terms under Article IX of the Indenture. The form
and substance of the second supplemental indenture, insofar as the
Indenture Amendments and any other changes requested by the Holders are
concerned, shall be in form and substance satisfactory to the New
Investor. The Consent Costs incurred in connection with obtaining the
Indenture Amendments shall be reasonably acceptable to the New Investor
based upon the estimates of the likely cost provided to the New
Investor prior to the date hereof by the financial advisors to the New
Investor and the financial advisors to the Sellers and the Company. It
is a further condition to the obligations of the New Investor to
consummate the Transactions that the Board of Directors shall have
approved the form and substance of such second supplemental indenture
and the related Consent Costs, as arranged by the New Investor;
otherwise the New Investor may terminate this Agreement;
(f) each of the Credit Agreement Parties shall have
entered into an amendment and waiver to the Credit Agreement, in form
and substance reasonably satisfactory to the New Investor, providing
for the Bank Amendments. By the terms of such amendment and waiver, the
Bank Amendments shall become effective without any further action by
any person upon the Closing Date. The amendment and waiver shall have
been irrevocably consented to by the requisite lenders under the Credit
Agreement for it to become effective in accordance with its terms and
the provisions of the Credit Agreement. The Consent Costs incurred in
connection with obtaining the Bank Amendments shall be reasonably
acceptable to the New Investor based upon the estimates of the likely
cost provided to the New Investor prior to the date hereof by the
financial advisors to the New Investor and the financial advisors to
the Sellers and the Company. In addition, the New Investor shall be
satisfied that the effect of the Bank Amendments will be to modify the
documentation relating to the Master Lease Agreement and the
Receivables Agreement and related documentation, including, without
limitation, the receivables transfer agreement, to ensure that no
default or, in the case of the receivables financing, no "Termination
Event" or "Potential Termination Event" will arise as a result of the
transactions contemplated hereby and by the
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Secondary Share Purchase Agreement. It is a further condition to the
obligations of the New Investor to consummate the Transactions that the
Board of Directors shall have approved the form and substance of the
proposed Bank Amendments and the related Consent Costs, as arranged by
the New Investor; otherwise the New Investor may terminate this
Agreement;
(g) the Certificate of Designations governing the
Convertible Preferred Stock shall have been filed and become effective
with the Secretary of State of the State of Delaware;
(h) the Company shall have paid to Heartland a
transaction fee in cash equal to $12.0 million (the "TRANSACTION FEE");
and
(i) there shall not have occurred and be continuing any
Material Adverse Effect.
SECTION 7.03. Conditions to the Obligations of the
Company. The obligations of the Company to consummate the Transactions are
subject to the satisfaction of the following further conditions:
(a) (i) the New Investor shall have performed in all
material respects all of its obligations hereunder required to be
performed by it at or prior to the Closing Date, (ii) the
representations and warranties of the New Investor contained in this
Agreement and in any certificate or other writing delivered by the New
Investor pursuant hereto that are qualified by materiality or material
adverse effect shall be true, and all other such representations or
warranties of the New Investor shall be true in all material respects,
in each case at and as of the Closing Date as if made at and as of such
time and (iii) the Company shall have received a certificate signed by
a duly authorized manager of the New Investor to the foregoing effect;
(b) each of the Indenture Parties shall have entered into
a second supplemental indenture to the Indenture providing for the
Indenture Amendments. By the terms of such second supplemental
Indenture, the Indenture Amendments shall become effective without any
further action by any person upon the Closing Date. The Indenture
Amendments shall have been irrevocably consented to by the requisite
Holders (as defined under the Indenture) of Notes for the second
supplemental indenture containing the Indenture Amendments to be
entered into by the Indenture Parties and to become effective in
accordance with their terms under Article IX of the Indenture. The form
and substance of such second supplemental indenture and the related
Consent Costs, as arranged by the New Investor shall be satisfactory to
the Board of Directors;
(c) each of the Credit Agreement Parties shall have
entered into an amendment and waiver to the Credit Agreement, in form
and substance reasonably
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satisfactory to the New Investor, providing for the Bank Amendments. By
the terms of such amendment and waiver, the Bank Amendments shall
become effective upon the Closing Date. The amendment and waiver shall
have been irrevocably consented to by the requisite lenders under the
Credit Agreement for it to become effective in accordance with its
terms and the provisions of the Credit Agreement. In addition, the
Company shall be satisfied that the effect of the Bank Amendments will
be to modify the documentation relating to the Master Lease Agreement
and the Receivables Agreement and related documentation, including,
without limitation, the receivables transfer agreement, to ensure that
no default or, in the case of the receivables financing, no
"Termination Event" or "Potential Termination Event" will arise as a
result of the transactions contemplated hereby and by the Secondary
Share Purchase Agreement. The form and substance of the proposed Bank
Amendments and the related Consent Costs, as arranged by the New
Investor, shall be satisfactory to the Board of Directors; and
(d) the Company, the Sellers and the New Investor (and
any of its assigns pursuant to Section 9.05) shall have entered into
the New Master Shareholder Agreement and the Profit Participation
Agreement, and such agreements shall be in full force and effect.
ARTICLE 8
TERMINATION
SECTION 8.01. Termination. This Agreement may be
terminated and the Transactions may be abandoned at any time prior to the
Closing Date:
(a) by mutual written agreement of the Company and the
New Investor;
(b) by either the Company or the New Investor, if:
(i) the Closing has not occurred on or before
May 31, 2001 or if the Closing has occurred, the Charter
Amendment Effective Date has not occurred on or before August
31, 2001 (as applicable, the "END DATE"), provided that the
right to terminate this Agreement pursuant to this Section
8.01(b)(i) shall not be available to any party whose breach of
any provision of this Agreement results in the failure of the
Transactions to be consummated by such time; or
(ii) there shall be any law or regulation that
makes consummation of the Transactions illegal or otherwise
prohibited or any judgment, injunction, order or decree of any
Governmental Authority having competent jurisdiction enjoining
the Company or the New Investor from consummating the
Transac-
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tions is entered and such judgment, injunction, order or
decree shall have become final and nonappealable;
(c) by the New Investor, (i) if a breach of or failure to
perform any representation, warranty, covenant or agreement on the part
of the Company set forth in this Agreement shall have occurred that
would cause any condition set forth in clauses (a), (b) and (d) in
Section 7.02 not to be satisfied, and such condition is incapable of
being satisfied by the End Date or (ii) as provided in the last
sentence of clauses (e) and (f) of Section 7.02;
(d) by either the Company or the New Investor, if the
Secondary Share Purchase Agreement has been terminated;
(e) by the Company, if a breach of or failure to perform
any representation, warranty, covenant or agreement on the part of the
New Investor set forth in this Agreement shall have occurred that would
cause the condition set forth in Section 7.03(a) not to be satisfied,
and such condition is incapable of being satisfied by the End Date; or
(f) by the Company, if the Board of Directors or a
committee thereof, at any time shall have concluded in good faith
(after receiving and considering the advice of its legal and financial
advisors and after taking into account all legal, financial, regulatory
and other aspects of an Acquisition Proposal and the person making the
Acquisition Proposal) that, if consummated, the Acquisition Proposal
would result in a transaction more favorable to the stockholders of the
Company than the transaction contemplated by this Agreement.
The party desiring to terminate this Agreement pursuant to
this Section 8.01 (other than pursuant to Section 8.01(a)) shall give notice of
such termination to the other party.
SECTION 8.02. Effect of Termination. (a) If this Agreement
is terminated pursuant to Section 8.01, this Agreement shall become void and of
no effect with no liability on the part of any party (or any stockholder,
member, manager, director, officer, employee, agent, consultant or
representative of such party) to the other party hereto; provided that, if such
termination shall result from the willful (i) failure of either party to fulfill
a condition to the performance of the obligations of the other party or (ii)
failure of either party to perform a covenant hereof, such party shall be fully
liable for any and all liabilities and damages incurred or suffered by the other
party as a result of such failure. The provisions of the last sentence of
Section 5.02 and Sections 6.05, 9.04, 9.06, 9.07, 9.08 and this Section 8.02
shall survive any termination hereof pursuant to Section 8.01.
(b) If (i) either (A) this Agreement is terminated
pursuant to Section 8.01(f) or (B) there has been a bona fide Acquisition
Proposal and this Agreement is termi-
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nated pursuant to Section 8.01(b)(i) and (ii) the Company consummates or enters
into a definitive agreement to consummate a transaction or series of related or
unrelated transactions (other than an underwritten public offering) on or prior
to the first anniversary of the termination (x) pursuant to which the Company
issues for cash Common Stock in amount equal to or greater than 10% of the
Common Stock outstanding immediately prior to such transaction or transactions,
or (y) described in the definition of Acquisition Proposal (but substituting 50%
for the percentages set forth therein), then the Company shall pay to the New
Investor an amount in cash equal to 2.5% of the value of the shares sold or 2.5%
of the value of the acquisition transaction, as applicable (not to exceed $3.125
million in the case of an acquisition).
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to Heartland, to:
Heartland Industrial Partners, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: W. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
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if to the Company, to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
and
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel
with copies to:
Morris, Nichols, Arsht & ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m., and such day is
a Business Day. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day.
SECTION 9.02. Survival of Representations and Warranties.
The representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Closing Date, except for the agreements set forth in the last sentence of
Section 5.02 and Sections 5.01, 5.03(a), 5.06, 5.07, 6.02, 6.05, 6.06, 9.04,
9.06, 9.07 and 9.08.
SECTION 9.03. Amendments; No Waivers. (a) Any provision
of this Agreement may be amended or waived prior to the Closing Date if, but
only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this
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Agreement or, in the case of a waiver, by each party against whom the waiver is
to be effective, provided that, after the adoption of this Agreement by the
Company's shareholders and without their further approval, no such amendment or
waiver shall reduce the amount or change the kind of consideration to be
received in exchange for any shares of capital stock of the Company.
(b) 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.
SECTION 9.04. Expenses. The Company will reimburse the New
Investor for (a) all of its costs and expenses incurred prior to the date hereof
in connection with the Transactions up to a maximum of $500,000, and (b) all of
its costs and expenses incurred on and after the date hereof in connection with
the Transactions (other than, in the case of either clause (a) or (b), internal
costs and expenses of the New Investor), unless in any case the Transactions do
not close solely due to a termination by the Company pursuant to Section
8.01(e), which costs and expenses shall be payable upon the earlier of the
Closing and the termination of this Agreement.
SECTION 9.05. 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 assigns. No party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto, except that the New
Investor may assign its rights under this Agreement without the consent of any
other party so long as (i) the New Investor is not relieved of its obligations
hereunder, (ii) any assignee of the New Investor makes the representations and
warranties to the Company in writing set forth in Article IV mutatis mutandis,
and (iii) upon the purchase of the Primary Shares at the Closing, Heartland and
its affiliates will beneficially own a majority of the shares of Common Stock
(assuming conversion of the Convertible Preferred Shares) to be purchased
hereunder and under the Secondary Share Purchase Agreement. Any assignment in
violation of this Agreement shall be null and void.
SECTION 9.06. Governing Law. The validity, construction
and effect of this Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of law of such state.
SECTION 9.07. Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Transactions shall be brought in the
United States District Court for the Southern District of New York or any New
York state court sitting in New York City, and
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43
each of the parties hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 9.01 shall be deemed effective service of
process on such party.
SECTION 9.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
SECTION 9.09. Counterparts; Effectiveness; Third Parties.
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 hereof signed by all of the other
parties hereto. Except as provided in Section 6.06, no provision of this
Agreement is intended to confer any rights, benefits, remedies, obligations or
liabilities hereunder upon any Person other than the parties hereto and their
respective successors and assigns.
SECTION 9.10. Entire Agreement. This Agreement, the other
Transaction Documents and the Confidentiality Agreement constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
Exhibits referred to herein are incorporated by reference herein and shall
constitute a part of this Agreement.
SECTION 9.11. Captions. The captions herein are included
for convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 9.12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority 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. Upon such a determination, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner so that the Transactions
be consummated as originally contemplated to the fullest extent possible.
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44
SECTION 9.13. Specific Performance. The parties hereto
agree that irreparable damage would occur if any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement or to enforce specifically the performance of the terms and provisions
hereof in the United States District Court for the Southern District of New York
or any New York state court sitting in New York City, in addition to any other
remedy to which they are entitled at law or in equity.
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45
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates L.L.C.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
S-1
46
Annex A
TERMS OF NON-VOTING CONVERTIBLE PREFERRED STOCK
Number of Shares: 1,000,000 shares of Non-Voting Convertible Preferred
Stock, par value $0.01 per share, (the "CONVERTIBLE
PREFERRED SHARES") of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation (the
"COMPANY").
Liquidation Preference: $0.01 per share.
Voting Rights: Non-voting.
Conversion: Each Convertible Preferred Share will be convertible into 16.4
shares of Common Stock, par value $0.01 per share (the "COMMON
STOCK"), of the Company upon the occurrence of the Charter
Effective Amendment Date (as defined in this Agreement).
Redemption: None.
Dividends: Non-cumulative participating dividend.
Anti-dilution Protection: Customary.
47
ANNEX B
PROFIT PARTICIPATION AGREEMENT
PROFIT PARTICIPATION INTEREST AGREEMENT (this "Agreement")
dated as of [ ], 2001 among [ ] (collectively "Heartland", and together with
any Permitted Transferee, the "New Investors") and each of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Corporation (the "Company"), Blackstone Capital Company II, L.L.C.
("Blackstone") and ▇▇▇▇▇▇▇▇▇▇▇/C&A Holdings, L.L.C. ("▇▇▇▇▇▇▇▇▇▇▇," and
together with the Company and Blackstone, the "Sellers").
RECITALS
WHEREAS, the New Investors and the Sellers have entered into
those certain stock share purchase agreements dated [ ] relating to the sales
by the Sellers to the New Investors of 52,000,000 Shares (the "Purchase
Agreements") (capitalized terms used herein without definition have the
meanings given such terms in the Purchase Agreement); and
WHEREAS, as part of the consideration for the purchase of
Shares from the Sellers, the New Investors desire to grant the Sellers a
participating interest in their respective Realized Profits (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements herein set forth, the parties hereby agree as follows:
ARTICLE I
PROFIT PARTICIPATION
Section 1.1 Sellers' Interest in Realized Profits. If a New
Investor effects any Transfer of Shares held by it and the aggregate Transfer
Consideration received by such New Investor for all Shares subject to any such
Transfer exceeds an amount equal to the Base Price times such number of Shares
(any such excess amount, the "Realized Profit"), then such New Investor shall
pay at the time or times and in the method set forth in Section 1.2, on the
Settlement Date for each such Transfer, to each Seller, pro rata with respect
to the number of Shares sold by such Seller to such New Investor pursuant to
the Purchase Agreements, an amount equal to such Realized Profit up to a
maximum amount of (a) $13,000,000 ("Participating Profit") plus (b) the
Attributable Accretion.
Section 1.2 Time and Method of Payment. Any payments required
under Section 1.1 shall be paid in the appropriate amounts to each Seller
within three (3) Trading Days of receipt of the Transfer Consideration by a New
Investor (each such date, a "Settlement
48
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Date"). In the event Transfer Consideration consists of more than one type of
consideration, the amount payable to a Seller shall consist of each such type
of consideration pro rata based on the percentage of the Transfer Consideration
that constitutes the aggregate amount of payments to which the Seller is
entitled to under Section 1.1; provided, the New Investor shall pay the Seller
in cash the amount of any Transfer Consideration constituting liabilities
assumed or paid by the transferee. Any New Investor making a payment under this
Article I shall at the time of such payment deliver a written statement to each
Seller setting forth the calculations, including any adjustments pursuant to
Article II, used to determine the amount of such payment which in each case
shall have been made in good faith by the mutual agreement of all New Investors
party hereto. Each payment made pursuant to Section 1.1 will first be deemed to
be a payment of accrued and unpaid Attributable Accretion and then applied to
reduce Participating Profit.
ARTICLE II
ADJUSTMENT OF BASE PRICE
Section 2.1 Adjustments Generally. The Base Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as provided in this Article II.
Section 2.2 Shares Reorganization. If the Company shall after
the date hereof (A) subdivide, split or reclassify its outstanding Shares into
a greater number of shares or consolidate its outstanding Shares into a smaller
number of shares or (B) declare a dividend on the outstanding Shares payable in
additional Shares (any such event being called a "Shares Reorganization"),
then, effective immediately after the record date at which the holders of
Shares are determined for purposes of such Shares Reorganization, the Base
Price shall be adjusted to an amount in each case determined by multiplying the
Base Price as in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Shares outstanding on such record
date before giving effect to such Shares Reorganization and the denominator of
which shall be the number of Shares outstanding after giving effect to such
Shares Reorganization.
49
-3-
Section 2.3 Distributions. If the Company shall after the
date hereof issue or distribute to holders of Shares evidences of indebtedness,
any other securities of the Company (other than Shares, but including any
rights, warrants or options for the purchase of Shares exercisable for a period
of greater than 45 days), or any property, assets or cash (a "Distribution"),
then the Distribution shall be paid by the New Investors directly over to the
Sellers and the Fair Market Value of such Distribution shall first be deemed to
be a payment of accrued and unpaid Attributable Accretion and then applied to
reduce Participating Profit.
Section 2.4 Capital Reorganization. (a) If after the date
hereof, there shall be any consolidation or merger of an entity with or into
the Company, including, without limitation, a consolidation or a merger in
which the Company is a continuing corporation and which results in any
reclassification of, or change (other than a Shares Reorganization), in,
outstanding Shares, or any sale or conveyance of the property of the Company as
an entirety or substantially as an entirety (any such event being called a
"Capital Reorganization"), then if the holders of all of the outstanding Shares
immediately prior to such Capital Reorganization after giving effect thereto
own in the aggregate less than a majority of the voting power of all classes of
capital stock having the power to vote for the election of the directors of the
surviving or transferee entity, a Transfer shall be deemed to have occurred and
the Transfer Consideration with respect to each Share shall be deemed to be the
Fair Market Value of the capital stock and any property received therefor
pursuant to the Capital Reorganization.
(b) If after the date hereof, there shall be any Capital
Reorganization and the holders of all the outstanding Shares immediately prior
to such Capital Reorganization, after giving effect thereto, own in the
aggregate at least a majority of the voting power of all classes of capital
stock having the power to vote for the election of the directors of such
surviving or transferee entity, (1) to the extent any property (other than
common stock of such surviving or transferee entity) is received by such
holders in connection with such Capital Reorganization, a Distribution shall be
deemed to have occurred consisting of such property and (2) the term "Shares"
shall be deemed to include such common stock as shall then be held by the New
Investors and the aggregate unrecovered Base Price shall be allocated to the
number of shares of common stock received by the New Investors.
Section 2.5 Other Adjustments. If the Company shall, after
the date hereof, distribute to the holders of the Shares, cash, equity (other
than Shares) or other property or take any other similar action with respect to
its Shares, other than any action of a type otherwise described in this Article
II, then the Base Price shall be adjusted to such extent, if any, and in such
manner and at such time as is required to provide to the Sellers with a profit
participation interest that is economically equivalent with the profit
participation interest held by the Sellers prior to any such action.
Section 2.6 Adjustment Rules. (a) Any adjustments pursuant to
this Article II shall be made successively whenever an event referred to herein
shall occur.
50
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(b) If the Company shall set a record date to determine the
holders of Shares for purposes of a Shares Reorganization, Distribution or
Capital Reorganization, and shall legally abandon such action prior to
effecting such action, then the adjustment shall be rescinded as of the
effective date of such abandonment.
(c) No adjustment in the Base Price shall be made hereunder
unless such adjustment increases or decreases such amount or price by one
percent or more, but any such lesser adjustment shall be carried forward and
shall be made at the time and together with the next subsequent adjustment
which together with any adjustments so carried forward shall serve to adjust
such amount or price by one percent or more.
ARTICLE III
TERMINATION
The obligations of each New Investor hereunder shall
terminate (1) upon the Transfer by such New Investor of the aggregate of (a)
all Shares initially acquired by such New Investor pursuant to the Purchase
Agreement and the Primary Share Purchase Agreement and (b) any other Shares
received by such New Investor in respect of such Shares pursuant to a Shares
Reorganization or Capital Reorganization and (2) the payment to the Sellers
from Realized Profit on all sales of Shares subject to this Agreement of the
amounts required by Section 1.1 with respect to such sales. It is agreed that
such New Investor shall not have any obligation to pay any Unrealized
Participating Profit and Unrealized Accretion remaining upon termination.
ARTICLE IV
DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings indicated:
"Attributable Accretion" means the amount in U.S. dollars
which would have accrued as interest from the Closing Date through the date of
determination if the Unrealized Participating Profit plus the Unrealized
Accretion had been accruing interest on a daily basis, compounded quarterly on
each January 1, April 1, July 1 and October 1, at the annual rate of 6.8%.
51
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"Base Price" means an amount, initially equal to $5.00 per
Share, as adjusted from time to time pursuant to Article II.
"Fair Market Value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction, assuming each
party acts with full knowledge of the facts and without undue pressure or
compulsion to complete such transaction as determined, if the Sellers are
unable to agree on such valuation within 10 Business Days of the Transfer
giving rise to such valuation, by an independent investment banking firm of
national reputation selected by Heartland and reasonably acceptable to each
Seller; provided, however, that the Fair Market Value of any security for which
a public market trading price is available shall be the average of the closing
prices of such security for the five Trading Day period immediately preceding
the date of the transaction to which such Fair Market Value determination
relates.
"Permitted Transferee" shall mean a person to whom a transfer
of Shares has been made pursuant to Section 2.2 of the New Master Shareholder
Agreement and is a Permitted Transferee as defined in such Agreement.
"Realized Profit" has the meaning given such term in Section
1.1 hereof.
"Settlement Date" has the meaning given such term in Section
1.2 hereof.
"Shares" shall mean shares of Common Stock, par value $.01
per share, of the Company and shall include each Convertible Preferred Share
which shall be treated as 16.4 Shares.
"Trading Day" shall mean a day on which the New York Stock
Exchange is open for business.
"Transfer" means any sale, conveyance, assignment,
disposition or other transfer (each an "Assignment" or "Assign"), but does not
include (1) Assignments to Permitted Transferees or (2) a pledge or assignment
of interests or assets of any New Investor to a lender in the ordinary course
of business (and any subsequent exercise of remedies by such lender) shall not
constitute a transfer for purposes of this Agreement.
"Transfer Consideration" means the value of all cash and
other property actually paid, directly or indirectly, by a transferee to a New
Investor in connection with a Transfer, less any brokerage commissions,
underwriting discount, reasonable and customary fees or out-of-pocket expenses,
in each case payable to a non-affiliated person or entity payable by such New
Investor in connection with such Transfer. The value of any non-cash
consideration shall be the Fair Market Value thereof and shall also include the
aggregate value of any liabilities assumed or paid, directly or indirectly, by
the transferee in connection with a Transfer.
52
-6-
"Unrealized Accretion" means the amount of Attributable
Accretion accrued as of any date less the amount of payments theretofore
received by Sellers pursuant to Section 1.1(b).
"Unrealized Participating Profit" means $13,000,000 less the
amount of payments theretofore received by Sellers pursuant to Section 1.1(a).
ARTICLE V
MISCELLANEOUS
Section 5.1 Obligations Several and Not Joint. The New
Investors' obligations under this Agreement are several in proportion to the
Shares acquired by such New Investors under the Purchase Agreement and not
joint.
Section 5.2 Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
delivered by hand or sent by prepaid telex, cable or telecopy or sent, postage
prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, telexed,
cabled or telecopied, or if mailed, three business days after mailing (one
business day in the case of express mail or overnight courier service), as
follows:
If to Heartland:
Heartland Industrial Partners, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
53
-7-
if to Sellers:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel
with copies to:
Morris, Nichols, Arsht & ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
and:
Blackstone Capital Partners L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇
-▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Management Partners
1301 Avenue of the Americas - 44th Floor
New York, New York 10019
Attn: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 5.3 Expenses. Subject to the terms of the Purchase
Agreement with the Company, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid, whether
or not the transactions contemplated hereby are consummated, by the party
incurring such costs and expenses.
Section 5.4 Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) 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.
Section 5.5 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 assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto. Notwithstanding the
foregoing, (1) Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ each may Assign its right to receive
Participating Profit and Attributable Accretion to any of its Affiliates (as
defined in the New Master Stockholder Agreement, (2) Shares are freely
Assignable to a Permitted Transferee with the party Assigning Shares retaining
the obligation to pay the related Participating Profit and Attributable
Accretion and (3) Shares and the obligation to pay Participating Profit and
Attributable Accretion may be Assigned to a Permitted Transferee provided the
Sellers receive the written agreement of such Permitted Transferee to assume
such obligation and, in
55
-9-
the case of clause (3), the party Assigning such Shares shall no longer have
the obligation to pay Participating Profit and Attributable Accretion with
respect to such Shares.
Section 5.6 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New York.
Section 5.7 Jurisdiction. The parties hereto agree that any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought
in an inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 5.1 shall
be deemed effective service of process on such party.
Section 5.8 Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 5.9 Counterparts; Third Party Beneficiaries. 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 a counterpart hereof signed by the other party
hereto. No provision of this Agreement shall confer upon any person other than
the parties hereto any rights or remedies hereunder.
Section 5.10 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 5.11 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
56
-10-
Section 5.12 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be deemed to be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforced in accordance with its terms to the maximum extent permitted by
law.
57
S-1
IN WITNESS WHEREOF, each of the parties has duly executed
this Agreement or caused it to be duly executed as of the date first written
above.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
By:
-----------------------------------------
BLACKSTONE CAPITAL COMPANY II, L.L.C.
By: , Member
---------------------------------
▇▇▇▇▇▇▇▇▇▇▇/C&A HOLDINGS, L.L.C.
By: , Member
---------------------------------
[NEW INVESTORS]
By:
-----------------------------------------
58
ANNEX C
COMPOSITE CERTIFICATE OF AMENDMENT
OF
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
MARKED TO SHOW CHANGES TO BE EFFECTED BY THE PROPOSALS
(Additions to the current Restated Certificate of Incorporation to be
effected by the Proposals are shown by ALL CAPS for text, and parentheses () for
figures. Deletions from the current Restated Certificate of Incorporation
effected by the Proposals are shown by square brackets [].)
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation (the "Corporation"), a corporation
organized and existing under the Delaware General Corporation Law, hereby
certifies that the following resolution was duly adopted by the Corporation's
directors and stockholders in accordance with the provisions of Section 242 of
the Delaware General Corporation Law:
RESOLVED, that the introduction and paragraph (a) of Article FOUR of
the Restated Certificate of Incorporation of the Corporation be amended
to read as follows:
"FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is [166,000,000] (316,000,000),
consisting of:
(a) [150,000,000] (300,000,000) shares of Common Stock, par value
$0.01 per share, which shall be designated "Common Stock". Each share
of Common Stock shall be entitled to one vote per share; and"
RESOLVED, that Article FIVE of the Restated Certificate of
Incorporation of the Corporation be amended to read as follows:
"FIFTH: (a) The business of the Corporation shall be managed by or
under the direction of the Board of Directors, except as may be
otherwise provided by statute or by this Certificate of Incorporation.
The number of directors of the Corporation shall be fixed by[, or] THE
BOARD OF DIRECTORS AS CONSTITUTED FROM TIME TO TIME in the manner
provided in[,] the By-laws of the Corporation; provided, [however, that
such number] THERE SHALL BE AT LEAST ONE DIRECTOR FOR EACH CLASS of
directors [shall not exceed nine]. The directors of the Corporation,
other
59
-2-
than those who may be elected pursuant to any Preferred Stock
Designation, shall be divided into three classes (Class I, Class II and
Class III), with the term of office of one class expiring each year.
Each class shall consist, as nearly as may be possible, of one-third of
the total number of directors constituting the entire Board of
Directors. The membership of each class initially shall be as set forth
in a resolution adopted by the Board of Directors of the Corporation on
or prior to June 30, 1994 (the "Effective Date"). The initial term of
Class I directors shall expire at the first annual meeting of
stockholders following the Effective Date; the initial term of Class II
directors shall expire at the second annual meeting of stockholders
following the Effective Date; and the initial term of Class III
directors shall expire at the third annual meeting of stockholders
following the Effective Date. At each annual meeting of stockholders,
each class of directors whose term shall then expire shall be elected
to hold office for a three year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as
nearly equal as possible, but in no case shall a decrease in the number
of directors shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which such
director's term expires and until such director's successor shall be
elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office.
(b) There shall be a nominating committee of the Board of
Directors (the "Nominating Committee") consisting of all directors
serving on the Board of Directors, excluding directors that are
salaried employees of the Corporation. The Nominating Committee shall
be authorized to nominate, by a majority vote thereof [and subject only
to the restrictions set forth in this paragraph (b) of this Article
FIFTH], persons for election to the Board of Directors at any annual
meeting of stockholders or at any special meeting of stockholders
called for the purpose of electing directors[; provided, however, that
if the Nominating Committee does not nominate a person by majority vote
with respect to any directorship to be voted upon at such meeting and
the incumbent director holding such directorship is affiliated with
Blackstone Capital Partners L.P. ("Blackstone Partners"), ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Partners, L.P. ("WP Partners") or a Transferee (as defined in
Section 3.01 of that certain Voting Agreement dated as of June 29, 1994
between Blackstone Partners and WP Partners, as the same may be amended
from time to time) of either, in lieu of any Nominating Committee
nomination, the Corporation shall place in nomination the name of the
incumbent director or a similarly affiliated person designated by the
party with whom such incumbent director is affiliated (i.e., Blackstone
Partners, WP Part-]
60
-3-
[ners or a Transferee, as the case may be) for election to the Board of
Directors at such meeting, and the Corporation shall nominate no other
person for election to such director position. For purposes of the
preceding sentence and paragraph (d) and (f) of this Article FIFTH, a
person shall be affiliated with Blackstone Partners, WP Partners or a
Transferee if such person is a general partner, limited partner,
director or officer or employee of such entity or any affiliate of such
entity or is otherwise an "affiliate" of such entity as defined in the
rules and regulations under the Securities Act of 1933]. Except as
provided herein, the Board of Directors, or any committee thereof,
shall not be authorized to nominate persons for election to the Board
of Directors.
(c) Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the
Corporation need not be by written ballot.
(d) Newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement,
disqualification or removal from office shall be filled solely by the
Nominating Committee, by a majority vote thereof, and not by the
stockholders[; provided, however, that if a vacancy in the Board of
Directors results from the death, resignation, retirement,
disqualification or removal from office of a director affiliated with
(as defined in paragraph (b) of this Article FIFTH) Blackstone
Partners, WP Partners or a Transferee (excluding, however, a
resignation by a director affiliated with Blackstone Partners or WP
Partners pursuant to Section 3.01 of the Voting Agreement referred to
in paragraph (b) of this Article FIFTH), such vacancy shall
automatically be filled with a similarly affiliated person designated
by the party with whom such incumbent director was affiliated (i.e.,
Blackstone Partners, WP Partners or a Transferee, as the case may be),
such affiliation being a qualification for election to such
directorship]. Any director elected to fill a newly created
directorship or any vacancy on the Board of Directors resulting from
death, resignation, retirement, disqualification or removal from
office, shall hold office for the remainder of the full term of the
class of director's in which the new directorship was created or the
vacancy occurred and until such director's successor shall have been
elected and qualified. Directors shall continue in office until others
are chosen and qualified in their stead.
(e) Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of Preferred Stock issued by the Corporation,
if any, shall have the right, voting separately by class or series, to
elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacan-
61
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cies and other features of such directorships shall be governed by the
terms of the applicable resolution or resolutions of the Board of
Directors adopted pursuant to Article FOURTH.
(f) Any director or the entire Board of Directors of the
Corporation may be removed from office only for cause and only by the
affirmative vote of the holders of a majority of the shares of capital
stock of the Corporation then entitled to vote in the election of such
director or directors. For purposes of this paragraph and to the extent
permitted by law, "cause", shall be limited to (i) action by a director
involving wilful malfeasance, which conduct has a material adverse
effect on the Corporation, (ii) conviction of a director of a felony or
(iii) the wilful and continuous failure of a director substantially to
perform such director's duties to the Corporation (including any such
failure resulting from incapacity due to physical or mental illness).
[In addition to the foregoing, if any director was at the time of his
election to the Board of Directors of the Corporation affiliated with
(as defined in paragraph (b) of this Article Fifth) Blackstone Partners
or WP Partners, it shall be a qualification for such director to hold
office that such director continue to remain affiliated with Blackstone
Partners or WP Partners and upon any failure of such director to remain
so affiliated, such director shall automatically be removed from
office.]
(g) In furtherance and not in limitation of the powers conferred
upon it by law, the Board of Directors is expressly authorized to
adopt, alter, amend or repeal any provision of the By-laws of the
Corporation (including, without limitation, By-laws governing the
conduct of, and the matters which may properly be brought before,
meetings of the stockholders and By-laws specifying the manner and
extent to which prior notice shall be given of the submission of
proposals to be submitted at any meeting of stockholders or of
nominations of elections of directors to be held at any such meeting)
by the vote of a majority of the entire Board of Directors.
(h) In addition to the powers and authorities herein or by statute
expressly conferred upon it, the Board of Directors may exercise all
such powers and do all such acts and things as may be exercised or done
by the Corporation, subject, nevertheless, to the provisions of the
laws of the State of Delaware, this Restated Certificate of
Incorporation and the By-laws of the Corporation; provided, however,
that no By-laws hereafter adopted by the stockholders shall invalidate
any prior act of the directors which would have been valid if such
By-laws had not been adopted."
62
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RESOLVED, that Article SIX of the Restated Certificate of Incorporation
of the Corporation be amended to read as follows:
"SIXTH:
(A) EXCEPT AS SET FORTH IN PARAGRAPH (B) BELOW, ANY ACTION
REQUIRED OR PERMITTED TO BE TAKEN BY THE STOCKHOLDERS OF THE
CORPORATION AT ANY ANNUAL OR SPECIAL MEETING OF SUCH STOCKHOLDERS MAY
BE TAKEN WITHOUT A MEETING, WITHOUT PRIOR NOTICE AND WITHOUT A VOTE, IF
A CONSENT OR CONSENTS IN WRITING, SETTING FORTH THE ACTION SO TAKEN,
SHALL BE SIGNED BY THE HOLDERS OF OUTSTANDING STOCK HAVING NOT LESS
THAN THE MINIMUM NUMBER OF VOTES THAT WOULD BE NECESSARY TO AUTHORIZE
OR TAKE SUCH ACTION AT A MEETING AT WHICH ALL SHARES ENTITLED TO VOTE
THEREON WERE PRESENT AND VOTED AND SHALL BE DELIVERED TO THE
CORPORATION BY DELIVERY TO ITS REGISTERED OFFICE IN THE STATE OF
DELAWARE, ITS PRINCIPAL PLACE OF BUSINESS, OR AN OFFICER OR AGENT OF
THE CORPORATION HAVING CUSTODY OF THE BOOK IN WHICH PROCEEDINGS OF
MEETINGS OF STOCKHOLDERS ARE RECORDED. DELIVERY MADE TO THE
CORPORATION'S REGISTERED OFFICE SHALL BE BY HAND OR BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED.
(B) IF AT ANY TIME THE PARTIES (OTHER THAN THE COMPANY) TO THE
STOCKHOLDERS AGREEMENT DATED [ ], 2001, TO WHICH THE COMPANY IS A PARTY
(AS SUCH AGREEMENT MAY BE AMENDED, AMENDED AND RESTATED, OR OTHERWISE
MODIFIED OR REPLACED) BENEFICIALLY OWN IN THE AGGREGATE LESS THAN 25%
OF THE OUTSTANDING CAPITAL STOCK OF THE COMPANY, THEN ON AND AFTER SUCH
DATE, ANY [Any] action required or permitted to be taken by the
stockholders of the Corporation may be effected only at a duly called
annual or special meeting of such stockholders and may not be effected
by consent in writing by such stockholders. Except as otherwise
provided by any Preferred Stock Designation, special meetings of
stockholders for any purpose or purposes may be called only by the
Chairman or a Co-Chairman of the Board, if there be one, or by
resolution of the Board of Directors, acting by not less than a
majority of the entire Board, and the power of stockholders to call a
special meeting is specifically denied. No business shall be transacted
and no corporate action shall be taken at a special meeting of
stockholders other than that stated in the notice of such meeting."
63
S-1
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed in the name and on behalf of the Corporation, and attested to, by the
duly elected officers of the Corporation as indicated below this [ ] day of [ ].
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
By:
-----------------------------------------
Name:
Title:
Attest:
--------------------------
Name:
Title:
64
Annex D
================================================================================
REGISTRATION RIGHTS AGREEMENT
by and among
BLACKSTONE CAPITAL COMPANY II, L.L.C.,
HEARTLAND INDUSTRIAL PARTNERS, L.P.,
▇▇▇▇▇▇▇▇▇▇▇/C&A HOLDINGS, L.L.C.,
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
--------------------------
Dated: ______ __, 2001
--------------------------
================================================================================
65
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS............................................................ 2
1.1 Definitions.................................................... 2
ARTICLE II GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT......................... 4
2.1 Grant of Rights................................................ 4
2.2 Registrable Securities......................................... 4
2.3 Holders of Registrable Securities.............................. 5
ARTICLE III DEMAND REGISTRATION.................................................. 5
3.1 Request for Demand Registration................................ 5
3.2 Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration................................................... 6
3.3 Effective Demand Registration.................................. 7
3.4 Expenses....................................................... 7
3.5 Underwriting Procedures........................................ 7
3.6 Selection of Underwriters...................................... 8
ARTICLE IV INCIDENTAL OR "PIGGY-BACK" REGISTRATION............................... 8
4.1 Request for Incidental Registration............................ 8
4.2 Expenses....................................................... 9
ARTICLE V HOLDBACK AGREEMENTS.................................................... 9
5.1 Restrictions on Public Sale by Designated Holders.............. 9
5.2 Restrictions on Public Sale by the Company..................... 9
ARTICLE VI REGISTRATION PROCEDURES............................................... 10
6.1 Obligations of the Company..................................... 10
6.2 Seller Information(a).......................................... 13
6.3 Notice to Discontinue.......................................... 13
6.4 Registration Expenses.......................................... 14
ARTICLE VII INDEMNIFICATION; CONTRIBUTION........................................ 14
7.1 Indemnification by the Company................................. 14
7.2 Indemnification by Designated Holders.......................... 15
7.3 Conduct of Indemnification Proceedings......................... 15
7.4 Contribution................................................... 16
ARTICLE VIII COVENANTS........................................................... 17
8.1 Rule 144....................................................... 17
8.2 ▇▇▇▇▇▇▇▇▇▇▇ and Blackstone Priority of Sale.................... 17
ARTICLE IX MISCELLANEOUS......................................................... 17
9.1 Recapitalizations, Exchanges, etc.............................. 17
9.2 No Inconsistent Agreements..................................... 18
66
9.3 Remedies....................................................... 18
9.4 Notices........................................................ 18
9.5 Successors and Assigns; Third Party Beneficiaries.............. 20
9.6 Amendments and Waivers......................................... 20
9.7 Counterparts................................................... 20
9.8 Headings....................................................... 20
9.9 GOVERNING LAW.................................................. 20
9.10 Severability................................................... 20
9.11 Rules of Construction.......................................... 21
9.12 Entire Agreement............................................... 21
9.13 Further Assurances............................................. 21
9.14 Other Agreements............................................... 21
67
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated , 2001, by and among
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, a Delaware corporation (the "COMPANY"), Heartland
Industrial Partners, L.P. ("Heartland") and the other investor stockholders
listed on Schedule 1 hereto (together with Heartland, the "INVESTORS"),
Blackstone Capital Company II, L.L.C. ("BLACKSTONE CAPITAL II"), Blackstone
Family Investment Partnership I L.P. ("BLACKSTONE FAMILY"), Blackstone Advisory
Directors Partnership L.P. ("BLACKSTONE ADVISORY") and Blackstone Capital
Partners, L.P. ("BLACKSTONE CAPITAL") (together with Blackstone Capital II,
Blackstone Family and Blackstone Advisory, "BLACKSTONE") and ▇▇▇▇▇▇▇▇▇▇▇/C&A
Holdings, L.L.C. ("▇▇▇▇▇▇▇▇▇▇▇," together with Blackstone, the "ORIGINAL
STOCKHOLDERS").
WHEREAS, pursuant o the Share Purchase Agreement, dated
January , 2001 (the "COMPANY STOCK PURCHASE AGREEMENT"), by and between the
Company and Heartland, the Company is selling to the Investors (x) an aggregate
of 1,000,000 shares of Non-Voting Convertible Preferred Stock, par value $.01
per share (the "CONVERTIBLE PREFERRED SHARES"), which is convertible into
16,400,000 shares of Common Stock, par value $ 0.01 per share, of the Company
(the "COMMON STOCK") and (y) 8,600,000 shares (the "Treasury Shares") of Common
Stock.
WHEREAS, pursuant to the Stock Purchase Agreement, dated
January , 2001 (the "SECONDARY STOCK PURCHASE AGREEMENT" and, together with the
Company Stock Purchase Agreement, the "STOCK PURCHASE AGREEMENTS"), the Original
Stockholders are selling to the Investors an aggregate of 27,000,000 shares of
Common Stock;
WHEREAS, concurrently herewith, the Company, the Investors and
the Original Stockholders are entering into the Stockholders Agreement (as
hereinafter defined), pursuant to which the parties thereto have agreed to,
among other things, certain first offer and tag-along rights, preemptive rights
and certain corporate governance rights and obligations; and
WHEREAS, in order to induce each of the Investors to purchase
its shares of Common Stock as provided in the Stock Purchase Agreements, and to
induce the parties hereto to enter into the Stockholders Agreement, the Company
has agreed to grant registration rights with respect to the Registrable
Securities (as hereinafter defined) as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"AFFILIATE" has the meaning specified in the Stockholders
Agreement.
"AGREEMENT" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"APPROVED UNDERWRITER" has the meaning set forth in Section
3.6.
"BLACKSTONE HOLDERS OR STOCKHOLDERS" means Blackstone and its
Permitted Transferees and Partner Transferees to whom Registrable Securities are
transferred in accordance with Section 2.2 of the Stockholders Agreement and
Section 9.5 of this Agreement.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"COMMISSION" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
"COMMON STOCK" has the meaning set forth in the preamble to
this Agreement or any other capital stock of the Company into which such stock
is reclassified or reconstituted and any other common stock of the Company and
shall include the Convertible Preferred Shares for all purposes of this
Agreement, whether or not converted.
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY UNDERWRITER" has the meaning set forth in Section
4.1.
"CONVERTIBLE PREFERRED SHARES" has the meaning set forth in
the preamble to this Agreement.
"DEMAND REGISTRATION" has the meaning set forth in Section
3.1.
"DESIGNATED HOLDER" means each of the Investors, the Major
Stockholders and any transferee of any of them to whom Registrable Securities
have been transferred in accordance with Section 9.5, other than a transferee to
whom Registrable Securities have been transferred pursuant to a Registration
Statement under the Securities Act or Rule 144 or Regulation S under the
Securities Act (or any successor rule thereto).
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"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission thereunder.
"HEARTLAND" has the meaning set forth in the preamble to this
Agreement.
"HEARTLAND ENTITIES" has the meaning ascribed thereto in the
Stockholders Agreement.
"HOLDER'S COUNSEL" has the meaning set forth in Section
6.1(a).
"INCIDENTAL REGISTRATION" has the meaning set forth in Section
4.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.3.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.3.
"INITIATING HOLDERS" has the meaning set forth in Section 3.1.
"INSPECTOR" has the meaning set forth in Section 6.1(g).
"INVESTORS" has the meaning set forth in the preamble to this
Agreement.
"INVESTOR STOCKHOLDERS" means each Investor and any Permitted
Transferee thereof to whom Registrable Securities are transferred in accordance
with Section 2.2 of the Stockholders Agreement and Section 9.5 of this
Agreement.
"LIABILITY" has the meaning set forth in Section 7.1.
"MAJOR STOCKHOLDERS" means each Original Stockholder and any
Permitted Transferee or Partner Transferee thereof to whom Registrable
Securities are transferred in accordance with Section 2.2 of the Stockholders
Agreement and Section 9.5 of this Agreement.
"MAJORITY OF THE INVESTOR STOCKHOLDERS" means the Investor
Stockholders holding a majority of the Registrable Securities held by all
Investor Stockholders.
"MAJORITY OF BLACKSTONE STOCKHOLDERS" means the Blackstone
Stockholders holding a majority of the Registrable Securities held by all
Blackstone Stockholders.
"MAJORITY OF ▇▇▇▇▇▇▇▇▇▇▇ STOCKHOLDERS" means the ▇▇▇▇▇▇▇▇▇▇▇
Stockholders holding a majority of the Registrable Securities held by all
▇▇▇▇▇▇▇▇▇▇▇ Stockholders.
"NASD" means the National Association of Securities Dealers,
Inc.
"PARTNER TRANSFEREE" has the meaning ascribed to such term in
the Stockholders Agreement.
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"PERMITTED TRANSFEREE" has the meaning ascribed to such term
in the Stockholders Agreement.
"PERSON" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
"RECORDS" has the meaning set forth in Section 6.1(g).
"REGISTRABLE SECURITIES" means, subject to Section 2.2, each
of the following: (a) any and all shares of Common Stock owned by the Designated
Holders and (b) any shares of Common Stock issued or issuable to any of the
Designated Holders with respect to the Registrable Securities by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and
any shares of Common Stock or voting common stock issuable upon conversion,
exercise or exchange thereof.
"REGISTRATION EXPENSES" has the meaning set forth in Section
6.4.
"REGISTRATION STATEMENT" means a registration statement filed
pursuant to the Securities Act.
"SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"VALID BUSINESS REASON" has the meaning set forth in Section
3.1.
"▇▇▇▇▇▇▇▇▇▇▇ HOLDERS OR STOCKHOLDERS" means ▇▇▇▇▇▇▇▇▇▇▇ and
its Permitted Transferees and Partner Transferees to whom Registrable Securities
are transferred in accordance with Section 2.2 of the Stockholders Agreement and
Section 9.5 of this Agreement.
Any terms not defined herein shall have the meanings ascribed
thereto in the Stockholders Agreement.
ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT
2.1 GRANT OF RIGHTS. The Company hereby grants registration rights
to the Designated Holders upon the terms and conditions set forth in this
Agreement.
2.2 REGISTRABLE SECURITIES. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such securities has been declared effective
under the Securities Act
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by the Commission and such securities have been disposed of pursuant to such
effective Registration Statement or (ii) (x) with respect to a Designated
Holder, the entire amount of such Designated Holder's Registrable Securities may
be sold in a single sale, in the opinion of counsel satisfactory to the Company
and the Designated Holder, each in their reasonable judgment, without any
limitation as to volume pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act and (y) the Designated Holder owning such
Registrable Securities owns less than one percent (1%) of the outstanding shares
of Common Stock on a fully diluted basis.
2.3 HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option to purchase, or a security convertible into or
exercisable or exchangeable for, Registrable Securities whether or not such
acquisition or conversion has actually been effected. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
ARTICLE III
DEMAND REGISTRATION
3.1 REQUEST FOR DEMAND REGISTRATION. Blackstone or Blackstone
Holders designated by Blackstone (the "Initiating Blackstone Holders"),
▇▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇▇▇ Holders designated by ▇▇▇▇▇▇▇▇▇▇▇ (the "INITIATING
▇▇▇▇▇▇▇▇▇▇▇ HOLDERS"), and Heartland or an Investor Stockholder designated by
the Heartland Entities (the "INITIATING INVESTOR HOLDERS," each of the
Initiating Blackstone Holders, the Initiating ▇▇▇▇▇▇▇▇▇▇▇ Holders and the
Initiating Investor Holders shall be known as the "INITIATING HOLDERS," as
appropriate), may each make a written request to the Company to register, and
the Company shall register, under the Securities Act (other than pursuant to a
Registration Statement on Form S-4 or S-8 or any successor thereto) a "DEMAND
REGISTRATION", the number of Registrable Securities stated in such request;
PROVIDED, HOWEVER, that the Company shall not be obligated to effect (x) more
than four (4) such Demand Registrations at the request of Initiating Investor
Holders, and (y) in the aggregate not more than four (4) such Demand
Registrations at the request of Initiating Blackstone and Initiating ▇▇▇▇▇▇▇▇▇▇▇
Holders: two of which shall be at the request of Initiating Blackstone Holders
and two of which shall be at the request of Initiating ▇▇▇▇▇▇▇▇▇▇▇ Holders. For
purposes of the preceding sentence, two or more Registration Statements filed in
response to one demand shall be counted as one Demand Registration; provided,
however, that any such Registration Statement filed at the request of an
Initiating Holder and subsequently withdrawn at the request of that Initiating
Holder shall be counted as a Demand Registration unless the withdrawing
Initiating Holder pays the expenses associated with such Registration Statement
in which case such Registration shall not be so counted. Notwithstanding
anything to the contrary contained herein, no Demand Registration need be
effected by the Company within six (6) months after the
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effectiveness of any registration statement pursuant to a Demand Registration.
The Company shall not be obliged to include more than 10 million Shares (as
equitably adjusted for stock splits, stock combinations and similar events) in
any Registration Statement pursuant to a Demand Registration, inclusive of any
Shares to be included pursuant to any incidental or piggy-back rights under this
Agreement. If the Board of Directors, in its good faith judgment, determines
that any registration of Registrable Securities should not be made or continued
because it would materially interfere with any material financing, acquisition,
corporate reorganization or merger or other material transaction involving the
Company (a "VALID BUSINESS REASON"), the Company may (x) postpone filing a
registration statement relating to a Demand Registration until such Valid
Business Reason no longer exists, but in no event for more than ninety (90)
days, and (y) in case a registration statement has been filed relating to a
Demand Registration, if the Valid Business Reason has not resulted from actions
taken by the Company, the Company, upon the approval of a majority of the Board
of Directors, such majority to include at least one Investor Director and the
Blackstone Director, if applicable, and the ▇▇▇▇▇▇▇▇▇▇▇ Director, if applicable,
may cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration
statement. The Company shall give written notice of its determination to
postpone or withdraw a registration statement and of the fact that the Valid
Business Reason for such postponement or withdrawal no longer exists, in each
case, promptly after the occurrence thereof. Notwithstanding anything to the
contrary contained herein, the Company may not postpone or withdraw a filing
under this Section 3.1 more than once in any twelve (12) month period. Each
request for a Demand Registration by the Initiating Holders shall state the
amount of the Registrable Securities proposed to be sold and the intended method
of disposition thereof.
3.2 INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO A DEMAND
REGISTRATION. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3.1) may offer its or his
Registrable Securities under any Demand Registration pursuant to this Section
3.2. Within five (5) Business Days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3.1) and (ii) subject to
Section 3.5, include in such registration all of the Registrable Securities held
by such Designated Holders from whom the Company has received a written request
for inclusion therein within ten (10) days of the receipt by such Designated
Holders of such written notice referred to in clause (i) above. Each such
request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered. The failure of any Designated Holder to
respond within such 10-day period referred to in clause (ii) above shall be
deemed to be a waiver of such Designated Holder's rights under this Article III
with respect to such Demand Registration. Any Designated Holder may waive its
rights under this Article III prior to the expiration of such 10-day period by
giving written notice to the Company, with a copy to the Initiating Holders. If
a Designated Holder sends the Company a written request for inclusion of part or
all of such Designated Holder's Registrable Securities in a registration, such
Designated Holder shall not be entitled to withdraw or revoke such request
without the prior written consent of the Company in its sole discretion unless,
as a result of facts or circumstances arising
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after the date on which such request was made relating to the Company or to
market conditions, such Designated Holder reasonably determines that
participation in such registration would have a material adverse effect on such
Designated Holder.
3.3 EFFECTIVE DEMAND REGISTRATION. The Company shall use its
reasonable best efforts to cause any such Demand Registration to become
effective not later than sixty (60) days after it receives a request under
Section 3.1 hereof. A registration shall not constitute a Demand Registration
until it has become effective and remains continuously effective for the shorter
of (i) 90 days and (ii) the period during which all Registrable Securities
registered in the Demand Registration are sold; PROVIDED, HOWEVER, that a
registration shall not constitute a Demand Registration if (x) after such Demand
Registration has become effective, such registration or the related offer, sale
or distribution of Registrable Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Initiating
Holders and such interference is not thereafter eliminated or (y) the conditions
specified in the underwriting agreement, if any, entered into in connection with
such Demand Registration are not satisfied or waived, other than by reason of a
failure by the Initiating Holder or (z) the Company exercises its rights of
postponement, termination or withdrawal under Section 3.1.
3.4 EXPENSES. The Company shall pay all Registration Expenses in
connection with a Demand Registration, whether or not such Demand Registration
becomes effective.
3.5 UNDERWRITING PROCEDURES. If the Company or the Initiating
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders so elect, the Company shall use its reasonable best efforts
to cause such Demand Registration to be in the form of a firm commitment
underwritten offering and the managing underwriter or underwriters selected for
such offering shall be the Approved Underwriter selected in accordance with
Section 3.6. In connection with any Demand Registration under this Article III
involving an underwritten offering, none of the Registrable Securities held by
any Designated Holder making a request for inclusion of such Registrable
Securities pursuant to Section 3.2 hereof shall be included in such underwritten
offering unless such Designated Holder accepts the terms of the offering as
agreed upon by the Company, the Initiating Holders and the Approved Underwriter
(including execution of an escrow agreement and/or a power of attorney with
respect to the disposition of the Registrable Securities), and then only in such
quantity as will not, in the opinion of the Approved Underwriter, jeopardize the
success of such offering by the Initiating Holders. If the Approved Underwriter
advises the Company that the aggregate amount of such Registrable Securities
requested to be included in such offering is sufficiently large to have a
material adverse effect on the success of such offering, then the Company shall
include in such registration only the aggregate amount of Registrable Securities
that the Approved Underwriter believes may be sold without any such material
adverse effect and shall reduce the amount of Registrable Securities to be
included in such registration, first as to the Company and any holder of capital
stock of the Company who is not a Designated Holder, second as to the Investors
as a group, pro rata based on
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the number of Registrable Securities owned by each Investor and third as to
Blackstone Holders and ▇▇▇▇▇▇▇▇▇▇▇ Holders as a group, pro rata based on the
number of Registrable Securities then owned by each.
3.6 SELECTION OF UNDERWRITERS. If any Demand Registration, as the
case may be, of Registrable Securities is in the form of an underwritten
offering, the Company shall select and obtain an investment banking firm of
national reputation to act as the managing underwriter of the offering (the
"Approved Underwriter"); provided, however, that the Approved Underwriter shall,
in any case, also be approved by the Initiating Holders such approval not to be
unreasonably withheld.
ARTICLE IV
INCIDENTAL OR "PIGGY-BACK" REGISTRATION
4.1 REQUEST FOR INCIDENTAL REGISTRATION. If the Company proposes
to file a Registration Statement under the Securities Act with respect to an
offering by the Company for its own account (other than a Registration Statement
on Form S-4 or S-8 or any successor thereto) (a "COMPANY OFFERING") or for the
account of any stockholder of the Company other than the Designated Holders
(each such Stockholder, a "NON-DESIGNATED STOCKHOLDER" and such offering a
"NON-DESIGNATED STOCKHOLDER OFFERING"), then the Company shall give written
notice of such proposed filing to each of the Designated Holders at least ten
(10) Business Days before the anticipated filing date, and such notice shall
describe the proposed registration and distribution and offer such Designated
Holders the opportunity to register the number of Registrable Securities as each
such Designated Holder may request (an "INCIDENTAL REGISTRATION"). The Company
shall use its reasonable best efforts to cause the managing underwriter or
underwriters in the case of a proposed underwritten offering (the "COMPANY
UNDERWRITER") to permit each of the Designated Holders who have requested in
writing to participate in the Incidental Registration to include its or his
Registrable Securities in such offering on the same terms and conditions as the
securities of the Company or the securities of such Non-Designated Stockholders,
as the case may be, included therein. In connection with any Incidental
Registration under this Section 4.1 involving an underwritten offering, the
Company shall not be required to include any Registrable Securities in such
underwritten offering unless the Designated Holders thereof accept the terms of
the underwritten offering as agreed upon between the Company, such
Non-Designated Stockholders, if any, and the Company Underwriter (including
execution of an escrow agreement and/or a power of attorney with respect to the
disposition of the Registrable Securities), and then only in such quantity as
the Company Underwriter believes will not jeopardize the success of the offering
by the Company. If the Company Underwriter determines that the registration of
all or part of the Registrable Securities which the Designated Holders have
requested to be included would materially adversely affect the success of such
offering, then the Company shall be required to include in such Incidental
Registration, to the extent of the amount that the Company Underwriter believes
may be sold without causing such adverse effect, (i) in the case of a Company
Offering: FIRST, all of the securities to be offered for the account of the
Company; SECOND, the Registrable Securities to be offered for the account of
Blackstone Holders and ▇▇▇▇▇▇▇▇▇▇▇ Holders, pro rata based on the
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number of Registrable Securities then owned by each; and THIRD, any other
securities requested to be included in such offering by the Investors and any
other Person pro rata based on the number of Registrable Securities then owned
by each; and (ii) in the case of a Non-Designated Stockholder Offering: FIRST,
the Registrable Securities to be offered for the account of Blackstone Holders
and ▇▇▇▇▇▇▇▇▇▇▇ Holders pro rata based on the number of Registrable Securities
owned by each; SECOND, all of the securities to be offered for the account of
the Company, such Non-Designated Stockholder and the Investors pro rata based on
the number of securities then owned by each. Nothing in this Section 4.1 shall
create any liability on the part of the Company or any other person to the
Designated Holders if the Company, for any reason, decides not to file a
Registration Statement proposed to be filed pursuant to this Section 4.1 or to
withdraw such Registration Statement subsequent to its filing, regardless of any
action whatsoever that a Designated Holder may have taken, whether as a result
of the issuance by the Company of any notice under this Section 4.1 or
otherwise.
4.2 EXPENSES. The Company shall bear all Registration Expenses in
connection with any Incidental Registration pursuant to this Article IV, whether
or not such Incidental Registration becomes effective.
ARTICLE V
HOLDBACK AGREEMENTS
5.1 RESTRICTIONS ON PUBLIC SALE BY DESIGNATED HOLDERS. To the
extent requested (A) by the Company or the Initiating Holders, as the case may
be, in the case of a non-underwritten public offering and (B) by the Approved
Underwriter or the Company Underwriter, as the case may be, in the case of an
underwritten public offering, each Designated Holder of Registrable Securities
agrees (x) not to effect any sale or distribution of any Registrable Securities
or of any securities convertible into or exchangeable or exercisable for such
Registrable Securities, including a sale pursuant to Rule 144 under the
Securities Act, or offer to sell, contract to sell (including without limitation
any short sale), grant any option to purchase or enter into any hedging or
similar transaction with the same economic effect as a sale of Registrable
Securities and (y) not to make any request for a Demand Registration under this
Agreement, during the one hundred-twenty (120) day period or such shorter
period, if any, agreed to by the requesting party beginning on the effective
date of such Registration Statement (except as part of such registration). No
Designated Holder of Registrable Securities subject to this Section 5.1 shall be
released from any obligation under any agreement, arrangement or understanding
entered into pursuant to this Section 5.1 except to the extent all other
Designated Holders of Registrable Securities subject to the same obligation are
also released.
5.2 RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees
not to effect any sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on Form S-4 or S-8 or any successor thereto),
during the period beginning on the effective date of any Registration Statement
in which the Designated Holders of
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Registrable Securities are participating and ending on the earlier of (i) the
date on which all Registrable Securities registered on such Registration
Statement are sold and (ii) one hundred-twenty (120) days after the effective
date of such Registration Statement (except as part of such registration).
ARTICLE VI
REGISTRATION PROCEDURES
6.1 OBLIGATIONS OF THE COMPANY. Whenever registration of
Registrable Securities has been requested pursuant to Article III or Article IV
of this Agreement, the Company shall use its reasonable best efforts to effect
the registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request, the Company shall, as expeditiously as
possible:
(a) prepare and file with the Commission a Registration
Statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
sale of such Registrable Securities in accordance with the intended method of
distribution thereof, and use its reasonable best efforts to cause such
Registration Statement to become effective; PROVIDED, HOWEVER, that (x) before
filing a Registration Statement or prospectus or any amendments or supplements
thereto, the Company shall provide counsel selected by the Designated Holders
holding a majority of the Registrable Securities being registered in such
registration ("HOLDERS' COUNSEL") and any other Inspector with a reasonably
adequate and appropriate opportunity to review and comment on such Registration
Statement and each prospectus included therein (and each amendment or supplement
thereto) to be filed with the Commission, subject to such documents being under
the Company's control, and (y) the Company shall notify the Holders' Counsel and
each seller of Registrable Securities of any stop order issued or threatened by
the Commission and take all action required to prevent the entry of such stop
order or to remove it if entered;
(b) prepare and file with the Commission such amendments
and supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective for the lesser of (x) 90 days and (y) such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
(c) furnish to each seller of Registrable Securities,
prior to filing a Registration Statement, at least one copy of such Registration
Statement as is proposed to be filed, and thereafter such number of copies of
such Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
Registration Statement (including each
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preliminary prospectus) and any prospectus filed under Rule 424 under the
Securities Act as each such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) register or qualify such Registrable Securities under
such other securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may reasonably request, and to continue such
qualification in effect in such jurisdiction for as long as required pursuant to
the laws of such jurisdiction, or for as long as any such seller reasonably
requests or until all of such Registrable Securities are sold, whichever is
shortest, and do any and all other acts and things which may be reasonably
necessary or advisable to enable any such seller to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such seller;
PROVIDED, HOWEVER, that the Company shall not be required to (x) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6.1(d), (y) subject itself to taxation
in any such jurisdiction or (z) consent to general service of process in any
such jurisdiction;
(e) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and the
Company shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller of Registrable Securities a reasonable number of copies
of such supplement to or an amendment of such prospectus as may be necessary so
that, after delivery to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(f) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Article III
or Article IV, as the case may be) and take such other actions as are prudent
and reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
(g) make available at reasonable times for inspection by
any seller of Registrable Securities, any managing underwriter participating in
any disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent retained
by any such seller or any managing underwriter (each, an "INSPECTOR" and
collectively, the "INSPECTORS"), all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(collectively, the "RECORDS") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's and its
subsidiaries officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in
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connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (and the
Inspectors shall confirm their agreement in writing in advance to the Company if
the Company shall so request) unless (x) the disclosure of such Records is
necessary, in the Company's judgment, to avoid or correct a misstatement or
omission in the Registration Statement, (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction after exhaustion of all appeals therefrom or (z) the information in
such Records was known to the Inspectors on a non-confidential basis prior to
its disclosure by the Company or has been made generally available to the
public. Each seller of Registrable Securities agrees that it shall, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(h) if such sale is pursuant to an underwritten offering,
cause to be delivered "cold comfort" letters dated the effective date of the
registration statement and the date of the closing under the underwriting
agreement from the Company's independent public accountants in customary form
and covering such matters of the type customarily covered by "cold comfort"
letters as Holders' Counsel or the managing underwriter reasonably requests;
(i) if such sale is pursuant to an underwritten offering,
cause to be furnished, at the request of any seller of Registrable Securities on
the date such securities are delivered to the underwriters for sale pursuant to
such registration or, if such securities are not being sold through
underwriters, on the date the Registration Statement with respect to such
securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the seller making such request, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as the underwriters, if any, and such seller may reasonably request
and are customarily included in such opinions;
(j) comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable but no later than fifteen (15) months after the effective
date of the Registration Statement, an earnings statement covering a period of
twelve (12) months beginning after the effective date of the Registration
Statement, in a manner which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed, PROVIDED that the applicable listing requirements are satisfied;
(l) keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Article III or Article IV
hereunder;
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(m) cooperate with each seller of Registrable Securities
and each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD;
(n) make officers available to participate in customary
road shows and other informational meetings as reasonably requested by any
Approved Underwriter or Company Underwriter (it being understood that the
Company, in its discretion, may require that there be "road shows" and other
informational meetings in connection with a Demand Registration); and
(o) take all other steps reasonably necessary to effect
the registration of the Registrable Securities contemplated hereby.
6.2 SELLER INFORMATION. (a) It shall be a condition precedent to
the obligation of the Company to include any Registrable Securities of any
Designated Holder in a Registration Statement pursuant to this Agreement that
the Designated Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it, any other securities of the
Company held by it, and the intended method of disposition of such Registrable
Securities as shall be required to effect the registration of the Registrable
Securities held by such Designated Holder, including, without limitation, all
information required to be disclosed in order to make the information previously
furnished to the Company by such Designated Holder not materially misleading or
necessary to cause such Registration Statement not to omit a material fact with
respect to such Designated Holder necessary in order to make the statements
therein not misleading. Any such Information shall be provided to the Company
within any reasonable time period requested by the Company.
(b) Each Designated Holder shall notify the Company, at
any time when a prospectus is required to be delivered under applicable law, of
the happening of any event as a result of which the prospectus included in the
applicable Registration Statement, as then in effect, in each case only with
respect to information provided by such Holder, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing. Such Designated Holder shall immediately upon the
happening of any such event cease using such prospectus.
6.3 NOTICE TO DISCONTINUE. Each Designated Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 6.1(e) or 6.2(b), such Designated Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such
Designated Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.1(e) and, if so directed by the Company,
such Designated Holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Designated Holder's
possession, of the prospectus covering such Registrable Securities which is
current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be
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maintained effective pursuant to this Agreement (including, without limitation,
the period referred to in Section 6.1(b)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6.1(e) to and including the date when sellers of such Registrable
Securities under such Registration Statement shall have received the copies of
the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 6.1(e).
6.4 REGISTRATION EXPENSES. The Company shall pay all expenses
arising from or incident to its performance of, or compliance with, this
Agreement, including, without limitation, (i) Commission, stock exchange and
NASD registration and filing fees, (ii) all fees and expenses incurred in
complying with securities or "blue sky" laws (including reasonable fees, charges
and disbursements of counsel to any underwriter incurred in connection with
"blue sky" qualifications of the Registrable Securities as may be set forth in
any underwriting agreement), (iii) all printing, messenger and delivery
expenses, (iv) the fees, charges and disbursements of counsel to the Company and
of its independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification), (v) the reasonable fees, charges
and disbursements of one counsel to all Designated Holders not to exceed $35,000
and (vi) any liability insurance or other premiums for insurance obtained in
connection with any Demand Registration or piggy-back registration thereon or
Incidental Registration pursuant to the terms of this Agreement, regardless of
whether such Registration Statement is declared effective. All of the expenses
described in the preceding sentence of this Section 6.4 are referred to herein
as "REGISTRATION EXPENSES." The Designated Holders of Registrable Securities
sold pursuant to a Registration Statement shall bear the expense of any broker's
commission, underwriter's discount or commission or transfer taxes relating to
registration and sale of such Designated Holders Registrable Securities and,
subject to clause (v) above, shall bear the fees and expenses of their own
counsel.
ARTICLE VII
INDEMNIFICATION; CONTRIBUTION
7.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Designated Holder, its partners, directors,
officers, affiliates and each Person who controls (within the meaning of Section
15 of the Securities Act) such Designated Holder from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) (each, a "LIABILITY" and collectively, "LIABILITIES"), arising
out of or based upon any untrue, or allegedly untrue, statement of a material
fact contained in any Registration Statement, prospectus or preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading under the
circumstances such statements were made, except insofar as such Liability (i)
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or
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alleged omission contained in such Registration Statement, preliminary
prospectus or final prospectus in reliance and in conformity with information
concerning such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to Section 6.2, or (ii) is caused
by any failure by the Designated Holder to deliver a prospectus or preliminary
prospectus (or amendment or supplement thereto) as and when required under the
Securities Act after such prospectus has been timely furnished by the Company .
The Company shall also provide customary indemnities to any underwriters of the
Registrable Securities, their officers, directors and employees and each Person
who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
7.2 INDEMNIFICATION BY DESIGNATED HOLDERS. Each Designated Holder
agrees to indemnify and hold harmless the Company, any underwriter retained by
the Company, each of their respective officers, directors and affiliates and
each Person who controls the Company or such underwriter (within the meaning of
Section 15 of the Securities Act) to the same extent as the foregoing indemnity
from the Company to the Designated Holders, but only if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with information with respect to such Designated Holder furnished
in writing to the Company by such Designated Holder expressly for use in such
registration statement or prospectus, including, without limitation, the
information furnished to the Company pursuant to Section 6.2; PROVIDED, HOWEVER,
that the total amount to be indemnified by such Designated Holder pursuant to
Section 6.2 shall be limited to the net proceeds received by such Designated
Holder in the offering to which the Registration Statement or prospectus
relates.
7.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder (the "INDEMNIFIED PARTY") agrees to give prompt
written notice to the indemnifying party (the "INDEMNIFYING PARTY") after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; PROVIDED, HOWEVER, that the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any Liability
that it may have to the Indemnified Party hereunder (except to the extent that
the Indemnifying Party is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense
of such action with counsel reasonably satisfactory to the Indemnified Party or
(iii) the named parties to any such
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action (including any impleaded parties) include both the Indemnifying Party and
the Indemnified Party and such parties have been advised by such counsel that
either (x) representation of such Indemnified Party and the Indemnifying Party
by the same counsel would be inappropriate under applicable standards of
professional conduct or (y) there may be one or more legal defenses available to
the Indemnified Party which are different from or additional to those available
to the Indemnifying Party. In any of such cases, the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Indemnified Parties. No
Indemnifying Party shall be liable for any settlement entered into without its
written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the consent of such Indemnified Party, which
consent shall not be unreasonably withheld, effect any settlement of any pending
or threatened proceeding in respect of which such Indemnified Party is a party
and indemnity has been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability for claims that are the subject matter of such proceeding.
7.4 CONTRIBUTION. If the indemnification provided for in this
Article 7 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Liabilities referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions which resulted in such Liabilities, as well as any other relevant
equitable considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Liabilities referred to above shall be
deemed to include, subject to the limitations set forth in Sections 7.1, 7.2 and
7.3, any legal or other fees, charges or expenses reasonably incurred by such
party in connection with any investigation or proceeding; PROVIDED that the
total amount to be contributed by such Designated Holder shall be limited to the
net proceeds received by such Designated Holder in the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
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ARTICLE VIII
COVENANTS
8.1 RULE 144. The Company covenants that it shall (a) file any
reports required to be filed by it under the Exchange Act and (b) take such
further action as each Designated Holder of Registrable Securities may
reasonably request (including providing any information necessary to comply with
Rule 144 under the Securities Act), all to the extent required from time to time
to enable such Designated Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or Regulation S under the Securities Act or (ii) any similar
rules or regulations hereafter adopted by the Commission. The Company shall,
upon the request of any Designated Holder of Registrable Securities, deliver to
such Designated Holder a written statement as to whether it has complied with
such requirements.
8.2 ▇▇▇▇▇▇▇▇▇▇▇ AND BLACKSTONE PRIORITY OF SALE. Notwithstanding
anything to the contrary set forth in this Agreement, in the event of any
offering of Common Stock, whether pursuant to a public offering, private
placement or other exempt sale in which Blackstone Holders and/or ▇▇▇▇▇▇▇▇▇▇▇
Holders, on the one hand, and any other stockholder of the Company (including,
without limitation, any Investor), on the other hand, desire or intend to sell
Common Stock, Blackstone Holders and ▇▇▇▇▇▇▇▇▇▇▇ Holders, pro rata based on the
number of shares of Common Stock then owned by each, shall have an absolute
right to sell prior to the right of any other such holder. The foregoing rights
of priority will not preclude the grant by the Company of any demand or
piggyback rights to any other person that do not conflict with the provisions of
this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of common stock of the
Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of
assets or otherwise) to enter into a new registration rights agreement with the
Designated Holders on terms substantially the same as this Agreement as a
condition of any such transaction.
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9.2 NO INCONSISTENT AGREEMENTS. The Company represents and
warrants that it has not granted to any Person the right to request or require
the Company to register any securities issued by the Company, other than the
rights granted to the Designated Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement or grant any
additional registration rights to any Person or with respect to any securities
which are not Registrable Securities which are prior in right to or inconsistent
with the rights granted in this Agreement.
9.3 REMEDIES. The Designated Holders, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of their rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for specific performance the
defense that a remedy at law would be adequate.
9.4 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be made
by telecopier, courier service or personal delivery:
(a) if to the Company:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. General Counsel
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(b) if to Heartland:
Heartland Industrial Partners, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(c) if to any Blackstone Holders:
Blackstone Capital Partners L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(d) if to ▇▇▇▇▇▇▇▇▇▇▇:
Wasserstein, Perella Management Partners
1301 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by
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courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 9.4 designate another address or Person for receipt
of notices hereunder.
9.5 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto as hereinafter provided. The Demand
Registration rights and related rights of the Investor Stockholders and Major
Stockholders contained in Article III hereof, shall be with respect to any
Registrable Security that is transferred to a Permitted Transferee of an
Investor Stockholder or Major Stockholder, automatically transferred to such
transferee who agrees to be bound hereby. The incidental or "piggy-back"
registration rights of the Designated Holders contained in Section 3.2 and
Article IV hereof and the other rights of each of the Designated Holders with
respect thereto shall be, with respect to any Registrable Security,
automatically transferred to any Person who is the transferee of such
Registrable Security, but only if transferred in compliance with the
Stockholders Agreement. All of the obligations of the Company hereunder shall
survive any such transfer. Any assignment in violation of this Agreement shall
be null and void. Except as provided in Article VII, no Person other than the
parties hereto and their successors and permitted assigns is intended to be a
beneficiary of this Agreement.
9.6 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless consented to in writing by (i) the Company, (ii) a Majority of the
Investor Stockholders, (iii) a Majority of Blackstone Stockholders and (iii) a
Majority of ▇▇▇▇▇▇▇▇▇▇▇ Stockholders. Any such written consent shall be binding
upon the Company and all of the Designated Holders.
9.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.8 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
9.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.10 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not
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be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
9.11 RULES OF CONSTRUCTION. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.12 ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
9.13 FURTHER ASSURANCES. Each of the parties shall, and shall cause
their respective Affiliates to, execute such documents and perform such further
acts as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement.
9.14 OTHER AGREEMENTS. Nothing contained in this Agreement shall be
deemed to be a waiver of, or release from, any obligations any party hereto may
have under, or any restrictions on the transfer of Registrable Securities or
other securities of the Company imposed by, any other agreement including, but
not limited to, the Stock Purchase Agreements or the Stockholders Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Registration Rights Agreement on the date first
written above.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation
By:
-----------------------------------------------------
Name:
Title:
Heartland Industrial Partner, L.P.
By: Heartland Industrial Associates L.L.C.,
its general partner
By:
--------------------------------------------------
Name:
Title:
Blackstone Capital Partners L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
-----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Blackstone Advisory Directors Partnership L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
-----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Blackstone Family Investment Partnership I L.P.
By: Blackstone Management Associates I L.L.C., its
general partner
By:
-----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
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23
Blackstone Capital Company II, L.L.C.
By:
-----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇▇▇▇▇▇/C & A Holdings, L.L.C.
By:
-----------------------------------------------------
Name:
Title:
90
SCHEDULE I
INVESTORS
[To be completed prior to closing and to include only Permitted Transferees of
Heartland and other investors, subject to approval of Blackstone and
▇▇▇▇▇▇▇▇▇▇▇, not to be unreasonably withheld.]
91
Annex E
STOCKHOLDERS AGREEMENT
by and among
BLACKSTONE CAPITAL COMPANY II, L.L.C.,
HEARTLAND INDUSTRIAL PARTNERS, L.P.,
▇▇▇▇▇▇▇▇▇▇▇/C&A HOLDINGS, L.L.C.,
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
------------------------------
Dated: ____________, 2001
------------------------------
92
TABLE OF CONTENTS
PAGE #
------
ARTICLE I DEFINITIONS; TERMINATION............................................................. 2
1.1 Definitions.......................................................................... 2
1.2 Termination.......................................................................... 7
ARTICLE II TRANSFER............................................................................. 8
2.1 Limitation on Transfer............................................................... 8
2.2 Permitted Transfers.................................................................. 8
2.3 Permitted Transfer Procedures........................................................ 8
2.4 Transfers in Compliance with Law; Substitution of Transferee......................... 8
ARTICLE III RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
AFFILIATE TRANSACTIONS; ENCUMBRANCE ................................................. 9
3.1 Proposed Voluntary Transfers......................................................... 9
3.2 Involuntary Transfers................................................................ 14
3.3 Certain Transactions................................................................. 15
3.4 Prohibition on Encumbrance........................................................... 18
ARTICLE IV [Intentionally Omitted.]............................................................. 18
ARTICLE V AFTER-ACQUIRED SECURITIES; AGREEMENT TO BE BOUND..................................... 18
5.1 After-Acquired Securities............................................................ 18
5.2 Beneficial Ownership................................................................. 18
ARTICLE VI CORPORATE GOVERNANCE................................................................. 18
6.1 General.............................................................................. 18
6.2 Stockholder Actions.................................................................. 19
6.3 Election of Directors; Number and Composition........................................ 19
6.4 Removal and Replacement of Director.................................................. 20
6.5 Reimbursement of Expenses; D&O Insurance............................................. 20
6.6 Quorum............................................................................... 21
6.7 Observer Rights...................................................................... 21
ARTICLE VII COVENANTS............................................................................ 21
7.1 Financial Statements and Other Information........................................... 21
7.2 Inspection........................................................................... 22
ARTICLE VIII STOCK CERTIFICATE LEGEND............................................................. 22
ARTICLE IX MISCELLANEOUS........................................................................ 23
9.1 Notices.............................................................................. 23
9.2 Successors and Assigns; Third Party Beneficiaries.................................... 25
9.3 Amendment and Waiver................................................................. 25
9.4 Counterparts......................................................................... 25
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9.5 Specific Performance................................................................. 25
9.6 Headings............................................................................. 25
9.7 GOVERNING LAW........................................................................ 25
9.8 Severability......................................................................... 26
9.9 Rules of Construction................................................................ 26
9.10 Entire Agreement..................................................................... 26
9.11 Further Assurances................................................................... 26
EXHIBITS
A Form of Transfer Agreement (Previously issued shares)
ii
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated _____________, 2001, by and among ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ Corporation, a Delaware corporation (the "Company"), Heartland
Industrial Partners, L.P. ("Heartland") and the other investor stockholders
listed on Schedule 1 hereto (together with Heartland, the "Investors"), and
Blackstone Capital Company II, L.L.C. ("Blackstone Capital II"), Blackstone
Family Investment Partnership I L.P. ("Blackstone Family"), Blackstone Advisory
Directors Partnership L.P. ("Blackstone Advisory") and Blackstone Capital
Partners, L.P. ("Blackstone Capital") (together with Blackstone Capital II,
Blackstone Family and Blackstone Advisory, "Blackstone") and ▇▇▇▇▇▇▇▇▇▇▇/C&A
Holdings, L.L.C. ("▇▇▇▇▇▇▇▇▇▇▇," together with Blackstone, the "Original
Stockholders").
WHEREAS, pursuant to the Stock Purchase Agreement, dated January [ ],
2001, (the "Company Stock Purchase Agreement"), by and among the Company and
Heartland, the Company has agreed to issue and sell to the Investors (x) an
aggregate of 1,000,000 shares of Non-Voting Convertible Preferred Stock, par
value $0.01 per share (the "Convertible Preferred Shares"), which are
convertible into 16,400,000 shares of Common Stock, par value $0.01 per share,
of the Company (the "Common Stock") and (y) 8,600,000 shares (the "Treasury
Shares") of Common Stock.
WHEREAS, pursuant to the Stock Purchase Agreement, dated January __,
2001, (the "Original Stockholders Stock Purchase Agreement," and, together with
the Company Stock Purchase Agreement, the "Stock Purchase Agreements"), by and
among the Original Stockholders and Heartland, the Original Stockholders have
agreed to sell to the Investors an aggregate of 27,000,000 shares of Common
Stock;
WHEREAS, the Company, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc. ("C&A Group"),
Blackstone Capital and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners, L.P. entered into an
Amended and Restated Stockholders Agreement dated as of June 29, 1994 (the
"Original Stockholders Agreement");
WHEREAS, the parties hereto wish to restrict the transfer of the Shares
(as hereinafter defined) and to provide for, among other things, first offer,
tag-along and preemptive rights, corporate governance rights and obligations and
certain other rights under certain conditions;
WHEREAS, in order to induce each of the Investors to purchase its
shares of Common Stock and the Original Stockholders to enter into this
agreement, the Company has agreed to grant registration rights with respect to
the Common Stock owned by the Investors and the Original Stockholders in a
Registration Rights Agreement (the "Registration Rights Agreement"); and
WHEREAS, the Company, C&A Group, Blackstone Capital and ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Partners, L.P. wish to terminate the Original Stockholders Agreement
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2
and the Original Stockholders wish to enter into a new stockholders agreement
with the Investors.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; TERMINATION.
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" shall mean, when used with respect to any Person, any other
person which directly or indirectly beneficially owns or controls 25% or more of
the total voting power of shares of capital stock of such Person having the
right to vote for directors under ordinary circumstances, any Person
controlling, controlled by or under common control with any such Person (within
the meaning of Rule 405 of the Securities Act), and any director or executive
officer of any such person. Affiliate shall in any event include, when used with
respect to ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Co., Inc., ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Group, Inc. and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Management Partners, Inc. and, when used
with respect to Blackstone, The Blackstone Group L.P. and Blackstone Group
Holdings L.P. and the successors of any of the above.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Big Five Accounting Firm" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Deloitte & Touche
LLP, Ernst & Young LLP, KPMG Peat Marwick, LLP or PricewaterhouseCoopers, and
any of their successors.
"Blackstone" has the meaning set forth in the preamble to this
Agreement.
"Blackstone Director" has the meaning set forth in Section 6.3.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"Charter Documents" means the Restated Certificate of Incorporation and
the By-laws of the Company each as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
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3
"Common Stock" has the meaning set forth in the recitals to this
Agreement and any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"Common Stock Equivalents" means any security or obligation which is by
its terms convertible, exchangeable or exercisable into or for shares of Common
Stock, including any option, warrant or other subscription or purchase right
with respect to Common Stock and the Convertible Preferred Stock.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Option" has the meaning set forth in Section 3.1(c).
"Company Option Period" has the meaning set forth in Section 3.1(c).
"Contract Date" has the meaning set forth in Section 3.1(e).
"Convertible Preferred Stock" has the meaning set forth in the preamble
to this Agreement.
"Disinterested Members" has the meaning set forth in Section 3.3(a).
"Drag-Along Notice" has the meaning set forth in Section 3.1(g).
"Drag-Along Rightholders" has the meaning set forth in Section 3.1(g).
"Drag-Along Sellers" has the meaning set forth in Section 3.1(g).
"Excess Offered Securities" has the meaning set forth in Section
3.1(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exempt Issuances" has the meaning set forth in Section 3.3(d).
"Exempt Transfer" has the meaning set forth in Section 2.1.
"Fair Value" has the meaning set forth in Section 3.2(b).
"GAAP" means United States generally accepted accounting principles in
effect from time to time.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
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"Heartland" has the meaning set forth in the preamble.
"Heartland Entities" means Heartland Industrial Partners, L.P.,
Heartland Industrial Partners (FF), L.P., Heartland Industrial Partners (E1),
L.P., Heartland Industrial Partners (K1), L.P., Heartland Industrial Partners
(C1), L.P. and Permitted Transferees under clause (ii)(a) or (b) of the
definition of Permitted Transferees of any of the foregoing.
"Institutional Stockholder means any Stockholder that is not a natural
person (other than Sponsor).
"Investor Directors" has the meaning set forth in Section 6.3.
"Investor Selling Stockholder" has the meaning set forth in Section
3.1(f).
"Investor Stockholders" means each Investor and any Permitted
Transferee thereof to whom Shares are transferred in accordance with Section 2.2
of this Agreement, and the term "Investor Stockholder" shall mean any such
person.
"Investors" has the meaning set forth in the preamble to this
Agreement.
"Involuntary Transfer" means any transfer, proceeding or action by or
in which a Stockholder shall be deprived or divested of any right, title or
interest in or to any of the Shares, including, without limitation, (i) any
seizure under levy of attachment or execution, (ii) any transfer in connection
with bankruptcy (whether pursuant to the filing of a voluntary or an involuntary
petition under the United States Bankruptcy Code of 1978, or any modifications
or revisions thereto) or other court proceeding to a debtor in possession,
trustee in bankruptcy or receiver or other officer or agency, (iii) any transfer
to a state or to a public officer or agency pursuant to any statute pertaining
to escheat or abandoned property and (iv) any transfer pursuant to a divorce or
separation agreement or a final decree of a court in a divorce action.
"Involuntary Transferee" has the meaning set forth in Section 3.2(a).
"IT Rightholder" has the meaning set forth in Section 3.2(a).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).
"Major Stockholders" means the Original Stockholders and any Permitted
Transferee or Partner Transferee thereof to whom Shares are transferred in
accordance with Section 2.2 of this Agreement, and the term "Major Stockholder"
shall mean any such Person.
"New Issuance Notice" has the meaning set forth in Section 3.3(d).
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"New Securities" has the meaning set forth in Section 3.3.(d).
"Offer Price" has the meaning set forth in Section 3.1(a).
"Offered Securities" has the meaning set forth in Section 3.1(a).
"Offering Notice" has the meaning set forth in Section 3.1(a).
"Offering Stockholders" has the meaning set forth in the preamble.
"Original Stockholders" has the meaning set forth in the preamble.
"Partner Transferee" has the meaning set forth in Section 2.2.
"Partner Transferor" has the meaning set forth in Section 2.2.
"Permitted Transferee" means:
(i) with respect to any Stockholder who is a natural person, (1) the
spouse (or another individual designated in writing by a Stockholder who has no
spouse), parent or any lineal descendant (including by adoption and
stepchildren) of such Stockholder, (2) any trust of which such Stockholder is
the trustee and which is established solely for the benefit of any of the
foregoing individuals, (3) any charitable foundation selected by such
Stockholder, or (4) any partnership, all of the general partner(s) and limited
partner(s) (if any) of which are one or more Persons identified in this clause
(i), provided that, in the case of clause (1), (2), (3) or (4), such Person
executes a Transfer Agreement;
(ii) with respect to Sponsor, (a) any Person which is an Affiliate of
Sponsor on the date hereof, (b) any controlled Affiliate of Sponsor, (c) any
investor in Sponsor in connection with a pro rata distribution of shares of
Common Stock to all investors in Sponsor at the time of the expiration or
termination of the fund or any Affiliate of such investor, or (d)(1) any Person
to whom Sponsor transfers any of its Shares within a year of the date hereof; or
(2) any partner or member of any investment fund of Sponsor to whom the Sponsor
transfers any of its Shares after the first anniversary hereof for a price of
$5.00 or less per Share (equitably adjusted for stock splits, stock combinations
and similar events) plus an amount payable to reflect any retention by Sponsor
or its Affiliates of liability to make payments under the Profit Participation
Agreement; provided that, in the case of clauses (d)(1) and (d)(2), immediately
after such transfer, the Sponsor will own at least 50% of the Shares owned by
the Sponsor on the date hereof after giving effect to the transactions
contemplated by the Stock Purchase Agreements; provided that, in the case of
clause (a), (b), (c) or (d) any such transferee executes a Transfer Agreement;
(iii) with respect to any Institutional Stockholder, (a) any Affiliate
of such Institutional Stockholder, (b) any investor of such Institutional
Stockholder that is an investment fund in connection with a pro rata
distribution of shares of Common Stock to all investors (a "Stockholder
Investor" or collectively "Stockholder Investors") in such
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Institutional Stockholder at the time of the expiration or termination of the
fund, or (c) any Person acquiring all or substantially all of the investment
portfolio of such Institutional Stockholder provided, that, in the case of
clause (a), (b) or (c), all such investors execute a Transfer Agreement; and
(iv) with respect to any Stockholder, any institutional lender to which
such Stockholder pledges or grants a security interest in shares of Common Stock
in a bona fide transaction effected in good faith provided that (a) such pledgee
executes a Transfer Agreement and (b) prior to any subsequent foreclosure or
sale of such shares or any transfer resulting from such foreclosure is effected,
the provisions of Article III must be satisfied.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Profit Participation Agreement" means the Profit Participation
Interest Agreement, dated the date hereof, any Heartland, Blackstone,
▇▇▇▇▇▇▇▇▇▇▇ and the Company.
"Proportionate Percentage" has the meaning set forth in Section 3.3(d).
"Proposed Price" has the meaning set forth in Section 3.3(d).
"Qualified Investor" means an Investor designated by Heartland who (x),
together with its Affiliates, at or prior to any date of determination, has made
an aggregate cash investment in Common Stock of the Company equal to at least
$25.0 million (based upon the original cost of such investment) or (y) owns,
together with its Direct Permitted Transferees, at least 10% or more of the
outstanding shares of Common Stock of the Company at the date of determination.
"Registration Rights Agreement" has the meaning set forth in the
preamble.
"Rightholder(s)" has the meaning set forth in Section 3.1(b).
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Selling Stockholder" has the meaning set forth in Section 3.1(a).
"Shares" means, with respect to each Stockholder, all shares, whether
now owned or hereafter acquired, of Common Stock of the Company and the
Convertible Preferred Shares (with the amount thereof calculated on an
as-converted basis, if applicable) and any other Common Stock Equivalents owned
thereby; provided, however, for the purposes of any computation of the number of
Shares pursuant to
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Sections 2, 3, 7 and 10.3, all outstanding Common Stock Equivalents shall be
deemed converted, exercised or exchanged as applicable and the shares of Common
Stock issuable upon such conversion, exercise or exchange shall be deemed
outstanding, whether or not such conversion, exercise or exchange has actually
been effected.
"Sponsor" means collectively the Heartland Entities or Heartland
Industrial Partners, L.P. acting on behalf of the other Heartland Entities.
"Stock Issuance Rightholder" has the meaning set forth in Section
3.3(d).
"Stock Purchase Agreements" has the meaning set forth in the recitals
to this Agreement.
"Stockholders" means the Investor Stockholders, the Major Stockholders
and any transferee thereof who has agreed to be bound by the terms and
conditions of this Agreement in accordance with Section 2.4.
"Stockholders Meeting" has the meaning set forth in Section 6.1.
"Stockholder Option Period" has the meaning set forth in Section
3.1(b).
"Tag-Along Rightholder" has the meaning set forth in Section 3.1(f).
"Third Party Purchaser" has the meaning set forth in Section 3.1(a).
"transfer" has the meaning set forth in Section 2.1.
"Transferred Shares" has the meaning set forth in Section 3.2(a).
"▇▇▇▇▇▇▇▇▇▇▇" has the meaning set forth in the preamble.
"▇▇▇▇▇▇▇▇▇▇▇ Director" has the meaning set forth in Section 6.3.
"Written Consent" has the meaning set forth in Section 6.1.
1.2 Termination. The Company, C&A Group, Blackstone Capital
Partners, L.P. and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners, L.P. hereby terminate the
Original Stockholders Agreement and all the rights and obligations of each of
the parties thereto. Blackstone Capital Partners, L.P. and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Partners, L.P. hereby terminate the Voting Agreement, dated June 29, 1994,
between them and each hereby represents that the existing monitoring agreements
between their respective Affiliates and the Company have been terminated as of
the date hereof and that it and its Affiliates are not party to any other
agreement with the Company or any of its subsidiaries other than this Agreement,
the Original Stockholders Purchase Agreement, the Profit Participation
Agreement, and the Registration Rights Agreement.
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ARTICLE II
TRANSFER.
2.1 Limitation on Transfer. No Stockholder shall directly or
indirectly sell, give, assign, hypothecate, pledge, encumber, grant a security
interest in, subject to a Lien or otherwise dispose of (whether by operation of
law or otherwise) (each a "transfer") any Shares or any right, title or interest
therein or thereto, except (1) pursuant to (a) Sections 2.2, 2.3, 2.4, 3.1, 3.2
or 3.4 of this Agreement, (b) market sales in compliance with Rule 144 under the
Securities Act, (c) a registration statement filed under the Securities Act or
(d) a transaction in which all stockholders of the Company have a right to
transfer their shares on a pro rata basis and (2) otherwise in compliance with
this Agreement. Transfers referred to in clauses (1)(b), (c) and (d) are "Exempt
Transfers." Any attempt to transfer any Shares or any rights thereunder in
violation of the preceding sentence shall be null and void ab initio.
2.2 Permitted Transfers. Notwithstanding anything to the contrary
contained in this Agreement, but subject to Sections 2.3 and 2.4, at any time,
(a) each Stockholder may transfer all or a portion of its Shares to any of its
Permitted Transferees, and (b) each Major Stockholder (each in such capacity, a
"Partner Transferor") may Transfer any Common Stock held by it, in whole or in
part, to its or its successor's members, limited partners or general partners (a
"Partner Transferee").
2.3 Permitted Transfer Procedures. If any Stockholder wishes to
transfer Shares to a Permitted Transferee or Partner Transferee under Section
2.2, such Stockholder shall give notice to the Company of its intention to make
such a transfer not less than five (5) days prior to effecting such transfer,
which notice shall state the name and address of each Permitted Transferee or
Partner Transferee to whom such transfer is proposed, the relationship of such
Permitted Transferee or Partner Transferee to such Stockholder, and the number
of Shares proposed to be transferred to such Permitted Transferee or Partner
Transferee.
2.4 Transfers in Compliance with Law; Substitution of Transferee.
(a) Notwithstanding any other provision of this
Agreement, no transfer may be made pursuant to this Section 2 or Section 3
(except in an Exempt Transfer in the case of the following clauses (a) and (b))
unless (a) if (1) to a Permitted Transferee or Partner Transferee or (2) in a
transfer by any person other than a Major Stockholder, the transferee executes,
prior to such transfer, a Transfer Agreement substantially in the form attached
hereto as Exhibit A, which shall cause such transferee to be bound by the
obligations of this Agreement, (b) the transfer complies in all respects with
the applicable provisions of this Agreement and (c) the transfer complies in all
respects with applicable federal and state securities laws, including, without
limitation, the Securities Act. If requested by the Company, an opinion of
counsel to such transferring Stockholder shall be supplied to the Company, at
such transferring Stockholder's expense, to the effect that such transfer
complies with the applicable federal and state securities laws. Upon becoming a
party to this Agreement, (i) the
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Permitted Transferee or Partner Transferee of a Major Stockholder shall be
substituted for and deemed to be, and shall enjoy the same rights and be subject
to the same obligations as, the transferring Major Stockholder hereunder with
respect to the Shares transferred to such Permitted Transferee or Partner
Transferee, subject to the limitations of any voting proxy granted pursuant to
Section 2.4(b) and (ii) the transferee shall be substituted for and deemed to
be, and shall enjoy the same rights and be subject to the same obligations as,
an Investor Stockholder hereunder with respect to the Shares transferred to such
transferee, subject to the limitation of any voting proxy granted pursuant to
Section 2.4(b).
(b) Each Partner Transferee shall execute prior to a
transfer by a Partner Transferor an irrevocable proxy granting to Blackstone or
▇▇▇▇▇▇▇▇▇▇▇ or their respective Affiliates all voting rights with respect to the
Common Stock so transferred.
ARTICLE III
RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; AFFILIATE
TRANSACTIONS; ENCUMBRANCE.
3.1 Proposed Voluntary Transfers.
(a) Offering Notice. Subject to Sections 2.2, 2.3, 2.4
and 3.1(h), if any Stockholder other than a Heartland Entity (a "Selling
Stockholder") wishes to transfer all or any portion of its Shares to any Person
(other than to its Permitted Transferee or in the case of a Major Stockholder,
to its Partner Transferee) (a "Third Party Purchaser") and such Selling
Stockholder wants to make any offer or has received a bona fide offer to
purchase such Shares from a Third Party Purchaser, such Selling Stockholder
shall then offer to sell such Shares by sending written notice (an "Offering
Notice") to each Investor Stockholder and the Company, which shall state (i) the
number of Shares proposed to be transferred (the "Offered Securities"); (ii) the
proposed purchase price per Share proposed by the Selling Stockholder or offered
by the Third Party Purchaser for the Offered Securities (the "Offer Price"); and
(iii) the terms and conditions of such sale. Upon delivery of the Offering
Notice, such offer shall be irrevocable unless and until the rights of first
refusal provided for herein shall have been waived or shall have expired.
(b) Stockholder Option; Exercise.
(i) For a period of ten (10) Business Days after
the giving of the Offering Notice pursuant to Section 3.1(a) (the
"Stockholder Option Period"), each of the Investor Stockholders (for
the purpose of Section 3.1, each, a "Rightholder" and collectively, the
"Rightholders") shall have the right to purchase the Offered Securities
at a purchase price equal to the Offer Price and upon the terms and
conditions set forth in the Offering Notice. Each Rightholder shall
have the right to purchase that percentage of the Offered Securities
determined by dividing (A) the total number of Shares then owned by
such Rightholder by (B) the total number of Shares then owned by all
such
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Rightholders. If the consideration consists wholly or in material part
of consideration other than cash or marketable securities and the
Rightholder or the Company would be willing to exercise its rights
hereunder based upon the value ascribed to such consideration by the
Selling Stockholders, the Company, Heartland or any Selling Stockholder
may require that a determination of Fair Value be made in the same
manner as would apply to a determination of Fair Value under Section
3.2(b) (with Heartland substituted for IT Rightholders and the Selling
Stockholders requesting such an appraisal substituted for the
Involuntary Transferee), and in such event, all time periods under this
Section 3.1(a) through 3.1(e) shall be tolled pending the determination
of Fair Value. If any Rightholder does not fully subscribe for the
number or amount of Offered Securities it or he is entitled to
purchase, then each other fully participating Rightholder shall have
the right to purchase that percentage of the Offered Securities not so
subscribed for (for the purposes of this Section 3.1(b), the "Excess
Offered Securities") determined by dividing (x) the total number of
Shares then owned by such fully participating Rightholder by (y) the
total number of Shares then owned by all fully participating
Rightholders. The calculation described in the preceding sentence shall
be made in successive proration calculations until there are no
remaining Excess Offered Securities or there is no remaining
Rightholder who indicated a willingness in the notice referred to in
Section 3.1(b)(ii) to subscribe for additional shares.
(ii) The right of each Rightholder to purchase
the Offered Securities under subsection (i) above shall be exercisable
by delivering written notice of the exercise thereof, prior to the
expiration of the Stockholder Option Period, to the Selling Stockholder
with a copy to the Company. Each such notice shall state (a) the number
of Shares held by such Rightholder, (b) the number of Shares that such
Rightholder is willing to purchase pursuant to this Section 3.1(b),
including the number of Excess Offered Shares, if any, such Rightholder
shall wish to purchase. The giving of such notice shall constitute a
binding obligation to purchase the number of Shares elected in
accordance with Section 3.1(d). The failure of a Rightholder to respond
within the Stockholder Option Period to the Selling Stockholder shall
be deemed to be a waiver of such Rightholder's rights under subsection
(i) above, provided that each Rightholder may waive its rights under
subsection (i) above prior to the expiration of the Stockholder Option
Period by giving written notice to the Selling Stockholder, with a copy
to the Company.
(c) Company Option; Exercise. If the Rightholders do not
elect to purchase all of the Offered Securities, then on the Business Day next
following the earlier to occur of (A) the expiration of the Stockholder Option
Period and (B) the date upon which the Company shall have received written
notice from each of the Rightholders of its exercise of its right pursuant to
Section 3.1(b) or its waiver thereof (the "Company Option Period"), the Company
shall have the right (the "Company Option") but not the obligation to purchase
any remaining Offered Securities at a purchase price equal to the Offer Price
and upon the terms and conditions set forth in the Offering Notice. The right of
the Company to purchase any of the Offered Securities
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under this Section 3.1(c) shall be exercisable by delivering written notice of
the exercise thereof, prior to the expiration of the Company Option Period, to
the Selling Stockholder. The failure of the Company to respond within the
Company Option Period to the Selling Stockholder shall be deemed to be a waiver
of the Company Option, provided that the Company may waive its rights under this
Section 3.1(c) prior to the expiration of the Company Option Period by giving
written notice to the Selling Stockholder. If the Company and/or the
Rightholders do not purchase all of the Offered Securities pursuant to Section
3.1(b) and/or Section 3.1(c), then the Selling Stockholder may, subject to
Section 3.1(f), sell the remaining Offered Securities to a Third Party Purchaser
in accordance with Section 3.1(e).
(d) Closing. The closing of the purchases of Offered
Securities subscribed for by the Rightholders under Section 3.1(b) and/or the
Company under Section 3.1(c) shall be held at the executive office of the
Company at 11:00 a.m., local time, on the fifteenth Business Day after the
giving of the Offering Notice pursuant to Section 3.1(a) or at such other time
and place as the parties to the transaction may agree. At such closing, the
Selling Stockholder shall deliver certificates representing the Offered
Securities, duly endorsed for transfer and accompanied by all requisite transfer
taxes, if any, and such Offered Securities shall be free and clear of any Liens
(other than those arising hereunder and those attributable to actions by the
purchasers thereof) and the Selling Stockholder shall so represent and warrant,
and shall further represent and warrant that it is the sole beneficial and
record owner of such Offered Securities. The Company and/or each Rightholder, as
the case may be, purchasing Offered Securities shall deliver at the closing
payment in full for the Offered Securities purchased by it or him. At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(e) Sale to a Third Party Purchaser. Unless the Company
and/or the Rightholders elect to purchase all the Offered Securities under
Sections 3.1(b) and 3.1(c), the Selling Stockholder may, subject to Section
3.1(f), sell any remaining Offered Securities to a Third Party Purchaser at a
price not less than the price set forth in the Offering Notice and otherwise on
terms and conditions not materially more favorable to the Third Party Purchaser
than those set forth in the Offering Notice; provided, however, that such sale
is bona fide and made pursuant to a contract within thirty (30) days after the
earlier to occur of (i) the exercise or waiver by the Company and all of the
Rightholders of their options to purchase the Offered Securities and (ii) the
expiration of the Company Option Period (the "Contract Date"); and provided
further, that such sale shall not be consummated unless and until (x) such Third
Party Purchaser shall represent in writing to the Company and each Rightholder
that it is aware of the rights of the Company and the Stockholders contained in
this Agreement and (y) prior to the purchase by such Third Party Purchaser of
any of such Offered Securities such Third Party Purchaser shall become a party
to this Agreement and shall agree to be bound by the terms and conditions hereof
in accordance with Section 2.4. If such sale is not consummated within thirty
(30) days after the Contract Date for any reason, then the restrictions provided
for herein shall again become effective, and no transfer of such Offered
Securities may be made thereafter by the Selling Stockholder without again
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offering the same to the Company and the Rightholders in accordance with this
Section 3.1.
(f) Tag-Along Rights.
(i) If an Investor (an "Investor Selling
Stockholder") wishes to transfer Shares to a Third Party Purchaser, the
Company or any of its subsidiaries other than in an Exempt Transfer,
then each other Stockholder (each, a "Tag-Along Rightholder") shall
have the right to sell to such Third Party Purchaser, the Company, or
any of its subsidiaries, upon the terms set forth in the Offering
Notice, that number of Shares held by such Tag-Along Rightholder equal
to that percentage of the Offered Securities determined by dividing (A)
the total number of Shares then owned by such Tag-Along Rightholder by
(B) the sum of (x) the total number of Shares then owned by all such
Tag-Along Rightholders with respect to which Tag-Along Rightholders are
exercising their rights pursuant to this Section 3.1(f) and (y) the
total number of Shares then owned by the Investor Selling Stockholder.
The Investor Selling Stockholder and the Tag-Along Rightholder(s)
exercising their rights pursuant to this Section 3.1(f) shall effect
the sale of the Offered Securities and such Tag-Along Rightholder(s)
shall sell the number of Offered Securities required to be sold by such
Tag-Along Rightholder(s) pursuant to this Section 3.1(f)(i), and the
number of Offered Securities to be sold to such Third Party Purchaser,
the Company or any of its subsidiaries by the Investor Selling
Stockholder shall be reduced accordingly.
(ii) The Investor Selling Stockholder shall give
notice to each Tag-Along Rightholder of each proposed sale by it of
Offered Securities which gives rise to the rights of the Tag-Along
Rightholders set forth in this Section 3.1(f) at least ten (10)
Business Days prior to the proposed consummation of such sale, setting
forth the name of such Investor Selling Stockholder, the number of
Offered Securities, the name and address of the proposed Third Party
Purchaser, the Company or its subsidiaries, as applicable, the proposed
amount and form of consideration and terms and conditions of payment
offered by or to such Third Party Purchaser, the Company or its
subsidiary, as applicable, the percentage of Shares that such Tag-Along
Rightholder may sell to such Third Party Purchaser, the Company or its
subsidiary, as applicable, (determined in accordance with Section
3.1(f)(i)), and a representation that such Third Party Purchaser, the
Company or its subsidiary has been informed of the "tag-along" rights
provided for in this Section 3.1(f) and has agreed to purchase Shares
in accordance with the terms hereof. The tag-along rights provided by
this Section 3.1(f) must be exercised by any Tag-Along Rightholder
wishing to sell its Shares within ten (10) days following receipt of
the notice required by the preceding sentence by delivery of a written
notice to the Investor Selling Stockholder indicating such Tag-Along
Rightholder's wish to exercise its rights and specifying the number of
Shares (up to the maximum number of Shares owned by such Tag-Along
Rightholder required to be purchased by such Third Party Purchaser)it
wishes to sell, provided that any Tag-Along Rightholder may waive its
rights
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under this Section 3.1(f) prior to the expiration of such 10-day period
by giving written notice to the Investor Selling Stockholder, with a
copy to the Company. The failure of a Tag-Along Rightholder to respond
within such 10-day period shall be deemed to be a waiver of such
Tag-Along Rightholder's rights under this Section 3.1(f). If a Third
Party Purchaser, the Company or its subsidiary, as applicable, fails to
purchase Shares from any Tag-Along Rightholder that has properly
exercised its tag-along rights pursuant to this Section 3.1(f)(ii),
then the Investor Selling Stockholder shall not be permitted to
consummate the proposed sale of the Offered Securities, and any such
attempted sale shall be null and void ab initio.
(g) Drag-Along Rights. For so long as Heartland is
entitled to the right to designate directors as set forth in Section 6.3, in the
event that one or more of the Heartland Entities (the "Drag-Along Rightholders")
receive a bona fide offer from a Third Party Purchaser to purchase (including a
purchase by merger) all of the Shares held by the Investor Stockholders or all
or a substantial portion of the consolidated assets of the Company, the
Drag-Along Rightholders may send written notice (the "Drag-Along Notice") to the
Company and the other Stockholders (the "Drag-Along Sellers") notifying them
they will be required to sell all (but not less than all) of their Shares in
such sale (or, in the case of a merger or asset sale, vote in favor of such
sale). Upon receipt of a Drag-Along Notice, each Drag-Along Seller receiving
such notice shall be obligated to (i) sell all of its Shares in the transaction
(including a sale by merger or asset sale) contemplated by the Drag-Along Notice
for the same consideration per share and otherwise on the same terms and
conditions as the Drag-Along Rightholders (including payment of its pro rata
share of all costs associated with such transaction); if, but only if, the
Drag-Along Seller shall receive cash and/or other freely tradable consideration
having a fair market value of at least $11 per Share, adjusted for stock splits,
stock dividends, reclassifications and other recapitalizations and (ii)
otherwise take all necessary action in its capacity as a stockholder to cause
the consummation of such transaction, including voting its Shares in favor of
such transaction and not exercising any appraisal rights in connection
therewith. The obligations of the Drag-Along Sellers in respect of a Transaction
under this Section 3.1(g) are subject to the satisfaction of the following
conditions: (i) upon the consummation of the Transaction, each Drag-Along Seller
shall have the right to receive cash and/or other consideration having a fair
market value of at least $11 per Share (adjusted for stock splits, stock
dividends, reclassifications and recapitalizations) in the same form and amount
per share of consideration paid to Drag-Along Rightholders in such transaction
or any other transaction related thereto (such as a payment for consulting or
management services or non-compete payments); (ii) if any Drag-Along Seller is
given an option as to the form and amount of consideration to be received, each
other Drag-Along Seller will be given the same option with respect to its
applicable Pro Rata Share; and (iii) no Drag-Along Seller shall be obligated
under the terms of any agreement respecting any transaction subject to this
Section 3.1(g) to indemnify any person in an amount greater than the proceeds to
be received by such Drag-Along Seller in such transaction.
(h) Notwithstanding anything to the contrary contained in
this Agreement, the following transfers will not be subject to the provisions of
Section 2.4 or
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Sections 3.1(a) through (e): a transfer of any Shares pursuant to Rule 144 or a
transfer pursuant to a registration statement filed under the Securities Act.
3.2 Involuntary Transfers.
(a) Rights of First Offer upon Involuntary Transfer. If
an Involuntary Transfer of any Shares (the "Transferred Shares") owned by any
Stockholder shall occur, then the Company and the Investor Stockholders (unless
such Stockholder is the Stockholder transferring the Transferred Shares) (for
the purpose of Section 3.2, each, a "IT Rightholder" and collectively, the "IT
Rightholders") shall have the same rights as specified in Sections 3.1(a),
3.1(b) and 3.1(c), respectively, with respect to such Transferred Shares as if
the Involuntary Transfer had been a proposed voluntary transfer by a Selling
Stockholder and shall be governed by Section 3.1 except that (i) the time
periods shall run from the date of agreement as to the purchase price applicable
to such Involuntary Transfer with written determination of Fair Value in
accordance with Section 3.2(b), (ii) such rights shall be exercised by notice to
the transferee of such Transferred Shares (the "Involuntary Transferee") rather
than to the Stockholder who suffered or will suffer the Involuntary Transfer and
(iii) the purchase price per Transferred Share shall be agreed upon by the
Involuntary Transferee and the Company and/or the purchasing IT Rightholders
purchasing a majority of the Transferred Shares, as the case may be; provided,
however, that if such parties fail to agree as to such purchase price, the
purchase price shall be the Fair Value thereof as determined in accordance with
Section 3.2(b).
(b) Fair Value. If the parties fail to agree upon the
purchase price of the Transferred Shares in accordance with Section 3.2(a)
hereof, then the Company or the IT Rightholders, as the case may be, shall
purchase the Transferred Shares at a purchase price equal to the Fair Value
thereof. The Fair Value of the Transferred Shares shall be determined by a
nationally recognized investment banking firm or nationally recognized expert
experienced in the valuation of corporations engaged in the business conducted
by the Company. Within five (5) Business Days after the date the applicable
parties determine that they cannot agree as to the purchase price, the
Involuntary Transferee and the Board of Directors (in the case of a purchase by
the Company), or the purchasing IT Rightholders purchasing a majority of the
Transferred Shares being purchased by the purchasing IT Rightholders (if the
Company is not purchasing any Transferred Shares), or the Board of Directors and
such purchasing IT Rightholders jointly (in the case of a purchase by the
Company and IT Rightholders), as the case may be, shall designate one such
appraiser that is willing and able to conduct such determination. If either the
Involuntary Transferee or the Board of Directors or the purchasing IT
Rightholders or both, or all, as the case may be, fails to make such designation
within such period, then any other party may apply to the American Arbitration
Association or a court of appropriate jurisdiction for the appointment of such
an appraiser. The appraiser shall conduct its determination as promptly as
practicable, and the Fair Value of the Transferred Shares shall be determined by
such appraiser. Such determination shall be final and binding on the Involuntary
Transferee, the Company and the Rightholders. The Involuntary Transferee shall
be responsible for one-half the fees and expenses of the appraiser designated by
or on behalf of it, and the Company and/or
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the purchasing IT Rightholders in proportion to the ratio in which they are
purchasing Transferred Shares shall be responsible for one-half of the fees and
expenses of the appraiser. For purposes of this Section 3.2(b), the "Fair Value"
of the Transferred Shares means the fair market value of such Transferred Shares
determined in accordance with this Section 3.2(b) based upon all considerations
that the appraiser determine to be relevant.
(c) Closing. The closing of any purchase under this
Section 3.2 shall be held at the executive office of the Company at 11:00 a.m.,
local time, on the earlier to occur of (a) the fifth Business Day after the
purchase price per Transferred Share shall have been agreed upon by the
Involuntary Transferee and the Company or the purchasing IT Rightholders, as the
case may be, in accordance with Section 3.2(a)(iii), or (b) the fifth Business
Day after the determination of the Fair Value of the Transferred Shares in
accordance with Section 3.2(b), or at such other time and place as the parties
to the transaction may agree. At such closing, the Involuntary Transferee shall
deliver certificates, if applicable, or other instruments or documents
representing the Transferred Shares being purchased under this Section 3.2, duly
endorsed with a signature guarantee for transfer and accompanied by all
requisite transfer taxes, if any, and such Transferred Shares shall be free and
clear of any Liens (other than those arising hereunder) arising through the
action or inaction of the Involuntary Transferee and the Involuntary Transferee
shall so represent and warrant, and further represent and warrant that it is the
beneficial owner of such Transferred Shares. The Company or each Rightholder, as
the case may be, purchasing such Transferred Shares shall deliver at closing
payment in full in immediately available funds for such Transferred Shares. At
such closing, all parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(d) General. In the event that the provisions of this
Section 3.2 shall be held to be unenforceable with respect to any particular
Involuntary Transfer, the Company and the IT Rightholders shall have the rights
specified in Sections 3.1(b) and 3.1(c), respectively, with respect to any
transfer by an Involuntary Transferee of such Shares, and each IT Rightholder
agrees that any Involuntary Transfer shall be subject to such rights, in which
case the Involuntary Transferee shall be deemed to be the Selling Stockholder
for purposes of Section 3.1 of this Agreement and shall be bound by the
provisions of Section 3.1 and other related provisions of this Agreement.
3.3 Certain Transactions.
(a) Without the consent of (1) Blackstone and ▇▇▇▇▇▇▇▇▇▇▇
for so long as Sponsor directly or indirectly beneficially owns fifty (50%)
percent or more of the outstanding shares of Common Stock of the Company and (2)
the members of the Board of Directors of the Company that are disinterested with
respect to the applicable matter and not designated for election by Heartland
Industrial Partners, L.P. (the "Disinterested Members"), for so long as Sponsor
directly or indirectly owns 25% or more of the Shares (equitably adjusted for
stock splits, stocks combinations and similar events) that it beneficially owns
on the date hereof after giving effect to the transactions contemplated by the
Stock Purchase Agreements, the Company and its subsidiaries will
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not enter into any transaction or series of related transactions with Sponsor or
any of its Affiliates involving payments or other consideration in excess of
$500,000; provided no such consent shall be required from Blackstone or
▇▇▇▇▇▇▇▇▇▇▇ for any transaction that has been approved by a majority of the
directors of the Company who were not designated for election by Heartland
Industrial Partners, L.P. The foregoing restrictions will not apply to: (i) the
payments to Sponsor described in paragraph (b) below; (ii) from and after the
first anniversary hereof, the payment to Sponsor of advisory fees in connection
with acquisitions or divestiture by the Company or any of its subsidiaries in an
amount not exceeding 1% of the enterprise value thereof and out-of-pocket
expense reimbursement in connection therewith; (iii) reimbursement of
out-of-pocket fees and expenses by Sponsor in connection with the Transactions;
(iv) transactions involving the sale, purchase or lease of goods or services in
the ordinary course of business and on an arm's-length basis between or among
the Company or any of its subsidiaries and portfolio companies of Sponsor in an
amount involving not more than $1,250,000 in any transaction or series of
related transactions; (v) transactions between or among the Company or any of
its subsidiaries; (vi) issuances of securities in any rights offering made to
all stockholders of the Company; (vii) issuances of up to an aggregate of $25
million in value of Common Stock at fair market value in compliance with Section
3.3(d) if applicable; (viii) issuances of securities under the circumstances
contemplated by clauses (i), (ii)(x) and (iv) of Section 3.3(d); (ix) the
Company's entering into a Monitoring Fee Arrangement pursuant to which Heartland
will receive an annual monitoring fee of $4 million from the Company, payable
quarterly in advance; and (x) the Company's paying Heartland a transaction fee
not to exceed $12.0 million upon the closing of the Transaction. Heartland shall
not cause or permit the Company to take any action in contravention of Section
3.3(a).
(b) [Intentionally omitted]
(c) Without the prior written consent of Blackstone and
▇▇▇▇▇▇▇▇▇▇▇, the Investors shall not cause or permit the Company to effect any
transaction:
(i) which is a "Rule 13e-3 transaction," as
defined in Rule 13e-3(a)(3) of the Exchange Act as in effect on the
date hereof, unless such transaction is a transaction in which the
Major Stockholders and the Investor Stockholders are entitled to
receive the same form and amount per Share of consideration in such
transaction or any other transaction related thereto (such as a payment
for consulting or management services or non-compete payments but
disregarding the effect of the Profit Participation Agreement); or
(ii) which requires or permits any holder of
Common Stock to exchange or sell any of such shares for an amount in
cash and/or other consideration having a fair market value of less than
$5.00 per share (as adjusted for stock splits, stock dividends,
reclassifications and recapitalizations), except that this Section
3.3(c)(ii) shall not restrict the Company from engaging in open market
purchase programs consistent with past practice; or
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(iii) which causes the company to cease being
required to file periodic reports under Section 13(a) of the Exchange
Act, except as otherwise permitted by Section 3.3(c)(i).
(d) Except for (i) a subdivision of the
outstanding shares of Common Stock into a larger number of shares of Common
Stock, including by way of stock split or stock dividend, (ii) capital stock
issued upon exercise, conversion or exchange of any Common Stock Equivalent
either (x) previously issued or (y) issued in accordance with the terms of this
Section 3.3(d) or pursuant to the Stock Purchase Agreements, (iii) pursuant to
an effective registration statement filed under the Securities Act of 1933 , or
(iv) issuance of capital stock to all holders of Common Stock on a pro rata
basis (each, an "Exempt Issuance"), Sponsor shall not acquire from the Company
or any of its subsidiaries any capital stock or any other securities convertible
into or exchangeable for capital stock of the Company or its subsidiaries
(collectively, "New Securities") unless Sponsor shall offer each of the Investor
Stockholders and the Major Stockholders (each, a "Stock Issuance Rightholder"
and collectively, the "Stock Issuance Rightholders") an opportunity to
participate therein on a pro rata basis in the manner set forth in this Section
3.3(d) by sending a written notice (the "New Issuance Notice") to the Stock
Issuance Rightholders, which New Issuance Notice shall state (x) the number of
New Securities proposed to be issued and (y) the proposed purchase price per
security of the New Securities (the "Proposed Price"). Upon delivery of the New
Issuance Notice, such offer shall be irrevocable unless and until the rights
provided for in this Section 3.3(d) shall have been waived or shall have
expired. For a period of twenty (20) days after the giving of the New Issuance
Notice, each of the Stock Issuance Rightholders shall have the right to purchase
its Proportionate Percentage (as hereinafter defined) of the New Securities, at
a purchase price equal to the Proposed Price and upon the same terms and
conditions set forth in the New Issuance Notice. Each such Stock Issuance
Rightholder shall have the right to purchase that percentage of the New
Securities determined pro rata based on the number of Shares then owned by the
Investor Stockholders and the Major Stockholders that were acquired in purchases
directly from the Company or any subsidiary of the Company, whether pursuant to
the Stock Purchase Agreements or in issuances made in compliance with this
Section 3.3(d) or otherwise, as applicable. The right of each Stock Issuance
Rightholder to purchase the New Securities shall be exercisable by delivering
written notice of the exercise thereof prior to the expiration of the 20-day
period referred to above to the Sponsor, which notice shall state the amount of
New Securities that such Stock Issuance Rightholder elects to purchase pursuant
to this Section 3.3(d). The failure of a Stock Issuance Rightholder to respond
within such 20-day period shall be deemed to be a waiver of such Stock Issuance
Rightholder's rights under this Section 3.3(d), provided that each Stock
Issuance Rightholder may waive its rights under Section 3.3(d) prior to the
expiration of such 20-day period by giving written notice to the Company. Where
reasonably possible, the Sponsor shall give the New Issuance Notice at least 20
days prior to the issuance of capital stock to the Sponsor, but in any event,
such notice shall be given not later than five (5) days following any such
issuance.
(e) Notwithstanding anything to the contrary in this
Agreement, each of Blackstone (together with its Permitted Transferees and
Partner
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Transferees) and ▇▇▇▇▇▇▇▇▇▇▇ (together with its Permitted Transferees
and Partner Transferees) shall cease having the rights granted under Section 3.3
if Blackstone or ▇▇▇▇▇▇▇▇▇▇▇, as applicable, together with its Permitted
Transferees and Partner Transferees, no longer holds at least 25% of the Shares
(equitably adjusted for stock splits, stock combinations and similar events)
held by Blackstone or ▇▇▇▇▇▇▇▇▇▇▇, as applicable, on the date hereof after
giving effect to the transactions effected pursuant to the Original Stockholders
Stock Purchase Agreement.
3.4 Prohibition on Encumbrance. No Stockholder shall pledge,
hypothecate, grant a security interest in or subject to a Lien any of the shares
of Common Stock held by it; provided, however, that a Stockholder may pledge,
hypothecate, grant a security interest in or subject to a Lien such shares to a
lender if such lender agrees in writing to be bound by the terms of this
Agreement (and acknowledges that it shall not receive any of the rights granted
to Stockholders under this Agreement) and such lender is not granted any voting
rights with respect to Common Stock prior to foreclosure.
ARTICLE IV
[Intentionally Omitted.]
ARTICLE V
AFTER-ACQUIRED SECURITIES; AGREEMENT TO BE BOUND.
5.1 After-Acquired Securities. Except as otherwise provided
herein, all of the provisions of this Agreement shall apply to all of the Shares
and Common Stock Equivalents now owned or which may be issued or transferred
hereafter to a Stockholder in consequence of any additional issuance, purchase,
exchange or reclassification of any of such Shares or Common Stock Equivalents,
corporate reorganization, or any other form of recapitalization, consolidation,
merger, share split or share dividend, or which are acquired by a Stockholder in
any other manner.
5.2 Beneficial Ownership. In making calculations under this
Agreement, no Shares or Common Stock Equivalents owned by any Stockholder shall
be deemed to be beneficially owned by any other Stockholder solely because of
this Agreement and the transactions contemplated hereby.
ARTICLE VI
CORPORATE GOVERNANCE.
6.1 General. From and after the execution of this Agreement, each
Stockholder shall vote its Shares at any regular or special meeting of
stockholders of the Company (a "Stockholders Meeting") or in any written consent
executed in lieu of such a meeting of stockholders (a "Written Consent"), and
shall take all other actions necessary, to give effect to the provisions of this
Agreement (including, without limitation,
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Section 6.3 hereof) and to ensure that the Charter Documents do not, at any time
hereafter, conflict in any respect with the provisions of this Agreement. In
addition, each Stockholder shall vote his, her or its Shares at any Stockholders
Meeting or act by Written Consent with respect to such Shares, upon any matter
submitted for action by the Company's stockholders or with respect to which such
Stockholder may vote or act by Written Consent, in conformity with the specific
terms and provisions of this Agreement and the Charter Documents.
6.2 Stockholder Actions. In order to effectuate the provisions of
this Section 6, each Stockholder (a) hereby agrees that when any action or vote
is required to be taken by such Stockholder pursuant to this Agreement, such
Stockholder shall use his, her or its reasonable best efforts to call, or cause
the appropriate officers and directors of the Company to call, a Stockholders
Meeting, or to execute or cause to be executed a Written Consent to effectuate
such stockholder action, (b) shall use his, her or its reasonable best efforts
to cause the Board of Directors to adopt, either at a meeting of the Board of
Directors or by unanimous written consent of the Board of Directors, all the
resolutions necessary to effectuate the provisions of this Agreement, and (c)
shall use his, her or its reasonable best efforts to cause the Board of
Directors to cause the Secretary of the Company, or if there be no secretary,
such other officer of the Company as the Board of Directors may appoint to
fulfill the duties of Secretary, not to record any vote or consent contrary to
the terms of this Section 6.
6.3 Election of Directors; Number and Composition.
(a) Each Stockholder shall vote its Shares at any
Stockholders Meeting, or act by Written Consent with respect to such Shares, and
take all other actions necessary to ensure that the number of directors
constituting the entire Board of Directors shall be nine (9) prior to conversion
of the Convertible Preferred Stock and thirteen after such conversion. Each
Stockholder shall vote its Shares at any Stockholders Meeting called for the
purpose of filling the positions on the Board of Directors, or in any Written
Consent executed for such purpose, and take all other actions necessary to
ensure the election to the Board of Directors of the following: four (4)
individuals prior to conversion of the Convertible Preferred Stock and seven (7)
individuals after such conversion designated by Heartland Industrial Partners,
L.P. (collectively, the "Investor Directors" and each an "Investor Director"),
so long as in each case the Heartland Entities continue to hold at least 25% of
the Shares (subject to equitable adjustments for stock splits, stock
combinations and similar events) which the Heartland Entities hold on the date
hereof after giving effect to the transactions contemplated by the Stock
Purchase Agreements; one (1) individual designated by Blackstone (the
"Blackstone Director") as long as Blackstone and its direct or indirect
Permitted Transferees continue to hold at least 25% of the Shares (subject to
equitable adjustments for stock splits, stock combinations and similar events)
which Blackstone holds on the date hereof after the transactions effected
pursuant to the Stock Purchase Agreements; one (1) individual designated by
▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇▇▇▇▇ Director") as long as ▇▇▇▇▇▇▇▇▇▇▇ and its direct
or indirect Permitted Transferees continue to hold at least 25% of the Shares
(subject to equitable adjustments for stock splits, stock combinations and
similar events) which ▇▇▇▇▇▇▇▇▇▇▇ holds on the date hereof after the
transactions effected pursuant to the
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Stock Purchase Agreements; two outside directors prior to conversion of the
Convertible Preferred Stock and three outside directors within 60 days of the
dates hereof but in any event after such conversion, in each case that satisfy
the independent director requirements of any securities exchange upon which the
Common Stock is then listed as in effect from time to time; and the person from
time to time serving as the Company's chief executive officer.
(b) Each of Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ agrees that if the
Charter Amendment Effective Date (as defined in the Company Stock Purchase
Agreement) has not occurred on or prior to the date that is 45 days after the
date of this Agreement, it shall cause one of the two members of the Board of
Directors designated by them (the "B/W Director") to resign and shall thereafter
at all times prior to the Charter Amendment Effective Date vote its Shares at
any Stockholders Meeting called for the purpose of filling the positions on the
Board of Directors, or in any Written Consent executed for such purpose, and
take all other actions necessary to ensure the election to the Board of
Directors of five (5) individuals designated by Heartland Industrial Partners,
L.P. After the Charter Amendment Effective Date, Blackstone and ▇▇▇▇▇▇▇▇▇▇▇'▇
rights under Section 6.3(a) shall be fully restored. At such time as this clause
(b) shall be in effect Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ shall have the right to
designate one Observer to the board who shall have the rights, and be subject to
the restrictions, set forth in Section 6.7.
6.4 Removal and Replacement of Director.
(a) Removal of Directors. If at any time the Investor
Stockholders, Blackstone or ▇▇▇▇▇▇▇▇▇▇▇ notifies the other Stockholders of their
or its wish to remove at any time and for any reason (or no reason) a director
designated by them or it, then each Stockholder shall vote, or execute a Written
Consent for, all of its Shares so as to remove such director.
(b) Replacement of Directors.
(i) If at any time, a vacancy is created on the
Board of Directors by reason of the incapacity, death, removal or
resignation of any of the director designated pursuant to Section 6.3
hereof, then the Stockholder(s) who designated such director shall
designate an individual who shall be elected to fill the vacancy until
the next Stockholders Meeting.
(ii) Upon receipt of notice of the designation of
a nominee pursuant to Section 6.4(b)(i), each Stockholder shall, as
soon as practicable after the date of such notice, take all reasonable
actions, including the voting of its Shares or executing a Written
Consent, to elect the director so designated to fill the vacancy.
6.5 Reimbursement of Expenses; D&O Insurance. The Company shall
reimburse the Investor Stockholders, Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ or their
respective designees, for all reasonable travel and accommodation expenses
incurred by the Investor
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Directors, the Blackstone Director and the ▇▇▇▇▇▇▇▇▇▇▇ Director in connection
with attendance at meetings of the Board of Directors and committees thereof
upon presentation of appropriate documentation therefor. The Company shall, and
each Stockholder shall use reasonable commercial efforts to cause the Board of
Directors to cause the Company to, maintain a directors' liability insurance
policy that is reasonably acceptable to the Investor Directors, the Blackstone
Director and the ▇▇▇▇▇▇▇▇▇▇▇ Director.
6.6 Quorum. A quorum of the Board of Directors shall consist of
six (6) directors. All actions of the Board shall require approval by a majority
of the Board of Directors present at a meeting of the Board of Directors at
which a quorum is present.
6.7 Observer Rights. In the case of a Qualified Investor, for so
long as such Qualified Investor retains a number of shares of Common Stock equal
to at least a majority of the shares of Common Stock owned by such Person
immediately following the date hereof (subject to equitable adjustments for
stock splits, stock combinations and similar events), such Person will have
right to send one Representative on its behalf (the "Observer") to attend all
meetings of the Board of Directors, including all committees thereof (other than
meetings at which confidential matters related to the Qualified Investor or its
Observer are discussed and other than confidential audit and compensation
committee meetings), solely in a non-voting observer capacity. The Company will
furnish to the Observer copies of all notices, minutes, consents and other
materials that it generally makes available to its directors. The Observer may
participate in discussions of matters under consideration by the Board of
Directors and any matters brought before any committee thereof but will not be
entitled to vote on any matter presented to the Board of Directors. Any
Qualified Investor will have the right to remove and replace its Observer in its
sole discretion and to designate a substitute representative if its Observer is
unable or unwilling to attend any of the Board's meetings, including any
committees thereof. In no event shall there be at any time more than three
Observers (in addition to any Observer under Section 6.3(b) without the approval
of a majority of the directors not designated by Heartland Industrial Partners,
L.P. Notwithstanding the foregoing, if the Company is advised by counsel that
the rules of the Securities and Exchange Commission or other applicable
securities laws require that the Observer and/or the Qualified Investor
appointing the same be subject to a confidentiality agreement, then such
Observer and/or the Qualified Investor shall enter into such reasonable form of
confidentiality agreement that the Company shall request.
ARTICLE VII
COVENANTS.
7.1 Financial Statements and Other Information. The Company shall
deliver to each Investor Stockholder, Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ such financial
statements (including monthly financial statements), reports and information as
may be reasonably requested by any of the Investor Stockholders, Blackstone or
▇▇▇▇▇▇▇▇▇▇▇ including a copy of any filings by the Company with the Commission.
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7.2 Inspection. The Company shall permit representatives of the
Investor Stockholders, Blackstone and ▇▇▇▇▇▇▇▇▇▇▇ to visit and inspect any of
its properties, to examine its corporate, financial and operating records and
make copies thereof or abstracts therefrom, and to discuss its affairs, finances
and accounts with their respective directors, officers and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably requested upon reasonable advance notice to the
Company. No Stockholder beneficially owning less than 5% of the outstanding
Common Stock shall be entitled to any of the rights under this Section 7.2.
ARTICLE VIII
STOCK CERTIFICATE LEGEND
8.1 A copy of this Agreement shall be filed with the Secretary of
the Company and kept with the records of the Company. Each certificate
representing Shares now held or hereafter acquired by any Stockholder shall for
as long as this Agreement is effective (until a transfer pursuant to Rule 144 or
an effective registration statement filed under the Securities Act) bear legends
substantially in the following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
STOCKHOLDERS AGREEMENT, DATED __, 2001, AMONG THE COMPANY AND THE
STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE
COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER
OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE
TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS
AGREEMENT.
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ARTICLE IX
MISCELLANEOUS
9.1 Notices. All notices, demands or other communications provided
for or permitted hereunder shall be made in writing and shall be by telecopier,
courier service, or personal delivery:
(a) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel
with copies to:
Morris, Nichols, Arsht & ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(b) if to the New Investor:
Heartland Industrial Partners, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(c) if to Sellers:
Blackstone Capital Partners L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
and
Wasserstein, Perella Management Partners
1301 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(d) if to any other Stockholder, at its address
as it appears on the record books of the
Company.
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All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; and when receipt is
mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 9.1 designate another address or Person for
receipt of notices hereunder.
9.2 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon successors and
permitted assigns of the parties hereto. This Agreement is not assignable
except in connection with a transfer of Shares in accordance with this
Agreement. No Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
9.3 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of any party hereto
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties
hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to
any provision of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by any party from the terms of any provision
of this Agreement, shall be effective only if it is made or given in writing
and signed by (i) the Company, and (ii) each Stockholder who is adversely
affected by such amendment, supplement, modification, waiver, consent or
departure. Any such amendment, supplement, modification, waiver or consent
shall be binding upon the Company and all of the Stockholders.
9.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.5 SPECIFIC PERFORMANCE. The parties hereto intend that each of
the parties have the right to seek damages or specific performance in the event
that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party
has an adequate remedy at law.
9.6 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF
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THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
9.8 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall materially impair the
benefits of the remaining provisions hereof.
9.9 RULES OF CONSTRUCTION. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.10 ENTIRE AGREEMENT. This Agreement, together with the exhibits
hereto, is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, representations,
warranties or undertakings, other than those set forth or referred to herein or
therein. This Agreement, together with the exhibits hereto, supersede all prior
agreements and understandings among the parties with respect to such subject
matter.
9.11 FURTHER ASSURANCES. Each of the parties shall, and shall
cause their respective Affiliates to, execute such documents and perform such
further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation
By:
--------------------------------------------------
Name:
Title:
Heartland Industrial Partner, L.P.
By: Heartland Industrial Associates L.L.C.,
its general partner
By:
--------------------------------------------------
Name:
Title:
Blackstone Capital Partners L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
--------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Blackstone Advisory Directors Partnership L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
--------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Blackstone Family Investment Partnership I L.P.
By: Blackstone Management Associates I L.L.C., its
general partner
By:
--------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
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28
Blackstone Capital Company II, L.L.C.
By:
--------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇▇▇▇▇▇/C & A Holdings, L.L.C.
By:
--------------------------------------------------
Name:
Title:
The undersigned hereby execute this Agreement on the date
first written above for purposes of Section 1.2 only.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc.
By:
--------------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners, L.P.
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Management Partners, Inc.,
its general partner
By:
--------------------------------------------------
Name:
Title:
122
EXHIBIT A
ACKNOWLEDGMENT AND AGREEMENT
The undersigned wishes to receive from [NAME] ("Transferor")
certain shares or certain options, warrants or other rights to purchase
[NUMBER] shares, par value $[NUMBER] per share, of Common Stock (the "Shares")
of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, a Delaware corporation (the "Company");
The Shares are subject to the Stockholders Agreement, dated
[ ], 2001 (the "Agreement"), among the Company and the other parties listed on
the signature pages thereto;
The undersigned has been given a copy of the Agreement and
afforded ample opportunity to read and to have counsel review it, and the
undersigned is thoroughly familiar with its terms;
Pursuant to the terms of the Agreement, the Transferor is
prohibited from transferring such Shares and the Company is prohibited from
registering the transfer of the Shares unless and until a transfer is made in
accordance with the terms and conditions of the Agreement and the recipient of
such Shares acknowledges the terms and conditions of the Agreement and agrees
to be bound thereby; and
The undersigned wishes to receive such Shares and have the
Company register the transfer of such Shares.
In consideration of the mutual promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and to induce the Transferor to transfer such Shares
to the undersigned and the Company to register such transfer, the undersigned
does hereby acknowledge and agree that (i) he[/she] has been given a copy of
the Agreement and afforded ample opportunity to read and to have counsel review
it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares
are subject to the terms and conditions set forth in the Agreement, and (iii)
the undersigned does hereby agree fully to be bound thereby as [an " Investor"]
[a "Major Stockholder"] (as therein defined).
This ________ day of ________, 20__.
123
SCHEDULE I
INVESTORS
[To be completed prior to closing and to include only Permitted Transferees of
Heartland and other investors, subject to approval of Original Stockholders,
not to be unreasonably withheld.]