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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 14, 1998
----------------------------
MS ACQUISITION CORP.
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-11801-01 13-3379803
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
24331 Sherwood Avenue, Centerline, Michigan 48015-0067
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (810) 759-2200
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Exhibit Index Appears on Page 7
Total Number of Pages 7
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ITEM 5. Other Events.
On April 3, 1998, MS Acquisition Corp., a Delaware corporation (the
"Registrant"), entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") with Societe Financiere de Development Industriel et
Technologique, a French societe anonyme ("Sofedit"), and the other parties named
on the signature pages thereto. On April 14, 1998, pursuant to the terms of the
Stock Purchase Agreement, the outstanding capital stock of Sofedit, held both
directly and indirectly through certain holding companies (the capital stock of
which was also transferred) by its stockholders, was transferred to the
Registrant in consideration of: (i) Promissory Notes of the Registrant in an
aggregate principal amount of $40,968,000; (ii) a portion of Sofedit's profits
for fiscal year 1997 to be paid to the former stockholders of Sofedit consistent
with the past dividend policy of Sofedit; (iii) $27 million in Series B
Preferred Stock of the Registrant; and (iv) 3,000,000 shares of Class A Common
Stock of the Registrant. In addition, the Registrant assumed approximately $12
million of debt of the Sofedit group in connection with the transaction. After
giving effect to the transaction, the stockholders of Sofedit own approximately
75% of the common stock of the Registrant, consisting of 1,673,718 shares of
Class A-1 Common Stock, $.01 par value per share ("Class A-1 Common Stock"),
1,326,282 shares of Class A-2 Common Stock, $.01 par value per share ("Class
A-2 Common Stock"), and no shares of Class A-3 Common Stock, $.01 par value per
share ("Class A-3 Common Stock"), as well as approximately 66% of the Preferred
Stock of the Registrant, including no shares of Series A Preferred Stock, $.01
par value per share, and 270,000 shares of the Series B Preferred Stock, $.01
par value per share ("Series B Preferred Stock").
The Stock Purchase Agreement contains customary representations,
warranties, covenants and conditions. The Stock Purchase Agreement required the
Registrant to (i) seek stockholder approval to amend the Registrant's
Certificate of Incorporation to, among other things, authorize new classes of
Common Stock to be designated as Class A-1 Common Stock, Class A-2 Common Stock,
Class A-3 Common Stock, Class I Common Stock, $.01 par value per share, and
Class II Common Stock, $.01 par value per share, and authorize a new class of
Preferred Stock to be designated as Series B Preferred Stock, and (ii) propose
for election to the Board of Directors seven directors who would be selected in
the manner described below. Consummation of the proposed transaction was subject
to various conditions including, among others, the accuracy of representations
and warranties, the performance of covenants, the absence of litigation and the
approval of the stockholders of the Registrant.
Pursuant to the Stock Purchase Agreement, (i) three of the then current
members of the Registrant's Board of Directors (Messrs. Ueli Spring, Harold A.
Brown and Richard Puricelli) resigned and did not stand for re-election to the
Board and (ii) the number of members of the Board was increased from five to
seven. The current members of the Board are Messrs. Michael Delaney and David
Howe and the following newly elected members; Messrs. Francis Barge, Felix
Domenench, Jean-Rene Hergoualc'h, Jean-Phillipe Laramendy and Edouard Lenthier.
The Promissory Notes issued by the Registrant pursuant to the Stock
Purchase Agreement mature on October 14, 1999, may be prepaid at any time and
must be prepaid in full upon the consummation of a "Qualifying Offering" or a
"Sale of the Company", each as defined in the Promissory Notes. No interest will
accrue on the Promissory Notes unless a Qualifying Offering has not been
consummated on or prior to April 14, 1999, at which time the Promissory Notes
will begin to accrue interest at LIBOR plus 2%, payable quarterly in cash.
Page 2 of 7 Pages
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The Class A Common Stock (voting) of the Registrant is divided into
three series. The Series A-1 Common is entitled to elect 3 of 7 directors and
was issued to the former stockholders of Sofedit who were involved in the
management of Sofedit and certain affiliates of such managers. The Series A-2
Common is entitled to elect 2 of 7 directors and was issued to the former
stockholders of Sofedit which are financial institutions. The Series A-3 Common
is entitled to elect 2 of 7 directors and was issued to the current stockholders
of the Registrant. Other than with respect to the election of directors, the
ability to convert the Series A-3 Common into non-voting Common Stock (the
Series A-1 is not so convertible) and the requirement that certain significant
corporate transactions be approved by a majority of the Series A-3 Common, the
Series A-1 Common, Series A-2 Common and Series A-3 Common are identical in all
respects.
Upon the earlier to occur of (i) a qualified initial public offering
with respect to the Registrant and (ii) a sale of the Registrant, each as set
forth in the Compnay's Amended and Restated Certificate of Incorporation, the
Series A-1 Common, Series A-2 Common and Series A-3 Common will be automatically
converted into a single series of Class A Common Stock and the directors of the
Registrant will be elected by the holders of a majority of such single series.
The Series B Preferred Stock issued to the former stockholders of
Sofedit will not accrue dividends until the earlier of (i) a qualified initial
public offering with respect to the Registrant and (ii) April 14, 1999.
Otherwise, the Series B Preferred Stock is pari passu with, and have
substantially the same terms as, the currently outstanding Series A Preferred
Stock.
The Registrant also entered into a Stockholders Agreement, dated as of
April 14, 1998, among the Registrant and its stockholders (the "New Stockholders
Agreement"). The current Stockholders Agreement dated August 13, 1996 terminated
in accordance with its terms in connection with the proposed transaction. The
New Stockholders Agreement with the former stockholders of Sofedit
provides for among other things, tag-along, drag-along and first refusal rights.
The Registrant also entered into a Registration Rights Agreement dated
as of April 14, 1998 among the Registrant and the parties named on the signature
pages thereto (the "New Registration Rights Agreement"). The New Registration
Rights Agreement furnishes certain parties thereto with demand registration
rights. Additionally, certain parties thereto have the right to cause the
Registrant to consummate an initial public offering. All stockholders party to
the New Registration Rights Agreement have piggy-back registration rights.
As a condition to the consummation of the proposed combination, the
holders of the 11% Junior Subordinated Notes due 2007 (the "Junior Notes")
issued by Aetna Holdings, Inc. on August 13, 1996 agreed that the Junior Notes
would not be redeemed in connection with the combination.
As a condition to the consummation of the proposed combination, the
holders of the Junior Notes agreed to enter into that certain Promissory Note
Exchange Agreement pursuant to which each holder of a Junior Note would tender
such Junior Note to the Registrant for cancellation in exchange for an Amended
and Restated 11% Junior Subordinated Note due 2007,
Page 3 of 7 Pages
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which would be due and payable in full upon the consummation of a Qualified
Offering, as such term is defined in the Junior Notes.
As a condition to the consummation of the proposed combination, the
holders of the Registrant's Series A Preferred Stock agreed to waive their right
of redemption which would be triggered by the combination.
The Stock Purchase Agreement, New Stockholders Agreement, the New
Registration Rights Agreement and the Amended and Restated Certificate of
Incorporation are exhibits to this Current Report. The foregoing summary of
material terms of these documents is qualified in its entirety by reference to
these exhibits.
Page 4 of 7 Pages
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ITEM 7. Financial Statements and Exhibits
(a) Financial statements will be filed by amendment no later
than June 29, 1998.
(b) Pro forma financial information will be filed by amendment
no later than June 29, 1998.
(c) The following exhibits are filed with this report:
Exhibit Number Description
3.1 Amended and Restated Certificate of
Incorporation of the Registrant.
10.1 Stock Purchase Agreement, dated as of April 3,
1998, among the Registrant, Societe Financiere
de Developpement Industriel et Technologique
and the parties named on the signature pages
thereto.
10.2 Stockholders Agreement, dated as of April 14,
1998, among the Registrant and the parties
named on the signature pages thereto.
10.3 Registration Rights Agreement, dated as of
April 14, 1998, among the Registrant and the
parties named on the signature pages thereto.
Page 5 of 7 Pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MS ACQUISITION CORP.
Date: April 29, 1998 By: /s/ Harold A. Brown
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Name: Harold A. Brown
Title: Vice President, Finance and Secretary
Page 6 of 7 Pages
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------ ----------- ----
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation of the Registrant.
10.1 Stock Purchase Agreement, dated as of April 3, 1998, among the
Registrant, Societe Financiere de Developpement Industriel et
Technologique and the other parties named on the signature pages
thereto.
10.2 Stockholders Agreement, dated as of April 14, 1998, among the
Registrant and the parties named on the signature pages thereto.
10.3 Registration Rights Agreement, dated as of April 14, 1998, among the
Registrant and the parties set forth on the signature pages thereto.
</TABLE>
Page 7 of 7 Pages
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EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
MS ACQUISITION CORP.
MS ACQUISITION CORP., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "GCL"), does
hereby certify that:
1. The name of the corporation is MS ACQUISITION CORP. (the
"Corporation"). The Corporation was originally incorporated under the name PWC
Acquisition Corp., and the original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of Delaware on
May 2, 1986 being thereafter amended and restated.
2. This Restated Certificate of Incorporation (i) has been adopted in
accordance with the provisions of Sections 228 (with the written consent of the
stockholders of the Corporation), 242 and 245 of the GCL and (ii) amends,
restates and integrates the provisions of the Certificate of Incorporation of
the Corporation as in effect immediately prior to the filing hereof.
3. The Certificate of Incorporation of the Corporation is hereby
amended and restated to read in its entirety as follows:
FIRST: The name of the corporation is MS Acquisition Corp.
(hereinafter the "Corporation").
SECOND: The address of the Corporation's registered office in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "GCL").
FOURTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is 22,563,123.32 shares, consisting of
20,000,000 shares of Common Stock, par value $.01 per share (the "Common
Stock"); and 2,563,123.32 shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock"). The Common Stock will consist of two classes of Common
Stock as follows:
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(a) 12,000,000 shares of Class A Common Stock, par value $.01
per share (the "Class A Common"), consisting of four series designated as
follows:
(i) 2,000,000 shares of Series A-1 Common Stock,
$.01 par value per share (the "Series A-1
Common"),
(ii) 1,500,000 shares of Series A-2 Common Stock,
$.01 par value per share (the "Series A-2
Common"),
(iii) 2,500,000 shares of Series A-3 Common Stock,
$.01 par value per share (the "Series A-3
Common"), and
(iv) 6,000,000 shares of Series I Common Stock,
$.01 par value per share (the "Series I
Common"); and
(b) 8,000,000 shares of Class B Common Stock, par value $.01
per share (the "Class B Common"), consisting of two series designated as
follows:
(i) 1,500,000 shares of Series B-1 Common Stock,
$.01 par value per share (the "Series B-1
Common"), and
(ii) 2,500,000 shares of Series B-2 Common Stock,
$.01 par value per share (the "Series B-2
Common"), and
(iii) 4,000,000 shares of Series II Common Stock,
$.01 par value per share (the "Series II
Common").
Each share of Class A Common Stock, par value $.01 per share,
of the Corporation which is issued and outstanding immediately prior to the
filing of this Restated Certificate of Incorporation shall be reclassified into
one share of Series A-3 Common. Each share of Class B Common Stock, par value
$.01 per share, of the Corporation which is issued and outstanding immediately
prior to the filing of this Restated Certificate of Incorporation shall be
reclassified into one share of Series B-2 Common.
The Preferred Stock will consist of:
(a) 293,123.32 shares of a class of Preferred Stock
constituting Series A Preferred Stock, par value $.01 per share (the "Series A
Preferred Stock");
(b) 270,000 shares of a class of Preferred Stock constituting
Series B Preferred Stock, par value $.01 per share (the "Series B Preferred
Stock"); and
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(c) 2,000,000 shares of a class of Preferred Stock
constituting New Preferred Stock, par value $.01 per share, in one or more
series, the terms of which may be set forth by resolution of the Board of
Directors, as provided by Section 1(b) of Part III of Article FOURTH (the "New
Preferred Stock").
I. DEFINITIONS
1. The following terms shall have the following meanings in this
Certificate of Incorporation (such definitions to be equally applicable to both
singular and plural forms of the terms defined):
"Affiliate" means, with respect to any Person, any other Person that
controls, is controlled by or is under common control with such Person. For the
purposes of this definition, "control" (including its correlative meanings, the
terms "controlled by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of securities, by contract or otherwise.
"Associate" means, with respect to any Person, (i) any other Person
of which such Person or the Persons described in clause (iii) below is an
officer, member or partner or is, directly or indirectly, the beneficial owner
of 5 percent (5%) or more of any class of equity securities or equivalent
economic interest; (ii) any trust, estate, or similar organization in which such
Person has a substantial beneficial interest or as to which such Person serves
as trustee or in a similar fiduciary capacity; and (iii) any spouse or other
relative of such Person, or any relative of such spouse.
"Board of Directors" means the board of directors of the
Corporation.
"Business Day" means a day, other than a Saturday or Sunday, on
which banks in New York, New York are open for business.
"Equity Equivalents" means securities exercisable, convertible or
exchangeable for or into Common Stock.
"Funded Debt" means, without duplication, with respect to any Person
(i) all indebtedness for borrowed money or for the deferred purchase price of
property, (ii) the face amount of all letters of credit, banker's acceptances
and other credit facilities issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iii) all liabilities secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof, (iv) lease obligations of such Person
which, in accordance with generally
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accepted accounting principles, should be capitalized, (v) obligations with
respect to any conditional sale agreement or title retention agreement and (vi)
guarantees by such Person of the Funded Debt of another Person; but excluding in
each case trade and other accounts payable in the ordinary course of business.
"Person" or "person" means an individual, partnership, corporation,
limited liability company or partnership, trust, unincorporated organization,
joint venture, government (or agency or political subdivision thereof) or any
other entity of any kind.
"Qualifying Offering" means the consummation of an underwritten
primary or secondary public offering of Common Stock pursuant to an effective
registration statement under the Securities Act as a result of which (i)
(together with all similar previous public offerings) at least $50 million of
aggregate net proceeds are raised for the Corporation, and (ii) the Common Stock
is listed on The New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market.
"Regulatory Problem" means, with respect to any stockholder, any set
of facts or circumstances wherein such stockholder has made a determination that
(i) such stockholder or such stockholder's Affiliates own, control or have
certain power over a quantity of securities of any kind issued by the
Corporation which exceeds any limitation to which it is (or they are) subject,
or which is otherwise not permitted, under any law, rule or regulation of any
governmental authority (including any position to that effect taken by such
governmental authority) or (ii) that restrictions are imposed on such
stockholder as a result of any law, regulation, rule or directive (whether or
not having the force of law) of any governmental or regulatory authority which
make it illegal or unduly burdensome for such stockholder or such stockholder's
Affiliates to continue to own, control or have such power over any securities of
any kind issued by the Corporation.
"Sale of the Company" means the sale of the Corporation (whether by
merger, consolidation, recapitalization, reorganization, sale of securities,
sale of assets or otherwise) in one transaction or a series of related
transactions to a Person or Persons that is not an Affiliate or Associate of any
Sofedit Stockholder or Sofedit Institutional Stockholder pursuant to which such
Person or Persons acquires (i) securities representing at least a majority of
the voting power of all securities of the Corporation, assuming the conversion,
exchange or exercise of all securities convertible, exchangeable or exercisable
for or into voting securities, or (ii) all or substantially all of the business
or assets of the Corporation and its Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
"Significant Subsidiaries" means those Subsidiaries of the
Corporation which constitute a "Significant Subsidiary" as defined in Regulation
S-X promulgated by the Securities
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and Exchange Commission under the Securities Act, as such Regulation is in
effect on the date hereof.
"Significant Transaction" means:
(i) any merger, consolidation or other business
combination of the Corporation or any of its Significant
Subsidiaries with or into any Person or any formation by the
Corporation or any of its Significant Subsidiaries of any
entity which would, upon such formation, be a Subsidiary;
(ii) any sale, lease, exchange or other disposition
by the Corporation or any of its Significant Subsidiaries of a
significant portion of the Corporation's assets on a
consolidated basis, in a single transaction or a series of
related transactions, to or with any Person;
(iii) any amendment to or modification or repeal of
any provision of this Restated Certificate of Incorporation or
the By-Laws of the Corporation;
(iv) any acquisition by the Corporation or any of its
Subsidiaries of securities or assets, in a single transaction
or a series of related transactions, if such securities or
assets will represent thirty-five percent (35%) or more of the
total assets or revenues of the Corporation, as reflected on
the Corporation's most recent consolidated financial
statements, as such is determined in accordance with the
generally accepted accounting principles used to prepare such
financial statements;
(v) any significant increase or reduction of the
capital of the Corporation or any of its Significant
Subsidiaries or the creation of any additional class of
capital stock of the Corporation or any of its Subsidiaries,
or the issuance by the Corporation or any of its Subsidiaries
of Equity Equivalents on a basis other than pro rata to the
holders of capital stock other than the issuance of Common
Stock upon the conversion of any outstanding class or series
of Common Stock;
(vi) the incurrence or guaranty after the April 14,
1998 by the Corporation or any of its Subsidiaries of any
material Funded Debt or any modification or amendment to any
agreement governing the incurrence or guaranty thereof (other
than (x) any incurrence or guaranty under an agreement
approved by the Board of Directors prior to the date of the
filing of this Restated Certificate of Incorporation or the
incurrence or guaranty of Funded Debt as permitted under any
such agreement, (y) any guaranty with respect to Funded Debt
not in excess of $10,000,000 in the aggregate and (z) any
increase not in
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excess of $5,000,000 in the amount of Funded Debt guaranteed
under an agreement approved by the Board of Directors prior to
the date of the filing of this Restated Certificate of
Incorporation);
(vii) the dissolution of the Corporation (or any of
its Significant Subsidiaries), the adoption of a plan of
liquidation by the Corporation (or any of its Significant
Subsidiaries), any action by the Corporation (or any of its
Significant Subsidiaries) to commence any suit, case,
proceeding or other action (A) under any existing or future
law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors seeking to have an order
for relief of debtors entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all
or any substantial part of its assets, or making a general
assignment for the benefit of its creditors; and
(viii) any transaction or dealing between the
Corporation or any of it Subsidiaries and one or more of its
stockholders (or any Affiliate or Associate of any
stockholder).
"Sofedit Institutional Stockholders" has the meaning provided
in the Stockholders Agreement.
"Sofedit Stockholders" has the meaning provided in the
Stockholders Agreement.
"Stockholders Agreement" means the Stockholders Agreement
dated as of April 9, 1998 by and among the Corporation and its stockholders, as
in effect on the date of execution thereof.
"Subsidiary" means, with respect to any Person, any other
Person in which such Person, directly or indirectly through Subsidiaries or
otherwise, owns more than fifty percent (50%) of either the equity interests or
the voting power.
"Tax" or "Taxes" means all Federal, state, local or foreign
net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value
added, franchise, bank shares, withholding, payroll, employment, excise,
property, alternative or ad-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any nature
whatever, whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
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2. The following terms, when used in this Restated Certificate of
Incorporation, shall have the meanings provided for such terms in the Articles,
Parts and Sections set forth below (such definitions to be equally applicable to
both singular and plural forms of the terms defined):
Term Article
---- -------
Corporation FIRST
GCL THIRD
Term Section (Part)
---- of Article FOURTH
-----------------
Class A Common preamble
Class B Common preamble
Common Stock preamble
Conversion Event 6(c)
Conversion Price 7(a) (Part III)
Date of Issuance 1(c) (Part III)
Dividend Payment Date 2 (Part III)
Dividend Period 2 (Part III)
Dividend Rate 2 (Part III)
Junior Stock 3(c) (Part III)
New Preferred Stock preamble
Optional Conversion 7(a) (Part III)
Organic Change 8(a) (Part III)
Parity Securities 3(d) (Part III)
Preferred Liquidation Value 3(b) (Part III)
Preferred Stock preamble
Redemption Date 4(a) (Part III)
Redemption Price 4(a) (Part III)
Series A-1 Common preamble
Series A-2 Common preamble
Series A-3 Common preamble
Series A Preferred Stock preamble
Series B Accrual Date 3(a) (Part III)
Series B-1 Common preamble
Series B-2 Common preamble
Series B Preferred Stock preamble
Series I Common preamble
Series II Common preamble
Share 1(c) (Part III)
Stated Value 1(c) (Part III)
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II. COMMON STOCK
Except as otherwise provided herein or as otherwise required
by applicable law, all shares of Common Stock will be identical in all respects
and will entitle the holders thereof to the same rights and privileges.
1. Voting Rights Generally.
(a) Except as expressly provided herein or as required under
the GCL, on all matters to be voted on by the Corporation's stockholders, (i)
each holder of record of shares of Class A Common will be entitled to one vote
per share so held, and (ii) holders of shares of Class B Common will be entitled
to no voting rights.
(b) Except as expressly required under the GCL, on any matter
on which holders of Class B Common shall be entitled to vote, they shall be
entitled to one vote per share.
2. Voting for and by the Board of Directors.
(a) Prior to the occurrence of a Conversion Event, the holders
of shares of Series A-1 Common, Series A-2 Common and Series A-3 Common shall
have the right to nominate and elect the members of the Board of Directors, and
the Board of Directors shall vote on matters, in each case as described below:
(i) The Board of Directors shall have seven (7)
members. Except as provided in clause (a) (v)
below, the Board of Directors shall act by
the affirmative vote of directors on the
Board of Directors having a majority of the
votes entitled to be cast at a meeting at
which a quorum is present. The Board of
Directors may also take action by unanimous
written consent of the directors, as provided
in the ByLaws of the Corporation.
(ii) So long as any shares of Series A-1 Common
shall remain outstanding, the holders of such
shares, voting together as a separate series,
shall be entitled to nominate and elect three
(3) members to the Board of Directors by the
affirmative vote of the holders of a majority
in number of all such shares then
outstanding.
(iii) So long as any shares of Series A-2 Common
shall remain outstanding, the holders of such
shares, voting together as a separate series,
shall be entitled to nominate and elect two
(2)
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members to the Board of Directors by the
affirmative vote of the holders of a majority
in number of all such shares then
outstanding.
(iv) So long as any shares of Series A-3 common
shall remain outstanding, the holders of such
shares, voting together as a separate series,
shall be entitled to nominate and elect two
(2) members to the Board of Directors by the
affirmative vote of the holders of a majority
in number of all such shares then
outstanding.
(v) The affirmative vote of at least one (1)
director elected by the holders of the Series
A-3 Common shall be required prior to the
Corporation or any Subsidiary of the
Corporation entering into any Significant
Transaction.
(b) Upon and after the occurrence of a Conversion Event, the
holders of shares of Class A Common Stock shall have the right to elect members
of the Board of Directors, and the Board of Directors shall vote on matters as
described below:
(i) The Board of Directors shall have such number
of members as may be determined by the Board
of Directors. The members of the Board of
Directors shall act by the affirmative vote
of directors on the Board of Directors having
a majority of the votes entitled to be cast
at a meeting at which a quorum is present.
The Board of Directors may also take action
by the unanimous written consent of the
directors, as provided in the By-laws of the
Corporation.
(ii) The holders of the shares of the Class A
Common, voting together as a separate class,
shall be entitled to elect the members of the
Board of Directors by the plurality vote of
the holders of such issued and outstanding
shares.
3. Dividends. When and as dividends are declared or paid on shares of
Common Stock, whether in cash, property or securities, each holder of record of
shares of Common Stock will be entitled to a ratable portion of such dividend,
based upon the number of shares of Common Stock then held of record by each such
holder, provided that (a) if dividends are declared in shares of Common Stock,
such dividends will be declared and paid at the same rate per share on each
class and each series of Common Stock, and, unless the Corporation obtains the
prior affirmative vote or written consent of at least ninety-five percent (95%)
of the shares of each class of Common Stock then outstanding, in each case
voting together as a separate class, dividends payable in shares of a specific
class and series of Common Stock will be payable only to holders of that
particular class and series of Common Stock; provided, further, that any
dividend or distribution payable to one class or series of Common Stock entitles
the other class
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and series of Common Stock to the same form and distribution amount (except as
provided for in (a) above and (b) below) on the same date, and (b) if the
dividends consist of voting securities of the Corporation, the Corporation will
make available to each holder of Class B Common, at such holder's request,
dividends consisting of non-voting securities of the Corporation, which are
otherwise identical to the voting securities and which are convertible into or
exchangeable for such voting securities on the same terms as the shares of Class
B Common are convertible into the shares of Class A Common.
4. Stock Splits; Combinations. If the Corporation, in any manner,
subdivides or combines (by stock split, stock dividend or otherwise) the
outstanding shares of one class or series of Common Stock, the issued and
outstanding shares of the other classes and series of Common Stock will be
proportionately subdivided or combined unless the Corporation obtains the prior
affirmative vote or consent of the holders of all of the issued and outstanding
shares of Class A Common and Class B Common, voting together as a separate
class.
5. Liquidation.
(a) Ratable Participation. The holders of the Common Stock will be
entitled to share ratably, on the basis of the number of shares of Common Stock
then held by each such holder, in all distributions to the holders of the Common
Stock in any liquidation, dissolution or winding-up of the Corporation.
(b) Mergers, etc. Neither the voluntary sale, conveyance, exchange
or transfer (for cash, shares of stock, securities or other consideration) of
all or substantially all of the property or assets of the Corporation nor the
consolidation, merger or other business combination of the Corporation with or
into one or more corporations shall, alone, be deemed to be a liquidation,
dissolution or winding-up, voluntary or involuntary, of the Corporation.
6. Conversion.
(a) Optional Conversion of Class A Common. Prior to the occurrence
of a Conversion Event, each share of Series A-2 Common is convertible into one
share of Series B-1 Common and each share of Series A-3 Common is convertible
into one share of Series B-2 Common, in each case at the option of the holder
thereof in the event that the holder thereof has determined that it (or its
Affiliates, other than the Corporation) might be subject to a Regulatory Problem
as a result of its holdings of shares of any Class A Common. Upon and after the
occurrence of a Conversion Event, each share of Series I Common is convertible
into one share of Series II Common at the option of the holder thereof in the
event that the holder thereof has determined that it (or its Affiliates, other
than the Corporation) might be subject to a Regulatory Problem as a result of
its holdings of shares of any Class A Common.
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(b) Optional Conversion of Class B Common. Prior to the occurrence
of a Conversion Event, each share of Series B-1 Common is convertible into one
share of Series A-2 Common and each share of Series B-2 Common is convertible
into one share of Series A-3 Common, in each case at the option of the holder
thereof. Upon and after the occurrence of a Conversion Event, each share of
Series II Common is convertible into one share of Series I Common, in each case
at the option of the holder thereof.
(c) Automatic Conversion. Upon (i) the consummation of a Qualifying
Offering, (ii) the consummation of a Sale of the Company pursuant to clause (i)
of the definition of "Sale of the Company" or (iii) the distribution of any
proceeds from a Sale of the Company to the stockholders of the Corporation
pursuant to clause (ii) of the definition of "Sale of the Company" (each a
"Conversion Event"), (x) each share of Series A-1 Common, Series A-2 Common and
Series A-3 Common shall be automatically converted into one fully paid and
non-assessable share of Series I Common and (y) each share of Series B-1 Common
and Series B-2 Common shall be automatically converted into one fully paid and
non-assessable share of Series II Common.
7. Conversion Procedure.
(a) Each conversion pursuant to Section 6(a) or 6(b) of this Part II
of shares of one series of Class A Common (or series of Class B Common, as the
case may be) into a series of Class B Common (or Class A Common, as the case may
be) will be effected by the surrender of the certificate or certificates
representing the shares to be converted at the principal office of the
Corporation at any time during normal business hours, together with written
notice to the Corporation by the holder of such shares stating (x) that the
holder desires to convert the shares, or a stated number of the shares, of a
series of Class A Common or series of Class B Common (as the case may be), (y)
with respect to any conversion of shares of a series of Class A Common into a
series of Class B Common, that such holder has determined that such conversion
is necessary because of a Regulatory Problem and (z) with respect to any
conversion of a series of Class B Common into a series of Class A Common, that
such holder has determined that such conversion will not result in a Regulatory
Problem for any of such holder or its Affiliates (other than the Corporation).
(b) Each conversion pursuant to Section 6(a) or 6(b) of this Part II
will be deemed to have been effected as of the close of business on the date on
which such certificate or certificates were surrendered and such notice was
received. Each automatic conversion pursuant to Section 6(c) of this Part II
will be deemed to have been effected at the close of business on the date of the
consummation of the Conversion Event. At such time the rights of the holder of
the converted Common Stock as such holder will cease and the Person or Persons
in whose name or names the certificate or certificates for shares of such other
class or series of Common Stock are to be issued upon such conversion will be
deemed to have become the holder or holders of record of the shares of such
other class or series of Common Stock represented thereby.
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(c) Following each surrender of certificates representing the class
or series of Common Stock being converted, the Corporation will issue and
deliver in accordance with the surrendering holder's instructions (a) the
certificate or certificates for the class or series of Common Stock issuable
upon such conversion and (b) in the case of the Class A Common and the Class B
Common, a certificate representing any Common Stock which was represented by the
certificate or certificates delivered to the Corporation in connection with such
conversion but which was not converted.
(d) The issuance of certificates for a class or series of Common
Stock upon conversion of any class or series of Common Stock will be made
without charge to the holders of such shares for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of such other class or series of Common
Stock.
(e) The Corporation will at all times reserve and keep available out
of its authorized but unissued shares of Class A Common and Class B Common the
number of such shares sufficient for issuance upon conversion of any class or
series of the Common Stock hereunder.
(f) The Corporation will not close its books against the transfer of
any class or series of Common Stock in any manner which would interfere with the
timely conversion of any class or series of Common Stock.
(g) The Corporation shall not issue any shares of Series A-1 Common,
Series A-2 Common, Series A-3 Common, Series B-1 Common or Series B-2 Common
following the occurrence of a Conversion Event.
(h) The Corporation shall not issue any shares of Series I Common or
Series II Common prior to the occurrence of a Conversion Event.
8. Registration of Transfer. The Corporation will keep at its principal
office (or such other place as the Corporation reasonably designates) a register
for the registration and transfer of shares of Common Stock. Upon the surrender
of any certificate representing shares of any class or series of Common Stock at
such place, the Corporation will, at the request of the registered holder of
such certificate, execute and deliver a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares of such
class or series represented by the surrendered certificate, and the Corporation
forthwith will cancel such surrendered certificate. Each such new certificate
will be registered in such name and will represent such number of shares of such
class or series as is requested by the holder of the surrendered certificate and
will be substantially identical in form to the surrendered certificate.
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9. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder will be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class or series of Common Stock, and in the
case of any such loss, theft or destruction, upon receipt of the indemnity
reasonably satisfactory to the Corporation (provided that if the holder is a
financial institution or other institutional investor its own agreement will be
satisfactory with the approval of the Board of Directors or the Corporation),
or, in the case of any such mutilation upon surrender of such certificate, the
Corporation will (at its expense) execute and deliver in lieu of such
certificate a new certificate of like kind representing the number of shares of
such class or series represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
10. Amendment and Waiver. No amendment or waiver of any provision of
this Article FOURTH will be effective without the prior approval of the holders
of a majority in number of all shares of Class A Common then outstanding, voting
together as a separate class, and the holders of a majority in number of all
shares of Class B Common then outstanding, voting together as a separate class.
11. Merger Consideration. Without the prior affirmative vote or written
consent of the holders of at least ninety-five percent (95%) of each class of
Common Stock then outstanding, in each case voting together as a separate class,
the Corporation will not merge, consolidate or effect a recapitalization,
unless, in connection with any merger, consolidation or recapitalization in
which holders of any class or series of Common Stock generally receive, or are
given the opportunity to receive, consideration for their shares, all holders of
all classes or series of Common Stock shall be given the opportunity to receive
the same form and amount of consideration per share.
III. PREFERRED STOCK
1. Designation.
(a) Series A Preferred Stock and Series B Preferred Stock. Two
classes of Preferred Stock are hereby created with the designations, powers,
preferences and rights set forth herein. The Corporation is authorized to issue
a class of Preferred Stock designated as "Series A Preferred Stock" consisting
of 293,123.32 shares and a class of Preferred Stock designated as "Series B
Preferred Stock" consisting of 270,000 shares.
(b) New Preferred Stock. The Board of Directors is authorized to
issue, in one or more series, shares of New Preferred Stock. The New Preferred
Stock shall have voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other special
rights, and qualifications, or restrictions thereof, as shall
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be stated and expressed in a resolution or resolutions providing for the
issuance of such New Preferred Stock adopted by the Board of Directors.
(c) Stated Value; Date of Issuance. The shares of Series A Preferred
Stock and the shares of Series B Preferred Stock (individually, a "Share" and,
collectively, the "Shares") shall each have a stated value of $100 per share
(the "Stated Value"). No Shares shall be issued except as part of the original
issuance thereof. The date on which the Corporation initially issues any Share
will be deemed its "Date of Issuance" regardless of the number of times transfer
of such Share is made on the stock records of the Corporation and regardless of
the number of certificates which may be issued to evidence such Share.
(d) Ranking. The shares of Series A Preferred Stock and the shares
of Series B Preferred Stock shall rank pari passu as between each other with
respect to payment of dividends, other distributions, preferences or redemption
or liquidation rights or otherwise. For so long as any shares of Series A
Preferred Stock are issued and outstanding, the Corporation will not, without
the consent of the holders of a majority in number of shares of Series A
Preferred Stock then outstanding (other than any holder who will also hold (or
whose Affiliates, Associates, employees or designees will also hold) the
Preferred Stock which is subject to such consent), voting together as a separate
series, issue any series of Preferred Stock which will be senior to or pari
passu with the Series A Preferred Stock with respect to payment of dividends,
other distributions, preferences or redemption or liquidation rights or
otherwise. For so long as any shares of Series B Preferred Stock are issued and
outstanding, the Corporation will not, without the consent of the holders of a
majority in number of shares of Series B Preferred Stock then outstanding (other
than any holder who will also hold (or whose Affiliates, Associates, employees
or designees will also hold) the Preferred Stock which is subject to such
consent), voting together as a separate series, issue any series of Preferred
Stock which will be senior to or pari passu with the Series B Preferred Stock
with respect to payment of dividends, other distributions, preferences or
redemption or liquidation rights or otherwise.
2. Dividends. When, as and if declared by the Board of Directors, to
the extent funds are legally available therefor, dividends will be payable on
each Share, in cash, as provided herein. Dividends on the Shares will be payable
at a rate per annum equal to eleven percent (11%) of the Stated Value thereof
(the "Dividend Rate"). Such dividends shall be payable semi-annually on the 13th
day of February and August of each year, commencing on February 13, 1997 with
respect to the Series A Preferred Stock and on the first 13th day of February or
August to occur subsequent to the Series B Accrual Date with respect to the
Series B Preferred Stock (each such date hereinafter referred to as a "Dividend
Payment Date" and each such dividend period hereinafter referred to as a
"Dividend Period"), except that if such date is not a Business Day, then such
dividend shall be payable on the next succeeding Business Day, to the holders of
record as they appear on the register of the Corporation for the Shares.
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3. Accrual.
(a) Dividends on the Shares shall accrue cumulatively on a daily
basis and shall accrue from the Date of Issuance of such Shares with respect to
the Series A Preferred Stock and from the earlier to occur of (i) April 14, 1999
and (ii) the consummation of a Qualifying Offering (such date being referred to
as the "Series B Accrual Date") with respect to the Series B Preferred Stock, in
each case to and including the date on which the redemption of such Shares shall
have been effected or on which full payment with respect to such Shares shall
have been made pursuant to any liquidation, dissolution or winding-up of the
Corporation, whether or not such dividends have been declared and whether or not
there shall be (at the time such dividends became or become payable or any other
time) profits, surpluses or other funds of the Corporation legally available for
the payment of dividends.
(b) To the extent not paid on any Dividend Payment Date, all
dividends which have accrued on any Shares then outstanding during the period
from and including the preceding Dividend Payment Date (or from and including
the Date of Issuance or the Series B Accrual Date, as the case may be, for such
Shares in the case of the initial Dividend Payment Date for such Shares) to (but
excluding) such Dividend Payment Date shall be added on such Dividend Payment
Date to the Preferred Liquidation Value of such Shares (so that, without
limitation, dividends shall thereafter accrue in respect of the amount of such
accrued but unpaid dividends) and shall remain a part thereof until (but only
until) such dividends are paid. The "Preferred Liquidation Value" of any Share
as of a particular date shall be equal to the sum of $100 plus an amount equal
to any accrued and unpaid dividends (whether or not earned or declared) on such
Share added to the Preferred Liquidation Value of such Share on any Dividend
Payment Date pursuant to this Section (3)(b) of Part III and not thereafter
paid.
(c) Priority for Shares. For so long as any Shares shall be
outstanding, no dividend or distribution, whether in cash, stock or other
property, shall be paid, declared and set apart for payment or made on any date
on or in respect to the Common Stock, or any other class or series of stock of
the Corporation ranking junior to the Shares (together with the Common Stock, a
"Junior Stock") as to dividends or distributions of assets upon liquidation,
dissolution or winding-up, and no payment on account of the redemption, purchase
or other acquisition or retirement for value by the Corporation of shares of
Common Stock or any other Junior Stock shall be made on any date unless, in each
case, the full amount of unpaid dividends accrued on all outstanding Shares
shall have been paid or contemporaneously are declared and paid; provided,
however, that the foregoing provisions of this sentence shall not prohibit (i) a
dividend payable solely in shares of Common Stock or any other Junior Stock,
(ii) the acquisition of any shares of any Common Stock or any other Junior Stock
upon conversion or exchange thereof into or for any shares of any other class of
Common Stock or other Junior Stock or (iii) the acquisition of any shares of
Common Stock pursuant to the Stockholders Agreement.
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(d) Pro Rata. If the Corporation pays any dividend on the Series A
Preferred Stock or the Series B Preferred Stock which is less than the total
amount of accrued and unpaid dividends thereon, such payment will be distributed
ratably among the holders of the Series A Preferred Stock, among the holders of
the Series B Preferred Stock and among the holders of any class or series of
capital stock of the Corporation ranking pari passu with respect to dividends
and liquidation preference ("Parity Securities") based on the aggregate accrued
but unpaid dividends on the Series A Preferred Stock, the Series B Preferred
Stock and the Parity Securities held by each such holder.
(e) The Board of Directors may fix a record date for the
determination of holders of Shares entitled to receive payment of the dividends
payable pursuant to Section 2 of this Part III, which record date shall not be
more than sixty (60) days prior to the Dividend Payment Date.
4. Redemption.
(a) Redemption by Corporation. To the extent funds are legally
available therefor, on the earlier of (i) February 13, 2007, or if such date is
not a Business Day then on the next Business Day, or (ii) the date on which a
Sale of the Company occurs, the Corporation shall redeem at the Redemption Price
therefor all issued and outstanding Shares. On any Business Day prior to
February 13, 2007, the Corporation, at its option, may redeem at the Redemption
Price therefor all of the issued and outstanding Shares. The date on which
Shares are redeemed pursuant to this Section 4(a) of Part III is referred to
herein as the "Redemption Date." If on the Redemption Date there shall be
insufficient funds of the Corporation legally available for such redemption,
such amount of the funds as is legally available shall be used for the
redemption requirement as described in this Section 4(a)(i) and (ii) of this
Part III. Such redemption requirement shall be cumulative so that if such
requirement shall not be fully discharged for any reason, funds legally
available therefor shall immediately be applied thereto upon receipt by the
Corporation until such requirement is discharged.
The redemption price (the "Redemption Price") for each outstanding
Share to be redeemed pursuant to this Section 4(a) of Part III shall be the sum
of (i) the Stated Value thereof plus (ii) an amount equal to all accrued and
unpaid dividends thereon to the Redemption Date.
(b) Payment of Redemption Price. On the Redemption Date, the
Corporation shall pay to the holder of each Share being redeemed, upon surrender
by such holder at the Corporation's principal executive office of the
certificate representing such Share, duly endorsed in blank or accompanied by an
appropriate form of assignment, the Redemption Price.
(c) Redeemed or Otherwise Acquired Shares not to be Reissued. All
Shares redeemed pursuant to this Section 4 of Part III or otherwise acquired by
the Corporation shall be retired and shall not thereafter be reissued.
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(d) Determination of Number of Each Holder's Shares to be Redeemed.
If less than all of the outstanding Shares are to be redeemed pursuant to
Section 4(a) of this Part III, the Corporation shall determine the Shares held
by each holder to be redeemed as hereinafter provided. The number of Shares to
be redeemed from each holder thereof shall be the number of Shares determined by
multiplying the total number of Shares to be redeemed by a fraction, the
numerator of which shall be equal to the sum of (i) the aggregate Stated Value
of all Shares then held by such holder, plus (ii) the aggregate amount of
accrued and unpaid dividends on all Shares then held by such holder and the
denominator of which shall be equal to the sum of (i) the aggregate Stated Value
of all Shares then outstanding, plus (ii) the aggregate amount of accrued and
unpaid dividends on all Shares then outstanding.
(e) Notice of Redemption. Notice of the redemption of Shares
pursuant to Section 4(a) of this Part III, specifying the time and place of
redemption and the Redemption Price, shall be given to each holder of record of
Shares to be redeemed, at the address for such holder shown on the stock records
of the Corporation not less than thirty (30) Business Days prior to the date on
which such redemption is to be made; provided, that neither failure to give such
notice nor any defect therein shall affect the validity of the proceeding for
the redemption of any Shares to be redeemed. Such notice shall also specify the
number of Shares of each holder thereof and the certificate numbers thereof
which are to be redeemed. In case less than all the Shares represented by any
certificate are redeemed, a new certificate representing the unredeemed Shares
shall be issued to the holder thereof without cost to such holder.
(f) Dividends After Redemption Date. Unless the Redemption Price is
not made available to the holder of a Share, then from and after its Redemption
Date, no Share shall be entitled to any dividends accruing after such date, all
rights of the holder of such Share, as a stockholder of the Corporation by
reason of the ownership of such Share, shall cease, except the right to receive
the Redemption Price of such Share upon the presentation and surrender of the
certificate representing such Share, and such Share shall not after such date be
deemed to be outstanding for any purpose.
5. Liquidation Rights.
(a) Preference for Series A Preferred Stock and Series B Preferred
Stock. Upon the dissolution, liquidation or winding-up of the Corporation,
whether voluntary or involuntary, the holders of outstanding Shares shall be
entitled to receive for each such Share, out of the assets of the Corporation
available for distribution to stockholders, before any payment or distribution
shall be made to the holders of Common Stock or any other Junior Stock, an
amount in cash equal to the sum of (i) the Stated Value, plus (ii) all accrued
and unpaid dividends on each such Share to the date of final distribution.
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(b) Preferences are not Participating. After the payment to the
holders of the Shares of the full preferential amounts provided for in this
Section 5 of Part III, the holders of the Shares as such shall have no right or
claim to any of the remaining assets of the Corporation.
(c) Preferences. In the event the assets of the Corporation
available for distribution to the holders of the Shares upon any dissolution,
liquidation or winding-up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to this Section 5 of Part III, no such distribution shall be
made on account of any shares of any other class or series of Junior Stock, if
any, unless the full distributive amount shall be paid on account of the Shares.
If upon any such dissolution, liquidation or winding-up of the Corporation, the
assets of the Corporation available for distribution to stockholders shall be
insufficient to provide for payment in full of the preference accorded to the
Series A Preferred Stock hereunder, the Series B Preferred Stock hereunder and
the Parity Securities, if any, then such assets shall be distributed ratably
among the Series A Preferred Stock, the Series B Preferred Stock and the Parity
Securities, if any, based on the sum of (i) the Stated Value or the stated value
of the Parity Securities, as the case may be, plus (ii) all accrued and unpaid
dividends on the Series A Preferred Stock, the Series B Preferred Stock and the
Parity Securities, if any.
(d) Mergers, etc. Neither the voluntary sale, conveyance, exchange
or transfer (for cash, shares of stock, securities or other consideration) of
all or substantially all of the property or assets of the Corporation nor the
consolidation, merger or other business combination of the Corporation with or
into one or more corporations shall be deemed to be a liquidation, dissolution
or winding-up, voluntary or involuntary, of the Corporation.
6. Voting.
(a) Generally. Except as required by law, and except as otherwise
specifically provided herein, none of the Shares shall have any voting rights.
(b) Amendment; Certification of Incorporation. So long as any shares
of Series A Preferred Stock remain outstanding, the Corporation shall not,
without the affirmative vote at a meeting or the written consent in lieu of a
meeting of the holders of at least a majority in number of all shares of Series
A Preferred Stock then outstanding, amend, alter or repeal any of the provisions
of this Restated Certificate of Incorporation so as to affect adversely the
preferences, special rights or powers of the Series A Restated Preferred Stock.
So long as any shares of Series B Preferred Stock remain outstanding, the
Corporation shall not, without the affirmative vote at a meeting or the written
consent in lieu of a meeting of the holders of at least a majority in number of
all shares of Series B Preferred Stock then outstanding, amend, alter or repeal
any of the provisions of this Restated Certificate of Incorporation so as to
affect adversely the preferences, special rights or powers of the Series B
Preferred Stock.
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(c) Authorized Shares. So long as any shares of Series A Preferred
Stock remain outstanding, the Corporation shall not amend this Restated
Certificate of Incorporation so as to increase or decrease the aggregate number
of authorized shares of the Preferred Stock, or increase or decrease the par
value of the Preferred Stock, without the affirmative vote at a meeting or the
written consent in lieu of a meeting of the holders of at least a majority in
number of all shares of Series A Preferred Stock then outstanding. So long as
any shares of Series B Preferred Stock remain outstanding, the Corporation shall
not amend this Restated Certificate of Incorporation so as to increase or
decrease the aggregate number of authorized shares of the Preferred Stock, or
increase or decrease the par value of the Preferred Stock, without the
affirmative vote at a meeting or the written consent in lieu of a meeting of the
holders of at least a majority in number of all shares of Series B Preferred
Stock then outstanding.
7. Conversion of Series A Preferred Stock and Series B Preferred Stock.
The holders of the Shares shall each have the following conversion rights:
(a) Right to Convert. Subject to the provisions for adjustment
hereinafter set forth, (i) each share of Series A Preferred Stock shall be
convertible, as provided for below, at the option of the holders of a majority
in number of all shares of Series A Preferred Stock then outstanding and (ii)
each share of Series B Preferred Stock shall be convertible, as provided for
below, at the option of the holders of a majority in number of all shares of
Series B Preferred Stock then outstanding (each such conversion of Series A
Preferred Stock or Series B Preferred Stock, an "Optional Conversion"), into
fully paid and non-assessable shares of Series I Common or Series II Common by
election made as provided below, during the period of one hundred eighty (180)
days immediately following the date of consummation of a Qualifying Offering at
a conversion price per share of Series I Common or Series II Common, as the case
may be, equal to the price per share (net of underwriters' fees, commissions and
discounts and of the offering expenses) of Common Stock paid by the public in
connection with such Qualifying Offering (such price shall be the "Conversion
Price" with respect to an Optional Conversion hereunder). The number of shares
of Common Stock into which each Share shall be convertible shall be determined
by dividing (i) the sum of (x) the Stated Value thereof, plus (y) an amount
equal to all accrued but unpaid dividends thereon to the date of conversion, by
(ii) the Conversion Price.
(b) Conversion Procedure.
(i) If the holders of a majority in number of all shares of
Series A Preferred Stock then outstanding or the holders of
a majority in number of all shares of Series B Preferred
Stock then outstanding, as the case may be, notify the
Corporation in writing during such one hundred eighty (180)
day period that they elect an Optional Conversion, each
holder of Series A Preferred Stock or Series B Preferred
Stock, as the case may be, shall be promptly notified in
writing thereof by the Corporation, and for a period of
twenty (20)
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days after receipt of such written notice, each such holder
shall have the right to surrender the certificate or
certificates for all of such shares of Series A Preferred
Stock or Series B Preferred Stock, as the case may be, that
it proposes to convert, duly endorsed, at the principal
office of the Corporation or of any transfer agent for the
Series A Preferred Stock, the Series B Preferred Stock or
Common Stock, together with written notice of the name or
names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued if
such name or names shall be different than that of such
holder. In case such notice shall specify a name or names
other than that of such holder, such notice shall be
accompanied by payment of all transfer Taxes payable upon
the issuance and delivery of shares of Common Stock in such
name or names. Thereupon, the Corporation shall issue and
deliver at such office on the second succeeding Business
Day to such holder a certificate or certificates for the
number of validly issued, fully paid and non-assessable
shares of Common Stock to which such holder is entitled if
less than the full number of shares of Series A Preferred
Stock or Series B Preferred Stock evidenced by the
surrendered certificate or certificates are being
converted, a new certificate or certificates, for the
number of shares of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, evidenced by such
surrendered certificate or certificates less the number of
shares converted.
(ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date of
such surrender of the Shares to be converted so that the
rights of the holder thereof as to the Shares being
converted shall cease at such time except for the right to
receive shares of Common Stock, any rights trading
therewith and any dividends declared, accrued and unpaid in
accordance herewith, and the Person entitled to receive
shares of Common Stock and any dividends declared, accrued
and unpaid in accordance herewith shall be treated for all
purposes as the record holder of such shares of Common
Stock at such time.
(c) Adjustment for Stock Splits and Combinations. If the Corporation
at any time or from time to time after the date of the Qualifying Offering and
prior to the date of any Optional Conversion (A) subdivides its issued and
outstanding shares of Series I Common or Series II Common, or (B) combines its
issued and outstanding shares of Series I Common or Series II Common into a
smaller number of shares, then, in each such case, the Conversion Price in
effect immediately prior to such event shall be adjusted so that each holder of
Shares shall have the right to convert its Shares into the number of shares of
Common Stock which it would have owned after the event had such Shares been
converted immediately before the happening of
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such event. Any adjustment under this Section 7(c) of Part III shall become
effective as of the date and time such event becomes effective.
8. Miscellaneous.
(a) Reorganization, Reclassification, Consolidation, Merger or
Sale.
(i) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all
of the Corporation's assets to another Person or other
transaction, occurring during the period of one hundred
eighty (180) days after a Qualifying Offering, which is
effected in such a way that holders of Common Stock are
entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to
or in exchange for Common Stock is referred to herein as
an "Organic Change." Prior to the consummation of any
Organic Change, the Board of Directors shall obtain the
affirmative vote or written consent of the holders of at
least ninety-five percent (95%) of the shares of Series A
Preferred Stock then outstanding, voting together as a
separate series, and the holders of at least ninety-five
percent (95%) of the shares of Series B Preferred Stock
then outstanding, voting together as a separate series,
approving such Organic Change; provided, further, the
terms of such Organic Change shall make appropriate
provision to insure that each of the holders of the
Shares shall thereafter have the right to acquire and
receive in lieu of or in addition to (as the case may be)
the shares of Series I Common (or Series II Common, as
the case may be) immediately theretofore acquirable and
receivable upon the conversion of such holder's Shares,
such shares of stock, securities or assets as may be
issuable or payable with respect to or in exchange for
the number of shares of Common Stock immediately
theretofore acquirable and receivable upon conversion of
such holder's Shares had such Organic Change not taken
place. In any such case, the terms of the Organic Change
shall make appropriate provision with respect to such
holders' rights and interest to insure that the
provisions hereof shall thereafter be applicable to the
Shares (including, in the case of any such consolidation,
merger or sale in which the successor entity or
purchasing entity is other than the Corporation, an
immediate adjustment to reflect the value for the Shares
reflected by the terms of such consolidation, merger or
sale, if the value so reflected would cause a decrease in
the Conversion Price in effect immediately prior to such
consolidation, merger or sale).
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<PAGE> 22
(ii) Unless the holders of at least ninety-five percent (95%)
of the shares of Series A Preferred Stock then
outstanding, voting together as a separate series, and
the holders of at least ninety-five percent (95%) of the
shares of Series B Preferred Stock then outstanding,
voting together as a separate series, vote in favor
thereof or by written consent thereto, the Corporation
shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof, the successor
entity (if other than the Corporation) resulting from
such consolidation or merger or the corporation
purchasing such assets assumes by written instrument
(which may be the agreement of consolidation, merger or
sale), the obligation to deliver to each such holder such
shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be
entitled to acquire.
(b) Fractional Shares Adjustments. Fractional shares may be issued
upon conversion of any Shares.
(c) Shares to be Reserved. The Corporation shall at all times
reserve and keep available, out of its authorized and unissued stock, solely for
the purpose of effecting the conversion of the Shares, such number of shares of
Series I Common and Series II Common as shall from time to time be sufficient to
effect the conversion of all of the Shares from time to time outstanding. The
Corporation shall from time to time, in accordance with the laws of the State of
Delaware, including receipt by the Corporation of stockholder approval, increase
the authorized number of shares of each series of Series I Common and Series II
Common if at any time the number of shares of Series I Common and Series II
Common not then outstanding shall be insufficient to permit the conversion in
full of the Shares.
(d) Taxes and Charges. The Corporation will pay any and all Taxes
that may be payable in respect of any issuance or delivery of shares of Common
Stock on conversion of the Shares. The Corporation shall not, however, be
required to pay any Tax which may be payable in respect of any transfer involved
in the issuance or delivery of Common Stock in a name other than that of the
holder of the Shares, and no such issuance or delivery shall be made unless and
until the Person requesting such issuance has paid to the Corporation the amount
of such Tax or has established, to the satisfaction of the Corporation, that
such Tax has been paid.
(e) Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any Shares or of any shares of Common
Stock issued or issuable upon the conversion of any Shares in any manner which
interferes with the timely conversion of such Shares.
(f) Status of Converted Stock. In the event any Shares shall be
converted pursuant to Section 7 of Part III, the Shares so converted shall be
retired and the certificates representing such Shares shall be canceled and such
Shares shall not be issuable by the Corporation.
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<PAGE> 23
FIFTH: The Corporation shall be entitled to treat the Person in
whose name any shares of its capital stock are registered as the owner thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to, or interest in, such shares on the part of any other Person, whether
or not the Corporation shall have notice thereof, except as required by
applicable law.
SIXTH: The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
SEVENTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to adopt,
alter, amend or repeal the By-Laws of the Corporation.
EIGHTH: The Corporation expressly elects not to be governed by
Section 203 of the GCL.
NINTH: To the fullest extent permitted by the GCL as the same exists
or may hereafter be amended, a director of the Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. If the GCL is amended after the date of filing of
this Restated Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the GCL, as so amended from time to time. No repeal or
modification of this Article NINTH by the stockholders shall adversely affect
any right or protection of a director of the Corporation existing by virtue of
this Article NINTH at the time of such repeal or modification.
TENTH: Except as set forth herein, the Corporation reserves the
right to amend, alter, change or repeal any provision contained in this Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred on stockholders herein are granted subject to
this reservation.
ELEVENTH: Meetings of stockholders may be held within or outside of
the State of Delaware, as the By-Laws of the Corporation may provide. The books
of the Corporation may be kept (subject to any provision contained in applicable
law) outside the State of Delaware at such place as may be designated from time
to time by the Board of Directors or in the By-Laws of the Corporation. Any
document or agreement which is, or has terms which are, incorporated by
reference herein, including without limitation the Stockholders Agreement, shall
be available for inspection by any stockholder of the Corporation at the
principal office of the Corporation. Copies of any such document or agreement
will be furnished by the Corporation to any such stockholder at the
Corporation's expense.
TWELFTH: Any notice required by the provisions of this Certificate
of Incorporation shall be in writing and shall be deemed given upon delivery, if
delivered
-23-
<PAGE> 24
personally, or by a recognized commercial courier postage prepaid with receipt
acknowledged, or upon the expiration of one hundred twenty (120) hours after the
same has been deposited in the United States mail, by certified or registered
mail, return receipt requested, postage prepaid, and addressed, in the case of a
notice to any holder of shares of capital stock of the Corporation, to such
holder as such holder's address appears on the books of the Corporation, or in
the case of a notice to the Corporation, at its principal executive office.
Neither the failure to mail any such notice to any particular holder nor any
defect in any such notice shall affect the sufficiency of notice with respect to
any other Person.
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<PAGE> 25
IN WITNESS WHEREOF, the undersigned, being the Secretary of
the Corporation, has duly executed this Restated Certificate of Incorporation on
this 14th day of April, 1998.
MS ACQUISITION CORP.
By: /s/ Harold A. Brown
-------------------------------
Name: Harold A. Brown
Title: Secetary
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<PAGE> 1
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
AMONG
SOFEDIT,
MS,
BDHI, CIBA,CEFI
THE BARGE FAMILY,
THE DOMENECH FAMILY,
YACESE,
JRMH,
H.H.A.WAY,
AND
SOFEDIT FINANCIAL SHAREHOLDERS
DATED AS OF APRIL 3, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C>
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms............................................................................2
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale of the Shares..................................................................9
2.02. Consideration....................................................................................9
2.03. Closing.........................................................................................10
2.04. Closing Deliveries by the Sellers...............................................................10
2.05. Closing Deliveries by MS........................................................................10
2.06. Sellers' Representative.........................................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MS
3.01. Organization, Authority and Qualification of MS.................................................11
3.02. Capital Stock of MS; Ownership of the Shares....................................................11
3.03. Subsidiaries....................................................................................13
3.04. Corporate Books and Records.....................................................................14
3.05. No Conflict.....................................................................................14
3.06. Governmental Consents and Approvals.............................................................15
3.07. Financial Information, Books and Records, Securities Reports....................................15
3.08. No Undisclosed Liabilities......................................................................16
3.09. Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions...............17
3.10. Litigation......................................................................................18
3.11. Certain Interests...............................................................................18
3.12. Compliance with Laws............................................................................19
3.13. Environmental and Other Permits and Licenses; Related Matters...................................19
3.14. Material Contracts..............................................................................20
3.15. Real Property...................................................................................22
3.16. Customers.......................................................................................23
3.17. Suppliers.......................................................................................23
3.18. Employee Benefit Matters........................................................................23
3.19. Labor Matters...................................................................................26
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3.20. Key Employees...................................................................................27
3.21. Taxes...........................................................................................27
3.22. Insurance.......................................................................................28
3.23. Full Disclosure.................................................................................28
3.24. Brokers.........................................................................................28
3.25. Stockholder Approvals...........................................................................28
3.26. State Takeover Statute..........................................................................28
ARTICLE IV-A
REPRESENTATIONS AND WARRANTIES OF CIBA
4.A.01. Organization of CIBA..........................................................................29
4.A.02. No Conflict...................................................................................29
4.A.03. Governmental Consents and Approvals...........................................................29
4.A.04. Capital Stock of CIBA.........................................................................29
4.A.05. Ownership of the CIBA Shares..................................................................30
4.A.06. Financial Information, Books and Records......................................................30
4.A.07. No Undisclosed Liabilities....................................................................30
4.A.08. Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions.............31
4.A.09. Litigation....................................................................................32
4.A.10. Compliance with Laws..........................................................................32
4.A.11. Absence of Activities.........................................................................32
4.A.12. Subsidiaries..................................................................................32
4.A.13. Corporate Books and Records...................................................................32
4.A.14. Brokers.......................................................................................32
4.A.15. Taxes.........................................................................................32
4.A.16. Full Disclosure...............................................................................33
4.A.17. Title to the Shares Owned by CIBA in BDHI.....................................................33
4.A.18. Stockholders Approval.........................................................................33
ARTICLE IV-B
REPRESENTATIONS AND WARRANTIES OF THE BARGE FAMILY AND CEFI
4.B.01. Authority and Qualification of the Barge Family and ..........................................33
4.B.02. No Conflict...................................................................................34
4.B.03. Governmental Consents and Approvals...........................................................34
4.B.04. Title to the Shares Owned by the Barge Family and CEFI in CIBA................................34
</TABLE>
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4.B.05. Full Disclosure...............................................................................34
4.B.06. Brokers.......................................................................................35
4.B.07. Stockholders Approval.........................................................................35
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF EACH OF THE MEMBERS
OF THE DOMENECH FAMILY AND YACESE
5.01. Organization of YACESE, Authority and Qualification of the Domenech
Family and YACESE..............................................................................35
5.02. No Conflict.....................................................................................36
5.03. Governmental Consents and Approvals.............................................................36
5.04. Title to the Shares Owned by the Domenech Family and YACESE in BDHI
..............................................................................................36
5.05. Full Disclosure.................................................................................36
5.06. Brokers.........................................................................................36
5.07. Stockholders Approval...........................................................................36
ARTICLE VI-A
REPRESENTATIONS AND WARRANTIES OF JRMH AND H.H.A.WAY
6.A.01. Organization, Authority and Qualification of JRMH and H.H.A.WAY...............................37
6.A.02. No Conflict...................................................................................37
6.A.03. Governmental Consents and Approvals...........................................................38
6.A.04. Title to the Shares Owned by JRMH and H.H.A.WAY in BDHI.......................................38
6.A.05. Full Disclosure...............................................................................38
6.A.06. Brokers.......................................................................................38
6.A07. Stockholders Approval.........................................................................38
ARTICLE VI-B
REPRESENTATIONS AND WARRANTIES OF BDHI
6.B.01. Organization, Authority and Qualification of BDHI.............................................38
6.B.02. Capital Stock of BDHI; Ownership of the BDHI Shares...........................................39
. No Conflict.........................................................................................39
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6.B.04. Governmental Consents and Approvals...........................................................39
6.B.05. Subsidiaries..................................................................................40
6.B.06. Corporate Books and Records...................................................................40
6.B.07. Financial Information, Books and Records......................................................40
6.B.08. No Undisclosed Liabilities....................................................................40
6.B.09. Conduct in the Ordinary Course; Absence of Certain Changes, Events and
Conditions.....................................................................................40
6.B.10. Litigation....................................................................................42
6.B.11. Compliance with Laws..........................................................................42
6.B.12. Brokers.......................................................................................42
6.B.13. SOFEDIT Shares................................................................................42
6.B.14. Taxes.........................................................................................42
6.B.15. Full Disclosure...............................................................................43
6.B.16. Stockholders Approval.........................................................................43
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
THE SOFEDIT FINANCIAL SHAREHOLDERS
7.01. Organization, Authority and Qualification of the SOFEDIT Financial
Shareholders...................................................................................43
7.02. No Conflict.....................................................................................43
7.03. Governmental Consents and Approvals.............................................................44
7.04. Brokers.........................................................................................44
7.05. SOFEDIT Shares..................................................................................44
7.06. Full Disclosure.................................................................................44
7.07. Stockholders Approval...........................................................................44
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF SOFEDIT
8.01. Organization, Authority and Qualification of SOFEDIT............................................44
8.02. Capital Stock of SOFEDIT........................................................................45
8.03. Ownership of the shares of SOFEDIT..............................................................45
8.04. Subsidiaries....................................................................................46
8.05. Corporate Books and Records.....................................................................47
8.06. No Conflict.....................................................................................47
8.07. Governmental Consents and Approvals.............................................................47
8.08. Financial Information, Books and Records........................................................47
8.09. No Undisclosed Liabilities......................................................................48
</TABLE>
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8.10. Conduct in the Ordinary Course; Absence of Certain Changes, Events and
Conditions......................................................................................48
8.11. Litigation......................................................................................50
8.12. Compliance with Laws............................................................................50
8.13. Environmental and Other Permits and Licenses; Related Matters...................................50
8.14. Material Contracts..............................................................................51
8.15. Brokers.........................................................................................53
8.16. Taxes...........................................................................................53
8.17. Customers.......................................................................................53
8.18. Suppliers.......................................................................................54
8.19. Employee Benefit Matters........................................................................54
8.20. Labor Matters...................................................................................55
8.21. Certain Interests...............................................................................56
8.22. Real Property...................................................................................56
8.23. Insurance.......................................................................................57
8.24. Full Disclosure.................................................................................57
8.25. Stockholders Approval...........................................................................57
ARTICLE IX
ADDITIONAL AGREEMENTS
9.01. Conduct of Business Prior to the Closing........................................................58
9.02. Access to Information...........................................................................58
9.03. Confidentiality.................................................................................59
9.04. Regulatory and Other Authorizations; Notices and Consents.......................................59
9.05. Notice of Developments..........................................................................60
9.06. Stockholder Approvals...........................................................................60
9.07. Contribution(s) of BDHI Shares to YACESE........................................................60
9.08. Contribution(s) of BDHI Shares to H.H.A.WAY.....................................................61
9.09. Purchases of BDHI Shares........................................................................61
9.10. Promise to Transfer the Preferred Shares........................................................61
9.11. Further Action..................................................................................61
9.12. Securities Act..................................................................................61
ARTICLE X
CONDITIONS TO CLOSING
10.01. Conditions to Obligations of MS................................................................62
</TABLE>
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Termination of the SOFEDIT Stockholders Agreement and of the BDHI
Stockholders Agreement.........................................................................63
10.02. Conditions to Obligations of SOFEDIT, BDHI, CIBA and the Sellers...............................63
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
11.01. Survival of Representations and Warranties.....................................................66
ARTICLE XII
TERMINATION AND WAIVER
12.01. Termination....................................................................................66
12.02. Effect of Termination..........................................................................67
12.03. Waiver.........................................................................................68
ARTICLE XIII
GENERAL PROVISIONS
13.01. Expenses.......................................................................................68
13.02. Notices........................................................................................68
13.03. Public Announcements...........................................................................69
13.04. Headings.......................................................................................69
13.05. Severability...................................................................................69
13.06. Entire Agreement...............................................................................69
13.07. Assignment.....................................................................................70
13.08. No Third Party Beneficiaries...................................................................70
13.09. Amendment......................................................................................70
13.10. Governing Law..................................................................................70
13.11. Dispute Resolution and Arbitration.............................................................70
13.12. Counterparts...................................................................................71
13.13. Specific Performance...........................................................................71
13.14. Limited Recourse...............................................................................71
</TABLE>
<PAGE> 8
STOCK PURCHASE AGREEMENT, dated as of April 3, 1998, between
MS Acquisition Corp., a Delaware corporation ("MS"), Societe Financiere de
Developpement Industriel et Technologique, a French societe anonyme ("SOFEDIT"),
BDHI, a French societe anonyme ("BDHI"), CIBA, a French societe anonyme
("CIBA"), CEFI, a Luxembourg societe de participations financieres ("CEFI"), the
individuals listed in Exhibit 1 hereto, duly represented by Mr. Francis Barge
(collectively, the "Barge Family"), YACESE S.A., a French societe anonyme
("YACESE"), the individuals listed in Exhibit 2 hereto, duly represented by Mr.
Felix Domenech (collectively, the "Domenech Family"), JRMH, a French societe
civile ("JRMH"), H.H.A.WAY S.A., a French societe anonyme ("H.H.A.WAY"), and the
entities listed in Exhibit 3 hereto (collectively, the "SOFEDIT Financial
Shareholders" and, together with CEFI, YACESE, JRMH, H.H.A.WAY, the Barge
Family, the Domenech Family, the "Sellers").
W I T N E S S E T H:
WHEREAS, MS and the Sellers have agreed on the principle of a
transaction whereby the Sellers would sell to MS the CIBA Shares (as defined
below), the BDHI Shares (as defined below) and the SOFEDIT Shares (as defined
below), in consideration of the issuance by MS of promissory notes issued by MS
and shares of Common Stock and Preferred Stock of MS.
WHEREAS, BDHI and the SOFEDIT Financial Shareholders own all
the issued and outstanding shares of common stock, FF 100 par value per share
(the "SOFEDIT Common Stock"), of SOFEDIT;
WHEREAS, as of the date hereof, CIBA, YACESE, JRMH and the
individuals listed in Exhibit 5 hereto own all the issued and outstanding shares
of common stock, FF 100 par value per share of BDHI (the "BDHI Common Stock");
WHEREAS, the members of the Barge Family and CEFI own all the
issued and outstanding shares of common stock, FF 100 par value per share (the
"CIBA Common Stock"), of CIBA;
WHEREAS, the SOFEDIT Financial Shareholders wish to sell to
MS, and MS wishes to purchase from the SOFEDIT Financial Shareholders, their
shares of SOFEDIT (the "SOFEDIT Shares") held at the Closing (as defined below),
upon the terms and subject to the conditions set forth herein;
WHEREAS, between the date hereof and the Closing Date (as
defined below), Mr. Felix Domenech will sell 578 shares of BDHI to COMPAGNIE DE
FINANCEMENT INDUSTRIEL S.A. and Mr. Jean-Rene Hergoualc'h will sell one share of
BDHI to H.H.A.WAY;
WHEREAS, on the Closing Date (as defined below), the
contribution of 3.051 shares of BDHI by JRMH to H.H.A.WAY will become effective;
<PAGE> 9
2
WHEREAS, YACESE, the members of the Domenech Family,
H.H.A.WAY, JRMH and COMPAGNIE DE FINANCEMENT INDUSTRIEL S.A wish to sell to MS,
and MS wishes to purchase from YACESE, the Domenech Family, H.H.A.WAY, JRMH and
COMPAGNIE DE FINANCEMENT INDUSTRIEL S.A., all their shares of BDHI (the "BDHI
Shares") owned at the Closing Date (as defined below), upon the terms and
subject to the conditions set forth herein; and
WHEREAS, the members of the Barge Family and CEFI wish to sell
to MS, and MS wishes to purchase from the members of the Barge Family and CEFI,
their shares of CIBA (the "CIBA Shares"), upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Aetna Holdings" means Aetna Holdings, Inc., a wholly owned
subsidiary of MS.
"Aetna Industries" means Aetna Industries, Inc., a wholly
owned subsidiary of Aetna Holdings.
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Agreement" or "this Agreement" means this Stock Purchase
Agreement, dated as of April 3, 1998, among the parties hereto (including the
Exhibits hereto and the Disclosure Schedules) and all amendments hereto made in
accordance with the provisions of Section 14.09.
"BDHI Reference Balance Sheet" means the audited balance sheet
of BDHI as of December 31, 1997, a copy of which is set forth in Section
6.B.07(a) of the Disclosure Schedules.
<PAGE> 10
3
"BDHI Stockholders Agreement" means the agreement dated March
1, 1995, relating to, among other things, the management of BDHI, among Messrs.
Francis Barge, Felix Domenech and Jean-Rene Hergoualc'h.
"Business" means, as applicable to MS or SOFEDIT or their
respective subsidiaries, the business of automobile equipment part supplier and
all other business which prior to the date hereof has been conducted by MS or
SOFEDIT or their respective subsidiaries, as applicable.
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by law to be closed in
the City of New York or Paris.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended through the date hereof.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System, as updated through the date
hereof.
"CIBA Reference Balance Sheet" means the audited balance sheet
of CIBA as of December 31, 1997, a copy of which is set forth in Section
4.A.06(a) of the Disclosure Schedules.
"Code" means the Internal Revenue Code of 1986, as amended.
"Control" (including the terms "control", "controlled by" and
"under common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Disclosure Schedules" means the Disclosure Schedules attached
hereto, dated as of the date hereof, and forming a part of this Agreement.
"Encumbrance" means any security interest, pledge, mortgage,
lien (including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including, without limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership, in each case
other than pursuant to the Stockholders Agreement, the New Stockholders
Agreement, the Registration Rights Agreement, or the New Registration Rights
Agreement.
"Environment" means surface waters, ground waters, soil,
subsurface strata and ambient air.
<PAGE> 11
4
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations, proceedings, consent
orders or consent agreements relating in any way to any Environmental Law or any
Environmental Permit (hereafter "Claims"), including, without limitation, (a)
any and all Claims by Governmental Authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (b) any and all Claims by any Person seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the Environment.
"Environmental Condition" means a condition relating to or
arising or resulting from a failure to comply with any applicable Environmental
Law or Environmental Permit or a Release of Hazardous Materials into the
Environment that is required to be remediated under applicable Environmental
Laws.
"Environmental Laws" means any Law in effect on the Closing
Date and any binding judicial or administrative interpretation thereof,
including any binding judicial or administrative order, consent decree or
judgment, relating to pollution or protection of the environment, health, safety
or natural resources, including without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permits" means all permits, approvals,
identification numbers, licenses and other authorizations required under any
applicable Environmental Law.
"Governmental Authority" means any United States federal,
state or local or any foreign government or international organization,
governmental, regulatory or administrative authority, agency or commission or
any court, tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Materials" means (a) petroleum and petroleum
products, by-products or breakdown products, radioactive materials, asbestos in
any form that is or could become friable, urea formaldehyde foam insulation,
polychlorinated biphenyls, and radon gas, (b) any other chemicals, materials or
substances defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar import, under any applicable
Environmental Law, and (c) any other chemical, material or substance exposure to
which is regulated by any Governmental Authority under Environmental Laws.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
<PAGE> 12
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"Indebtedness" means, with respect to any Person, (a) all
indebtedness of such Person, whether or not contingent, for borrowed money, (b)
all obligations of such Person for the deferred purchase price of property or
services, (c) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (d) all Indebtedness
of others referred to in clauses (a) through (c) above guaranteed in any manner
by such Person, or in effect guaranteed by such Person through an agreement to
assure a creditor against loss, and (e) all Indebtedness referred to in clauses
(a) through (c) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any
Encumbrance on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness.
"Inventories" means all inventory, merchandise, finished
goods, and raw materials, packaging, supplies and other personal property
related to the Business maintained, held or stored by or for MS or any MS
Subsidiary on the Closing Date and any prepaid deposits for any of the same.
"IRS" means the Internal Revenue Service of the United States.
"Law" means any U.S., French or European, federal, state,
local or otherwise foreign statute, law, ordinance, regulation, rule, code,
order, other requirement or rule of law.
"Leased Real Property" means the real property leased by MS or
any MS Subsidiary, as tenant, together with, to the extent leased by MS or any
MS Subsidiary, all buildings and other structures, facilities or improvements
currently or hereafter located thereon, all fixtures, systems, equipment and
items of personal property of MS or any MS Subsidiary attached or appurtenant
thereto, and all easements, licenses, rights and appurtenances relating to the
foregoing.
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, including, without limitation, those
arising under any Law (including, without limitation, any Environmental Law),
Action or Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.
"Material Adverse Effect" means any circumstance, change in,
or effect on the Business, MS or any MS Subsidiary, SOFEDIT or any SOFEDIT
Subsidiary, BDHI or CIBA, as applicable, that, individually or in the aggregate
with any other circumstances, changes in, or effects on, the Business, MS or any
MS Subsidiary, or SOFEDIT or any SOFEDIT Subsidiary, BDHI or CIBA, respectively:
(a) is materially adverse to the business, operations, assets or Liabilities,
employee relationships, customer or supplier relationships, prospects, results
of operations or the condition (financial or otherwise) of MS or any MS
Subsidiary, SOFEDIT or any SOFEDIT
<PAGE> 13
6
Subsidiary, BDHI or CIBA, as applicable, or (b) adversely affectsthe ability of
MS or any MS Subsidiary, SOFEDIT or any SOFEDIT Subsidiary, BDHI or CIBA, as
applicable, to operate or conduct the Business in the manner in which it is
currently operated or conducted by MS or any MS Subsidiary, SOFEDIT or any
SOFEDIT Subsidiary, BDHI or CIBA, as applicable.
"MS Class A Common Stock" means the Series A-1 Class A Common
Stock, $0.01 par value per share, of MS, the Series A-2 Class A Common Stock,
$0.01 par value per share, of MS, the Series A-3 Class A Common Stock, $0.01 par
value per share, of MS and the Series I Class A Common Stock, $0.01 par value
per share, of MS, as such series are defined in the attached form of Amended and
Restated Certificate of Incorporation of MS, taken together.
"MS Class B Common Stock" means the Series B-1 Class A Common
Stock, $0.01 par value per share, of MS, the the Series B-2 Class B Common
Stock, $0.01 par value per share, of MS and the Series II Class B Common Stock,
$.01 par value per share, of MS, as such series are defined in the attached form
of Amended and Restated Certificate of Incorporation of MS, taken together.
"MS Common Shares" has the meaning specified in Section 2.02.
"MS Common Stock" means the MS Class A Common Stock and the MS
Class B Common Stock.
"MS Preferred Shares" has the meaning specified in Section
2.02.
"MS Reference Balance Sheet" means the unaudited consolidated
balance sheet (including the related notes and schedules thereto) of MS, as of
June 30, 1997 (such date being the "MS Reference Balance Sheet Date"), a copy of
which is set forth in Section 3.07(a) of the Disclosure Schedules.
"MS Series A Preferred Stock" means the Series A Preferred
Stock, $0.01 par value, $100 stated value per share, of MS.
"MS Series B Preferred Stock" means the Series B Preferred
Stock, $0.01 par value, $100 stated value per share, of MS.
"MS Subsidiaries" means Aetna Holdings, Inc., Aetna
Industries, Inc., Aetna Export Sales Corp., Aetna Manufacturing Canada, Limited
and any and all other corporations, partnerships, joint ventures, associations
and other entities in which MS directly or indirectly owns an equity interest.
"New Registration Rights Agreement" has the meaning specified
in Section 10.01(h).
<PAGE> 14
7
"New Stockholders Agreement" has the meaning specified in
Section 10.01(h).
"Owned Real Property" means the real property owned by MS or
any MS Subsidiary or SOFEDIT or any SOFEDIT Subsidiary, as applicable, together
with all buildings and other structures, facilities or improvements currently or
hereafter located thereon, all fixtures, systems, equipment and items of
personal property of MS or any MS Subsidiary or SOFEDIT or any SOFEDIT
Subsidiary, as applicable, attached or appurtenant thereto and all easements,
licenses, rights and appurtenances relating to the foregoing.
"Permits" has the meaning specified in Section 3.13(a).
"Permitted Encumbrances" means such of the following as to
which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) liens for taxes, assessments and governmental
charges or levies not yet due and payable which are not in excess of $25,000 in
the aggregate; (b) Encumbrances imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's liens and other similar liens
arising in the ordinary course of business securing obligations that (i) are not
overdue for a period of more than 30 days and (ii) are not in excess of $25,000
in the case of a single property or $50,000 in the aggregate at any time; (c)
pledges or deposits to secure obligations under workers' compensation laws or
similar legislation or to secure public or statutory obligations; and (d) minor
survey exceptions, reciprocal easement agreements and other customary
encumbrances on title to real property that (i) were not incurred in connection
with any Indebtedness, (ii) do not render title to the property encumbered
thereby unmarketable and (iii) do not, individually or in the aggregate,
materially adversely affect the value or use of such property for its current
and anticipated purposes.
"Person" means any individual, partnership, firm, corporation,
limited liability company, association, trust, unincorporated organization or
other entity, as well as any syndicate or group that would be deemed to be a
person under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"Preferred Stock" means the MS Series A Preferred Stock and
the MS Series B Preferred Stock.
"Registration Rights Agreement" means the registration rights
agreement dated August 13, 1996, among MS and the stockholders of MS party
thereto.
"Real Property" applied to MS or SOFEDIT means the Leased Real
Property and the Owned Real Property, respectively, of MS or SOFEDIT and their
respective Subsidiaries.
"Regulations" means the Treasury Regulations (including
Temporary Regulations) promulgated by the United States Department of Treasury
with respect to the Code or other federal tax statutes.
<PAGE> 15
8
"Release" means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying or seeping into or upon
any land or water or air or otherwise entering into the Environment.
"Sellers' Shares" means the CIBA Shares, the BDHI Shares and
the SOFEDIT Shares, taken together.
"SOFEDIT Reference Balance Sheet" means the audited
consolidated balance sheet of SOFEDIT, as of June 30, 1997, a copy of which is
set forth in Section 8.08 of the Disclosure Schedules.
"SOFEDIT Stockholders Agreement" means the agreement dated
July 8, 1995, as amended, among the shareholders of SOFEDIT and Messrs. Francis
Barge, Felix Domenech and Jean-Rene Hergoualc'h.
"SOFEDIT Subsidiary" means any and all other corporations,
partnerships, joint ventures, associations and other entities in which SOFEDIT
directly or indirectly owns an equity interest.
"Stockholders Agreement" has the meaning specified in Section
3.02(a).
"Stock Option Plan" means the MS Acquisition Corp. Executive
Stock Option Plan.
"Subordinated Notes" means the 11% junior subordinated
promissory notes of Aetna Holdings due 2007.
"Subsidiaries" means any and all corporations, partnerships,
joint ventures, associations and other entities controlled by MS or SOFEDIT, as
applicable, directly or indirectly through one or more intermediaries.
"Tax" or "Taxes" means any and all federal, state, local or
foreign net or gross income, gross receipts, net proceeds, sales, use, ad
valorem, value-added, franchise, bank shares, withholding, payroll, employment,
excise, property, alternative or add-on minimum, environmental or other taxes,
fees, levies, duties, tariffs, imposts, and other charges of any kind (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any government or taxing authority,
whether disputed or not.
"U.S. GAAP" means United States generally accepted accounting
principles and practices as in effect from time to time and applied consistently
throughout the periods involved.
"USTs" means underground storage tanks, as such term is
defined in the Resource Conservation and Recovery Act, as amended, and the
regulations promulgated thereunder.
<PAGE> 16
9
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares. Upon the terms
and subject to the conditions of this Agreement, at the Closing (as defined
below), (i) the SOFEDIT Financial Shareholders shall sell to MS, and MS shall
purchase from the SOFEDIT Financial Shareholders, the SOFEDIT Shares, (ii) the
members of the Barge Family and CEFI shall sell to MS, and MS shall purchase
from the members of the Barge Family and CEFI, the CIBA Shares, and (iii)
YACESE, the members of the Domenech Family, H.H.A.WAY and JRMH shall sell to MS,
and MS shall purchase from YACESE, the members of the Domenech Family, H.H.A.WAY
and JRMH, the BDHI Shares.
SECTION 2.02. Consideration. As consideration for the sales
set forth in Section 2.01, MS shall:
(i) issue to the Sellers a total of three million (3,000,000)
shares of MS Series A-1 Common Stock (the "MS Common Shares"), so that
after completion of the Closing, if all the stock options that have
been issued under the Stock Option Plan in effect as of the date hereof
were exercised, the Sellers would own seventy-five percent (75%) of the
total number of issued and outstanding shares of MS Common Stock;
(ii) issue to the Sellers promissory notes dated as of the
Closing Date and substantially in the form attached hereto as Exhibit
2.02 (A) (the "Promissory Notes"), for an aggregate amount of forty
million nine hundred sixty eight thousand U.S. Dollars ($40,968,000)
(the "Debt Amount"); and
(iii) issue to the Sellers two hundred and seventy thousand
(270,000) shares of MS Series B Preferred Stock (the "MS Preferred
Shares").
The allocation of the MS Common Shares and the MS Preferred
Shares among the Sellers, and the amount in principal of the Promissory Notes
are indicated in Exhibit 2.02 (B) hereto.
The parties hereto acknowledge and agree that the shareholders
of SOFEDIT are entitled to an amount equal to the dividends corresponding to
SOFEDIT's profits for fiscal year 1997 that would be paid in 1998 if SOFEDIT's
past dividend policy remained unchanged from the past practices of SOFEDIT with
respect to the payment of dividends. Therefore, in addition to the consideration
described above and notwithstanding any transfer of title interest with respect
to their SOFEDIT Shares at the Closing, the SOFEDIT Financial Shareholders will
keep the jouissance (as such term is defined under French law) of their SOFEDIT
Shares until 12:00 p.m., the day following the date of the 1998 Annual General
Shareholders Meeting of SOFEDIT called to resolve the
<PAGE> 17
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distribution of dividends for fiscal year 1997 and, as a result, they will
receive the dividends voted on that meeting. With respect to the shareholders of
BDHI and CIBA, the Sellers acknowledge and agree among themselves that the
initial principal amounts of the PromissoryNotes to be issued to the Sellers as
set forth on the table attached as Exhibit 2.02 hereto reflect the amount of
BDHI's outstanding debt and the amount of dividends that would be paid by
SOFEDIT to BDHI out of SOFEDIT's profits for fiscal year 1997, based on
SOFEDIT's past dividend policy.
SECTION 2.03. Closing. Upon the terms and subject to the
conditions of this Agreement, the sales and purchases of Sellers' Shares
contemplated by this Agreement shall take place at a closing (the "Closing") to
be held at the offices of Natexis Finance S.A., in Paris, at 10:00 A.M. Paris
time on (i) April 9, 1998, or, if the closing conditions set forth in Article X
are not fulfilled on that date, (ii) at such other place or at such other time
or on such other date as the Sellers' Representative and MS may mutually agree
upon(the day on which the Closing actually takes place being the "Closing
Date").
SECTION 2.04. Closing Deliveries by the Sellers. At the
Closing, the Sellers shall deliver or cause to be delivered to MS:
(a) executed stock transfer forms ("ordres de mouvement") for
all their respective Sellers' Shares, completed pursuant to the terms
thereof, the stock ledger ("registre des mouvements de titres",
together with the "comptes d'actionnaires") of each of SOFEDIT, BDHI
and CIBA and any other documents necessary for the transfer of good and
marketable title to the Sellers' Shares;
(b) a receipt for the Promissory Notes, the MS Common Shares
and the MS Preferred Shares issued to them; and
(c) the certificates and other documents required to be
delivered pursuant to Section 10.01.
SECTION 2.05. Closing Deliveries by MS. At the Closing, MS
shall deliver to the Sellers:
(a) certificates for the MS Common Shares;
(b) certificates for the MS Preferred Shares;
(c) the Promissory Notes; and
(d) the certificates and other documents required to be
delivered pursuant to Section 10.02.
<PAGE> 18
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SECTION 2.06. Sellers' Representative. Each Seller hereby
appoints Mr. Francis Barge (such Person being the "Sellers' Representative"), as
each such Sellers' attorney-in-fact and representative, (i) to do any and all
things and to execute any and all documents or other papers, in each such
Seller's name, place and stead, in any way which each such Seller could do if
personally present, in connection with this Agreement, the New Stockholders
Agreement and the New Registration Rights Agreement and the transactions
contemplated hereby and thereby, (ii) to amend, cancel or extend, or waive the
terms of, this Agreement, the New Stockholders Agreement and the New
Registration Rights Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MS
As an inducement to the Sellers to enter into this Agreement,
MS hereby represents and warrants to the Sellers as follows:
SECTION 3.01. Organization, Authority and Qualification of MS.
MS is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all necessary power and authority to
own, operate or lease the properties and assets now owned, operated or leased by
it and to carry on the Business as it is currently conducted. The execution and
delivery of this Agreement, the New Stockholders Agreement and the New
Registration Rights Agreement by MS, the performance by MS of its obligations
hereunder and thereunder and the consummation by MS of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of MS. This Agreement has been, and upon their execution the
New Stockholders Agreement and the New Registration Rights Agreement shall have
been, duly executed and delivered by MS, and (assuming due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and upon their execution the New Stockholders Agreement and the New
Registration Rights Agreement will constitute, a legal, valid and binding
obligation of MS enforceable against MS in accordance with its and their terms.
MS is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary or desirable. All
corporate actions taken by MS have been duly authorized, and MS has not taken
any action that in any material respect conflicts with, constitutes a default
under or results in a violation of any provision of its Certificate of
Incorporation or By-laws, each as amended to date. True and correct copies of
the Certificate of Incorporation and By-laws of MS, each as in effect on the
date hereof, have been delivered or made available by MS to the Sellers.
SECTION 3.02. Capital Stock of MS; Ownership of the Shares.
(a) As of the date hereof, the authorized capital stock of MS consists of:
(x) 2,293,123.32 shares of Preferred Stock, consisting
of:
<PAGE> 19
12
(i) 293,123.32 shares of Series A Preferred Stock;
and
(ii) 2,000,000 additional shares of authorized
preferred stock which may be issued in one or more series upon
such terms as may be set forth by the board of directors of
MS; and
(y) 10,000,000 shares of Common Stock, par value $.01 per
share, consisting of:
5,000,000 shares of MS Class A Common Stock; and
5,000,000 shares of MS Class B Common Stock.
As of the date of this Agreement,
(i) 383,409 shares of MS Class A Common Stock are
issued and outstanding, all of which are duly authorized,
validly issued, fully paid and non-assessable;
(ii) 516,590 shares of MS Class B Common Stock are
issued and outstanding, all of which are validly issued, fully
paid and non-assessable;
(iii) 114,967.38 shares of Series A Preferred Stock
are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and non-assessable;
(iv) 100,000 shares of MS Class A Common Stock are
reserved for issuance pursuant to employee stock options
granted pursuant to the Stock Option Plan;
(v) 1,394,491 shares of MS Class B Common Stock are
issued and outstanding and held by Aetna Holdings, all of
which are validly issued, fully paid and non-assessable; and
(vi) 178,155.94 shares of Series A Preferred Sock are
issued and outstanding and held by Aetna Holdings, all of
which are validly issued, fully paid and non-assessable.
None of the issued and outstanding shares of MS Common Stock
or MS Preferred Stock was issued in violation of any preemptive rights. Except
for the stockholders agreement (the "Stockholders Agreement") dated August 13,
1996, among MS and the stockholders of MS party thereto (as of the date hereof),
the New Stockholders Agreement (as of the Closing Date), the Registration Rights
Agreement (as of the date hereof and as of the Closing Date), the New
<PAGE> 20
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Registration Rights Agreement (as of the Closing Date), the Stock Option Plan
and the MS Series A Preferred Stock, there are no options, warrants, convertible
securities or other rights, agreements, arrangements or commitments of any
character relating to the capital stock of MS or obligating MS to issue or sell
any shares of capital stock of, or any other interest in, MS. There are no
outstanding contractual obligations of MS to repurchase, redeem or otherwise
acquire any shares of MS Common Stock or of MS Preferred Stock or to provide
funds to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any other Person. The outstanding shares of MS Common Stock and
MS Preferred Stock referred to in this section constitute all the issued and
outstanding capital stock of MS and are owned of record and beneficially solely
by the Persons set forth in Section 3.02(a) of the Disclosure Schedules free and
clear of all Encumbrances.
(b) Upon consummation of the transactions contemplated by this
Agreement and registration of the MS Common Shares in the name of the Sellers in
the stock records of MS, the Sellers, assuming they shall have received the MS
Common Shares, will own at least seventy-five percent (75%) of the total number
of issued and outstanding shares of MS Common Stock free and clear of any
Encumbrances. Upon consummation of the transactions contemplated by this
Agreement, the MS Common Shares and the MS Preferred Shares will be fully paid
and nonassessable. There are no voting trusts, stockholder agreements, proxies
or other agreements or understandings in effect with respect to the voting or
transfer of any of the MS Common Stock or of the Preferred Stock, except for the
Registration Rights Agreement and the Stockholders Agreement (as of the date of
this Agreement only) and the Registration Rights Agreement, the New Registration
Rights Agreement and the New Stockholders Agreement (upon consummation of the
transactions contemplated by this Agreement). The MS Common Shares and MS
Preferred Shares to be issued pursuant to this Agreement will be duly
authorized, validly issued and not subject to preemptive rights created by
statute, MS' Certificate of Incorporation or By-laws or any agreement to which
MS is a party or is bound.
(c) The stock register of MS accurately records: (i) the name
and address of each Person owning shares of capital stock of MS and (ii) the
certificate number of each certificate evidencing shares of capital stock issued
by MS, the number of shares evidenced by each such certificate, the date of
issuance thereof and, in the case of cancellation, the date of cancellation.
SECTION 3.03. Subsidiaries. (a) Section 3.03(a) of the
Disclosure Schedules sets forth a true and complete list of all MS Subsidiaries,
listing for each MS Subsidiary its name, type of entity, the jurisdiction and
date of its incorporation or organization, its authorized capital stock,
partnership capital or equivalent, the number and type of its issued and
outstanding shares of capital stock, partnership interests or similar ownership
interests and the current ownership of such shares, partnership interests or
similar ownership interests.
(b) Other than the MS Subsidiaries, there are no other
corporations, limited liability company, partnerships, associations or other
entities in which MS owns, of record or beneficially, any direct or indirect
equity or other similar interest or any right (contingent or
<PAGE> 21
14
otherwise) to acquire the same. MS is not a member of (nor is any part of the
Business conducted through) any partnership. Except as set forth in Section
3.03(b) of the Disclosure Schedules, MS is not a participant in any joint
venture or similar arrangement.
(c) Each MS Subsidiary: (i) that is a corporation is duly
organized and validly existing under the laws of its jurisdiction of
incorporation, (ii) that is not a corporation is duly organized and validly
existing under the laws of its jurisdiction of organization, (iii) has all
necessary power and authority to own, operate or lease the properties and assets
owned, operated or leased by such MS Subsidiary and to carry on its business as
it has been and is currently conducted by such MS Subsidiary, and (iv) is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary.
(d) All the outstanding shares of capital stock of each MS
Subsidiary are validly issued, fully paid, nonassessable and free of preemptive
rights and are owned by MS, whether directly or indirectly, free and clear of
all Encumbrances.
(e) There are no options, warrants, convertible securities, or
other rights, agreements, arrangements or commitments of any character relating
to the capital stock of any MS Subsidiary or obligating MS or any MS Subsidiary
to issue or sell any shares of capital stock of, or any other interest in, MS or
any MS Subsidiary.
(f) All corporate actions taken by each MS Subsidiary have
been duly authorized and no MS Subsidiary has taken any action that in any
respect conflicts with, constitutes a default under or results in a violation of
any provision of its charter or by-laws (or similar organizational documents).
(g) No MS Subsidiary is a member of (nor is any part of its
business conducted through) any partnership nor is any MS Subsidiary a
participant in any joint venture or similar arrangement.
(h) Except for the Stockholders Agreement (on the date of this
Agreement), the New Stockholders Agreement and the New Registration Rights
Agreement ( after the Closing Date), there are no voting trusts, stockholder
agreements, proxies or other agreements or understandings in effect with respect
to the voting or transfer of any shares of capital stock of or any other
interests in any MS Subsidiary.
(i) The stock register of each MS Subsidiary accurately
records: (i) the name and address of each Person owning shares of capital stock
of such MS Subsidiary and (ii) the certificate number of each certificate
evidencing shares of capital stock issued by such MS Subsidiary, the number of
shares evidenced each such certificate, the date of issuance thereof and, in the
case of cancellation, the date of cancellation.
<PAGE> 22
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SECTION 3.04. Corporate Books and Records. The minute books of
MS and the MS Subsidiaries contain accurate records of all meetings and
accurately reflect all other actions taken by the stockholders, Boards of
Directors and all committees of the Boards of Directors of MS and the MS
Subsidiaries. Complete and accurate copies of all such minute books and of the
stock register of MS and each MS Subsidiary have been provided or made available
for inspection by MS to the Sellers for the period from August 1, 1996 to the
date hereof.
SECTION 3.05. No Conflict. Assuming that all consents,
approvals, authorizations and other actions described in Section 3.06 have been
obtained and all filings and notifications listed in Section 3.05 and Section
3.06 of the Disclosure Schedules have been made, the execution, delivery and
performance of this Agreement, the Promissory Notes, the New Stockholders
Agreement and the New Registration Rights Agreement by MS do not (a) violate,
conflict with or result in the breach of any provision of the charter or by-laws
(or similar organizational documents) of MS or any MS Subsidiary, (b) conflict
with or violate (or cause an event which could have a Material Adverse Effect as
a result of) any Law or Governmental Order applicable to MS or any MS Subsidiary
or any of their respective assets, properties or businesses, including, without
limitation, the Business, or (c) conflict with, result in any breach of,
constitute a material default (or event which, with the giving of notice or
lapse of time, or both, would become a material default) under, require any
consent under or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of the shares or on any of the assets or
properties of MS or any MS Subsidiary pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which MS or any MS Subsidiary is a party or
by which any of the shares or any of such assets or properties is bound or
affected. MS specifically represents and warrants that, assuming that all
consents, approvals, authorizations and other actions described in Section 3.06
have been obtained and all filings and notifications listed in Section 3.05 and
Section 3.06 of the Disclosure Schedules have been made, the execution, delivery
and performance of this Agreement, the Promissory Notes, the New Stockholders
Agreement and the New Registration Rights Agreement by MS and the consummation
of the transactions contemplated hereby and thereby do not and will not (i)
result in either (w) the redemption of the outstanding shares of MS Series A
Preferred Stock, (x) the acceleration of the $35 million credit facility among
Aetna Industries, MS, Aetna Holdings, Aetna Export Sales Corp. and NBD Bank, (y)
the obligation for Aetna Industries to offer to purchase any of its 11 7/8%
Senior Notes due 2006 (the "Aetna Notes") or the qualification of a "Change of
Control" under the indenture of the Aetna Notes, or (z) the mandatory redemption
of the 11% junior subordinated notes due 2007 issued by Aetna Holdings nor (ii)
result in any increase of the interest rate of these financings.
SECTION 3.06. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement, the New Stockholders
Agreement and the New Registration Rights Agreement by MS do not and will not
require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority, except for a filing
with the French Treasury pursuant to regulations on foreign investment in
France.
<PAGE> 23
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SECTION 3.07. Financial Information, Books and Records,
Securities Reports. (a) True and complete copies of the audited consolidated
balance sheet of MS and Aetna Industries for each of the three fiscal years
ended as of December 31, 1996, and December 31, 1997 and the related audited
consolidated statements of income, retained earnings, stockholders equity and
changes in financial position of MS and Aetna Industries, together with all
related notes and schedules thereto, accompanied by the reports thereon of MS
and Aetna Industries' accountants (collectively referred to herein as the
"Financial Statements") have been delivered by MS to the Sellers' Representative
and are attached hereto under Section 3.07(a) of the Disclosure Schedules. The
Financial Statements (i) were prepared in accordance with the books of account
and other financial records of MS and each of the MS Subsidiaries, (ii) present
fairly the consolidated financial condition and results of operations of MS and
each of the MS Subsidiaries as of the dates thereof or for the periods covered
thereby, (iii) have been prepared in accordance with U.S. GAAP applied on a
basis consistent with the past practices of MS and each of the MS Subsidiaries
(except as may be otherwise indicated in the notes thereto) and (iv) include all
adjustments that are necessary for a fair presentation of the consolidated
financial condition of MS and the MS Subsidiaries and the results of the
operations of MS and the MS Subsidiaries as of the dates thereof or for the
periods covered thereby. The Form 10-K405 of MS, Aetna Holdings and Aetna
Industries for the fiscal year ended December 28, 1997, does not contain any
information that reflects a breach of a covenant under the indenture of the
Aetna Notes or in the NBD Credit Agreement of Aetna Industries dated May 2,
1996, as amended.
(b) The books of account and other financial records of MS and
the MS Subsidiaries: (i) reflect all items of income and expense and all assets
and Liabilities required to be reflected therein in accordance with U.S. GAAP
applied on a basis consistent with the past practices of MS and the MS
Subsidiaries, respectively, (ii) are in all material respects complete and
correct, and do not contain or reflect any material inaccuracies or
discrepancies and (iii) have been maintained in accordance with good business
and accounting practices.
(c) Since August 1, 1996, Aetna Industries and MS have filed
(x) all forms, reports, statements and other documents required to be filed with
(A) the SEC including, without limitation, (i) all annual reports on Form 10-K,
(ii) all quarterly reports on Form 10-Q and (iii) all amendments and supplements
thereto, and (B) any other applicable state securities authorities, and (y) all
forms, reports, statements and other documents required to be filed with any
other applicable federal or state regulatory authorities (all such reports in
clauses (x) and (y) being the "Aetna Reports"). The Aetna Reports, including all
Aetna Reports filed after the date of this Agreement and prior to the Closing
Date, (x) were or will be prepared in all material respects in accordance with
the requirements of applicable Law and (y) did not at the time they were filed,
or will not at the time they are filed, contain any untrue statement of a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Since June 30, 1997, there have been no events or
circumstances relating to MS, any MS Subsidiary or the Business that would
require the filing of any report on Form 8-K, other than any events after the
date hereof and prior to the Closing as to which MS and Aetna Industries shall
have filed with the SEC and delivered to the Sellers' Representative, a copy of
such report on Form 8-K.
<PAGE> 24
17
SECTION 3.08. No Undisclosed Liabilities. There are no
Liabilities of MS or any MS Subsidiary, other than Liabilities (i) reflected or
reserved against on the MS Reference Balance Sheet, or (ii) disclosed in Section
3.08 of the Disclosure Schedules or (iii) incurred since the date of the MS
Reference Balance Sheet in the ordinary course of the business, consistent with
the past practice, of MS and the MS Subsidiaries and which, taken together, do
not and would not
<PAGE> 25
18
reasonably be expected to have a Material Adverse Effect. Reserves are
reflected on the MS Reference Balance Sheet against all Liabilities of MS and
the MS Subsidiaries in amounts that have been established on a basis consistent
with the past practices of MS and the MS Subsidiaries and in accordance with
U.S. GAAP.
SECTION 3.09. Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions. Since the date of the MS Reference
Balance Sheet, except as disclosed in Section 3.09 of the Disclosure Schedules,
the business of MS and the MS Subsidiaries has been conducted in the ordinary
course and consistent with past practice. As amplification and not limitation of
the foregoing, except as disclosed in Section 3.09 of the Disclosure Schedules,
since the date of the MS Reference Balance Sheet, neither MS nor any MS
Subsidiary has:
(i) permitted or allowed any of the assets or properties
(whether tangible or intangible) of MS or any MS Subsidiary to be
subjected to any Encumbrance, other than Permitted Encumbrances and
Encumbrances that will be released at or prior to the Closing;
(ii) except in the ordinary course of business consistent with
past practice, discharged or otherwise obtained the release of any
Encumbrance or paid or otherwise discharged any Liability, other than
current liabilities reflected on the MS Reference Balance Sheet and
current liabilities incurred in the ordinary course of business
consistent with past practice since the date of the MS Reference
Balance Sheet;
(iii) made any loan to, guaranteed any Indebtedness of or
otherwise incurred any Indebtedness on behalf of any Person;
(iv) redeemed any of the capital stock or declared, made or
paid any dividends or distributions (whether in cash, securities or
other property) to the holders of capital stock of MS or any MS
Subsidiary or otherwise, other than dividends, distributions and
redemptions declared, made or paid by any MS Subsidiary solely to MS;
(v) sold, transferred, leased, subleased, licensed or
otherwise disposed of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible
assets), other than the sale of Inventories in the ordinary course of
business consistent with past practice;
(vi) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same,
of, or any other interest in, MS or any MS Subsidiary;
<PAGE> 26
19
(vii) entered into any agreement, arrangement or transaction
with any of its directors, officers, employees or shareholders (or with
any relative, beneficiary, spouse or Affiliate of such Person);
(viii) made any change in any method of accounting or
accounting practice or policy used by MS or any MS Subsidiary, other
than such changes required by U.S. GAAP or disclosed in Section 3.09 of
the Disclosure Schedules;
(ix) allowed any Permit or Environmental Permit that was
issued or relates to MS or any MS Subsidiary or otherwise relates to
any Asset to lapse or terminate or failed to renew any such Permit or
Environmental Permit or any insurance policy that is scheduled to
terminate or expire within 45 calendar days of the Closing Date;
(x) incurred any Indebtedness, in excess of $50,000
individually or $250,000 in the aggregate;
(xi) amended or restated the Certificate of Incorporation or
the By-laws (or other organizational documents) of MS or any MS
Subsidiary, except as expressly provided for under this Agreement;
(xii) suffered any casualty loss or damage with respect to any
of their assets which in the aggregate have a replacement cost of more
than $50,000, whether or not such loss or damage shall have been
covered by insurance;
(xiii) suffered any Material Adverse Effect; or
(xiv) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 3.09 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights or commitments with respect to any of the actions
specified in this Section 3.09, except as expressly contemplated by
this Agreement.
SECTION 3.10. Litigation. Except as set forth in Section 3.10
of the Disclosure Schedules (which, with respect to each Action disclosed
therein, sets forth: the parties, nature of the proceeding, date and method
commenced, amount of damages or other relief sought and, if applicable, paid or
granted), there are no Actions by or against MS or any MS Subsidiary, or
affecting any of their Assets, pending before any Governmental Authority (or, to
the best knowledge of MS after due inquiry, threatened to be brought by or
before any Governmental Authority). None of the matters disclosed in Section
3.10 of the Disclosure Schedules has or has had a Material Adverse Effect or
would reasonably be expected to affect the legality, validity or enforceability
of this Agreement or the New Stockholders Agreement or the New Registration
Rights Agreement or the consummation of the transactions contemplated hereby and
thereby. Except as set forth in Section 3.10 of the Disclosure Schedules,
neither MS nor the MS Subsidiaries is subject to any Governmental Order (nor, to
the best
<PAGE> 27
20
knowledge of MS after due inquiry, are there any such Governmental Orders
threatened to be imposed by any Governmental Authority) which has or has had a
Material Adverse Effect.
SECTION 3.11. Certain Interests. (a) Except as disclosed in
Section 3.11(a) of the Disclosure Schedules, no officer or director of MS or any
MS Subsidiary, and no relative or spouse (or relative of such spouse) who
resides with, or is a dependent of, any such officer or director:
(i) owns, directly or indirectly, in whole or in part, or has
any other interest in any tangible or intangible property which MS or
any MS Subsidiary uses in the conduct of the Business or otherwise; or
(ii) has outstanding any Indebtedness to MS or any MS
Subsidiary.
(b) Except as disclosed in Section 3.11(b) of the Disclosure
Schedules, neither MS nor any MS Subsidiary has any Liability or any other
obligation of any nature whatsoever to any officer or director of MS or any MS
Subsidiary or to any relative or spouse (or relative of such spouse) who resides
with, or is a dependent of, any such officer or director.
SECTION 3.12. Compliance with Laws. MS and the MS Subsidiaries
have each conducted the Business, in all material respects, in accordance with
all Laws and Governmental Orders applicable, to the knowledge of MS, to MS or
any MS Subsidiary or any of their respective assets or properties or the
Business, and neither MS nor any MS Subsidiary is in violation of any such Law
or Governmental Order, which would result in a Material Adverse Effect.
SECTION 3.13. Environmental and Other Permits and Licenses;
Related Matters. (a) Except as disclosed in Section 3.13(a)(i) of the Disclosure
Schedules, and except as would not reasonably be expected to result in a
Material Adverse Effect, MS and the MS Subsidiaries currently hold and are in
compliance with, all the health and safety and other permits, licenses,
authorizations, certificates, exemptions and approvals of Governmental
Authorities (collectively, "Permits"), including, without limitation,
Environmental Permits, necessary or proper for the current use, occupancy and
operation of each Asset of MS and the MS Subsidiaries and the conduct of the
Business, and all such Permits are in full force and effect. Except as disclosed
in Section 3.13(a)(ii) of the Disclosure Schedules, and except as would not
reasonably be expected to result in a Material Adverse Effect, there is no
existing practice, action or activity of MS or any MS Subsidiary and no existing
condition of the assets of MS or any MS Subsidiary or the Business which would
reasonably be expected to give rise to any civil or criminal Liability under, or
violate or prevent compliance with, any health or occupational safety or other
applicable Law. Except as disclosed in Section 3.13(a)(iii) of the Disclosure
Schedules, neither MS nor any MS Subsidiary has received any notice from any
Governmental Authority revoking, canceling, rescinding, materially modifying or
refusing to renew any Permit or providing written notice of violations under any
Law. To the knowledge of MS, Section 3.13(a)(iv) of the Disclosure Schedules
identifies all Permits that are nontransferable or which
<PAGE> 28
21
will require the consent of any Governmental Authority in the event of the
consummation of the transactions contemplated by this Agreement.
(b) Except as disclosed in Section 3.13(b) of the Disclosure
Schedules, and except as would not reasonably be expected to result in a
Material Adverse Effect, (i) Hazardous Materials have not been generated, used,
treated, handled or stored on, or transported to or from, or Released on any
Real Property or on any property formerly owned, leased or occupied by MS
or any MS Subsidiaries; (ii) MS and the MS Subsidiaries have disposed of all
Hazardous Materials, in compliance with all applicable Environmental Laws and
Environmental Permits; (iii) there are no pending or, to the knowledge of MS,
threatened Environmental Claims against MS, any MS Subsidiary, or any Real
Property; (iv) no Real Property is listed or proposed for listing on the
National Priorities List under CERCLA or on the CERCLIS or any analogous state
list of sites requiring investigation or cleanup; and (v) neither MS nor any MS
Subsidiary has received notice that it transported or arranged for the
transportation of any Hazardous Materials to any location that is listed or
proposed for listing on the National Priorities List under CERCLA or on the
CERCLIS or any analogous state list or which is the subject of any Environmental
Claim.
(c) Except as disclosed in Section 3.13(c) of the Disclosure
Schedules and except as would not reasonably be expected to result in a Material
Adverse Effect, there are no circumstances with respect to any Real Property or
other Asset or the operation of the Business which could reasonably be
anticipated (i) to form the basis of an Environmental Claim against MS, any MS
Subsidiary or any Real Property or Asset or (ii) to cause such Real Property or
Asset to be subject to any restrictions on ownership, occupancy, use or
transferability under any applicable Environmental Law.
(d) Except as disclosed in Section 3.13(d) of the Disclosure
Schedules, there are not now and never have been any USTs located on any Real
Property.
SECTION 3.14. Material Contracts. (a) Section 3.14(a) of the
Disclosure Schedules lists each of the following contracts and agreements
(including, without limitation, oral and informal arrangements) of MS and the MS
Subsidiaries (such contracts and agreements, together with all contracts,
agreements, leases and subleases concerning the management or operation of any
Real Property listed or otherwise disclosed in Section 3.15(a) or 3.15(b) of the
Disclosure Schedules to which MS or any MS Subsidiary is a party and all
agreements relating to Intellectual Property set forth in Section 3.14(a) of the
Disclosure Schedules, being "Material Contracts"):
(i) each contract and agreement for the purchase of Inventory,
spare parts, other materials or personal property with any supplier or
for the furnishing of services to MS, any MS Subsidiary or otherwise
related to the Business under the terms of which MS or any MS
Subsidiary: (A) is likely to pay or otherwise give consideration of
more than $50,000 in the aggregate during the calendar year to be ended
on December 31, 1998, (B) is likely to pay or otherwise give
consideration of more than $100,000 in the aggregate over the remaining
term
<PAGE> 29
22
of such contract or (C) cannot be cancelled by MS or such MS
Subsidiary without penalty or further payment and without more than 30
days' notice;
(ii) each contract and agreement for the sale of Inventory or
other personal property or for the furnishing of services by MS or any
MS Subsidiary which: (A) is likely to involve consideration of more
than $50,000 in the aggregate during the calendar year ended December
31, 1998, (B) is likely to involve consideration of more than $100,000
in the aggregate over the remaining term of the contract or (C) cannot
be cancelled by MS or such MS Subsidiary without penalty or further
payment and without more than 30 days' notice;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements to which
MS or any MS Subsidiary is a party;
(iv) all management contracts and contracts with independent
contractors or consultants (or similar arrangements) to which MS or any
MS Subsidiary is a party and which are not cancellable without penalty
or further payment and without more than 30 days' notice;
(v) all contracts and agreements relating to Indebtedness of
MS or any MS Subsidiary;
(vi) all contracts and agreements with any Governmental
Authority to which MS or any MS Subsidiary is a party;
(vii) all contracts and agreements that limit or purport to
limit the ability of MS or any MS Subsidiary to compete in any line of
business or with any Person or in any geographic area or during any
period of time;
(viii) all contracts and agreements between or among MS, any
MS Subsidiary and any Affiliate of MS or any MS Subsidiary;
(ix) all contracts and agreements providing for benefits under
any Plan; and
(x) all other contracts and agreements whether or not made in
the ordinary course of business, which are material to MS, any MS
Subsidiary or the conduct of the Business or the absence of which would
have a Material Adverse Effect.
For purposes of this Section 3.14 and Section 3.15, the term
"lease" shall include any and all leases, subleases, sale/leaseback agreements
or similar arrangements.
(b) Except as disclosed in Section 3.14(b) of the Disclosure
Schedules, each Material Contract: (i) is valid and binding on the respective
parties thereto and is in full force and
<PAGE> 30
23
effect and (ii) upon consummation of the transactions contemplated by this
Agreement or the New Stockholders Agreement, shall continue in full force and
effect without penalty or other material adverse consequence resulting from the
transactions contemplated hereby and thereby. Neither MS nor any MS Subsidiary
is in material breach of, or material default under, any Material Contract.
(c) Except as disclosed in Section 3.14(c) of the Disclosure
Schedules, to the knowledge of MS, no other party to any Material Contract is in
material breach thereof or material default thereunder.
(d) Except as disclosed in Section 3.14(d) of the Disclosure
Schedules, there is no contract, agreement or other arrangement granting any
Person any preferential right to purchase, other than in the ordinary course of
business consistent with past practice, any of the properties or assets of MS or
any MS Subsidiary.
SECTION 3.15. Real Property. (a) Section 3.15(a) of the
Disclosure Schedules lists: (i) the street address of each parcel of Owned Real
Property, (ii) the date on which each parcel of Owned Real Property was
acquired, (iii) the current owner of each such parcel of Owned Real Property,
(iv) information relating to the recordation of the deed pursuant to which each
such parcel of Owned Real Property was acquired and (v) the current use of each
such parcel of Owned Real Property.
(b) Section 3.15(b) of the Disclosure Schedules lists: (i) the
street address of each parcel of Leased Real Property, (ii) the identity of the
lessor, lessee and current occupant (if different from lessee) of each such
parcel of Leased Real Property, (iii) the term (referencing applicable renewal
periods) and fixed or basic rental payment terms of the leases (and any
subleases) pertaining to each such parcel of Leased Real Property and (iv) the
current use of each such parcel of Leased Real Property.
(c) Except as described in Section 3.15(c) of the Disclosure
Schedules, there is no violation of any Law relating to any of the Owned Real
Property that would reasonably be expected to have a Material Adverse Effect. MS
has made available to the Sellers (to the extent such copies are in MS' physical
possession) true and complete copies of each deed for each parcel of Owned Real
Property and, to the extent available, for each parcel of Leased Real Property
and all the title insurance policies, title reports, surveys, certificates of
occupancy, environmental reports and audits, appraisals and Permits relating to
the Real Property, the operations of MS or any MS Subsidiary thereon or any
other uses thereof. Subject to all applicable leases, either MS or a MS
Subsidiary, as the case may be, is in peaceful and undisturbed possession of
each parcel of Real Property and neither MS nor any MS Subsidiary has executed
and delivered any contractual restrictions that preclude or materially restrict
the ability to use the premises for the purposes for which they are currently
being used. Except as set forth in Section 3.15(c) of the Disclosure Schedules,
neither MS nor any MS Subsidiary has leased or subleased any parcel or any
portion of any parcel of Real Property to any other Person, nor has MS
<PAGE> 31
24
or any MS Subsidiary assigned its interest under any lease or sublease listed in
Section 3.15(b) of the Disclosure Schedules to any third party.
(d) MS has, or has caused to be, delivered to the Sellers true
and complete copies of all leases and subleases listed in Section 3.15(b) of the
Disclosure Schedules. With respect to each of such leases and subleases:
(i) such lease or sublease represents the entire agreement
between the respective landlord and tenant with respect to such
property; and
(ii) except as otherwise disclosed in Section 3.15(b) of the
Disclosure Schedules, with respect to each such lease or sublease: (A)
neither MS nor any MS Subsidiary has received any notice of
cancellation or termination under such lease or sublease and (B)
neither MS nor any MS Subsidiary has received any notice of a breach or
default under such lease or sublease, which breach or default has not
been cured.
(e) There are no condemnation proceedings or eminent domain
proceedings of any kind pending or, to the actual knowledge of MS (without
investigation), threatened against the Owned Real Property.
(f) To the best knowledge of MS, all improvements on the Real
Property constructed by or on behalf of MS or any MS Subsidiary were constructed
in material compliance with all applicable Laws (including, but not limited to,
any building, planning or zoning Laws) affecting such Real Property.
SECTION 3.16. Customers. Listed in Section 3.16 of the
Disclosure Schedules are the names and addresses of the ten most significant
customers (by revenue) of MS and the MS Subsidiaries for the twelve-month period
ended December 31, 1997, and the amount for which each such customer was
invoiced during such period. Except as disclosed in Section 3.16 of the
Disclosure Schedules, neither MS nor any MS Subsidiary has received any notice
that any significant customer of MS has ceased, or will cease, to use the
products, equipment, goods or services of MS or any MS Subsidiary, or has
substantially reduced, or will substantially reduce, the use of such products,
equipment, goods or services at any time.
SECTION 3.17. Suppliers. Listed in Section 3.17 of the
Disclosure Schedules are the names and addresses of each of the ten most
significant suppliers of raw materials, supplies, merchandise and other goods
for MS and the MS Subsidiaries for the twelve-month period ended December 31,
1997, and the amount for which each such supplier invoiced MS and the MS
Subsidiaries during such period. Except as disclosed in Section 3.17 of the
Disclosure Schedules, neither MS nor any MS Subsidiary has received any notice
that any such supplier will not sell raw materials, supplies, merchandise and
other goods to MS or any MS Subsidiary at any time after the
<PAGE> 32
25
Closing Date on terms and conditions substantially similar to those used in its
current sales to MS and the MS Subsidiaries, subject only to general and
customary price increases.
SECTION 3.18. Employee Benefit Matters. (a) Plans and Material
Documents. Section 3.18(a) of the Disclosure Schedules lists (i) all employee
benefit plans (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) and all bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree medical or
life insurance, supplemental retirement, pension or severance plans and other
welfare and benefit plans, programs or arrangements, and all employment,
termination, severance or other contracts or agreements, whether legally
enforceable or not, to which MS or any MS Subsidiary is a party, with respect to
which MS or any MS Subsidiary has any obligation or which are maintained,
contributed to or sponsored by MS or any MS Subsidiary for the benefit of any
current or former employee, officer or director of MS or any MS Subsidiary, and
(ii) any contracts, arrangements or understandings between the Seller or any of
its Affiliates and any employee of MS or of any MS Subsidiary, including,
without limitation, any contracts, arrangements or understandings relating to a
sale or merger of MS (collectively, the "Plans"). Each Plan is in writing and MS
has furnished the Sellers with a complete and accurate copy of each Plan and a
complete and accurate copy of each material document prepared in connection with
each such Plan including, without limitation, (A) a copy of each trust or other
funding arrangement, (B) each summary plan description and summary of material
modifications, (C) the most recently filed Internal Revenue Service ("IRS") Form
5500, (D) the most recently received IRS determination letter for each such
Plan, and (E) the most recently prepared actuarial report and financial
statement in connection with each such Plan. Except as may be required pursuant
to any collective bargaining agreement, neither MS nor any MS Subsidiary has any
express or implied commitment, whether legally enforceable or not, (i) to create
any other employee benefit plan, program or arrangement, (ii) to enter into any
contract or agreement to provide compensation or benefits to any individual or
(iii) to modify, change or terminate any Plan, other than with respect to a
modification, change or termination required by Law. Each of the following
representations regarding the Plans is true, other than as disclosed in Section
3.18 of the Disclosures Schedules attached hereto.
(b) Absence of Certain Types of Plans. None of the Plans is a
multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
(a "Multiemployer Plan") or a single employer pension plan (within the meaning
of Section 4001(a)(15) of ERISA) for which MS or any MS Subsidiary could incur
liability under Section 4063 or 4064 of ERISA (a "Multiple Employer Plan"). None
of the Plans obligates MS or any MS Subsidiary to pay separation, severance,
termination or similar-type benefits solely as a result of any transaction
contemplated by this Agreement or as a result of a "change in control", within
the meaning of such term under Section 280G of the Code, other than with respect
to the vesting of stock options which will vest as a result of the transactions
contemplated herein. None of the Plans provides for or promises retiree medical,
disability or life insurance benefits to any current or former employee, officer
or director of MS or any MS Subsidiary.
<PAGE> 33
26
(c) Compliance with Applicable Law. Each Plan has been
operated in all material respects in accordance with the requirements of all
applicable Law, including, without limitation, ERISA and the Code, and all
persons who participate in the operation of such Plans and, to the best
knowledge of MS, all Plan "fiduciaries" (within the meaning of Section 3(21) of
ERISA) have always acted in all material respects in accordance with the
provisions of all applicable Law, including, without limitation, ERISA and the
Code. MS and each MS Subsidiary has performed all material obligations required
to be performed by it under, is not in any respect in default under or in
violation of, and has no knowledge of any material default or violation by any
party to, any Plan. No legal action, suit or claim is pending or threatened with
respect to any Plan (other than claims for benefits in the ordinary course), no
audit or investigation of any Plan is underway by the IRS, the Department of
Labor or the Pension Benefit Guaranty Corporation and, to the best knowledge of
MS, no fact or event exists that could give rise to any such action, suit,
audit, investigation or claim.
(d) Qualification of Certain Plans. Each Plan which is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code has received a favorable determination letter from the IRS that it is
so qualified and each trust established in connection with any Plan which is
intended to be exempt from federal income taxation under Section 501(a)
of the Code has received a determination letter from the IRS that it is so
exempt, and no fact or event has occurred to the best knowledge of MS since the
date of such determination letter from the IRS to adversely affect the qualified
status of any such Plan or the exempt status of any such trust. Each trust
maintained or contributed to by MS or any MS Subsidiary which is intended to be
qualified as a voluntary employees' beneficiary association and which is
intended to be exempt from federal income taxation under Section 501(c)(9) of
the Code has received a favorable determination letter from the IRS that it is
so qualified and so exempt, and no fact or event has occurred to the best
knowledge of MS since the date of such determination by the IRS to adversely
affect such qualified or exempt status.
(e) Absence of Certain Liabilities and Events. There has been,
to the best knowledge of MS, no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.
Neither MS nor any MS Subsidiary has incurred any material liability for any
penalty or tax arising under Section 4971, 4972, 4980, 4980B or 6652 of the Code
or any material liability under Section 502 of ERISA, and no fact or event
exists which could give rise to any such liability. Neither MS nor any MS
Subsidiary has incurred any material liability under, arising out of or by
operation of Title IV of ERISA (other than liability for premiums to the Pension
Benefit Guaranty Corporation arising in the ordinary course), including, without
limitation, any such liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA or (ii)
the withdrawal from any Multiemployer Plan or Multiple Employer Plan, and no
fact or event exists which could give rise to any such liability. No Plan had an
accumulated funding deficiency (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, as of the most recently ended
plan year of such Plan. None of the assets of MS or any MS Subsidiary is the
subject of any lien arising under Section 302(f) of ERISA or Section 412(n) of
the Code; neither MS nor any MS Subsidiary has been required to post any
security under Section 307 of ERISA or Section 401(a)(29) of the Code; and no
fact or event
<PAGE> 34
27
exists which could give rise to any such lien or requirement to post any such
security. Except as set forth in Section 3.18(e) of the Disclosure Schedules,
the consummation of the transactions contemplated by the Agreement will not
(either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any Plan, trust, or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any employee of MS or any MS Subsidiary.
(f) Plan Contributions and Funding. To the best knowledge of
MS, all contributions, premiums or payments required to be made with respect to
any Plan have been made on or before their due dates. All such contributions
have been fully deducted for income tax purposes and no such deduction has been
challenged or disallowed by any government entity and, to the best knowledge of
MS, no fact or event exists which could give rise to any such challenge or
disallowance. With respect to each Plan which is an "employee welfare benefit
plan" within the meaning of Section 3(1) of ERISA, all material claims incurred
(including claims incurred but not reported) by employees thereunder for which
MS or any MS Subsidiary is, or will become, liable are (i) insured pursuant to a
contract of insurance whereby the insurance company bears any risk of loss with
respect to such claim, (ii) covered under a contract with a health maintenance
organization (an "HMO") pursuant to which the HMO bears the liability for such
claims; or (iii) reflected as a liability or accrued for in Section 3.18(f) of
the Disclosure Schedules.
(g) WARN Act. To the extent presently applicable, MS and the
MS Subsidiaries are in material compliance with the requirements of the Workers
Adjustment and Retraining Notification Act ("WARN").
SECTION 3.19. Labor Matters. Except as set forth in Section
3.19 of the Disclosure Schedules,
(a) neither MS nor any MS Subsidiary is a party to any
collective bargaining agreement or other labor union contract
applicable to persons employed by MS or any MS Subsidiary and, to the
best knowledge of MS, currently there are no organizational campaigns,
petitions or other unionization activities seeking recognition of a
collective bargaining unit which could affect MS or any MS Subsidiary;
(b) there are no controversies, strikes, slowdowns or work
stoppages pending or, to the knowledge of MS, threatened between MS or
any MS Subsidiary and any of their respective employees, and neither MS
nor any MS Subsidiary has experienced any such controversy, strike,
slowdown or work stoppage within the past three years;
(c) neither MS nor any MS Subsidiary has breached or otherwise
failed to comply with the provisions of any collective bargaining or
union contract and there are no grievances
<PAGE> 35
28
outstanding against MS or any MS Subsidiary under any such agreement or
contract which could have a Material Adverse Effect;
(d) there are no unfair labor practice complaints pending or,
to the knowledge of MS, threatened, against MS or any MS Subsidiary
before the National Labor Relations Board or any other Governmental
Authority or any current union representation questions involving
employees of MS or any MS Subsidiary which could have a Material
Adverse Effect;
(e) MS and each MS Subsidiary is currently in compliance with
all applicable Laws relating to the employment of labor, including
those related to wages, hours, collective bargaining and the payment
and withholding of taxes and other sums as required by the appropriate
Governmental Authority and has withheld and paid to the appropriate
Governmental Authority or is holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from
employees of MS or any MS Subsidiary and is not liable for any arrears
of wages, taxes, penalties or other sums for failure to comply with any
of the foregoing;
(f) MS and each MS Subsidiary has paid in full to all their
respective employees or adequately accrued for in accordance with U.S.
GAAP all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees;
(g) to the knowledge of MS, there is no claim with respect to
payment of wages, salary or overtime pay that has been asserted or is
now pending or, to the best knowledge of MS, threatened before any
Governmental Authority with respect to any Persons currently or
formerly employed by MS or any MS Subsidiary;
(h) neither MS nor any MS Subsidiary is a party to, or
otherwise bound by, any consent decree with any Governmental Authority
relating to employees or employment practices;
(i) there is no charge or proceeding with respect to a
violation of any occupational safety or health standards that has been
asserted or is now pending or, to the best knowledge of MS, threatened
with respect to MS or any MS Subsidiary; and
(j) to the knowledge of MS, there is no charge of
discrimination in employment or employment practices, for any reason,
including, without limitation, age, gender, race, religion or other
legally protected category, which has been asserted or is now pending
or, to the best knowledge of MS, threatened before the United States
Equal Employment Opportunity Commission, or any other Governmental
Authority in any jurisdiction in which MS or any MS Subsidiary has
employed or currently employs any Person which would reasonably be
expected to have a Material Adverse Effect.
<PAGE> 36
29
SECTION 3.20. Key Employees. Section 3.20 of the Disclosure
Schedules lists the name, place of employment, the current annual salary rates,
bonuses, deferred or contingent compensation, pension, accrued vacation, "golden
parachute" and other like benefits paid or payable (in cash or otherwise) in
1997, the date of employment and a description of position and job function of
each current salaried employee, officer, director, consultant or agent of MS or
any MS Subsidiary whose annual compensation exceeded $100,000.
SECTION 3.21. Taxes. (a) (i) All returns and reports in
respect of Taxes required to be filed with respect to MS and each of its
Subsidiaries have been timely filed; (ii) all Taxes owed by MS or any of its
Subsidiaries, whether or not shown on such returns and reports due have been
timely paid; (iii) all such returns and reports are true, correct and complete
in all material respects; (iv) no adjustment relating to such returns and
reports has been proposed formally or informally by any Tax authority; (v) there
are no pending actions or proceedings for the assessment or collection of Taxes
against MS or any MS Subsidiary; (vi) there are no Tax liens on any assets of MS
or any MS Subsidiary; (vii) neither MS nor any of its Subsidiaries is a party to
any agreements or arrangements that would result, separately or in the aggregate
in the payment of any "excess parachute payments" within the meaning of Section
280G of the Code; (viii) no acceleration of the vesting schedule for any
property that is substantially unvested within the meaning of the regulations
under Section 83 of the Code will occur in connection with the transactions
contemplated by this Agreement; (ix) neither MS nor any MS Subsidiary has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code; and (x) neither MS nor any MS Subsidiary is subject to
any accumulated earnings tax penalty or personal holding company tax.
(b) Except as disclosed in reasonable specificity in Section
3.21(b) of the Disclosure Schedules: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period with respect to
any Tax to which MS or any of its Subsidiaries may be subject; (ii) neither MS
nor any MS Subsidiary presently has any income occurring in, or a change in
accounting method made for, a period ending on or prior to the Closing Date
which resulted from a deferred reporting of income from such transaction, or
from such change in accounting method; (iii) there are no proposed reassessments
of any property owned by MS or any MS Subsidiary or other proposals that could
increase the amount of any Tax to which MS or any MS Subsidiary would be
subject; and (iv) neither MS nor any MS Subsidiary is a party to any tax
sharing, indemnification or allocation agreement.
(c) The balance sheet of MS provides for reserves and
allowances adequate in amount to satisfy all Liabilities for Taxes relating to
MS and the MS Subsidiaries for prior Tax periods (including partial Tax periods
through the date hereof).
SECTION 3.22. Insurance. MS and the MS Subsidiaries have
obtained and maintained in full force and effect insurance with responsible and
reputable insurance companies or associations in such amounts, on such terms and
covering such risks, including fire and other risks insured against by extended
coverage, as is reasonably prudent, and each has maintained in full force and
effect public liability insurance, insurance against claims for personal injury
or death or property damage occurring
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30
in connection with the activities of MS or the MS Subsidiaries or any properties
owned, occupied or controlled by MS or the MS Subsidiaries, in such amount as
reasonably deemed necessary by MS.
SECTION 3.23. Full Disclosure. MS is not aware of any facts
pertaining to MS, any MS Subsidiary or the Business that would render any of the
representations and warranties of MS contained in this Article III inaccurate in
any material respect.
SECTION 3.24. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of MS.
SECTION 3.25. Stockholder Approvals. No other approval of the
stockholders of MS is required for the completion of the transactions
contemplated herein, in the New Stockholders Agreement and in the New
Registration Rights Agreement than the approval of: (i) this Agreement; (ii) the
New Stockholders Agreement; (iii) the Amended and Restated Certificate of
Incorporation of MS, substantially in the form attached hereto (together, the
"MS Stockholder Approvals").
SECTION 3.26. State Takeover Statute. The Board of Directors
of MS has taken all actions necessary under the Delaware General Corporation Law
(the "DGCL"), including approving the issuance of new shares of MS and the other
transactions contemplated in this Agreement to ensure that the restrictions on
business combinations set forth in Section 203 of the DGCL do not or will not
apply to the issuance of new shares of MS or any of the transactions
contemplated by this Agreement.
ARTICLE IV-A
REPRESENTATIONS AND WARRANTIES OF CIBA
As an inducement to MS to enter into this Agreement, CIBA
hereby represents and warrants to MS as follows:
SECTION 4.A.01. Organization of CIBA. CIBA is a French societe
anonyme duly organized, validly existing and in good standing under the laws of
France and has all necessary power and authority to enter into this Agreement to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by CIBA, the
performance by CIBA of its obligations hereunder and the consummation by CIBA of
the transactions contemplated hereby have been duly authorized by all requisite
action on the part of CIBA. This Agreement has been duly executed and delivered
by CIBA and (assuming due authorization, execution and delivery by all other
parties hereto) this Agreement constitutes a legal, valid and binding obligation
of CIBA enforceable against CIBA in accordance with its terms. All corporate
actions taken by CIBA
<PAGE> 38
31
have been duly authorized, and CIBA has not taken any action that in any
material respect conflicts with, constitutes a default under, or results in a
violation of any provision of its statuts.
SECTION 4.A.02. No Conflict. Assuming that all consents,
approvals, authorizations and other actions described in Section 4.A.03 have
been obtained and all filings and notifications listed in Section 4.A.03 have
been made, the execution, delivery and performance of this Agreement by CIBA do
not and will not (a) violate, conflict with or result in the breach of any
provision of the charter or by-laws (or similar organizational documents) of
CIBA, (b) conflict with or violate any Law or Governmental Order applicable to
CIBA, or (c) conflict with, result in any breach of, constitute a default (or
event which with the giving of notice or lapse of time, or both, would become a
default) under any contract to which CIBA is a party which would have a Material
Adverse Effect on the ability of CIBA to consummate the transactions
contemplated by this Agreement or the New Stockholders Agreement or the New
Registration Rights Agreement.
SECTION 4.A.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement by CIBA do not and will
not require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority.
SECTION 4.A.04. Capital Stock of CIBA. (a) The share capital
of CIBA consists of one class of 19,100 shares, each share having a par value of
FF 100. The CIBA Shares constitute 100% of the issued and outstanding capital
stock of CIBA. The CIBA Shares have been duly authorized and validly issued and
are fully paid and non-assessable. CIBA has no other shares or securities of any
kind outstanding. None of the issued and outstanding shares of CIBA was issued
in violation of any preemptive rights. There are no options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the capital stock of CIBA or obligating CIBA to
issue or sell any shares of capital stock of, or any other interest in, CIBA.
There are no outstanding contractual obligations of CIBA to repurchase, redeem
or otherwise acquire any shares of CIBA or to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
other Person. The outstanding shares of CIBA referred to in this section are
free and clear of all Encumbrances.
(b) The stock register of CIBA accurately records: (i) the
name and address of each Person owning shares of capital stock of CIBA and (ii)
the certificate number of each certificate evidencing shares of capital stock
issued by CIBA, the number of shares evidenced by each such certificate, the
date of issuance thereof and, in the case of cancellation, the date of
cancellation.
SECTION 4.A.05. Ownership of the CIBA Shares. (a) Section
4.A.05(a) of the Disclosure Schedules sets out the capital ownership of CIBA.
(b) Upon consummation of the transactions contemplated by this
Agreement, MS will own all the issued and outstanding capital stock of CIBA.
There are no voting trusts, stockholders
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32
agreements, proxies or other agreements or undertakings in effect with respect
to the voting or transfer of the CIBA Shares.
SECTION 4.A.06. Financial Information, Books and Records. (a)
True and complete copies of the CIBA Reference Balance Sheet have been delivered
to MS by CIBA and are attached hereto under Section 4.A.06 of the Disclosure
Schedules. The CIBA Reference Balance Sheet (i) was prepared in accordance with
the books of account and other financial records of CIBA, (ii) present fairly
the financial condition and results of operations of CIBA as of the date thereof
or for the period covered thereby, (iii) has been prepared in accordance with
French GAAP applied on a basis consistent with the past practices of CIBA and
(iv) include all adjustments (consisting only of normal recurring accruals) that
are necessary for a fair presentation of the financial condition of CIBA and the
results of the operations of CIBA as of the dates thereof or for the periods
covered thereby.
(b) The books of account and other financial records of CIBA:
(i) reflect all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with French GAAP applied on a
basis consistent with the past practices of CIBA, (ii) are in all material
respects complete and correct, and do not contain or reflect any material
inaccuracies or discrepancies and (iii) have been maintained in accordance with
good business and accounting practices.
SECTION 4.A.07. No Undisclosed Liabilities. There are no
Liabilities of CIBA, other than Liabilities (i) reflected or reserved against on
the CIBA Reference Balance Sheet, or (ii) incurred since the date of the CIBA
Reference Balance Sheet in the ordinary course of the business, consistent with
the past practice, of CIBA, and which do not and could not have a Material
Adverse Effect. Reserves are reflected on the CIBA Reference Balance Sheet
against all Liabilities of CIBA in amounts that have been established on a basis
consistent with the past practices of CIBA and in accordance with French GAAP.
SECTION 4.A.08. Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions. Since the date of the CIBA Reference
Balance Sheet, except as disclosed in Section 4.A.08 of the Disclosure
Schedules, the business of CIBA has been conducted in the ordinary course and
consistent with past practice. As amplification and not limitation of the
foregoing, except as disclosed in Section 4.A.08 of the Disclosure Schedules,
since the date of the CIBA Reference Balance Sheet, CIBA has not:
(i) permitted or allowed any of the assets or properties
(whether tangible or intangible) of CIBA to be subjected to any
Encumbrance, other than Permitted Encumbrances and Encumbrances that
will be released at or prior to the Closing;
(ii) except in the ordinary course of business consistent with
past practice, discharged or otherwise obtained the release of any
Encumbrance or paid or otherwise discharged any Liability, other than
current liabilities reflected on the CIBA Reference Balance
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Sheet and current liabilities incurred in the ordinary course of
business consistent with past practice since the date of the CIBA
Reference Balance Sheet;
(iii) made any loan to, guaranteed any Indebtedness of or
otherwise incurred any Indebtedness on behalf of any Person;
(iv) redeemed any of the capital stock or declared, made or
paid any dividends or distributions (whether in cash, securities or
other property) to the holders of capital stock of CIBA or otherwise,
other than dividends, distributions and redemptions declared, made or
paid by CIBA.
(v) disposed of any properties or assets;
(vi) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same,
of, or any other interest in, CIBA;
(vii) entered into any agreement, arrangement or transaction
with any of its directors, officers, employees or shareholders (or with
any relative, beneficiary, spouse or Affiliate of such Person);
(viii) made any change in any method of accounting or
accounting practice or policy used by CIBA, other than such changes
required by French GAAP or disclosed in Section 4.A.08 of the
Disclosure Schedules;
(ix) incurred any Indebtedness, in excess of $50,000
individually or $250,000 in the aggregate;
(x) amended or restated the Certificate of Incorporation or
the By-laws (or other organizational documents) of CIBA;
(xi) suffered any casualty loss or damage with respect to any
of their assets which in the aggregate have a replacement cost of more
than $50,000, whether or not such loss or damage shall have been
covered by insurance;
(xii) suffered any Material Adverse Effect; or
(xiii) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 4.A.08 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights or commitments with respect to any of the actions
specified in this Section 4.A.08, except as expressly contemplated by
this Agreement.
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SECTION 4.A.09. Litigation. There are no Actions by or against
CIBA or any of its assets or properties, pending before any Governmental
Authority (or, to the best knowledge of CIBA after due inquiry, threatened to be
brought by or before any Governmental Authority).
SECTION 4.A.10. Compliance with Laws. CIBA has conducted its
business in accordance with all Laws and Governmental Orders applicable to it or
any of its assets or properties, and to the best of its knowledge CIBA is not in
violation of any such Law or Governmental Order.
SECTION 4.A.11. Absence of Activities. CIBA has no activities
except for holding shares in BDHI.
SECTION 4.A.12. Subsidiaries. CIBA has no other subsidiary
than BDHI.
SECTION 4.A.13. Corporate Books and Records. The minute books
of CIBA contain accurate records of all meetings and accurately reflect all
other actions taken by the stockholders, Boards of Directors and all committees
of the Boards of Directors of CIBA.
SECTION 4.A.14. Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission from
CIBA in connection with this Agreement and the transactions contemplated
therein.
SECTION 4.A.15. Taxes. (a) (i) All returns and reports in
respect of Taxes required to be filed with respect to CIBA have been timely
filed; (ii) all Taxes owed by CIBA whether or not shown on such returns and
reports or otherwise due have been timely paid; (iii) all such returns and
reports are true, correct and complete in all material respects; (iv) no
adjustment relating to such returns and reports has been proposed formally or
informally by any Tax authority; (v) there are no pending actions or proceedings
for the assessment or collection of Taxes against CIBA; (vi) there are no Tax
liens on any assets of CIBA; and (vii) CIBA is not subject to any accumulated
earnings tax penalty or personal holding company tax.
(b) Except as disclosed in reasonable specificity in Section
4.A.15(b) of the Disclosure Schedules: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period with respect to
any Tax to which CIBA may be subject; (ii) CIBA presently does not have any
income occurring in, or a change in accounting method made for, a period ending
on or prior to the Closing Date which resulted from a deferred reporting of
income from such transaction, or from such change in accounting method; (iii)
there are no proposed reassessments of any property owned by CIBA or other
proposals that could increase the amount of any Tax to which CIBA would be
subject; and (iv) CIBA is not a party to any tax sharing, indemnification or
allocation agreement.
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35
(c) The CIBA Reference Balance Sheet provides for reserves and
allowances adequate in amount to satisfy all Liabilities for Taxes relating to
CIBA for prior tax periods (including partial tax periods through the date
hereof).
(d) CIBA is not, and at no time has been, engaged in the
conduct of a trade or business within the United States within the meaning of
Section 864(b) and Section 882(a) of the Code, or treated as or considered to be
so engaged under Section 882(d) or Section 897 of the Code or otherwise.
SECTION 4.A.16. Full Disclosure. CIBA is not aware of any
facts pertaining to CIBA that would render any of the representations and
warranties of MS contained in this Article IV-A inaccurate in any material
respect.
SECTION 4.A.17. Title to the Shares Owned by CIBA in BDHI.
CIBA owns its shares of BDHI free and clear of any and all Encumbrances.
SECTION 4.A.18. Stockholders Approval. No approval of the
Board of Directors or the stockholders of CIBA is required for the completion of
the transactions contemplated herein, in the New Stockholders Agreement or in
the New Registration Rights Agreement, except for the approval of MS as new
shareholder of CIBA by the Board of Directors of CIBA.
ARTICLE IV-B
REPRESENTATIONS AND WARRANTIES OF THE BARGE FAMILY AND CEFI
As an inducement to MS to enter into this Agreement, each of
the members of the Barge Family and CEFI hereby represents and warrants for
itself only, but not for the others, to MS as follows:
SECTION 4.B.01. Authority and Qualification of the Barge
Family and CEFI. CEFI is a Luxembourg societe de participations financiere, duly
organised and validly existing under the laws of Luxembourg, and it, along with
each of the members of the Barge Family, has all necessary power and authority
to enter into this Agreement, and CEFI has all necessary power and authority to
enter into the New Stockholders Agreement and the New Registration Rights
Agreement, to carry out their respective obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement, the New Stockholders Agreement and the
New Registration Rights Agreement by CEFI and, with respect to this Agreement
only, the Barge Family, the performance by the Barge Family and CEFI of their
obligations hereunder and thereunder and the consummation by the Barge Family
and CEFI of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of the Barge Family and CEFI.
This Agreement has been, and upon their execution the New
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36
Stockholders Agreement and the New Registration Rights Agreement shall have
been, duly executed and delivered by each of the members of the Barge Family and
CEFI, as applicable, and (assuming due authorization, execution and delivery by
all other parties hereto) this Agreement constitutes, and upon their execution
the New Stockholders Agreement and the New Registration Rights Agreement shall
constitute, legal, valid and binding obligations of each of the members of the
Barge Family and CEFI, as applicable, enforceable against each of the members of
the Barge Family and CEFI, as applicable, in accordance with their terms. All
corporate actions taken by the Barge Family and CEFI have been duly authorized,
and CEFI has not taken any action that in any material respect conflicts with,
constitutes a default under or results in a violation of any provision of its
statuts.
SECTION 4.B.02. No Conflict. The execution, delivery and
performance of this Agreement by the Barge Family and CEFI and of the New
Stockholders Agreement and the New Registration Rights Agreement by CEFI do not
and will not (a) violate, conflict with or result in the breach of any provision
of the charter or by-laws (or similar organizational documents) of CEFI, (b)
conflict with or violate any Law or Governmental Order applicable to CEFI or any
member of the Barge Family, or (c) conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under any contract to which any member of the
Barge Family or CEFI is a party which would have a Material Adverse Effect on
the ability of any member of the Barge Family or CEFI to consummate the
transactions contemplated by this Agreement or the New Stockholders Agreement or
the New Registration Rights Agreement, as applicable.
SECTION 4.B.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement by the Barge Family and
CEFI and of the New Stockholders Agreement and the New Registration Rights
Agreement by CEFI by the members of the Barge Family or CEFI do not and will not
require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority.
SECTION 4.B.04. Title to the Shares Owned by the Barge Family
and CEFI in CIBA. Upon performance of this Agreement, the Barge Family and CEFI
will have transferred to MS good title to the shares of CIBA owned by the Barge
Family and CEFI, free and clear of any and all Encumbrances.
SECTION 4.B.05. Full Disclosure. Neither CEFI nor any member
of the Barge Family is aware of any facts pertaining to themselves that would
render any of their respective representations and warranties contained in this
Article IV-B inaccurate in any respect.
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37
SECTION 4.B.06. Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of any member of the Barge Family or CEFI.
SECTION 4.B.07. Stockholders Approval. No approval of the
Board of Directors or the stockholders of CEFI is required for the completion of
the transactions contemplated herein, in the New Stockholders Agreement or in
the New Registration Rights Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF EACH OF THE MEMBERS
OF THE DOMENECH FAMILY AND YACESE
As an inducement to MS to enter into this Agreement, each of
the members of the Domenech Family and YACESE hereby represents and warrants for
itself only, but not for the others, to MS as follows:
SECTION 5.01. Organization of YACESE, Authority and
Qualification of the Domenech Family and YACESE. YACESE is a French societe
anonyme duly organized, validly existing and in good standing under the laws of
France and, along with each of the members of the Domenech Family, has all
necessary power and authority to enter into this Agreement, has all necessary
power and authority to enter into the New Stockholders Agreement and the New
Registration Rights Agreement, to carry out their respective obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement by the Domenech Family
and YACESE and of the New Stockholders Agreement and the New Registration Rights
Agreement by YACESE, the performance by the Domenech Family and YACESE of their
obligations hereunder and thereunder and the consummation by the Domenech Family
and YACESE of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of the Domenech Family and
YACESE. This Agreement has been, and upon their execution the New Stockholders
Agreement and the New Registration Rights Agreement shall have been, duly
executed and delivered by each of the members of the Domenech Family and YACESE,
as applicable, and (assuming due authorization, execution and delivery by all
other parties hereto) this Agreement constitutes, and upon their execution the
New Stockholders Agreement and the New Registration Rights Agreement shall
constitute, legal, valid and binding obligations of each of the members of the
Domenech Family and YACESE, as applicable, enforceable against each of the
members of the Domenech Family and YACESE, as applicable, in accordance with
their terms. All corporate actions taken by the Domenech Family and YACESE have
been duly
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38
authorized, and YACESE has not taken any action that in any material respect
conflicts with, constitutes a default under or results in a violation of any
provision of its statuts.
SECTION 5.02. No Conflict. The execution, delivery and
performance of this Agreement by each member of the Domenech Family and YACESE
and of the New Stockholders Agreement and the New Registration Rights Agreement
by YACESE do not and will not (a) violate, conflict with or result in the breach
of any provision of the charter or by-laws (or similar organizational documents)
of YACESE, (b) conflict with or violate any Law or Governmental Order applicable
to any member of the Domenech Family or YACESE, or (c) conflict with, result in
any breach of, constitute a default (or event which, with the giving of notice
or lapse of time, or both, would become a default) under any contract which any
member of the Domenech Family or YACESE is a party which would have a Material
Adverse Effect on the ability of any member of the Domenech Family or YACESE to
consummate the transactions contemplated by this Agreement, the New Stockholders
Agreement or the New , as applicable.
SECTION 5.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement by the Domenech Family and
YACESE and of the New Stockholders Agreement and the New by YACESE do not and
will not require any consent, approval, authorization or other order of, action
by, filing with or notification to any Governmental Authority.
SECTION 5.04. Title to the Shares Owned by the Domenech Family
and YACESE in BDHI. Upon performance of this Agreement, the Domenech Family and
YACESE will have transferred to MS good and valid title to their shares of BDHI
Common Stock, free and clear of any and all Encumbrances.
SECTION 5.05. Full Disclosure. Neither YACESE nor any member
of the Domenech Family and YACESE is aware of any facts pertaining to themselves
that would render any of their respective representations and warranties
contained in this Article V inaccurate in any material respect.
SECTION 5.06. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of any member of the Domenech Family or YACESE.
SECTION 5.07. Stockholders Approval. No approval of the Board
of Directors or stockholders of YACESE is required for the completion of the
transactions contemplated herein, in the New Stockholders Agreement or in the
New Registration Rights Agreement.
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ARTICLE VI-A
REPRESENTATIONS AND WARRANTIES OF JRMH AND H.H.A.WAY
As an inducement to MS to enter into this Agreement, each of
JRMH and H.H.A.WAY hereby represents and warrants, for itself, but not for the
other, to MS as follows:
SECTION 6.A.01. Organization, Authority and Qualification of
JRMH and H.H.A.WAY. JRMH and H.H.A.WAY are, respectively, a French societe
civile and a French societe anonyme, and are duly organized, validly existing
and in good standing under the laws of France and have all necessary power and
authority to enter into this Agreement, and H.H.A. WAY has all necessary power
and authority to enter into the New Stockholders Agreement and the New
Registration Rights Agreement, to carry out their respective obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement by JRMH and H.H.A.WAY
and of the New Stockholders Agreement and the New Registration Rights Agreement
by H.H.A.WAY, the performance by JRMH and H.H.A.WAY of their obligations
hereunder and thereunder and the consummation by JRMH and H.H.A.WAY of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of JRMH and H.H.A.WAY. This Agreement has been, and
upon their execution the New Stockholders Agreement and the New Registration
Rights Agreement shall have been, duly executed and delivered by JRMH and
H.H.A.WAY and (assuming due authorization, execution and delivery by all other
parties hereto and thereto) this Agreement constitutes, and upon their execution
the New Stockholders Agreement and the New Registration Rights Agreement shall
constitute, legal, valid and binding obligations of JRMH and H.H.A.WAY
enforceable against JRMH and H.H.A.WAY in accordance with their terms All
corporate actions taken by JRMH and H.H.A.WAY have been duly authorized, and
JRMH and H.H.A.WAY have not taken any action that in any material respect
conflicts with, constitutes a default under or results in a violation of any
provision of their statuts.
SECTION 6.A.02. No Conflict. The execution, delivery and
performance of this Agreement by JRMH and H.H.A.WAY and of the New Stockholders
Agreement and the New Registration Rights Agreement by H.H.A.WAY do not and will
not (a) violate, conflict with or result in the breach of any provision of the
charter or by-laws (or similar organizational documents) of JRMH or H.H.A.WAY,
(b) conflict with or violate any Law or Governmental Order applicable to JRMH or
H.H.A.WAY, or (c) conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would
become a default) under any contract to which JRMH or H.H.A.WAY is a party which
would have a Material Adverse Effect on the ability of JRMH or H.H.A.WAY to
consummate the transactions contemplated by this Agreement, the New Stockholders
Agreement or the New .
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40
SECTION 6.A.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement by JRMH and H.H.A.WAY and
of the New Stockholders Agreement and the New by H.H.A.WAY do not and will not
require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority.
SECTION 6.A.04. Title to the Shares Owned by JRMH and
H.H.A.WAY in BDHI. Upon performance of this Agreement, JRMH and H.H.A.WAY will
have transferred to MS good and valid title to their shares of BDHI Common
Stock, as indicated in Exhibit 4, free and clear of any and all Encumbrances.
SECTION 6.A.05. Full Disclosure. Neither JRMH nor H.H.A.WAY is
aware of any facts pertaining to themselves that would render any of their
respective representations and warranties contained in this Article VI-A
inaccurate in any material respect.
SECTION 6.A.06. Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with this Agreement or the transactions contemplated herein from
either JRMH or H.H.A. WAY.
SECTION 6.A07. Stockholders Approval. No approval of the
members of JRMH or the Board of Directors or stockholders of H.H.A.WAY is
required for the completion of the transactions contemplated herein, in the New
Stockholders Agreement or in the New Registration Rights Agreement.
ARTICLE VI-B
REPRESENTATIONS AND WARRANTIES OF BDHI
As an inducement to MS to enter into this Agreement, BDHI
hereby represents and warrants to MS as follows:
SECTION 6.B.01. Organization, Authority and Qualification of
BDHI. BDHI is a French societe anonyme duly organized, validly existing and in
good standing under the laws of France and has all necessary power and authority
to enter into this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by BDHI, the performance by BDHI of its obligations hereunder and
the consummation by BDHI of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of BDHI. This Agreement has been
duly executed and delivered by BDHI and (assuming due authorization, execution
and delivery by all other parties hereto) this Agreement constitutes a legal,
valid and binding obligation of BDHI enforceable against BDHI in accordance with
its terms. All corporate actions taken by BDHI have been duly authorized, and
BDHI has not taken
<PAGE> 48
41
any action that in any material respect conflicts with, constitutes a default
under or results in a violation of any provision of its statuts.
SECTION 6.B.02. Capital Stock of BDHI; Ownership of the BDHI
Shares. (a) The authorized capital stock of BDHI consists of 35,000 shares of
Common Stock, par value FF 100 per share. The BDHI Shares, together with the
shares of BDHI held by CIBA, constitute 100% of the issued and outstanding
shares of BDHI. The BDHI Shares have been duly authorized and validly issued and
are fully paid and non-assessable. BDHI has no other shares or securities of any
kind outstanding.
None of the issued and outstanding shares of BDHI was issued
in violation of any preemptive rights. Except for the stockholders agreement
dated March 1, 1995, among BDHI and its current stockholders (the "BDHI
Stockholders Agreement"), there are no options, warrants, convertible securities
or other rights, agreements, arrangements or commitments of any character
relating to the capital stock of BDHI or obligating BDHI to issue or sell any
shares of capital stock of, or any other interest in, BDHI. There are no
outstanding contractual obligations of BDHI to repurchase, redeem or otherwise
acquire any shares of BDHI or to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any other Person. The
outstanding shares of BDHI referred to in this section constitute all the issued
and outstanding capital stock of BDHI and are owned of record and beneficially
solely by the Persons set forth in Section 6.B.02(a) of the Disclosure Schedules
free and clear of all Encumbrances.
(b) The stock register of BDHI accurately records: (i) the
name and address of each Person owning shares of capital stock of BDHI and (ii)
the certificate number of each certificate evidencing shares of capital stock
issued by BDHI, the number of shares evidenced by each such certificate, the
date of issuance thereof and, in the case of cancellation, the date of
cancellation.
SECTION 6.B.03. No Conflict. Assuming that all consents,
approvals, authorizations and other actions described in Section 6.B.03 of the
Disclosure Schedules, have been obtained and all filings and notifications
listed in Section 6.B.03 of the Disclosure Schedules, have been made, the
execution, delivery and performance of this Agreement by BDHI do not and will
not (a) violate, conflict with or result in the breach of any provision of the
charter or by-laws (or similar organizational documents) of BDHI, (b) conflict
with or violate any Law or Governmental Order applicable to BDHI, or (c)
conflict with, result in any breach of, constitute a default (or event which,
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the shares or on any of the assets or
properties of BDHI pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other .instrument or
arrangement to which BDHI is a party or by which any of the shares or any of
such assets or properties is bound or affected.
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42
SECTION 6.B.04. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and the New Stockholders
Agreement by BDHI do not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to any
Governmental Authority.
SECTION 6.B.05. Subsidiaries. BDHI has no other subsidiary
than SOFEDIT.
SECTION 6.B.06. Corporate Books and Records. The minute books
of BDHI contain accurate records of all meetings and accurately reflect all
other actions taken by the stockholders, Board of Directors and all committees
of the Board of Directors of BDHI. Complete and accurate copies of all such
minute books and of the stock register of BDHI have been provided by BDHI to MS.
SECTION 6.B.07. Financial Information, Books and Records. (a)
True and complete copies of BDHI Reference Balance Sheet have been delivered to
MS by BDHI or its financial advisor and are attached hereto under Section 6.B.07
of the Disclosure Schedules. The BDHI Reference Sheet (i) was prepared in
accordance with the books of account and other financial records of BDHI, (ii)
present fairly the financial condition and results of operations of BDHI as of
the date thereof or for the period covered thereby, (iii) has been prepared in
accordance with French GAAP applied on a basis consistent with the past
practices of BDHI and (iv) include all adjustments (consisting only of normal
recurring accruals) that are necessary for a fair presentation of the financial
condition of BDHI and the results of the operations of BDHI as of the date
thereof or for the period covered thereby.
(b) The books of account and other financial records of BDHI:
(i) reflect all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with French GAAP applied on a
basis consistent with the past practices of BDHI, (ii) are in all material
respects complete and correct, and do not contain or reflect any material
inaccuracies or discrepancies and (iii) have been maintained in accordance with
good business and accounting practices.
SECTION 6.B.08. No Undisclosed Liabilities. There are no
Liabilities of BDHI, other than Liabilities (i) reflected or reserved against on
the BDHI Reference Balance Sheet, or (ii) incurred since the date of the BDHI
Reference Balance Sheet in the ordinary course of the business, consistent with
the past practice, of BDHI, as applicable, and which do not and could not have a
Material Adverse Effect. Reserves are reflected on the BDHI Reference Balance
Sheet against all Liabilities of BDHI in amounts that have been established on a
basis consistent with the past practices of BDHI and in accordance with French
GAAP.
SECTION 6.B.09. Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions. Since the date of the BDHI Reference
Balance Sheet, the business of BDHI has been conducted in the ordinary course
and consistent with past practice. As amplification and not limitation of the
foregoing, except as disclosed in Section 6.B.09 of the Disclosure Schedules,
since the date of the BDHI Reference Balance Sheet, BDHI has not:
<PAGE> 50
43
(i) permitted or allowed any of the assets or properties
(whether tangible or intangible) of BDHI to be subjected to any
Encumbrance, other than Permitted Encumbrances and Encumbrances that
will be released at or prior to the Closing;
(ii) except in the ordinary course of business consistent
with past practice, discharged or otherwise obtained the release of
any Encumbrance or paid or otherwise discharged any Liability, other
than current liabilities reflected on the BDHI Reference Balance
Sheet and current liabilities incurred in the ordinary course of
business consistent with past practice since the date of the BDHI
Reference Balance Sheet;
(iii) made any loan to, guaranteed any Indebtedness of or
otherwise incurred any Indebtedness on behalf of any Person;
(iv) redeemed any of the capital stock or declared, made or
paid any dividends or distributions (whether in cash, securities or
other property) to the holders of capital stock of BDHI or otherwise,
other than dividends, distributions and redemptions declared, made or
paid by any of BDHI;
(v) disposed of any properties or assets;
(vi) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same,
of, or any other interest in, BDHI;
(vii) entered into any agreement, arrangement or transaction
with any of its directors, officers, employees or shareholders (or with
any relative, beneficiary, spouse or Affiliate of such Person);
(viii) made any change in any method of accounting or
accounting practice or policy used by BDHI, other than such changes
required by French GAAP or disclosed in Section 6.B.09 of the
Disclosure Schedules;
(ix) incurred any Indebtedness, in excess of $50,000
individually or $250,000 in the aggregate;
(x) amended or restated the Certificate of Incorporation or
the By-laws (or other organizational documents) of BDHI;
(xi) suffered any casualty loss or damage with respect to
any of their assets which in the aggregate have a replacement cost of
more than $50,000, whether or not such loss or damage shall have
been covered by insurance;
(xii) suffered any Material Adverse Effect; or
<PAGE> 51
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(xiii) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 6.B.09 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights or commitments with respect to any of the actions
specified in this Section 6.B.09, except as expressly contemplated by
this Agreement.
SECTION 6.B.10. Litigation. There are no Actions by or against
BDHI, or affecting any of their assets, pending before any Governmental
Authority (or, to the best knowledge of BDHI after due inquiry, threatened to be
brought by or before any Governmental Authority).
SECTION 6.B.11. Compliance with Laws. BDHI has conducted its
Business in accordance with all Laws and Governmental Orders applicable to it or
any of their respective assets or properties, and BDHI is not in violation of
any such Law or Governmental Order.
SECTION 6.B.12. Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission from
BDHI in connection with this Agreement and the transactions contemplated
therein.
SECTION 6.B.13. SOFEDIT Shares. BDHI owns the SOFEDIT Shares
subject to the pledges disclosed in Section 6.B.13 of the Disclosure Schedules.
SECTION 6.B.14. Taxes. (a) (i) All returns and reports in
respect of Taxes required to be filed with respect to BDHI have been timely
filed; (ii) all Taxes owed by BDHI whether or not shown on such returns and
reports have been timely paid; (iii) all such returns and reports are true,
correct and complete in all material respects; (iv) no adjustment relating to
such returns and reports has been proposed formally or informally by any Tax
authority; (v) there are no pending actions or proceedings for the assessment or
collection of Taxes against BDHI; (vi) there are no Tax liens on any assets of
BDHI; and (vii) BDHI is not subject to any accumulated earnings tax penalty or
personal holding company tax.
(b) Except as disclosed in reasonable specificity in Section
6.B.14(b) of the Disclosure Schedules: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period with respect to
any Tax to which BDHI may be subject; (ii) BDHI presently does not have any
income occurring in, or a change in accounting method made for, a period ending
on or prior to the Closing Date which resulted from a deferred reporting of
income from such transaction, or from such change in accounting method; (iii)
there are no proposed reassessments of any property owned by BDHI or other
proposals that could increase the amount of any Tax to which BDHI would be
subject; and (iv) BDHI is not a party to any tax sharing, indemnification or
allocation agreement.
(c) The BDHI Reference Balance Sheet provides for reserves and
allowances adequate in amount to satisfy all Liabilities for Taxes relating to
BDHI for prior Tax periods (including partial Tax periods through the date
hereof).
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(d) BDHI is not, and at no time has been, engaged in the
conduct of a trade or business within the United States within the meaning of
Section 864(b) and Section 882(a) of the Code, or treated as or considered to be
so engaged under Section 882(d) or Section 897 of the Code or otherwise.
SECTION 6.B.15. Full Disclosure. BDHI is not aware of any
facts pertaining to BDHI that would render any of the representations and
warranties of BDHI contained in this Article VI-B inaccurate in any material
respect.
SECTION 6.B.16. Stockholders Approval. No approval of the
Board of Directors or stockholders of BDHI is required for the completion of the
transactions contemplated herein, in the New Stockholders Agreement or in the
New , except for the approval of MS as new shareholder of BDHI by the Board of
Directors of BDHI
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
THE SOFEDIT FINANCIAL SHAREHOLDERS
As an inducement to MS to enter into this Agreement, each of
the SOFEDIT Financial Shareholders hereby represents and warrants to MS as
follows, provided that, none of the representations or warranties under this
article VII shall be construed as a representation or a warranty on either
SOFEDIT, any SOFEDIT Subsidiary, or on any party hereto other than itself:
SECTION 7.01. Organization, Authority and Qualification of the
SOFEDIT Financial Shareholders. Each of the SOFEDIT Financial Shareholders has
all necessary power and authority to enter into this Agreement, the New
Stockholders Agreement and the New Registration Rights Agreement, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement,
the New Stockholders Agreement and the New Registration Rights Agreement by each
SOFEDIT Financial Shareholder, the performance of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite action on its part. This
Agreement has been, and upon their execution the New Stockholders Agreement and
the New Registration Rights Agreement shall have been, duly executed and
delivered by it and (assuming due authorization, execution and delivery by all
other parties hereto) this Agreement constitutes, and upon their execution the
New Stockholders Agreement and the New Registration Rights Agreement shall
constitute, legal, valid and binding obligations of such SOFEDIT Financial
Shareholder, enforceable against it in accordance with their terms.
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46
SECTION 7.02. No Conflict. The execution, delivery and
performance of this Agreement, the New Stockholders Agreement and the New by
each SOFEDIT Financial Shareholder do not and will not (a) violate, conflict
with or result in the breach of any provision of the charter or by-laws (or
similar organizational documents) of such SOFEDIT Financial Shareholder, (b)
conflict with or violate any Law or Governmental Order applicable to such
SOFEDIT Financial Shareholder, or (c) conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under any contract to which such SOFEDIT
Financial Shareholder is a party which would have a Material Adverse Effect on
the ability of such SOFEDIT Financial Shareholder to consummate the transactions
contemplated by this Agreement, the New Stockholders Agreement and the New
Registration Rights Agreement.
SECTION 7.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and the New Stockholders
Agreement by each SOFEDIT Financial Shareholder do not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority.
SECTION 7.04. Brokers. No broker, finder or investment banker
other than Natexis Finance S.A. is entitled to any brokerage, finder's or other
fee or commission in connection with this Agreement and the transactions
contemplated therein, from any of the SOFEDIT Financial Shareholders.
SECTION 7.05. SOFEDIT Shares. Each of the SOFEDIT Financial
Shareholders owns its SOFEDIT Shares unrestricted, beneficially and of record,
free and clear of all Encumbrances and, at the Closing Date, it will transfer
good and valid title to its SOFEDIT Shares to MS pursuant to the terms of this
Agreement, free and clear of all Encumbrances.
SECTION 7.06. Full Disclosure. No SOFEDIT Financial
Shareholders is aware of any facts pertaining to itself that would render any of
the representations and warranties contained in this Article VII inaccurate in
any material respect.
(b) No representation or warranty of each of the SOFEDIT
Financial Shareholders in this Agreement, nor any statement or certificate
furnished or to be furnished to MS pursuant to this Agreement, or in connection
with the transactions contemplated by this Agreement, contains or will contain
on the Closing Date any untrue statement of a material fact, or omits or will,
on the Closing Date, omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
SECTION 7.07. Stockholders Approval. No approval of the
stockholders of any SOFEDIT Financial Shareholders is required for the
completion of the transactions contemplated herein, in the New Stockholders
Agreement or in the New .
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47
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF SOFEDIT
As an inducement to MS to enter into this Agreement, SOFEDIT
hereby represents and warrants to MS as follows:
SECTION 8.01. Organization, Authority and Qualification of
SOFEDIT. SOFEDIT is a French societe anonyme duly organized, validly existing
and in good standing under the laws of France and has all necessary power and
authority to own, operate or lease the properties and assets now owned, operated
or leased by it and to carry on the Business as it has been and is currently
conducted. The execution and delivery of this Agreement by SOFEDIT, the
performance by SOFEDIT of its obligations hereunder and the consummation by
SOFEDIT of the transactions contemplated hereby have been duly authorized by all
requisite action on the part of SOFEDIT. This Agreement has been duly executed
and delivered by SOFEDIT, and (assuming due authorization, execution and
delivery by the other parties hereto) this Agreement constitutes a legal, valid
and binding obligation of SOFEDIT enforceable against SOFEDIT in accordance with
its terms. SOFEDIT is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the properties owned or leased by it or
the operation of its business makes such licensing or qualification necessary or
desirable. All corporate actions taken by SOFEDIT have been duly authorized, and
SOFEDIT has not taken any action that in any respect conflicts with, constitutes
a default under or results in a violation of any provision of its "statuts".
True and correct copies of the "statuts" of SOFEDIT, as in effect on the date
hereof have been delivered by SOFEDIT to MS.
SECTION 8.02. Capital Stock of SOFEDIT. The share capital of
SOFEDIT consists of one class of authorized shares, each share having a par
value of FF 100. As of the date hereof, there are 102,812 issued and outstanding
shares of SOFEDIT Common Stock, which constitute 100% of the issued and
outstanding capital stock of SOFEDIT. The outstanding shares of SOFEDIT have
been duly authorized and validly issued and are fully paid and non-assessable.
SOFEDIT has no other shares or securities of any kind outstanding.
SECTION 8.03. Ownership of the shares of SOFEDIT. (a) Section
8.03(a) of the Disclosure Schedules sets out the capital ownership of SOFEDIT.
(b) Upon consummation of the transactions contemplated by this
Agreement, MS will own, directly or indirectly, all the issued and outstanding
capital stock of SOFEDIT. There are no voting trusts, stockholder agreement,
proxies or other agreements or understandings in effect with respect to the
voting or transfer of the shares of SOFEDIT free and clear of any and all
Encumbrances, except for the pledges described under Section 6.B.13 of the
Disclosure Schedules.
None of the issued and outstanding shares of SOFEDIT was
issued in violation of any preemptive rights. Except for the stockholders
agreement dated July 8, 1995, among SOFEDIT
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stockholders (the "SOFEDIT Stockholders Agreement"), there are no options,
warrants, convertible securities or other rights, agreements, arrangements or
commitments of any character relating to the capital stock of SOFEDIT or
obligating SOFEDIT to issue or sell any shares of capital stock of, or any other
interest in, SOFEDIT. There are no outstanding contractual obligations of
SOFEDIT to repurchase, redeem or otherwise acquire any shares of SOFEDIT or to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any other Person. The outstanding shares of
SOFEDIT referred to in this section constitute all the issued and outstanding
capital stock of SOFEDIT and are owned of record and beneficially solely by the
Persons set forth in Section 8.03(a) of the Disclosure Schedules free and clear
of any Encumbrances, except for the pledges disclosed under Section 6.B.13 of
the Disclosure Schedules.
(c) The stock register of SOFEDIT accurately records: (i) the
name and address of each Person owning shares of capital stock of SOFEDIT and
(ii) the certificate number of each certificate evidencing shares of capital
stock issued by SOFEDIT, the number of shares evidenced by each such
certificate, the date of issuance thereof and, in the case of cancellation, the
date of cancellation.
SECTION 8.04. Subsidiaries. (a) Section 8.04(a) of the
Disclosure Schedules sets forth a true and complete list of all SOFEDIT
Subsidiaries, listing for each SOFEDIT Subsidiary its name, type of entity, the
jurisdiction, and its authorized capital stock.
(b) Other than the SOFEDIT Subsidiaries, there are no other
corporations, limited liability companies, partnerships, associations or other
entities in which SOFEDIT owns, of record or beneficially, any direct or
indirect equity or other similar interest or any right (contingent or otherwise)
to acquire the same. SOFEDIT is not a member of (nor is any part of the Business
conducted through) any partnership. Except as set forth in Section 8.04(b) of
the Disclosure Schedules, neither SOFEDIT nor any SOFEDIT Subsidiary is a
participant in any joint venture or similar arrangement.
(c) Each SOFEDIT Subsidiary: (i) that is a corporation is duly
organized and validly existing under the laws of its jurisdiction of
incorporation, (ii) that is not a corporation is duly organized and validly
existing under the laws of its jurisdiction of organization, (iii) has all
necessary power and authority to own, operate or lease the properties and assets
owned, operated or leased by such SOFEDIT Subsidiary and to carry on its
business as it has been and is currently conducted by such SOFEDIT Subsidiary
and (iv) is duly licensed or qualified to do business and is in good standing in
each jurisdiction in which the properties owned or leased by it or the operation
of its business makes such licensing or qualification necessary or desirable.
(d) All the outstanding shares of capital stock of each
SOFEDIT Subsidiary are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights and are owned by SOFEDIT, whether
directly or indirectly, free and clear of all Encumbrances.
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(e) There are no options, warrants, convertible securities, or
other rights, agreements, arrangements or commitments of any character relating
to the capital stock of any SOFEDIT Subsidiary or obligating any SOFEDIT
Subsidiary to issue or sell any shares of capital stock of, or any other
interest in, such SOFEDIT Subsidiary.
(f) All corporate actions taken by each SOFEDIT Subsidiary
have been duly authorized and no SOFEDIT Subsidiary has taken any action that in
any respect conflicts with, constitutes a default under or results in a
violation of any provision of its charter or by-laws (or similar organizational
documents).
(g) There are no voting trusts, stockholder agreements,
proxies or other agreements or understandings in effect with respect to the
voting or transfer of any shares of capital stock of or any other interests in
any SOFEDIT Subsidiary.
(h) The stock register of each SOFEDIT Subsidiary accurately
records: (i) the name and address of each Person owning shares of capital stock
of such SOFEDIT Subsidiary and (ii) the certificate number of each certificate
evidencing shares of capital stock issued by such SOFEDIT Subsidiary, the number
of shares evidenced each such certificate, the date of issuance thereof and, in
the case of cancellation, the date of cancellation.
(i) Except as disclosed in Section 8.04 (b) of the Disclosure
Schedules, no SOFEDIT Subsidiary is a member of (nor is any part of the Business
conducted through) any partnership, nor is any SOFEDIT Subsidiary a participant
in any joint-venture or similar arrangement.
SECTION 8.05. Corporate Books and Records. The minute books of
SOFEDIT and the SOFEDIT Subsidiaries contain accurate records of all meetings
and accurately reflect all other actions taken by the stockholders, Boards of
Directors and all committees of the Boards of Directors of SOFEDIT and the
SOFEDIT Subsidiaries. Complete and accurate copies of all such minute books and
of the stock register of SOFEDIT and each SOFEDIT Subsidiary have been provided
by SOFEDIT to MS for the period from January 1, 1996, to the date hereof.
SECTION 8.06. No Conflict. Except as disclosed under Section
6.B.03 of the Disclosure Schedules, the execution, delivery and performance of
this Agreement by SOFEDIT and the Sellers do not and will not (a) violate,
conflict with or result in the breach of any provision of the charter or by-laws
(or similar organizational documents) of SOFEDIT or any SOFEDIT Subsidiary, (b)
conflict with or violate (or cause an event which could have a Material Adverse
Effect as a result of) any Law or Governmental Order applicable to SOFEDIT or
any SOFEDIT Subsidiary or any of their respective assets, properties or
businesses, including, without limitation, their Business, or (c) conflict with,
result in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of the shares or on any of the assets or
properties of SOFEDIT
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50
or any SOFEDIT Subsidiary pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which SOFEDIT or any SOFEDIT Subsidiary is a party
or by which any of the shares or any of such assets or properties is bound or
affected.
SECTION 8.07. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement by SOFEDIT do not and will
not require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority.
SECTION 8.08. Financial Information, Books and Records. (a)
True and complete copies of the SOFEDIT Reference Balance Sheet have been
delivered to MS by SOFEDIT and are attached hereto as Section 8.08 of the
Disclosure Schedules. The SOFEDIT Reference Balance Sheet (i) was prepared in
accordance with the books of account and other financial records of SOFEDIT,
(ii) presents fairly the consolidated financial condition and results
of operations of SOFEDIT described therein as of the dates thereof for the
period covered thereby, (iii) has been prepared in accordance with French GAAP
applied on a basis consistent with the past practices of SOFEDIT and (iv)
includes all adjustments (consisting only of normal recurring accruals) that are
necessary for a fair presentation of the consolidated financial condition of
SOFEDIT and the results of the operations of SOFEDIT as of the date thereof or
for the period covered thereby.
(b) The books of account and other financial records of
SOFEDIT: (i) reflect all items of income and expense and all assets and
Liabilities required to be reflected therein in accordance with French GAAP
applied on a basis consistent with the past practices of SOFEDIT, (ii) are in
all material respects complete and correct, and do not contain or reflect any
material inaccuracies or discrepancies and (iii) have been maintained in
accordance with good business and accounting practices.
SECTION 8.09. No Undisclosed Liabilities. There are no
Liabilities of SOFEDIT or any SOFEDIT Subsidiary, other than Liabilities (i)
reflected or reserved against on the SOFEDIT Reference Balance Sheet, or (ii)
disclosed in Section 8.09 of the Disclosure Schedules, or (iii) incurred since
the date of the SOFEDIT Reference Balance Sheet in the ordinary course of the
business, consistent with the past practice, of SOFEDIT or the SOFEDIT
Subsidiaries, as applicable, and which do not and could not have a Material
Adverse Effect. Reserves are reflected on the SOFEDIT Reference Balance Sheet
against all Liabilities of SOFEDIT and the SOFEDIT Subsidiaries in amounts that
have been established on a basis consistent with the past practices of SOFEDIT
and the SOFEDIT Subsidiaries and in accordance with French GAAP.
SECTION 8.10. Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions. Since the date of the SOFEDIT Reference
Balance Sheet, except as disclosed in Section 8.10 of the Disclosure Schedules,
the business of SOFEDIT has been conducted in the ordinary course and consistent
with past practice. As amplification and not limitation of the foregoing,
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51
except as disclosed in Section 8.10 of the Disclosure Schedules, since the date
of the SOFEDIT Reference Balance Sheet, SOFEDIT has not:
(i) permitted or allowed any of the assets or properties
(whether tangible or intangible) of SOFEDIT or of any SOFEDIT
Subsidiary to be subjected to any Encumbrance, other than Permitted
Encumbrances and Encumbrances that will be released at or prior to the
Closing;
(ii) except in the ordinary course of business consistent
with past practice, discharged or otherwise obtained the release of
any Encumbrance or paid or otherwise discharged any Liability,
other than current liabilities reflected on the SOFEDIT Reference
Balance Sheet and current liabilities incurred in the ordinary course
of business consistent with past practice since the date of the
SOFEDIT Reference Balance Sheet;
(iii) made any loan to, guaranteed any Indebtedness of or
otherwise incurred any Indebtedness on behalf of any Person;
(iv) redeemed any of the capital stock or declared, made or
paid any dividends or distributions (whether in cash, securities or
other property) to the holders of capital stock of SOFEDIT or any
SOFEDIT Subsidiary or otherwise, other than dividends, distributions
and redemptions declared, made or paid by any of SOFEDIT or any SOFEDIT
Subsidiary;
(v) sold, transferred, leased, subleased, licensed or
otherwise disposed of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible
assets), other than the sale of Inventories in the ordinary course of
business consistent with past practice;
(vi) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same,
of, or any other interest in, SOFEDIT or any SOFEDIT Subsidiary;
(vii) entered into any agreement, arrangement or transaction
with any of its directors, officers, employees or shareholders (or with
any relative, beneficiary, spouse or Affiliate of such Person);
(viii) made any change in any method of accounting or
accounting practice or policy used by SOFEDIT or any SOFEDIT
Subsidiary, other than such changes required by French GAAP or
disclosed in Section 8.10 of the Disclosure Schedules;
(ix) allowed any Permit or Environmental Permit that was
issued or relates to SOFEDIT or any SOFEDIT Subsidiary or otherwise
relates to any Asset to lapse or terminate
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52
or failed to renew any such Permit or Environmental Permit or any
insurance policy that is scheduled to terminate or expire within 45
calendar days of the Closing Date;
(x) incurred any Indebtedness, in excess of $50,000
individually or $250,000 in the aggregate;
(xi) amended or restated the Certificate of Incorporation or
the By-laws (or other organizational documents) of SOFEDIT or any
SOFEDIT Subsidiary;
(xii) suffered any casualty loss or damage with respect to any
of their assets which in the aggregate have a replacement cost of more
than $50,000, whether or not such loss or damage shall have been
covered by insurance;
(xiii) suffered any Material Adverse Effect; or
(xiv) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 8.10 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights or commitments with respect to any of the actions
specified in this Section 8.10, except as expressly contemplated by
this Agreement.
SECTION 8.11. Litigation. There are no Actions by or against
SOFEDIT or any SOFEDIT Subsidiary, or affecting any of their assets, pending
before any Governmental Authority (or, to the best knowledge of SOFEDIT after
due inquiry, threatened to be brought by or before any Governmental Authority).
None of the matters disclosed in Section 8.11 of the Disclosure Schedules has or
has had a Material Adverse Effect or could affect the legality, validity or
enforceability of this Agreement, the New Stockholders Agreement or the New
Registration Rights Agreement or the consummation of the transactions
contemplated hereby and thereby. Except as set forth in Section 8.11 of the
Disclosure Schedules, neither SOFEDIT nor any SOFEDIT Subsidiary is subject to
any Governmental Order (nor, to the best knowledge of SOFEDIT after due inquiry,
are there any such Governmental Orders threatened to be imposed by any
Governmental Authority) which has or has had a Material Adverse Effect.
SECTION 8.12. Compliance with Laws. SOFEDIT and any SOFEDIT
Subsidiary have each conducted the Business in accordance with all Laws and
Governmental Orders applicable to them or any of their respective assets or
properties or the Business, and neither SOFEDIT nor any SOFEDIT Subsidiary is in
violation of any such Law or Governmental Order.
SECTION 8.13. Environmental and Other Permits and Licenses;
Related Matters. (a) Except as disclosed in Section 8.13(a)(i) of the Disclosure
Schedules, and except as would not reasonably be expected to result in a
Material Adverse Effect, SOFEDIT and the SOFEDIT Subsidiaries currently hold and
are in compliance with, all Permits, including, without limitation,
Environmental Permits, necessary or proper for the current use, occupancy and
operation of each Asset
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of SOFEDIT and the SOFEDIT Subsidiaries and the conduct of the Business, and all
such Permits are in full force and effect. Except as disclosed in Section
8.13(a)(ii) of the Disclosure Schedules and except as would not reasonably be
expected to result in a Material Adverse Effect, there is no existing practice,
action or activity of SOFEDIT or any SOFEDIT Subsidiary and no existing
condition of the assets of SOFEDIT or any SOFEDIT Subsidiary or the Business
which would reasonably be expected to give rise to any civil or criminal
Liability under, or violate or prevent compliance with, any health or
occupational safety or other applicable Law. Except as disclosed in Section
8.13(a)(iii) of the Disclosure Schedules, neither SOFEDIT nor any SOFEDIT
Subsidiary has received any notice from any Governmental Authority revoking,
canceling, rescinding, materially modifying or refusing to renew any Permit or
providing written notice of violations under any Law. To the knowledge of
SOFEDIT, Section 8.13(a)(iv) of the Disclosure Schedules identifies all Permits
that are nontransferable or which will require the consent of any Governmental
Authority in the event of the consummation of the transactions contemplated by
this Agreement.
(b) Except as disclosed in Section 8.13(b) of the Disclosure
Schedules and except as would not reasonably be expected to result in a Material
Adverse Effect, (i) Hazardous Materials have not been generated, used, treated,
handled or stored on, or transported to or from, or Released on any Real
Property or on any property formerly owned, leased or occupied by SOFEDIT or any
SOFEDIT Subsidiaries; (ii) SOFEDIT and the SOFEDIT Subsidiaries have disposed of
all Hazardous Materials, in compliance with all applicable Environmental Laws
and Environmental Permits; (iii) there are no pending or, to the knowledge of
SOFEDIT, threatened Environmental Claims against SOFEDIT, any SOFEDIT
Subsidiary, or any Real Property; (iv) no Real Property is listed or proposed
for listing on any list of sites of any Governmental Authority requiring
investigation or cleanup; and (v) neither SOFEDIT nor any SOFEDIT Subsidiary has
received notice that it has transported or arranged for the transportation of
any Hazardous Materials to any location that is listed or proposed for listing
on any list of any Governmental Authority or which is the subject of any
Governmental Claim.
(c) Except as disclosed in Section 8.13(c) of the Disclosure
Schedules, and except as would not reasonably be expected to result in a
Material Adverse Effect, there are no circumstances with respect to any Real
Property or other Asset or the operation of the Business which could reasonably
be anticipated (i) to form the basis of an Environmental Claim against SOFEDIT,
any SOFEDIT Subsidiary or any Real Property or Asset or (ii) to cause such Real
Property or Asset to be subject to any restrictions on ownership, occupancy, use
or transferability under any applicable Environmental Law.
(d) Except as disclosed in Section 8.13(d) of the Disclosure
Schedules, there are not now and never have been any USTs located on any Real
Property.
SECTION 8.14. Material Contracts. (a) Section 8.14(a) of the
Disclosure Schedules lists each of the following contracts and agreements
(including, without limitation, oral and informal
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54
arrangements) of SOFEDIT and of the SOFEDIT Subsidiaries (such contracts and
agreements to which SOFEDIT or any SOFEDIT Subsidiary is a party being "SOFEDIT
Material Contracts"):
(i) each contract and agreement for the purchase of inventory,
spare parts, other materials or personal property with any supplier or
for the furnishing of services to SOFEDIT or any SOFEDIT Subsidiary, or
otherwise related to the Business under the terms of which SOFEDIT or
any SOFEDIT Subsidiary, as applicable: (A) is likely to pay or
otherwise give consideration of more than $50,000 in the aggregate
during the calendar year ended December 31, 1998, (B) is likely to pay
or otherwise give consideration of more than $100,000 in the aggregate
over the remaining term of such contract or (C) cannot be cancelled by
SOFEDIT or the SOFEDIT Subsidiary that is a party thereto, as
applicable, without penalty or further payment and without more than 30
days' notice;
(ii) each contract and agreement for the sale of the inventory
of SOFEDIT or the SOFEDIT Subsidiaries or other personal property or
for the furnishing of services by SOFEDIT or any SOFEDIT Subsidiary,
which: (A) is likely to involve consideration of more than $50,000 in
the aggregate during the calendar year ended December 31, 1998, (B) is
likely to involve consideration of more than $100,000 in the aggregate
over the remaining term of the contract or (C) cannot be canceled by
SOFEDIT or the SOFEDIT Subsidiary that is a party thereto, as
applicable, without penalty or further payment and without more than 30
days' notice;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements to which
SOFEDIT or any SOFEDIT Subsidiary is a party;
(iv) all management contracts and contracts with independent
contractors or consultants (or similar arrangements) to which SOFEDIT
or any SOFEDIT Subsidiary is a party and which are not cancellable
without penalty or further payment and without more than 30 days'
notice;
(v) all contracts and agreements relating to Indebtedness of
SOFEDIT or any SOFEDIT Subsidiary;
(vi) all contracts and agreements with any Governmental
Authority to which SOFEDIT or any SOFEDIT Subsidiary is a party;
(vii) all contracts and agreements that limit or purport to
limit the ability of SOFEDIT or any SOFEDIT Subsidiary to compete in
any line of business or with any Person or in any geographic area or
during any period of time;
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55
(viii) all contracts and agreements between or among SOFEDIT
or any SOFEDIT Subsidiary and any of the Sellers;
(ix) all contracts and agreements providing for benefits
under any Plan; and
(x) all other contracts and agreements whether or not made
in the ordinary course of business, which are material to SOFEDIT or
any SOFEDIT Subsidiary, or the conduct of the Business or the
absence of which would have a Material Adverse Effect.
(b) Each Material Contract: (i) is valid and binding on the
respective parties thereto and is in full force and effect and (ii) upon
consummation of the transactions contemplated by this Agreement or the New
Stockholders Agreement, shall continue in full force and effect without penalty
or other adverse consequence resulting from the transactions contemplated hereby
and thereby. Neither SOFEDIT nor any SOFEDIT Subsidiary is in breach of, or
default under, any Material Contract.
(c) No party to any Material Contract is in breach thereof or
default thereunder.
(d) Except as disclosed in Section 8.14(d) of the Disclosure
Schedules, there is no contract, agreement or other arrangement granting any
Person any preferential right to purchase, other than in the ordinary course of
business consistent with past practice, any of the properties or assets of
SOFEDIT or any SOFEDIT Subsidiary.
SECTION 8.15. Brokers. Except for Natexis Finance S.A., no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of SOFEDIT.
SECTION 8.16. Taxes. (a) (i) All returns and reports in
respect of Taxes required to be filed with respect to SOFEDIT and each of its
Subsidiaries have been timely filed; (ii) all Taxes owed by SOFEDIT or any of
its Subsidiaries whether or not shown on such returns and reports have been
timely paid; (iii) all such returns and reports are true, correct and complete
in all material respects; (iv) no adjustment relating to such returns and
reports has been proposed formally or informally by any Tax authority; (v) there
are no pending actions or proceedings for the assessment or collection of Taxes
against SOFEDIT or any of its Subsidiaries; (vi) there are no Tax liens on any
assets of SOFEDIT or any of its Subsidiaries; and (vii) neither SOFEDIT nor any
of its Subsidiaries is subject to any accumulated earnings tax penalty or
personal holding company tax.
(b) Except as disclosed in reasonable specificity in Section
8.16(b) of the Disclosure Schedules: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period with respect to
any Tax to which SOFEDIT or any of its Subsidiaries may be subject; (ii) neither
SOFEDIT nor any of its Subsidiaries presently has any income occurring in, or a
change in
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56
accounting method made for, a period ending on or prior to the Closing Date
which resulted from a deferred reporting of income from such transaction, or
from such change in accounting method; (iii) there are no proposed reassessments
of any property owned by SOFEDIT or any of its Subsidiaries or other proposals
that could increase the amount of any Tax to which SOFEDIT or any of its
Subsidiaries would be subject; and (iv) neither SOFEDIT nor any of its
Subsidiaries is a party to any tax sharing, indemnification or allocation
agreement.
(c) The SOFEDIT Reference Balance Sheet provides for reserves
and allowances adequate in amount to satisfy all Liabilities for Taxes relating
to SOFEDIT and its Subsidiaries for prior Tax periods (including partial Tax
periods through the date hereof).
(d) SOFEDIT and its Subsidiaries are not, and at no time have
been, engaged in the conduct of a trade or business within the United States
within the meaning of Section 864(b) and Section 882(a) of the Code, or treated
as or considered to be so engaged under Section 882(d) or Section 897 of the
Code or otherwise.
SECTION 8.17. Customers. Listed in Section 8.17 of the
Disclosure Schedules are the names and addresses of the ten most significant
customers (by revenue) of SOFEDIT and the SOFEDIT Subsidiaries for the
twelve-month period to be ended December 31, 1996, and the amount for which each
such customer was invoiced during such period. Except as disclosed in Section
8.17 of the Disclosure Schedules, neither SOFEDIT nor any SOFEDIT Subsidiary has
received any notice or has any reason to believe that any significant customer
of SOFEDIT has ceased, or will cease, to use the products, equipment, goods or
services of SOFEDIT or any SOFEDIT Subsidiary, or has substantially reduced, or
will substantially reduce, the use of such products, equipment, goods or
services at any time.
SECTION 8.18. Suppliers. Listed in Section 8.18 of the
Disclosure Schedules are the names and addresses of each of the ten most
significant suppliers of raw materials, supplies, merchandise and other goods
for SOFEDIT and the SOFEDIT Subsidiaries for the twelve-month period to be ended
December 31, 1996, and the amount for which each such supplier invoiced SOFEDIT
and the SOFEDIT Subsidiaries during such period. Except as disclosed in Section
8.18 of the Disclosure Schedules, neither SOFEDIT nor any SOFEDIT Subsidiary has
received any notice or has any reason to believe that any such supplier will not
sell raw materials, supplies, merchandise and other goods to SOFEDIT or any
SOFEDIT Subsidiary at any time after the Closing Date on terms and conditions
substantially similar to those used in its current sales to SOFEDIT and the
SOFEDIT Subsidiaries, subject only to general and customary price increases.
SECTION 8.19. Employee Benefit Matters. (a) Section 8.19 of
the Disclosure Schedules lists (i) all employee benefit plans and all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
pension or severance plans to which SOFEDIT is a party, with respect to which
SOFEDIT has any obligation or which are maintained, contributed to or sponsored
by SOFEDIT for the benefit of any
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57
current or former employee, officer or director, (ii) any contracts,
arrangements or understandings between SOFEDIT and any employee of SOFEDIT,
including, without limitation, any contracts, arrangements or understandings
relating to a sale or merger of SOFEDIT (collectively, the "SOFEDIT Plans")
except for the plans which are compulsory pursuant to French laws (including
compulsory collective bargaining agreements). Each SOFEDIT Plan is in writing
and SOFEDIT has furnished the Sellers with a complete and accurate copy of each
SOFEDIT Plan and a complete and accurate copy of each material document prepared
in connection with each such Plan including, without limitation (i) a copy of
each funding arrangement, (ii) each summary plan description and summary of
material modifications, (iii) the most recently prepared actuarial report and
financial statement in connection with each such Plan. Except as disclosed in
Section 8.19 of the Disclosure Schedules, SOFEDIT does not have any express or
implied commitment, whether legally enforceable or not (i) to create, incur
liability with respect to or cause to exist any other employee benefit plan,
program or arrangement, (ii) to enter into any contract or agreement to provide
compensation or benefits of any individual or (iii) to modify, change or
terminate any SOFEDIT Plan; each such Plan has been operated in material
compliance with all applicable Law. All contributions, premiums or payments to
be made with respect to each such Plan have been made on or before their due
dates, and the assets of each such Plan are sufficient to procure or provide for
the benefits provided under each such Plan to all current or former Plan
participants.
(b) (i) All returns and reports in respect of Social Security
Contributions required to be filed with respect to SOFEDIT have been timely
filed, (ii) all Social Security Contributions required to be shown on such
returns and reports or otherwise due have been timely paid, (iii) all such
returns and reports are true, correct and complete in all material respects,
(iv) there is no pending or, to the actual knowledge of SOFEDIT, threatened
action or proceeding for the assessment or collection of Social Security
Contributions against SOFEDIT, (v) there are no Social Security liens on any
asset of SOFEDIT, (vi) the SOFEDIT Reference Balance Sheet provides for reserve
or allowance adequate in amount to satisfy all liabilities for Social Security
Contributions through the date hereof. For purposes hereof, "Social Security
Contributions" means any and all compulsory contributions and other charges of
any kind with respect to social security, family contributions (allocations
familiales), retirements and pensions.
SECTION 8.20. Labor Matters. (a) Except as set forth in
Section 8.20 of the Disclosure Schedules, SOFEDIT is not a party to any
employment agreement which contains any provision which is substantially more
favorable than those which are provided for in applicable labor legislation,
including the applicable compulsory collective bargaining agreement.
(b) There are no controversies, strikes, slowdowns or work
stoppages outstanding or, to the knowledge of SOFEDIT, pending between SOFEDIT
and any of its employees.
(c) To the knowledge of SOFEDIT, SOFEDIT has not breached or
otherwise failed to comply with the provisions of any applicable collective
bargaining agreement, and there are no
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58
grievances outstanding against SOFEDIT under any such agreement which could
reasonably have a Material Adverse Effect.
(d) To the knowledge of SOFEDIT, SOFEDIT is currently in
compliance with all applicable laws relating to the employment of labor,
including those related to wages, hours, collective bargaining and the payment
and withholding of taxes and social security contributions and other sums as
required by the appropriate Governmental Authority except as would not be
expected to result in a Material Adverse Event and has withheld and paid to the
appropriate Governmental Authority or is holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees of
SOFEDIT and is not liable for any arrears of wages, taxes, penalties or other
sums for failure to comply with any of the foregoing that would reasonably
result in a Material Adverse Effect.
(e) To SOFEDIT's actual knowledge, SOFEDIT has paid in full to
all of its employees or adequately accrued for in accordance with French GAAP
all wages, salaries, commissions, bonuses, benefits and other compensation due
to or on behalf of such employees.
(f) SOFEDIT has not received notice that any claim with
respect to payment of wages, salary or overtime pay has been asserted or is now
pending or threatened before any Governmental Authority with respect to any
Persons currently or formerly employed by SOFEDIT.
(g) SOFEDIT has not received notice that any charge or
proceeding with respect to a material violation of any occupational safety or
health standards has been asserted or is now pending or, to the best knowledge
of SOFEDIT, threatened with respect to SOFEDIT.
SECTION 8.21. Certain Interests. (a) Except as disclosed in
Section 8.21(a) of the Disclosure Schedules, no officer or director of SOFEDIT
or any SOFEDIT Subsidiary and no relative or spouse (or relative of such spouse)
who resides with, or is a dependent of, any such officer or director:
(i) owns, directly or indirectly, in whole or in part, or has
any other interest in any tangible or intangible property which SOFEDIT
or any SOFEDIT Subsidiary uses in the conduct of the Business or
otherwise; or
(ii) has outstanding indebtedness to SOFEDIT or any SOFEDIT
Subsidiary.
(b) Except as disclosed in Section 8.21(b) of the Disclosure
Schedules, neither SOFEDIT nor any SOFEDIT Subsidiary has any Liability or any
other obligation of any nature whatsoever to any officer or director of SOFEDIT
or any SOFEDIT Subsidiary or to any relative or spouse (or relative of such
spouse) who resides with, or is a dependent of, any such officer or director.
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SECTION 8.22. Real Property. (a) Section 8.22(a) of the
Disclosure Schedules lists: (i) the street address of each parcel of Owned Real
Property, (ii) the date on which each parcel of Owned Real Property was
acquired, (iii) the current owner of each such parcel of Owned Real Property,
(iv) information relating to the recordation of the deed pursuant to which each
such parcel of Owned Real Property was acquired and (v) the current use of each
such parcel of Owned Real Property.
(b) Section 8.22(b) of the Disclosure Schedules lists: (i) the
street address of each parcel of Leased Real Property, (ii) the identity of the
lessor, lessee and current occupant (if different from lessee) of each such
parcel of Leased Real Property, (iii) the term (referencing applicable renewal
periods) and fixed or basic rental payment terms of the leases (and any
subleases) pertaining to each such parcel of Leased Real Property and (iv) the
current use of each such parcel of Leased Real Property.
(c) Except as described in Section 8.22(c) of the Disclosure
Schedules, there is no violation of any Law relating to any of the Owned Real
Property that would reasonably be expected to have a Material Adverse Effect.
SOFEDIT has made available to the Sellers (to the extent in SOFEDIT's physical
possession) true and complete copies of each deed for each parcel of Owned Real
Property and, to the extent available, for each parcel of Leased Real Property
and all the title insurance policies, title reports, surveys, certificates of
occupancy, environmental reports and audits, appraisals and Permits relating to
the Real Property, the operations of SOFEDIT or any SOFEDIT Subsidiary thereon
or any other uses thereof. Subject to all applicable leases, either SOFEDIT or a
SOFEDIT Subsidiary, as the case may be, is in peaceful and undisturbed
possession of each parcel of Real Property and neither SOFEDIT nor any SOFEDIT
Subsidiary has executed and delivered any contractual restrictions that preclude
or materially restrict the ability to use the premises for the purposes for
which they are currently being used. Except as set forth in Section 8.22(c) of
the Disclosure Schedules, neither SOFEDIT nor any SOFEDIT Subsidiary has leased
or subleased any parcel or any portion of any parcel of Real Property to any
other Person, nor has SOFEDIT or any SOFEDIT Subsidiary assigned its interest
under any lease or sublease listed in Section 8.22(b) of the Disclosure
Schedules to any third party.
(d) SOFEDIT has, or has caused to be, delivered to the Sellers
(to the extent in SOFEDIT's physical possession) true and complete copies of all
leases and subleases listed in Section 8.22(b) of the Disclosure Schedules. With
respect to each of such leases and subleases:
(i) such lease or sublease represents the entire agreement
between the respective landlord and tenant with respect to such
property;
(ii) except as otherwise disclosed in Section 8.22(b) of the
Disclosure Schedules, with respect to each such lease or sublease: (A)
neither SOFEDIT nor any SOFEDIT Subsidiary has received any notice of
cancellation or termination under such lease or sublease,
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and (B) neither SOFEDIT nor any SOFEDIT Subsidiary has received any
notice of a breach or default under such lease or sublease, which
breach or default has not been cured.
(e) There are no condemnation proceedings or eminent domain
proceedings of any kind pending or, to the actual knowledge of SOFEDIT (without
investigation), threatened against the Owned Real Property.
(f) All improvements on the Real Property constructed by or on
behalf of SOFEDIT or any SOFEDIT Subsidiary were constructed in material
compliance with all applicable Laws (including, but not limited to, any
building, planning or zoning Laws) affecting such Real Property.
SECTION 8.23. Insurance. SOFEDIT and the SOFEDIT Subsidiaries
have obtained and maintained in full force and effect insurance with responsible
and reputable insurance companies or associations in such amounts, on such terms
and covering such risks, including fire and other risks insured against by
extended coverage, as is reasonably prudent, and each has maintained in full
force and effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in connection with the
activities of MS or the MS Subsidiaries or any properties owned, occupied or
controlled by SOFEDIT or the SOFEDIT Subsidiaries, in such amount as reasonably
deemed necessary by SOFEDIT.
SECTION 8.24. Full Disclosure. Except as disclosed in Section
8.24 of the Disclosure Schedules, SOFEDIT is not aware of any facts pertaining
to SOFEDIT, any SOFEDIT Subsidiary or the Business, that would render any
representations and warranties made by SOFEDIT in this Article VIII inaccurate
in any material respect.
SECTION 8.25. Stockholders Approval. No approval of the Board
of Directors or stockholders of SOFEDIT is required for the completion of the
transactions contemplated herein, in the New Stockholders Agreement or in the
New Registration Rights Agreement, except for the approval of MS as new
shareholder of SOFEDIT by the Board of Directors of SOFEDIT.
ARTICLE IX
ADDITIONAL AGREEMENTS
SECTION 9.01. Conduct of Business Prior to the Closing. (a) MS
covenants and agrees that, except as described in Section 9.01(a) of the
Disclosure Schedules, between the date hereof and the time of the Closing,
neither MS nor any MS Subsidiary shall conduct its Business other than in the
ordinary course and consistent with MS' and such MS Subsidiary's prior practice.
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(b) Except as described in Section 9.01(b) of the Disclosure
Schedules, MS covenants and agrees that, prior to the Closing, without the prior
written consent of the Sellers' Representative, neither MS nor any MS Subsidiary
will do or cause to be done any of the things enumerated in the second sentence
of Section 3.09 (including, without limitation, clauses (i) through (xiv)
thereof).
(c) SOFEDIT, BDHI and CIBA covenant and agree each for itself
and not for the others that, between the date hereof and the time of the
Closing, (i) neither SOFEDIT (or its subsidiaries) nor CIBA or BDHI shall
conduct its Business other than in the ordinary course and consistent with prior
practice; (ii) BDHI and CIBA shall continue to have no activities except for
holding shares in BDHI or SOFEDIT, respectively, and (iii) BDHI and CIBA shall
incur no liabilities.
(d) SOFEDIT, BDHI and CIBA covenant and agree each for itself
and not for the others that, prior to the Closing, without the prior written
consent of MS, neither SOFEDIT (or its subsidiaries) nor BDHI, nor CIBA will do
or cause to be done any of the things enumerated in the second sentence of
Section 8.10 (including, without limitation, clauses (i) through (xiv) thereof).
SECTION 9.02. Access to Information. (a) From the date hereof
until the Closing, upon reasonable notice, MS shall, and shall cause each of the
MS Subsidiaries and each of their officers, directors, accountants and counsel
to: (i) afford the officers, directors, accountants, counsel, and
representatives of SOFEDIT and the Sellers reasonable access, during normal
business hours, to the offices, properties, plants, other facilities, books and
records of MS and each MS Subsidiary and to those officers, directors,
accountants and counsel of MS and of each MS Subsidiary who have any knowledge
relating to MS, any MS Subsidiary or the Business and (ii) furnish to the
officers, directors, accountants, counsel, and representatives of SOFEDIT and
the Sellers such additional financial and operating data and other information
regarding the assets, properties and goodwill of MS, the MS Subsidiaries and the
Business (or legible copies thereof) as SOFEDIT or the Sellers may from time to
time reasonably request.
(b) From the date hereof until the Closing, upon reasonable
notice, SOFEDIT, CIBA and BDHI shall, and shall cause each of the SOFEDIT
Subsidiaries and each of their officers, directors, accountants and counsel to:
(i) afford the officers, directors, accountants, counsel, and representatives of
MS reasonable access, during normal business hours, to the offices, properties,
plants, other facilities, books and records of SOFEDIT, CIBA and BDHI and each
SOFEDIT Subsidiary and to those officers, directors, accountants and counsel of
SOFEDIT, CIBA and BDHI and of each SOFEDIT Subsidiary who have any knowledge
relating to SOFEDIT, CIBA and BDHI, any SOFEDIT Subsidiary or the Business and
(ii) furnish to the officers, directors, accountants, counsel, and
representatives of MS such additional financial and operating data and other
information regarding the assets, properties and goodwill of SOFEDIT, CIBA and
BDHI, the SOFEDIT Subsidiaries and the Business (or legible copies thereof) as
MS may from time to time reasonably request.
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SECTION 9.03. Confidentiality. The parties to this Agreement
agree to, and shall cause their respective agents, representatives, Affiliates,
employees, officers and directors to: (i) treat and hold as confidential (and
not disclose or provide access to any Person to) any information relating to
this Agreement, the New Stockholders Agreement, the New Registration Rights
Agreement and the transactions contemplated herein and therein, as well as to
all information relating to trade secrets, processes, patent and trademark
applications, product development, price, customer and supplier lists, pricing
and marketing plans, policies and strategies, details of client and consultant
contracts, operations methods, product development techniques, business
acquisition plans, new personnel acquisition plans and all other confidential
information with respect to the Business, SOFEDIT or any party hereto, (ii) in
the event that any party hereto, or any such agent, representative, Affiliate,
employee, officer or director becomes legally compelled to disclose any such
information, provide the other parties hereto with prompt written notice of such
requirements so that any parties hereto may seek or cause to seek a protective
order or other remedy or waive compliance with this Section 9.03, (iii) in the
event that such protective order or other remedy is not obtained, or the other
parties hereto waive compliance with this Section 9.03, furnish only that
portion of such confidential information which is legally required to be
provided and exercise its best efforts to obtain assurances that confidential
treatment will be accorded such information, provided, however, that this
sentence shall not apply to any information that, at the time of disclosure, is
available publicly and was not disclosed in breach of this Agreement by any of
the parties hereto or any of their agents, representatives, Affiliates,
employees, officers or directors; provided further that, with respect to
intellectual property, specific information shall not be deemed to be within the
foregoing exception merely because it is embraced in general disclosures in the
public domain. In addition, with respect to intellectual property, any
combination of features shall not be deemed to be within the foregoing exception
merely because the individual features are in the public domain unless the
combination itself and its principle of operation are in the public domain. The
parties hereto agree and acknowledge that remedies at law for any breach of its
obligations under this Section 9.03 are inadequate and that in addition thereto
the parties hereto shall be entitled to seek equitable relief, including
injunction and specific performance, in the event of any such breach.
SECTION 9.04. Regulatory and Other Authorizations; Notices and
Consents. (a) CVC, MS and the Sellers shall use their best efforts to obtain (or
in the case of the Sellers to cause CIBA, BDHI, SOFEDIT and the SOFEDIT
Subsidiaries to obtain) all authorizations, consents, orders and approvals of
all Governmental Authorities and officials that may be or become necessary for
its execution and delivery of, and the performance of its obligations pursuant
to, this Agreement, the New Stockholders Agreement and the New Registration
Rights Agreement and will cooperate fully together and with any other parties in
promptly seeking to obtain all such authorizations, consents, orders and
approvals. Each party hereto agrees to make an appropriate filing, if necessary,
pursuant to the HSR Act with respect to the transactions contemplated by this
Agreement within five Business Days of the date hereof and to supply as promptly
as practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to the HSR
Act.
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(b) MS shall, and shall cause the MS Subsidiaries to, give
promptly such notices to third parties and use its or their best efforts to
obtain such third party consents as the Sellers may reasonably deem necessary or
desirable in connection with the transactions contemplated by this Agreement.
(c) SOFEDIT, CIBA and BDHI shall, and shall cause the SOFEDIT
Subsidiaries to, give promptly such notices to third parties and use its or
their best efforts to obtain such third party consents as MS may reasonably deem
necessary or desirable in connection with the transactions contemplated by this
Agreement.
(d) The Sellers shall cooperate and use reasonable best
efforts to assist MS, BDHI and CIBA in giving such notices and obtaining such
consents; provided, however, that the Sellers shall have no obligation to give
any guarantee or other consideration of any nature in connection with any such
notice or consent to any change in the terms of any agreement or arrangement
which the Sellers in their sole and absolute discretion may deem adverse to the
interests of the Sellers, BDHI, CIBA, SOFEDIT, any SOFEDIT Subsidiary or the
Business.
SECTION 9.05. Notice of Developments. Prior to the Closing,
each party hereto shall promptly notify the other parties hereto in writing of
all events, circumstances, facts and occurrences arising subsequent to the date
of this Agreement of which such party becomes aware and which could result in
any breach of a representation or warranty or covenant of such party or which
could have the effect of making any representation or warranty of such party to
this Agreement untrue or incorrect in any material respect. Prior to the
Closing, each of MS, BDHI, CIBA and SOFEDIT shall notify the other parties
hereto in writing of all other material developments affecting the assets,
Liabilities, business, financial condition, operations, results of operations,
customer or supplier relations, employee relations, projections or prospects of
it, any of its Subsidiaries or the Business.
SECTION 9.06. Stockholder Approvals. MS shall take all
necessary actions to cause the Stockholder Approvals to be obtained prior to the
Closing and SOFEDIT, BDHI and CIBA shall take all necessary actions to cause all
approvals required from their respective Boards of Directors to be obtained
prior to the Closing..
SECTION 9.07. Contribution(s) of BDHI Shares to YACESE. Prior
or concurrent to the Closing, Mr. Domenech shall contribute 578 shares of BDHI
to YACESE.
SECTION 9.08. Contribution(s) of BDHI Shares to H.H.A.WAY.
Prior or concurrent to the Closing, JRMH shall contribute 3.051 shares of BDHI
to H.H.A.WAY.
SECTION 9.09. Purchases of BDHI Shares. Prior or concurrent to
the Closing, CIBA shall purchase one share of BDHI from Mr. Jerome Barge and
JRMH shall purchase one share of BDHI from Mr. Jean-Rene Hergoualc'h.
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SECTION 9.10. Promise to Transfer the Preferred Shares. In
consideration for the loss of their control of SOFEDIT by the shareholders of
BDHI as a result of the transactions contemplated hereby, the SOFEDIT Financial
Shareholders irrevocably promise to transfer without additional consideration to
CEFI, YACESE and H.H.A.WAY, or their successors in interest, all of the
Preferred Shares received as part of the consideration for their SOFEDIT Shares,
if a Sale of the Company (as such term is defined in the form of Amended and
Restated Certificate of Incorporation of MS attached hereto) or an Initial
Public Offering of MS (as such term is defined in the form of Registration
Rights Agreement attached hereto) is completed within eighteen (18) months
following the Closing Date on the basis of an aggregate consolidated value of MS
before the Initial Public Offering or, as the case may be, at the time of the
Sale of the Company, equal or higher to two hundred and fifty million dollars
(USD250,000,000). This transfer shall take place promptly after the Closing of
the Initial Public Offering or the Sale of Company, as applicable, and the
SOFEDIT Financial Shareholders shall use their best efforts to ensure that, for
purposes of such transfer, their Preferred Shares be allocated to CEFI, YACESE
and H.H.A.WAY pro rata based upon the number of MS Common Shares received by
CEFI, YACESE and H.H.A.WAY hereunder. The SOFEDIT Financial Shareholders hereby
acknowledge the sufficiency of the consideration received for the undertakings
contained in this paragraph and irrevocably waive any claims based on the lack
or inadequacy of consideration for such undertakings. The SOFEDIT Financial
Shareholders further acknowledge that their undertakings in this paragraph are
not subject to any conditions other than those expressly stated in this
paragraph.
SECTION 9.11. Further Action. Each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things necessary, proper or advisable under
applicable Law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
SECTION 9.12. Securities Act. Each of the Sellers represents
and warrants, on behalf of itself only, that the Class A Common Stock, the
Series B Preferred Stock and the Promissory Notes (together, the "Restricted
Securities") to be issued to such Seller hereunder will be acquired by such
Seller for its own account for the purpose of investment and not with a view to
the resale or distribution of all or any part hereof in violation of the
Securities Act. Each of the Sofedit Financial Shareholders, CEFI, YACESE, JRMH
and H.H.A. Way represents and warrants, on behalf of itself only, that it is an
"accredited investor" as such term is defined in Rule 501 of Regulation D of the
Securities Act. Each member of the Barge Family and each member of the Domenech
Family represents and warrants, on behalf of itself only, that (i) such Seller's
financial situation is such that such Seller can afford to bear the economic
risk of holding the restricted Securities for an indefinite period of time and
(ii) the Seller's knowledge and experience in financial and business matters are
such that such Seller is capable of evaluating the merits and risks of such
Seller's ownership of such Restricted Securities, or such Seller has been
advised by a representative possessing such knowledge and experience. Each
Seller understands that the Restricted Securities have not been registered under
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the Securities Act in reliance on an exemption thereform under Section 4(2) of
the Securities Act and that such Restricted Securities shall bear an appropriate
legend.
ARTICLE X
CONDITIONS TO CLOSING
SECTION 10.01. Conditions to Obligations of MS. The
obligations of MS to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the relevant Sellers contained in
this Agreement shall have been true and correct when made and each
representation and warranty (i) that is qualified as to materiality
shall be true and correct and (ii) that is not so qualified shall be
true and correct in all material respects in each case as of the
Closing, with the same force and effect as if made as of the Closing
Date, other than such representations and warranties as are made as of
another date, which shall be true and correct as of such date, the
covenants and agreements contained in this Agreement to be complied
with by the relevant Sellers on or before the Closing shall have been
complied with in all material respects;
(b) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against MS, SOFEDIT,
BDHI, CIBA or any of the Sellers, seeking to restrain or materially and
adversely alter the transactions contemplated by this Agreement which,
in the reasonable, good faith determination of MS, is likely to render
it impossible or unlawful to consummate such transactions or which
could reasonably be expected to have a Material Adverse Effect or
otherwise render inadvisable, in the reasonable good faith
determination of MS, the consummation of the transactions contemplated
by this Agreement; provided, however, that the provisions of this
Section 10.01(b) shall not apply if MS or any MS Subsidiary has
directly or indirectly solicited or encouraged any such Action;
(c) Resolutions. MS shall have received a true and complete
copy, certified by the Secretary or an Assistant Secretary of each
Seller that is not a natural person, of the resolutions duly and
validly adopted by the Board of Directors or similar governing body of
such Seller evidencing its authorization of the execution and delivery
of this Agreement, the New Stockholders Agreement and the New
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby;
(d) Organizational Documents. MS shall have received a copy of
the statuts, as amended, of CIBA, BDHI, SOFEDIT and of each SOFEDIT
Subsidiary, certified as of a date not earlier than fifteen (15)
Business Days prior to the Closing Date;
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(e) Minute Books. MS shall have received a copy of the minute
books and stock register of CIBA, BDHI, SOFEDIT;
(f) Consents and Approvals. MS shall have received, each in
form and substance satisfactory to MS in its sole and absolute
discretion, all authorizations, consents, orders and approvals of all
Governmental Authorities and officials and all material third party
consents relating to any of CIBA, BDHI, SOFEDIT or any SOFEDIT
Subsidiary which MS reasonably deems necessary or desirable for the
consummation of the transactions contemplated by this Agreement;
(g) No Material Adverse Effect. No event or events shall have
occurred, or be reasonably likely to occur, which, individually or in
the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect on any of CIBA, BDHI or SOFEDIT;
(h) New Stockholders Agreement; New Registration Rights
Agreement. A stockholders agreement (the "New Stockholders Agreement")
and a registration rights agreement (the "New Registration Rights
Agreement"), in the forms attached hereto as Exhibits 10.01(h).A and
10.01(h).B, respectively, shall have been executed by the parties
thereto;
(i) Termination of the SOFEDIT Stockholders Agreement and of
the BDHI Stockholders Agreement. The SOFEDIT Stockholders Agreement and
the BDHI Stockholders Agreement shall have been terminated and shall be
of no further force or effect;
(j) Exchange of the Subordinated Notes. The holders of the
Subordinated Notes shall have exchanged their Subordinated Notes for
notes with the same principal amounts substantially in the form
attached hereto as Exhibit 10.01(j) hereto.
(k) Approvals by the Boards of Directors of SOFEDIT, BDHI and
CIBA. The Boards of Directors of SOFEDIT, BDHI and CIBA shall given all
approved MS as a new shareholder.
SECTION 10.02. Conditions to Obligations of SOFEDIT, BDHI,
CIBA and the Sellers. The obligations of SOFEDIT, BDHI, CIBA and the Sellers to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of MS contained in this Agreement shall
have been true and correct when
made and each representation and warranty (i) that is qualified as to
materiality shall be true and correct and (ii) that is not so qualified
shall be true and correct in all material respects in each case as of
the Closing with the same force and effect as if made as of the
Closing, other than
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such representations and warranties as are made as of another date
which shall be true and correct as of such date, the covenants and
agreements contained in this Agreement to be complied with by MS on or
before the Closing shall have been complied with in all material
respects, and the Sellers shall have received a certificate of MS to
such effect signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been
commenced or threatened by or before any Governmental Authority against
either MS, SOFEDIT, BDHI, CIBA or any of the Sellers, seeking to
restrain or materially and adversely alter the transactions
contemplated hereby which, in the reasonable, good faith determination
of the Sellers' Representative is likely to render it impossible or
unlawful to consummate the transactions contemplated by this Agreement,
or which could reasonably be expected to have a Material Adverse Effect
or otherwise render inadvisable, in the reasonable, good faith
determination of the Sellers' Representative, the consummation of the
transactions contemplated by this Agreement; provided, however, that
the provisions of this Section 10.02(b) shall not apply if SOFEDIT,
BDHI, CIBA, or the relevant Seller or Sellers has or have solicited or
encouraged any such Action;
(c) Resolutions. The Sellers shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of
MS, of the resolutions duly and validly adopted by the Board of
Directors of MS evidencing its authorization of the execution and
delivery of this Agreement, the New Stockholders Agreement and the New
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby;
(d) Resignations of MS' Directors. MS shall have received
letters of resignation, effective as of the Closing, from Harold A.
Brown, Ueli Spring and Richard Puricelli.
(e) Employment Contracts. MS shall have received a copy of an
amendment to the employment contract of Mr. Ueli Spring substantially
in the form attached hereto as Exhibit 10.02(e);
(f) Organizational Documents. The Sellers shall have received
a copy of (i) the Amended and Restated Certificate of Incorporation of
MS (substantially in the form attached as Exhibit 10.02(f) hereto) and
the Certificate of Incorporation (or other organizational document) of
each MS Subsidiary, certified by the secretary of state of the
jurisdiction in which each such entity is incorporated or organized, as
of a date not earlier than five Business Days prior to the Closing Date
and accompanied by a certificate of the Secretary or Assistant
Secretary of each such entity, dated as of the Closing Date, stating
that no amendments have been made to such Certificate of Incorporation
(or similar organizational
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documents) since such date, except as provided herein, and (ii) the
By-laws (or similar organizational documents) of MS and of each MS
Subsidiary, certified by the Secretary or Assistant Secretary of each
such entity;
(g) Minute Books. The Sellers shall have received a copy of
the minute books and stock register of MS and each MS Subsidiary,
certified by their respective Secretaries or Assistant Secretaries as
of the Closing Date;
(h) Good Standing; Qualification to Do Business. The Sellers
shall have received good standing certificates for MS and for each MS
Subsidiary from the secretary of state of the jurisdiction in which
each such entity is incorporated or organized and from the secretary of
state in each other jurisdiction in which the properties owned or
leased by any of MS or any MS Subsidiary, or the operation of its
business in such jurisdiction, requires MS or any MS Subsidiary to
qualify to do business as a foreign corporation, in each case dated as
of a date not earlier than five Business Days prior to the Closing Date
and accompanied by bring-down telegrams dated the Closing Date;
(i) Stockholder Approvals. The MS Stockholder Approvals shall
have been obtained;
(j) Consents and Approvals. The Sellers shall have received,
in form and substance satisfactory to the Sellers in their sole and
absolute discretion, copies of all authorizations, consents, orders and
approvals of all Governmental Authorities and officials and all third
party consents and estoppel certificates relating to MS or any MS
Subsidiary which the Sellers reasonably deem necessary or desirable for
the consummation of the transactions contemplated by this Agreement;
and
(k) No Material Adverse Effect. No event or events shall have
occurred, or be reasonably likely to occur, which, individually or in
the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect on MS; and
(l) New Stockholders Agreement; New Registration Rights
Agreement. The New Stockholders Agreement and the New Registration
Rights Agreement shall have been executed by the parties thereto; and
waivers of all their rights under the Registration Rights Agreement
shall have been signed by the stockholders of MS that are party
thereto.
(m) Exchange of the Subordinated Notes. The holders of the
Subordinated Notes shall have exchanged their Subordinated Notes for
notes with the same principal amounts substantially in the form
attached hereto as Exhibit 10.01(j) hereto.
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ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 11.01. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement, and all statements
contained in this Agreement, the Exhibits to this Agreement, the Disclosure
Schedules and any certificate delivered pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement (collectively,
the "Acquisition Documents"), shall survive the Closing until the third (3rd)
anniversary of the Closing Date; provided, however, that the representations and
warranties dealing with Tax matters shall survive until 60 days after the
expiration of the applicable statute of limitations for any tax. Neither the
period of survival nor the liability of the relevant parties with respect to
their representations and warranties shall be reduced by any investigation made
at any time by or on behalf of the other parties. If written notice of a claim
has been given prior to the expiration of the applicable representations and
warranties by a party to the other parties, then the relevant representations
and warranties shall survive as to such claim, until such claim has been finally
resolved.
ARTICLE XII
TERMINATION AND WAIVER
SECTION 12.01. Termination. This Agreement may be terminated
at any time prior to the Closing:
(a) by the Sellers' Representative if: (i) an event or
condition occurs that has resulted in or that may be expected to result
in a Material Adverse Effect on MS or any MS Subsidiary, (ii) any
representation or warranty of MS contained in this Agreement shall not
have been true and correct when made or shall have become untrue, in
any such case such that Section 10.02(a) will not be satisfied and such
breach (if curable) has not been cured within 10 days following receipt
by MS, as applicable, of written notice of such breach, (iii) MS shall
not have materially complied with any covenant or agreement to be
complied with by it and contained in this Agreement, or (iv) MS or any
MS Subsidiary makes a general assignment for the benefit of creditors,
or any proceeding shall be instituted by or against MS or any MS
Subsidiary seeking to adjudicate any of them a bankrupt or insolvent,
or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any
Law relating to bankruptcy, insolvency or reorganization; or
(b) by MS if: (i) an event or condition occurs that has
resulted in or that may be expected to result in a Material Adverse
Effect on SOFEDIT, BDHI or CIBA, (ii) any representation or warranty of
SOFEDIT, BDHI, CIBA or any Seller contained in this
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Agreement shall not have been true and correct when made or shall have
become untrue, in any such case such that Section 10.01(a) will not be
satisfied and such breach (if curable) has not been cured within 10
days following receipt by SOFEDIT, BDHI, CIBA or such Seller, as
applicable, of written notice of such breach, (iii) SOFEDIT, BDHI, CIBA
or any Seller shall not have materially complied with any covenant or
agreement to be complied with by it and contained in this Agreement, or
(iv) any of SOFEDIT, any SOFEDIT Subsidiaries, BDHI or CIBA makes a
general assignment for the benefit of creditors, or any proceeding
shall be instituted by or against any of them seeking to adjudicate any
of them a bankrupt or insolvent, or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization; or
(c) by either MS or the Sellers' Representative if the Closing
shall not have occurred by April 17, 1998; provided, however, that the
right to terminate this Agreement under this Section 12.01(c) shall not
be available to any party whose failure to fulfill any obligation under
this Agreement shall have been the cause of, or shall have resulted in,
the failure of the Closing to occur on or prior to such date; or
(d) by either MS or the Sellers' Representative in the event
that any Governmental Authority shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(e) by the mutual consent of all the parties hereto.
SECTION 12.02. Effect of Termination. (a) In the event of
termination of this Agreement as provided in Section 12.01, this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto except (i) for the breach of the obligations set forth in Sections 9.03,
12.02(b) and 12.02(c)(ii) that nothing herein shall relieve any party from
liability for any breach of any provision of the Agreement.
(b) Notwithstanding the foregoing, if the Closing does not
occur because of the failure to satisfy the conditions to the Sellers'
obligation to effect the Closing contained in Section 10.02 (a), then MS shall
reimburse SOFEDIT, BDHI, CIBA and the Sellers for their out-of-pocket costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel, financial advisors, financing sources and accountants, reasonably
incurred by SOFEDIT, BDHI, CIBA and the Sellers in connection with the
preparation, negotiation and performance of this Agreement and the transactions
contemplated hereby.
(c) Notwithstanding the foregoing, if the Closing does not
occur because of the failure to satisfy the conditions to MS' obligation to
effect the Closing contained in Section 10.01(a), then SOFEDIT, BDHI, CIBA and
the Sellers shall reimburse MS for its out-of-pocket costs and
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expenses, including, without limitation, reasonable fees and disbursements of
counsel, financial advisors, financing sources and accountants, reasonably
incurred by MS in connection with the preparation, negotiation and performance
of this Agreement and the transactions contemplated hereby.
SECTION 12.03. Waiver. Either the Sellers' Representative, on
behalf of the Sellers, SOFEDIT, BDHI, CIBA or MS may (a) extend the time for the
performance of any of the obligations or other acts of any other party, (b)
waive any inaccuracies in the representations and warranties of any other party
contained herein or in any document delivered by any other party pursuant hereto
or (c) waive compliance with any of the agreements or conditions of any other
party contained herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of any
of such rights.
ARTICLE XIII
GENERAL PROVISIONS
SECTION 13.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
SECTION 13.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by telecopy, by telegram, by
telex or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 13.02):
<PAGE> 79
72
(a) if to MS:
(i) before the Closing Date:
MS Acquisition Corp.
24331 Sherwood Avenue
Centerline, Michigan
48015-0061 U.S.A.
Telephone: (810) 759-2200
Telecopy: (810) 759-2209
Attention: Mr. Ueli Spring
(ii) after the Closing Date:
MS Acquisition Corp.
24331 Sherwood Avenue
Centerline, Michigan
48015-0061 U.S.A.
Telephone: (810) 759-2200
Telecopy: (810) 759-2209
Attention: Mr. Francis Barge
(b) if to any of the Sellers:
SOFEDIT S.A.
Quartier des Chenes
1, avenue du 8 Mai 1945
78289 Guyancourt Cedex
France
Telephone: (33 1) 39 41 20 00
Telecopy: (33 1) 30 48 53 91
Attention: Mr. Francis Barge
SECTION 13.03. Public Announcements. Unless otherwise required
by applicable Law, no party to this Agreement shall make, or cause to be made,
any press release or public announcement in respect of this Agreement or the
transactions contemplated hereby or otherwise communicate with any news media
without the prior written consent of MS and the Sellers' Representative and MS
and the Sellers' Representative shall cooperate as to the timing and contents of
any such press release or public announcement.
<PAGE> 80
73
SECTION 13.04. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 13.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
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 in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 13.06. Entire Agreement. This Agreement with the
schedules and exhibits thereto constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof and thereof and supersedes all
prior agreements and undertakings, both written and oral, among the parties
hereto with respect to the subject matter hereof and thereof.
SECTION 13.07. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of all
parties hereto or, with respect to the Sellers only, of the Sellers'
Representative (which consent may be granted or withheld in the sole discretion
of any party). Any assignment made in violation of the preceding sentence shall
be void.
SECTION 13.08. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement;
provided,however, that the holders of capital stock of MS as of the date hereof,
shall be deemed third party beneficiaries hereunder with respect to the
representations and warranties of SOFEDIT only, as if such representations and
warranties had been made to the holders of capital stock of MS as of the date
hereof. This agreement shall not be construed so as to give any rights to the
holders of capital stock of MS against any party hereto other than SOFEDIT.
SECTION 13.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by all parties hereto or,
with respect to the Sellers only, by the Sellers' Representative, or (b) by a
waiver in accordance with Section 12.03.
SECTION 13.10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of New York.
<PAGE> 81
74
SECTION 13.11. Dispute Resolution and Arbitration. (a)
Dispute. In the event of any dispute, controversy or claim (each, a "Dispute")
arising under or in connection with this Agreement or any breach, invalidity or
termination hereof, prior to the commencement of an arbitration proceeding
pursuant to clause (b) of this Section 13.11, MS and the Sellers'
Representative, on behalf of the Sellers, shall in good faith use their best
efforts for a 15-day period commencing on the date one party has notified the
other of a Dispute to resolve such Dispute. In the event that such efforts do
not resolve such Dispute, either MS or the Sellers' Representative may commence
an arbitration proceeding pursuant to clause (b) of this Section 13.11.
(b) ICC Rules. In the event a Dispute has not been resolved
pursuant to the procedure set forth in Section 13.11(a), all Disputes arising
under or in connection with this Agreement or any breach, invalidity or
termination hereof shall be finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (the "ICC Rules") by one or
more arbitrators appointed in accordance with the ICC Rules. The seat of the
arbitration shall be in Brussels, Belgium. The arbitration proceedings shall be
conducted, and the award shall be rendered in writing, in the English language.
Except to the extent allowed by the ICC Rules for the sole purpose of seeking
interim relief, no party shall be entitled to commence proceedings before the
courts of any jurisdiction, in connection with the conduct of the arbitration
proceedings, provided that the parties shall be free to commence proceedings
before such courts for the purpose of enforcing any arbitral award.
(c) Confidentiality. All arbitration proceedings under this
Section 13.11 shall be confidential and the arbitrators may issue appropriate
protective orders to safeguard the confidential information of any party. Except
as required by applicable Law, none of the parties to the arbitration
proceedings shall make (or request any arbitrator to make) any public
announcement with respect to the proceedings or decisions of the arbitrators
without the prior written consent of the other party or parties thereto. The
existence of any Dispute submitted to arbitration, and the award of the
arbitrators, shall be kept in strict confidence, except as required in
connection with the enforcement of such award or as otherwise required by
applicable Law.
SECTION 13.12. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 13.13. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 13.14. Limited Recourse. Notwithstanding anything in
this Agreement or any other document, agreement, or instrument contemplated
hereby to the contrary, (i) the obligations
<PAGE> 82
75
of MS, SOFEDIT, BDHI or CIBA hereunder shall be without recourse to any director
or stockholder of MS, SOFEDIT, BDHI or CIBA, respectively, or any stockholder,
partner, member, officer, director, manager, employee or agent of such
stockholder or such Affiliate, and shall be limited to the assets of MS,
SOFEDIT, BDHI or CIBA, respectively; and (ii) other than the representations,
warranties and covenants expressly made by the stockholders of SOFEDIT, BDHI and
CIBA herein, the stockholders of MS, SOFEDIT, BDHI and CIBA have made no (and
shall not be deemed to have made any) representations, warranties or covenants
(express or implied) under, or in connection with, this Agreement.
<PAGE> 83
IN WITNESS WHEREOF, each of the parties hereto has executed,
or has caused to be executed by its duly authorized representative, this
Agreement as of the date first written above.
SOFEDIT
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Title: President and Director
MS
By: /s/ Harold Brown
---------------------------
Name: Harold Brown
Title: Senior VP and CFO
BDHI
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Title: President and Director
<PAGE> 84
CIBA
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Title: President and Director
CEFI
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Title: President and Director
YACESE
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
Title: President
JRMH
By: /s/ Jean-Rene Hergoulac'h
---------------------------
Name: Jean-Rene Hergoulac'h
Title: President
<PAGE> 85
H.H.A.WAY
By: /s/ Jean-Rene Hergoualc'h
---------------------------
Name: Jean-Rene Hergoualc'h
Title: President
<PAGE> 86
Francis Barge
By: /s/ Francis Barge
---------------------------
Colette Barge
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Jerome Barge
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Felix Domenech
By: /s/ Felix Domenech
---------------------------
Josette Domenech
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
Sebastien Domenech
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
<PAGE> 87
Cecile Domenech
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
<PAGE> 88
81
COMPAGNIE DE FINANCEMENT
INDUSTRIEL S.A.
By: /s/ Patrick Lente
---------------------------
Name: Patrick Lente
Title: Director
JAFCO I SAINT HONORE S.A.
By: /s/ Pierre Passy
---------------------------
Name: Pierre Passy
Title:
JAFCO II SAINT HONORE S.A.
By: /s/ Pierre Passy
---------------------------
Name: Pierre Passy
Title:
TOCQUEVILLE EUROPE L.P.
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
Title: President
<PAGE> 89
82
BIDASSOA INVESTISSEMENTS S.C.A.
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
Title:
CININDEV S.A.
By: /s/ Blain Kevin
---------------------------
Name: Blain Kevin
Title: Director
CFJPE S.A.
By: /s/ Jean Delveaux
---------------------------
Name: Jean Delveaux
Title:
OBERON S.A.
By: /s/ Felix Domenech
---------------------------
Name: Felix Domenech
Title:
<PAGE> 90
EURO SYNERGIES INVESTMENTS S.C.A.
By: /s/ Jean De Severac
---------------------------
Name: Jean De Severac
Title:
VENTADOUR INVESTISSEMENTS S.A.
By: /s/ F. Neave
---------------------------
Name: F. Neave
Title:
COGEPA S.A.
By: /s/ Thierry Martinez
---------------------------
Name: Thierry Martinez
Title:
SOFEDICI S.C.
By: /s/ Francis Barge
---------------------------
Name: Francis Barge
Title:
<PAGE> 91
84
APAX PARTNER CLUB
By: /s/ R. Lambert
---------------------------
Name: R. Lambert
Title:
ALTAMIR & CIE
By: /s/ R. Lambert
---------------------------
Name: R. Lambert
Title:
APAX FRANCE IV
By: /s/ R. Lambert
---------------------------
Name: R. Lambert
Title:
<PAGE> 92
CCT Partners III, LP
By: /s/ Thomas H. Sanders
---------------------------
Name: Thomas H. Sanders
Title: General Partner
<PAGE> 93
EXHIBIT 1
OWNERSHIP OF CIBA
Name Number of Shares of CIBA
---- ------------------------
- Mr. Francis Barge 2.079
- Mrs. Colette Barge 2.270
- Mr. Jerome Barge 4.340
- CEFI S.A. 10.411
------
Total: 19.100
------
<PAGE> 94
EXHIBIT 2
MEMBERS OF THE DOMENECH GROUP OF SELLERS
Name Number of shares of BDHI
(as of the date hereof)
- Mr. Felix Domenech 2.921
- Mrs. Josette Domenech 1.405
- Mr. Sebastien Domenech 469
- Ms. Cecile Domenech 469
- YACESE S.A. 5.036
------
Total: 10.300
------
<PAGE> 95
EXHIBIT 2.02 (A)
FORM OF PROMISSORY NOTE
<PAGE> 96
EXHIBIT 2.02 (B)
TABLES OF ALLOCATION OF
THE PROMISSORY NOTES, THE MS COMMON SHARES
AND THE MS PREFERRED SHARES
AMONG THE SELLERS
<PAGE> 97
EXHIBIT 3
LIST OF SOFEDIT FINANCIAL SHAREHOLDERS
COMPAGNIE DE FINANCEMENT INDUSTRIEL S.A.
JAFCO I SAINT HONORE S.A.
JAFCO II SAINT HONORE S.A.
TOCQUEVILLE EUROPE L.P.
BIDASSOA INVESTISSEMENTS S.C.A.
CININDEV S.A.
CFJPE S.A.
OBERON S.A.
EURO SYNERGIES S.C.A.
VENTADOUR INVESTISSEMENTS S.A.
COGEPA S.A.
SOFEDICI S.C.
APAX PARTNER CLUB
ALTAMIR & CIE
APAX FRANCE IV
<PAGE> 98
EXHIBIT 4
SHARES OF BDHI OWNED BY JRMH AND H.H.A.WAY
Name Number of shares of BDHI
(as of the Closing Date)
- JRMH 2.549
- H.H.A. WAY S.A. 3.051
-----
Total: 5.600
-----
<PAGE> 99
EXHIBIT 5
INDIVIDUAL SHAREHOLDERS OF BDHI
As of the signing date:
NAME NUMBER OF SHARES HELD
- Mr. Francis Barge 1
- Mr. Felix Domenech 2.921
- Mr. Jean-Rene Hergoualc'h 1
- Mr. Jerome Barge 1
- Mrs.Josette Domenech 1.405
- Mr. Sebastien Domenech 469
- Ms. Cecile Domenech 469
-----
TOTAL 5.267
As of the Closing Date:
NAME NUMBER OF SHARES HELD
- Mr. Francis Barge 1
- Mr. Felix Domenech 2.343
- Mrs.Josette Domenech 1.405
- Mr. Sebastien Domenech 469
- Ms. Cecile Domenech 469
---
TOTAL 4.687
<PAGE> 1
EXHIBIT 10.2
EXECUTION COPY
STOCKHOLDERS AGREEMENT
AMONG
MS ACQUISITION CORP.
AND
ITS STOCKHOLDERS
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS......................................................................................................... 1
ARTICLE I
CERTAIN DEFINITIONS....................................................................................... 2
1.1 Defined Terms.................................................................................. 2
ARTICLE II
TRANSFERS OF RESTRICTED SECURITIES........................................................................ 11
2.1 Restrictions Generally; Securities Act......................................................... 11
2.2 Legend......................................................................................... 11
2.3 Limitations on Repurchases, Dividends, Etc. ................................................... 12
2.4 Transfers by Stockholders...................................................................... 12
2.5 Right of First Offer........................................................................... 13
2.6 Involuntary Transfers.......................................................................... 15
2.7 Drag Along Sale................................................................................ 17
ARTICLE III
RIGHTS OF INCLUSION....................................................................................... 19
3.1 Rights of Inclusion............................................................................ 19
3.2 Article III Sales.............................................................................. 19
3.3 Certain Transfers.............................................................................. 20
ARTICLE IV
REPURCHASE OF RESTRICTED SECURITIES OWNED BY MANAGEMENT STOCKHOLDERS OR ADDITIONAL STOCKHOLDERS........... 21
4.1 Sale Event..................................................................................... 21
4.2 Purchase Price................................................................................. 21
4.3 Closing........................................................................................ 22
4.4 Postponement................................................................................... 22
ARTICLE V
CERTAIN COVENANTS OF THE PARTIES.......................................................................... 23
5.1 Registration of Common Stock................................................................... 23
5.2 Management Stockholders; Additional Stockholders............................................... 23
5.3 Stockholders List; Certain Notices............................................................. 23
5.4 Regulatory Compliance Cooperation.............................................................. 24
5.5 Financial Disclosure........................................................................... 25
5.6 Purchaser Representative....................................................................... 26
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VI
RIGHT OF OFFER............................................................................................ 26
6.1 Rights of Offer................................................................................ 26
ARTICLE VII
MISCELLANEOUS............................................................................................. 28
7.1 Governing Law.................................................................................. 28
7.2 Entire Agreement; Amendments................................................................... 28
7.3 Term........................................................................................... 29
7.4 Certain Actions................................................................................ 29
7.5 Inspection..................................................................................... 30
7.6 Recapitalization, Exchanges, Etc., Affecting Restricted Securities............................. 30
7.7 Compliance with Regulations.................................................................... 31
7.8 Waiver......................................................................................... 31
7.9 Successors and Assigns......................................................................... 31
7.10 Remedies....................................................................................... 31
7.11 Income Tax Withholding......................................................................... 32
7.12 Invalid Provisions............................................................................. 32
7.13 Headings....................................................................................... 32
7.14 Further Assurances............................................................................. 32
7.15 Gender......................................................................................... 32
7.16 Counterparts................................................................................... 33
7.17 Notices........................................................................................ 33
7.18 Consent to Jurisdiction and Service of Process................................................. 37
7.19 Waiver of Jury Trial........................................................................... 37
7.20 No Other Understanding......................................................................... 38
Annex I - Ownership Chart
Exhibit A - Form of Joinder Agreement
</TABLE>
-ii-
<PAGE> 4
STOCKHOLDERS AGREEMENT (this "Agreement") dated as of April
9, 1998, by and among MS Acquisition Corp., a Delaware corporation ("Holding"),
Aetna Holdings, Inc., a Delaware corporation ("Aetna Holdings"), each of the
Persons whose name appears under the heading "Former Sofedit Investor" on the
signature pages hereto (individually, a "Former Sofedit Investor", and
collectively, the "Former Sofedit Investors"), each of the Persons whose name
appears under the heading "Former Sofedit Institutional Investor" on the
signature pages hereto (individually, a "Former Sofedit Institutional Investor",
and collectively, the "Former Sofedit Institutional Investors"), Citicorp
Venture Capital, Ltd., a New York corporation ("CVC"), and each of the Persons
whose name appears under the heading "CVC Co-investors" on the signature pages
hereto (together with CVC, the "CVC Investors", and individually a "CVC
Investor"), The Berkshire Fund, a Massachusetts limited partnership
("Berkshire"), each of the Persons whose name appears under the heading
"Berkshire Group" on the signature pages hereto (individually, a "Berkshire
Group Member" and collectively, the "Berkshire Group"), The Prudential Insurance
Company of America, a New Jersey mutual insurance company ("Prudential"), Pruco
Life Insurance Company, an Arizona corporation ("Pruco"), and the entities
comprising the various retirement systems of the State of Michigan listed on the
signature pages hereto (the "State of Michigan"; and together with Berkshire,
the Berkshire Group, Prudential and Pruco, the "Institutional Investors"), each
of the individuals whose name appears under the heading "Former Management
Group" on the signature pages hereto (individually, a "Former Management Group
Member" and collectively, the "Former Management Group"), and each of the
individuals whose name appears under the heading "Management Group" on the
signature pages hereto (individually, a "Management Group Member" and
collectively, the "Management Group"). Capitalized terms used and not otherwise
defined herein have the respective meanings ascribed thereto in Article I.
RECITALS
WHEREAS, Holding and certain of the Stockholders are parties
to that certain Stockholders Agreement, dated as of August 13, 1996 (the
"Original Agreement");
WHEREAS, the Original Agreement shall terminate in accordance
with its terms upon the consummation of the transactions contemplated by that
certain Stock Purchase Agreement dated April __, 1998 among SOFEDIT S.A., a
French societe anonyme, Holding, the Former Sofedit Investors, the Former
Sofedit Institutional Investors and the other parties thereto (the "Stock
Purchase Agreement") as a result which of all of the issued and outstanding
capital stock of Holding shall be owned as set forth in Annex I hereto;
WHEREAS, each of the Stockholders and Holding desires to enter
into this Agreement to regulate certain aspects of their relationship and to
provide for, among other things, restrictions on the transfer or other
disposition of securities of Holding.
NOW, THEREFORE, the parties hereto hereby agree as follows:
<PAGE> 5
ARTICLE I
CERTAIN DEFINITIONS
1.1 Defined Terms.
(a) The following capitalized terms, when used in
this Agreement, have the respective meanings set forth below:
"Additional Stockholder" means any Person (other than any
Aetna Stockholder, any Sofedit Stockholder or any Sofedit Institutional
Stockholder) to whom Holding issues or sells or Aetna Holdings sells
Restricted Securities after the date hereof other than pursuant to a
public offering registered under the Securities Act, in each case who
has executed a Joinder Agreement as an Additional Stockholder pursuant
to Section 5.2, and its direct and indirect Permitted Transferees, so
long as any such Person shall hold Restricted Securities.
"Aetna Holdings" means Aetna Holdings, Inc., a Delaware
corporation and a wholly-owned subsidiary of Holding.
"Aetna Stockholders" means the CVC Stockholders, the
Institutional Stockholders, the Management Stockholders and the Former
Management Stockholders.
"Affiliate" means, with respect to any Person, any other
Person that controls, is controlled by or is under common control with
such Person. For the purposes of this definition, "control" (including,
with its correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether
through the ownership of securities, by contract or otherwise.
"Associate" means, (a) with respect to any Person, (i) any
other Person of which such Person or the Persons described in Clause
(iii) below is an officer, member or partner or is, directly or
indirectly, the beneficial owner of five percent (5%) or more of any
class of equity securities or equivalent economic interest; (ii) any
trust, estate, or similar organization in which such Person has a
substantial beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity; and (iii) any spouse or
other relative of such Person, or any relative of such spouse and (b)
with respect to any Person which is a Sofedit Institutional
Stockholder, any other Person which is a partner or other equity
investor (whether with limited or unlimited liability) in such Person,
holding an equity participation of at least five percent (5%) in such
Person.
-2-
<PAGE> 6
"Berkshire Stockholder" means Berkshire, each Berkshire Group
Member and each of their respective direct and indirect Permitted
Transferees, so long as any such Person shall hold Restricted
Securities.
"Board" means the Board of Directors of Holding.
"Cause" means, with respect to a Management Stockholder or
Additional Stockholder, (i) a material breach by such Management
Stockholder or Additional Stockholder of this Agreement or any
employment or confidentiality agreement to which such Management
Stockholder or Additional Stockholder is a party or (ii) the commission
by such Management Stockholder or Additional Stockholder of a felony, a
crime involving moral turpitude or other act causing material harm to
the standing and reputation of Holding or any of its Subsidiaries.
"Certificate" means the Restated Certificate of Incorporation
of Holding, as the same may be amended and restated as of the Closing
Date and as the same thereafter may be amended or restated from time to
time.
"Class A Common" means Holding's Class A Common Stock, par
value $.01 per share, and any securities into which such Class A Common
shall have been changed or any securities resulting from any
reclassification or recapitalization of such Class A Common.
"Class B Common" means Holding's Class B Common Stock, par
value $.01 per share, and any securities into which such Class B Common
shall have been changed or any securities resulting from any
reclassification or recapitalization of such Class B Common.
"Closing Date" is the date on which the Closing under the
Stock Purchase Agreement occurs.
"Commission" means the Securities and Exchange Commission and
any other similar or successor agency of the federal government
administering the Securities Act or the Exchange Act.
"Common Stock" means the Class A Common and the Class B
Common, any securities into which such Class A Common or Class B Common
shall have been changed or any securities resulting from any
reclassification or recapitalization of such Class A Common or Class B
Common, and all other securities of any class or classes or series
(however designated) of Holding the holders of which have the right,
without limitation as to amount, after payment on any securities
entitled to a preference on
-3-
<PAGE> 7
dividends or other distributions upon any dissolution, liquidation or
winding-up, either to
-4-
<PAGE> 8
all or to a share of the balance of payments upon such dissolution,
liquidation or winding-up.
"CVC Stockholders" means the CVC Investors and each of their
respective direct and indirect Permitted Transferees, so long as any
such Person shall hold Restricted Securities.
"Debentures" means Aetna Holdings' Junior Subordinated Notes
due 2007.
"Equity Equivalents" means securities exercisable, convertible
or exchangeable for or into Common Stock, including, without
limitation, the Options.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Fair Market Value" means, with respect to each share of
Common Stock as of a particular date, the average of the closing prices
of such Common Stock on the New York Stock Exchange, Inc., on each of
the thirty (30) trading days next preceding such date or, if such
Common Stock is not then listed or admitted to trading on such
exchange, on the principal national securities exchange on which such
Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the Nasdaq
National Market, or if such Common Stock is not then listed or admitted
to trading on a national securities exchange or quoted on the Nasdaq
National Market, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange
member firm selected by Holding or if no such prices are available, the
fair market value per share as determined in good faith by the Board.
"Former Management Stockholders" means the Former Management
Group and each of their respective direct or indirect Permitted
Transferees, so long as any such Person shall hold Restricted
Securities.
"Fully Diluted Basis" means, with respect to the calculation
of the number of shares of Common Stock, (i) all shares of Common Stock
outstanding at the time of determination (other than shares of Common
Stock owned by Aetna Holdings) and (ii) all shares of Common Stock
issuable upon the exercise, conversion or exchange of Equity
Equivalents.
"Guaranties" means those guaranties delivered by Holding,
Aetna Holdings and certain other parties in connection with Holding's
exchange offer of its 11 7/8% senior notes due 2006.
"Institutional Stockholder" means the Institutional Investors
and each of their respective direct and indirect Permitted Transferees,
if any, so long as any such Person shall hold Restricted Securities.
-5-
<PAGE> 9
"Involuntary Transfer" means, with respect to Restricted
Securities of any Management Stockholder or Additional Stockholder, any
involuntary Transfer or Transfer by operation of law of such Restricted
Securities (other than to a Permitted Transferee of such Management
Stockholder or Additional Stockholder) by or in which such Management
Stockholder or Additional Stockholder shall be deprived or divested of
any right, title or interest in or to Restricted Securities, including,
without limitation, by seizure under levy of attachment or execution,
by foreclosure upon a pledge, in connection with any voluntary or
involuntary bankruptcy or other court proceeding to a debtor in
possession, trustee in bankruptcy or receiver or other officer or
agency, pursuant to any statute pertaining to escheat or abandoned
property, pursuant to a divorce or separation agreement or a final
decree of a court in a divorce action, upon or occasioned by the
incompetence of any Management Stockholder or Additional Stockholder
and to a legal representative of any Management Stockholder or
Additional Stockholder.
"Joinder Agreement" means a Joinder Agreement substantially in
the form attached hereto as Exhibit A.
"Lien" means any lien, claim, change, encumbrance, security
interest or other adverse claim of any kind.
"Management Representative" means such Person as is designated
as "Management Representative" by the affirmative vote of the holders
of shares of Common Stock representing more than fifty percent (50%) of
the Common Stock on a Fully Diluted Basis then held by the Management
Stockholders as a group in a written notice to the other Stockholders
and Holding.
"Management Stockholders" means the Management Group and their
respective Permitted Transferees, so long as any such Person shall hold
Restricted Securities.
"New Common Stock" means any Common Stock or Equity Equivalent
other than any (i) Common Stock and Equity Equivalents issued in
connection with any stock split, stock dividend or reclassification of
any Restricted Securities or Equity Equivalents; (ii) Common Stock or
Equity Equivalents issuable in a public offering registered under the
Securities Act; (iii) Common Stock or Equity Equivalents issuable upon
conversion of the Class A Common or Class B Common or upon exercise of
the Options; (iv) issuance of Options; or (v) issuances of Common Stock
to employees of Holding and its Subsidiaries with respect to shares of
Common Stock repurchased by Holding under Article IV.
"Officer's Certificate" means a certificate signed by the
Chief Financial Officer of Holding stating that (i) the officer signing
such certificate has made or has caused to be made such investigations
as are necessary in order to permit him or her to verify the accuracy
of the information set forth in such certificate or any documents
accompanying
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<PAGE> 10
such certificate and (ii) such certificate does not misstate any
material fact and does not omit to state any fact necessary to make the
certificate not misleading.
"Options" means options to purchase Common Stock granted to
employees of Holding or any of its Subsidiaries pursuant to any plan
approved by the Board and any Options issued upon subdivision or
combination, or in substitution thereof.
"Original Cost" means, (i) as to each share of Common Stock
purchased or otherwise acquired from Holding or owned by any
Stockholder on August 13, 1996, $1.419520803 and (ii) as to each share
of Common Stock purchased or otherwise acquired from Holding after
August 13, 1996, the price paid to Holding therefor, in each case
appropriately adjusted to reflect all stock splits, stock dividends,
recapitalizations or similar events affecting the Common Stock
subsequent to the date of purchase thereof.
"Permitted Transferee" means:
(i) as to any Stockholder who is a natural
person, (a) the spouse or any lineal
descendant (including by adoption) of such
Stockholder, or (b) any trust (i) (including
a charitable trust) of which such
Stockholder is the trustee or (ii) which is
established solely for the benefit of any
such Stockholder or such Stockholder's
spouse or any lineal descendant (including
by adoption) and in the case of each of
(b)(i) or (b)(ii) above the terms of any
such trust is not inconsistent with the
terms of this Agreement, or (c) any
partnership whose terms are not inconsistent
with the terms of this Agreement, the
general partner(s) and limited partner(s)
(if any) of which are one or more Persons
identified in this clause (i)(a);
(ii) as to any CVC Stockholder, any other CVC
Stockholder; any director, officer,
employee, Associate or Affiliate of CVC; any
director, officer, employee, member or
partner of any such Affiliate; and any
trust, a majority in interest of the
beneficiaries of which, or corporation,
limited liability company, or partnership, a
majority in interest of the stockholders,
members or limited partners of which, or
partnership, the managing general partner of
which, are (or is) one or more of the
Persons identified in this clause (ii), the
spouse of any such Person and/or such
Person's lineal descendants (including by
adoption);
(iii) as to any Institutional Stockholder, any
Affiliate or Associate of such Institutional
Stockholder; provided, that with respect to
the State of Michigan, Permitted Transferee
also means any successor fiduciary for the
State of Michigan;
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(iv) as to any Berkshire Stockholder, any other
Berkshire Stockholder; any director,
officer, employee, general partner or
limited partner, or Affiliate of Berkshire;
any director, officer, employee, general
partner or limited partner of any such
Affiliate; and any trust, a majority in
interest of the beneficiaries of which, or
corporation or partnership, a majority in
interest of the stockholders or limited
partners of which, or partnership, the
managing general partner of which, are (or
is) one or more of the Persons identified in
this clause (ii), the spouse of any such
Person and/or such Person's lineal
descendants (including by adoption);
(v) as to Prudential and Pruco, any trust
managed by Prudential;
(vi) as to any Sofedit Stockholder, any Affiliate
or Associate of any such Sofedit
Stockholder; and
(vii) as to any Sofedit Institutional Stockholder,
(a) any Affiliate or Associate of any such
Sofedit Institutional Stockholder, which
shall include, without limitation, any
investment fund controlled by or under
common control with such Sofedit
Institutional Stockholder, such Affiliate or
such Associate or (b) with respect to the
Series B Preferred, any Sofedit Stockholder.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, limited liability company, joint venture,
government (or agency or political subdivision thereof) or any other
entity of any kind.
"Preferred Stock" means the Series A Preferred and the Series
B Preferred.
"Pro Rata" means, with respect to one or more Stockholders or
Option holders, (i) as it relates to Common Stock, in proportion to the
number of shares of Common Stock on a Fully Diluted Basis owned by such
Stockholder or Stockholders or which may be acquired by any Stockholder
or by any Option holder pursuant to any Option, and (ii) as it relates
to Preferred Stock, in proportion to the aggregate stated value plus
accrued and unpaid dividends of the Preferred Stock owned by such
Stockholder or Stockholders.
"Pruco Stockholder" means Pruco and each of its Permitted
Transferees, so long as any such Person shall hold Restricted
Securities.
"Prudential Stockholder" means Prudential and each of its
Permitted Transferees, so long as any such Person shall hold Restricted
Securities.
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<PAGE> 12
"Qualifying Offering" means the consummation of an
underwritten primary or secondary public offering of Common Stock
pursuant to an effective registration statement under the Securities
Act as a result of which (i) (together with all similar previous public
offerings) at least $50 million of aggregate net proceeds are raised
for Holding, and (ii) the Common Stock is listed on The New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, among Holding and the parties
hereto, as the same may be amended from time to time.
"Restricted Securities" means the Common Stock and the
Options, and any securities issued with respect thereto as a result of
any stock dividend, stock split, reclassification, recapitalization,
reorganization, merger, consolidation or similar event or upon the
conversion, exchange or exercise thereof.
"Sale of the Company" means the sale of Holding (whether by
merger, consolidation, recapitalization, reorganization, sale of
securities, sale of assets or otherwise) in one transaction or a series
of related transactions to a Person or Persons that is not an Affiliate
or Associate of any Sofedit Stockholder or any Sofedit Institutional
Stockholder pursuant to which such Person or Persons acquires (i)
securities representing at least a majority of the voting power of all
securities of Holding, assuming the conversion, exchange or exercise of
all securities convertible, exchangeable or exercisable for or into
voting securities, or (ii) all or substantially all of the business or
assets of Holding and its Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"Senior Debt" means (i) the "Obligations" as such term is
defined in the Guaranties by Holding or any of its Subsidiaries,
including without limitation any interest accruing on any Obligation
after the date of filing of a petition in any bankruptcy, insolvency,
arrangement, reorganization and receivership proceeding involving
Holding or any of its Subsidiaries (or any other obligor with respect
to the underlying debt), whether or not such interest is an allowed
claim in such proceeding, and (ii) any and all refundings, renewals,
refinancings, replacements and extensions of any Senior Debt described
in clause (i) above, whether or not with the original lender or holders
thereof.
"Series A Preferred" means Holding's Series A Preferred Stock,
par value $.01 per share.
"Series B Preferred" means Holding's Series B Preferred Stock,
par value $.01 per share.
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"Sofedit Institutional Stockholders" means the Former Sofedit
Institutional Investors and each of their respective direct and
indirect Permitted Transferees, so long as such Person shall hold
Restricted Securities.
"Sofedit Stockholders" means the Former Sofedit Investors and
each of their respective direct and indirect Permitted Transferees, so
long as any such Person shall hold Restricted Securities.
"State of Michigan Stockholders" means the State of Michigan
and each of its Permitted Transferees, so long as any such Person shall
hold Restricted Securities.
"Stockholders" means each of the CVC Stockholders, the Sofedit
Stockholders, the Sofedit Institutional Stockholders, the Institutional
Stockholders, the Former Management Stockholders, the Management
Stockholders and the Additional Stockholders.
"Subsidiary" means, with respect to any Person, any other
Person in which such Person, directly or indirectly through
Subsidiaries or otherwise, owns more than fifty percent (50%) of either
the equity interests or the voting power.
"Transfer" means, directly or indirectly, any sale, transfer,
assignment, hypothecation, pledge or other disposition of any
Restricted Securities or any interests therein.
(b) Unless otherwise provided herein, all accounting
terms used in this Agreement shall be interpreted in accordance with generally
accepted accounting principles as in effect from time to time, applied on a
consistent basis.
(c) The following terms, when used in this Agreement,
shall have the meanings defined for such terms in the Section set forth below:
Term Section
---- -------
"Acceptance Date" 6.1
"Acceptance Notice" 6.1
"Acquiror" 2.7(a)
"Agreement" Preamble
"Article III Offer" 3.1(a)
"Berkshire" Preamble
"Berkshire Group" Preamble
"Berkshire Group Member" Preamble
"Buyer" 3.1(a)
"Control Person" 2.4(b)
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<PAGE> 14
"CVC" Preamble
"CVC Co-Investors" Preamble
"CVC Investors" Preamble
"Drag-Along Right" 2.7(a)
"Drag-Along Sale" 2.7(a)
"Former Management Group" Preamble
"Former Management Group Member" Preamble
"Former Sofedit Institutional Investors" Preamble
"Former Sofedit Investor" Preamble
"Holding" Preamble
"Holding Designee" 4.1
"Holding Notice" 2.5(b)
"Inclusion Notice" 3.1(a)
"Inclusion Right" 3.1(b)
"Institutional Investors" Preamble
"Management Group" Preamble
"Management Group Member" Preamble
"New Common Stock Notice" 6.1
"New Common Stock Offer" 6.1
"New Common Stock Offerees" 6.1
"New Common Stock Units" 6.1
"Notice of Intention" 2.5(a)
"Offer Price" 2.5(a)
"Offered Securities" 2.5(a)
"Offerees" 3.1(a)
"Original Agreement" Recital
"Prospective Buyers" 2.5(a)
"Prospective Buyer Notice" 2.5(c)
"Pruco" Preamble
"Prudential" Preamble
"Purchase Notice" 4.1
"Regulatory Problem" 5.4(c)
"Sale Event" 4.1
"Sellers" 4.1
"Selling Stockholder" 2.5(a)
"State of Michigan" Preamble
"Stock Purchase Agreement" Recital
"Third Party" 2.5(e)
"Transferor" 3.1(a)
"Transferor Shares" 3.1(a)
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ARTICLE II
TRANSFERS OF RESTRICTED SECURITIES
2.1 RESTRICTIONS GENERALLY; SECURITIES ACT. (a) Each
Stockholder agrees that it will not, directly or indirectly, Transfer any
Restricted Securities except in accordance with the terms of this Agreement. Any
attempt to Transfer any Restricted Securities not in accordance with the terms
of this Agreement shall be null and void and neither the issuer of such
securities nor any transfer agent of such securities shall give any effect to
such attempted Transfer in its stock records.
(b) Each Stockholder agrees that, in addition to the other
requirements herein, it will not Transfer any Restricted Securities except
pursuant to an effective registration statement under the Securities Act, or
upon receipt by Holding of an opinion of counsel to the Stockholder reasonably
satisfactory to Holding or, if agreed by the Board, counsel to Holding, or a
no-action letter from the Commission addressed to Holding, to the effect that no
registration statement is required because of the availability of an exemption
from registration under the Securities Act or to the effect that such Transfer
is not subject to the requirements of the Securities Act.
2.2 LEGEND. (a) Each certificate representing Restricted
Securities or Preferred Stock shall be endorsed with the following legends and
such other legends as may be required by applicable state securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE RESTRICTIONS, RIGHTS TO REPURCHASE AND TO REQUIRE
TRANSFERS CONTAINED IN THE STOCKHOLDERS AGREEMENT, DATED AS OF
APRIL __, 1998, AMONG MS ACQUISITION CORP. (THE "COMPANY") AND
ITS STOCKHOLDERS, AS MAY BE AMENDED FROM TIME TO TIME AND MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF (A "TRANSFER") EXCEPT IN ACCORDANCE WITH
THE PROVISIONS THEREOF, AND ANY TRANSFEREE OF THESE SECURITIES
SHALL BE SUBJECT TO THE TERMS OF SUCH AGREEMENT, AS SUCH
AGREEMENT MAY BE AMENDED OR MODIFIED FROM TIME TO TIME. COPIES
OF THE STOCKHOLDERS AGREEMENT, AS AMENDED OR MODIFIED, ARE
MAINTAINED WITH THE CORPORATE RECORDS OF THE COMPANY AND ARE
AVAILABLE FOR INSPECTION AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
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<PAGE> 16
AS AMENDED (THE "ACT"), OR STATE SECURITIES LAWS, AND
NO TRANSFER OF THESE SECURITIES MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
(B) PURSUANT TO AN EXEMPTION THEREFROM OR IN A TRANSACTION NOT
SUBJECT THERETO, WITH RESPECT TO WHICH THE COMPANY MAY REQUIRE
AN OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER IS
EXEMPT FROM OR NOT SUBJECT TO THE REQUIREMENTS OF THE ACT, AS
PROVIDED BY THE TERMS OF THE STOCKHOLDERS AGREEMENT DESCRIBED
ABOVE.
THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE
QUALIFICATIONS, LIMITATIONS, OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS OF EACH CLASS OR SERIES OF CAPITAL
STOCK OF THE COMPANY ARE SET FORTH IN THE RESTATED CERTIFICATE
OF INCORPORATION. THE CORPORATION WILL FURNISH A COPY OF THE
RESTATED CERTIFICATE OF INCORPORATION TO THE HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE UPON REQUEST.
(b) Any certificate issued at any time in exchange or
substitution for any certificate bearing such legends (except a new certificate
issued upon the completion of a Transfer pursuant to a registered public
offering under the Securities Act and made in accordance with the Securities
Act) shall also bear such legends, unless in the opinion of counsel for Holding,
the Restricted Securities or Preferred Stock represented thereby are no longer
subject to the provisions of this Agreement or the restrictions imposed under
the Securities Act or state securities laws, in which case the applicable legend
(or legends) shall at the request of Holder be removed.
2.3 LIMITATIONS ON REPURCHASES, DIVIDENDS, ETC. Each
Stockholder understands that Holding is entering or has entered into certain
financing agreements which will or do contain prohibitions, restrictions and
limitations, among other things, on the ability of Holding to purchase any
Restricted Securities or Preferred Stock (whether pursuant to this Agreement or
otherwise), to pay dividends and to waive, modify or discharge any rights or
obligations under this Agreement.
2.4 TRANSFERS BY STOCKHOLDERS. (a) Each of the Stockholders
severally agrees that it will not Transfer any Restricted Securities, except (i)
to a Permitted Transferee who shall have executed a Joinder Agreement and
thereby become a party to this Agreement; (ii) pursuant to the exercise of any
rights such Stockholder may have under the Registration Rights Agreement; (iii)
pursuant to Section 2.7 or Article III (in the capacity of a Transferor (subject
to compliance with the requirements of Section 2.5) or an Offeree thereunder)
or, with respect to
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<PAGE> 17
Management Stockholders and Additional Stockholders, Section 2.6 or Article IV;
(iv) pursuant to Section 2.5 (and to the extent applicable in the capacity of a
Transferor under Article III); provided, however, that none of the Management
Stockholders or Additional Stockholders shall Transfer any Restricted Securities
pursuant to Section 2.5 prior to August 12, 2001, and none of the Management
Stockholders or Additional Stockholders shall transfer any Options except
pursuant to Section 2.6, 2.7 or 3.2 or Article IV; or (v) after April __, 2008.
In addition, no Sofedit Institutional Stockholder shall transfer any shares of
Series B Preferred other than to a Permitted Transferee. Notwithstanding
anything to the contrary contained herein, no Transfer (including without
limitation any Involuntary Transfer but excluding any Transfer made in
accordance with this Agreement in connection with a Sale of the Company) or
entry into any agreement or arrangements with respect to Transfer will be
permitted or will be effective (other than any Transfer pursuant to Inclusion
Rights exercised in connection with an Article III Offer or in connection with
any registered public offering) to the extent such Transfer, agreement or other
arrangement would result in a change of control, event of default or other
prepayment obligation by Holding (or any of its Subsidiaries) under (A) any
agreement or instrument evidencing Senior Debt or the Preferred Stock or (B) any
successor agreement or instrument with respect to Senior Debt that contains such
a provision which is no more restrictive of the rights of any Aetna Stockholder
to transfer the securities of Holding or any Subsidiary than the most
restrictive provision contained in the agreements and instruments referred to in
clause (A) above.
(b) Each of the Stockholders hereby agrees that the following
events shall be deemed a Transfer of Restricted Securities owned or held of
record by such Stockholder for purposes of this Agreement: (i) the transfer of
all or a material part of the assets of such Stockholder or any Control Person
of such Stockholder to any Person that would not qualify as a Permitted
Transferee of such Stockholder, (ii) the transfer or issuance of any securities
of such Stockholder or such Control Person representing a majority of the voting
power or economic interest of all such securities to any Person that would not
qualify as a Permitted Transferee of such Stockholder or (iii) any other change
of control with respect to such Stockholder or such Control Person, whereby the
Person obtaining such control would not otherwise qualify as a Permitted
Transferee of such Stockholder, except, with respect to any Sofedit
Institutional Stockholder, if such change of control results from a
privitization of such Sofedit Institutional Stockholder, from a public tender
offer for the shares of the ultimate parent of such Sofedit Institutional
Stockholder or from a sale or exchange of shares on a regulated stock exchange.
"Control Person" means any person that possesses, directly or indirectly, the
power to direct or to cause the direction of the management and policies of any
other Person, whether through the ownership of securities, by contract or
otherwise.
2.5 RIGHT OF FIRST OFFER. (a) Except for Transfers permitted
pursuant to clauses (i), (ii), (iii) (in the capacity of an Offeree under
Article III or pursuant to Section 2.7) and (v) of Section 2.4(a), if any
Stockholder (a "Selling Stockholder") desires to Transfer any Restricted
Securities (the "Offered Securities"), prior to any Transfer it shall give
written notice of the proposed Transfer (the "Notice of Intention") to Holding
and to the other Stockholders (the "Prospective Buyers"), specifying the type
and number of Offered Securities which such Selling
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<PAGE> 18
Stockholder wishes to Transfer, the proposed purchase price (or the Fair Market
Value in the case of any deemed transfer under Section 2.4(b)) (the "Offer
Price") therefor and all other material terms and conditions of the proposed
Transfer.
(b) For a period of twenty (20) days following its receipt of
the Notice of Intention, Holding shall have an irrevocable right to purchase all
or any portion of the Offered Securities at the Offer Price and on the other
terms specified in the Notice of Intention, exercisable by delivery of notice
(the "Holding Notice") to the Selling Stockholder, with a copy to each of the
Prospective Buyers, specifying the number of Offered Securities with respect to
which Holding is exercising its option.
(c) For a period of twenty (20) days following its receipt of
the Holding Notice or, if no Holding Notice is so received, for a period of
forty-five (45) days following its receipt of the Notice of Intention, each of
the Prospective Buyers shall have the irrevocable right to purchase at the Offer
Price and on the other terms required to be specified in the Notice of Intention
addressed to it, any or all of the Offered Securities which Holding has elected
not to purchase, Pro Rata among the Prospective Buyers; provided, however, that
in the event any Prospective Buyer does not purchase any or all of its Pro Rata
portion of the Offered Securities, the other Prospective Buyers shall have the
right to purchase such portion, Pro Rata, until all of such Offered Securities
are purchased or until such other Prospective Buyers do not desire to purchase
any more Offered Securities. The right of the Prospective Buyers pursuant to
this Section 2.5(c) shall be exercisable by delivery of a notice (the
"Prospective Buyer Notice") setting forth the maximum number of Offered
Securities that such Prospective Buyer wishes to purchase, including any number
which would be allocated to such Prospective Buyer in the event any other
Prospective Buyer does not purchase all or any portion of its Pro Rata portion,
to the Selling Stockholder, Holding and the other Prospective Buyers and shall
expire if unexercised within such 20-day or 45-day period, as applicable.
(d) Notwithstanding the foregoing provisions of this Section
2.5, unless the Selling Stockholder shall have consented to the purchase of less
than all of the Offered Securities, neither Holding nor any Prospective Buyer
may purchase any Offered Securities unless all of the Offered Securities are to
be purchased (whether by Holding or the Prospective Buyers, or any combination
thereof).
(e) If all notices required to be given pursuant to this
Section 2.5 have been duly given and (i) Holding and the Prospective Buyers
determine not to exercise their respective options to purchase the Offered
Securities at the Offer Price and on the other terms specified in the Notice of
Intention or (ii) Holding and the Prospective Buyers determine, with the consent
of the Selling Stockholder, to exercise their options to purchase less than all
of the Offered Securities or (iii) Holding or any Stockholder that is a
Prospective Buyer fails to purchase any Offered Securities pursuant to and in
accordance with this Section 2.5 other than as a result of a breach of this
Section 2.5 by the Selling Stockholder, then the Selling Stockholder shall have
the right, for a period of one hundred (100) days from the earlier of (A) the
expiration of the last
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<PAGE> 19
applicable option period pursuant to this Section 2.5 or (B) the date on which
such Selling Stockholder receives notice from Holding and the Prospective Buyers
that they will not exercise in whole or in part the options granted pursuant to
this Section 2.5, to sell to a third party that is neither an Associate or an
Affiliate of the Selling Stockholder in a bona fide sale (a "Third Party") the
Offered Securities remaining unsold under this Section 2.5 at a price not less
than the Offer Price and on other terms which shall not be materially more
favorable in the aggregate than those set forth in the Notice of Intention;
provided that prior to any such Transfer to a Third Party, such Third Party
executes and delivers to Holding, for the benefit of Holding and all
Stockholders, a Joinder Agreement and thereby becomes a party to this Agreement
and such Selling Stockholder first complies with the provisions of Article III.
(f) The closing of any purchase and sale to Holding or any
Prospective Buyer pursuant to this Section 2.5 shall take place on such date,
not later than fifteen (15) business days after the later of delivery to the
Selling Stockholder of (i) the Holding Notice and (ii) the Prospective Buyer
Notice, as Holding and the Selling Stockholder shall select. At the closing of
such purchase and sale, the Selling Stockholder shall deliver certificates
evidencing the Offered Securities being sold duly endorsed, or accompanied by
written instruments of transfer in form satisfactory to the purchasers thereof,
duly executed by the Selling Stockholder, free and clear of any Liens, against
delivery of the Offer Price therefor.
(g) Any Transfer by a Stockholder which is subject to the
requirements of Section 2.5 (including to Holding, another Stockholder or to a
Third Party) shall be subject to each other Stockholder's rights of inclusion
under Article III, and prior to any transfer, the Selling Stockholder, if
applicable, shall deliver to the other Stockholders an Inclusion Notice pursuant
to Section 3.1(a).
2.6 INVOLUNTARY TRANSFERS. (a) Upon the occurrence of any
event which would cause any Restricted Securities owned by a Management
Stockholder or by an Additional Stockholder to be Transferred by Involuntary
Transfer, such Management Stockholder or Additional Stockholder (or his or her
legal representative or successor) shall give Holding written notice thereof
stating the terms of such Involuntary Transfer, the identity of the transferee
or proposed transferee, the price or other consideration, if readily
determinable, for which the Restricted Securities are proposed to be or have
been Transferred and the number of Restricted Securities which are the subject
of such Transfer, and Holding shall notify all of the Stockholders of the same.
After its receipt of such notice or, failing such receipt, after Holding
otherwise obtains actual knowledge of such a proposed or completed Involuntary
Transfer, Holding shall have the right and option to purchase (or to have any
designee approved by the Board purchase) all or any portion of such Restricted
Securities, which right shall be exercised by written notice given by Holding to
the transferor (or transferee following the occurrence of any Involuntary
Transfer) within sixty (60) days following the later of (i) Holding's receipt of
such notice or, failing such receipt, Holding's obtaining actual knowledge of
such proposed or completed Transfer and (ii) the date of such Involuntary
Transfer.
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(b) Any purchase pursuant to this Section 2.6 shall be at the
price and on the terms applicable to such Involuntary Transfer; provided,
however, that if the nature of the event giving rise to such Involuntary
Transfer is such that no readily determinable consideration is to be paid for or
assigned to the Transfer of the Restricted Securities, the price to be paid by
Holding and the applicable terms shall be the purchase price and terms
applicable to a Sale Event pursuant to Section 4.2. The closing of the purchase
and sale of such Restricted Securities pursuant to this Section 2.6 shall be
held at the place and on the date established by Holding, which in no event
shall be less than ten (10) nor more than forty-five (45) days from the date on
which Holding gives notice of its election to purchase such Restricted
Securities, and such purchase price shall be determined as of the date of the
notice of election to purchase such Restricted Securities. At such closing, the
Management Stockholder or Additional Stockholder (or his or her legal
representative or successor) shall deliver the certificates evidencing the
Restricted Securities to be purchased by Holding, as applicable, accompanied by
stock powers, duly endorsed in blank, or duly executed instruments of transfer,
and any other documents that are necessary to Transfer to Holding good title to
such Restricted Securities free and clear of all Liens and, concurrently with
such delivery, Holding shall deliver to the transferor thereof the full amount
of the purchase price therefor by certified or bank cashier's check.
(c) Notwithstanding anything to the contrary contained herein,
in the event a purchase (or the payment of the purchase price) by Holding
pursuant to this Section 2.6 would violate or conflict with any statute, rule,
injunction, regulation, order, judgment or decree applicable to Holding or any
of its Subsidiaries or by which any of them or their respective properties may
be bound or affected or would result in any breach of, or constitute a default
(or an event which with notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the property or assets of Holding or any of its Subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, franchise
or other instrument or obligation to which Holding or any of its Subsidiaries is
a party or by which any of their respective properties is bound or affected, the
rights of Holding to purchase (or to have any designee purchase) the Restricted
Securities of any Management Stockholder or Additional Stockholder shall be
suspended until the date which falls thirty (30) days following such time as
such prohibition first lapses or is waived and no such default would be caused.
For the purposes of this Section 2.6 only, the date of such lapse or waiver
shall be deemed the date of the Involuntary Transfer for purposes of the
purchase and sale of Restricted Securities pursuant to this Section 2.6 and such
purchase price shall be determined as of the date such prohibition lapses or is
waived. Holding shall use its reasonable efforts to obtain a waiver of any such
prohibition but shall not be obligated to incur any additional interest or other
costs or charges or to make any prepayment with respect to any indebtedness in
connection with such efforts.
(d) Notwithstanding anything to the contrary contained in this
Section 2.6, any event giving rise to an Involuntary Transfer which is also
subject to the provisions of Article IV shall be governed by the provisions of
Article IV.
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2.7 DRAG ALONG SALE. (a) If the Sofedit Stockholders, so long
as they own in the aggregate at least thirty-five percent (35%) of the shares of
Common Stock on a Fully Diluted Basis, (i) propose to Transfer to a third party
(which is not an Associate or an Affiliate of any of such Sofedit Stockholders)
(the "Acquiror") all of their Restricted Securities, the Sofedit Stockholders
shall have the right, subject to Section 2.7(f), to require all the other
Stockholders to sell or transfer all (but not less than all) of their Restricted
Securities to such third party on the same terms; or (ii) propose the Transfer
of all or substantially all of the assets or business (whether by merger, sale
or otherwise) of Holding to any such third party, the Sofedit Stockholders shall
have the right, subject to Section 2.7(f) (a "Drag-Along Right"), to require (x)
the Stockholders to take all action necessary or appropriate in order to cause
Holding to take all action necessary or appropriate to give effect to such
transaction and (y) the Stockholders to approve such transaction in their
capacity as stockholders of Holding (a transaction described in clause (i) or
(ii), a "Drag-Along Sale"); provided that upon the consummation of any
transaction resulting in a sale or transfer of all or substantially all of the
assets or business of Holding (whether by merger, sale or otherwise) Holding
will immediately distribute all of the net proceeds of such transaction to the
Stockholders, in accordance with their respective rights and privileges.
(b) Notwithstanding the foregoing, in the event that (i)
pursuant to an exercise of the Drag-Along Rights Holding (or one or more of its
Subsidiaries) proposes to voluntarily sell all or substantially all of the
consolidated assets of Holding to a third party in a transaction and (ii)
Holding intends to pay the net proceeds therefrom to its stockholders in a
distribution which is taxable as a dividend (and not pursuant to a plan of
liquidation) resulting in disparate tax treatment to the Stockholders, then the
Sofedit Stockholders shall only have the right to effect such transaction if the
Aetna Stockholders have consented thereto (which consent shall not be
unreasonably withheld or delayed).
(c) In order to exercise a Drag-Along Right, the Sofedit
Stockholders shall notify each Stockholder, such notice to set forth the terms
and conditions of such proposed sale. Subject to Section 2.7(b), each such
Stockholder will take all actions reasonably requested by the Sofedit
Stockholders in connection with the consummation of such sale, and within twenty
(20) business days of the receipt of such notice (or such longer period of time
as the Sofedit Stockholders shall designate in such notice), if such transaction
is structured as a sale of assets or a merger, such Stockholders shall approve
the transaction in their capacities as stockholders of Holding (subject to
Section 2.7(b)), and if such transaction is a sale of Restricted Securities,
such Stockholders shall cause all of their respective Restricted Securities to
be sold to the designated purchaser on the same terms and conditions and for the
same per share consideration as the Restricted Securities being sold by the
Sofedit Stockholders; provided, however, that if any of such Restricted
Securities are Equity Equivalents, the purchase price of such Equity Equivalents
shall equal the aggregate price that would be paid for the shares of Common
Stock issuable upon the exercise thereof minus the aggregate exercise or
conversion price under such Equity Equivalents for such shares of Common Stock
and if any Stockholders are given a choice as to the type or amount of
consideration to be received in respect of a specific security of Holding, all
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Stockholders will be given the same choice. In furtherance of, and not in
limitation of the foregoing, in connection with a Drag-Along Sale, subject to
Section 2.7(b) and Section 2.7(e) each Stockholder will (i) raise no objections
against the Drag-Along Sale or the process pursuant to which it was arranged,
(ii) waive any appraisal rights under Section 262 of the Delaware General
Corporation Law and other similar rights, and (iii) execute all documents
containing such terms and conditions as those executed by other Stockholders as
reasonably directed by the Sofedit Stockholders.
(d) In a transaction effected pursuant to the exercise of the
Drag-Along Rights pursuant to this Section 2.7, the Aetna Stockholders and/or
the Sofedit Institutional Stockholders may elect, upon notice to the Sofedit
Stockholders and Holding, to require that there be delivered to the Aetna
Stockholders and/or the Sofedit Institutional Stockholders, as applicable, a
fairness opinion, addressed to the Aetna Stockholders, of an internationally
recognized investment banking firm jointly selected by the Sofedit Stockholders
and the Aetna Stockholders and/or the Sofedit Institutional Stockholders, as
applicable (which selection shall be made promptly and in good faith by such
Stockholders and whose reasonable fees and expenses shall be paid by the Aetna
Stockholders and/or the Sofedit Institutional Stockholders, as applicable), to
the effect that the consideration to be paid to the Stockholders is fair. Such
notice must be given within ten (10) days after receipt of the notice of
exercise of Drag-Along Rights under Section 2.7(c). If the consideration
proposed to be paid to the Stockholders in respect of the Drag Along Sale is
less than the valuation established by such investment banking firm, then the
Sofedit Stockholders shall not have the right to effect such Drag-Along Sale
pursuant to this Section 2.7 without the consent of the Aetna Stockholders
and/or the Sofedit Institutional Stockholders, as applicable. The fees and
expenses of such investment banking firm shall be treated as a transaction
expense.
(e) Unless otherwise agreed by any Stockholder with respect to
the obligations of such Stockholder, all contractual indemnification and
contribution payments required to be made by any Stockholder in connection with
any Drag-Along Sale shall be limited to payments made from the proceeds of such
Drag-Along Sale set aside in an escrow account or similar arrangement, except
with respect to indemnification or contribution payments which arise from a
misrepresentation or breach by such Stockholder with respect to matters of title
to such Stockholders' securities and valid authorization by such Stockholder
with respect to the Drag-Along Sale. The amount of proceeds payable to each
Stockholder so set aside in respect of any such indemnification or contribution
payments shall be proportionate to the amount of consideration received or to be
received by such Stockholder in relation to all Stockholders. All Stockholders
will bear their pro rata share of the costs and expenses incurred in connection
with a Drag-Along Sale to the extent such costs are incurred for the benefit of
all Stockholders and are not otherwise paid by Holding or the purchaser and so
long as such costs and expenses are reimbursed solely out of the proceeds of
such Drag-Along Sale. Costs incurred by any Stockholder on its own behalf will
not be shared by any other Stockholder.
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(f) Notwithstanding anything contained herein to the contrary,
no Drag-Along Sale may be consummated unless prior to or contemporaneously
therewith, all of the outstanding Preferred Stock and Debentures have been paid
or redeemed in full in cash.
ARTICLE III
RIGHTS OF INCLUSION
3.1 RIGHTS OF INCLUSION. (a) If any Stockholder, other than
any Sofedit Institutional Stockholder or any Institutional Stockholder, (the
"Transferor") proposes to Transfer (subject to compliance with the requirements
of Section 2.5) any Restricted Securities and/or shares of Preferred Stock
("Transferor Shares") to any Person (the "Buyer"), other than as permitted by
Section 3.3, then, as a condition to such Transfer, the Transferor shall cause
the Buyer to include an offer (the "Article III Offer") to each of the other
Stockholders (collectively, the "Offerees"), to sell to the Buyer, at the option
of each Offeree, that number of shares of Restricted Securities and/or Preferred
Stock determined in accordance with Section 3.1(b), at the same time(s) and on
the same terms and conditions as are applicable to the Transferor Shares. The
Transferor shall provide a written notice (the "Inclusion Notice") of the
Article III Offer to each Offeree.
(b) Each Offeree shall have the right (an "Inclusion Right")
to sell pursuant to the Article III Offer part or all of a Pro Rata number of
its shares of Restricted Securities and/or Preferred Stock as is sold by the
Transferor, provided, however, that in the event any Offeree does not exercise
his, her or its Inclusion Right as to any or all of its Pro Rata portion of its
Restricted Securities and/or Preferred Stock, the other Offerees shall have the
right to sell their Restricted Securities and/or Preferred Stock, Pro Rata, in
an amount equal to such remaining portion of Restricted Securities and/or
Preferred Stock not being sold by such non-exercising Offeree until all of such
remaining portion is eliminated or until such other Offerees do not desire to
sell any more of their Restricted Securities and/or Preferred Stock. The
Inclusion Right shall be exercisable by delivery of a notice by each Offeree,
setting forth the number of Restricted Securities and/or Preferred Stock that
such Offeree wishes to sell, including any number which would be allocated to
such Offeree in the event any other Offeree does not exercise his, her or its
Inclusion Right as to all or any of its Pro Rata portion, to the Transferor
within twenty (20) days of delivery of the Inclusion Notice. The Transferor
shall have the right to sell the balance of the shares of Restricted Securities
and/or Preferred Stock not being sold by such Offerees as provided for above and
no other Offeree shall have any Inclusion Right with respect thereto. Any
Offeree which owns Options may exercise and sell shares of Common Stock pursuant
to the Article III Offer, and the purchase price therefor shall equal the
aggregate price that would be paid for the shares of Common Stock issuable upon
the exercise thereof minus the aggregate exercise price under such Option for
such shares of Common Stock.
3.2 ARTICLE III SALES. (a) Upon its exercise of an Inclusion
Right, each Offeree shall deliver to the Transferor a certificate or
certificates representing the shares of
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Restricted Securities and/or Preferred Stock to be sold or otherwise disposed of
pursuant to the Article III Offer by such Offeree, free and clear of all Liens,
and a limited power-of-attorney authorizing the Transferor to sell or otherwise
dispose of such shares of Restricted Securities and/or Preferred Stock pursuant
to the terms of the Article III Offer; provided, however, for so long as they
own Restricted Securities and/or Preferred Stock and are subject to this
Agreement, Prudential and the State of Michigan shall not be required to execute
a limited power-of-attorney; and provided, further, Prudential and the State of
Michigan hereby agree to take all reasonable actions to effectuate a sale by
such Stockholder pursuant to an Article III Offer.
The Transferor shall have one hundred (100) days, commencing
on the expiration of the Inclusion Rights, in which to sell or otherwise dispose
of, on behalf of itself and the Offerees, up to the number of Restricted
Securities and/or Preferred Stock covered by the Article III Offer (and the
number of Transferor Shares) to the Buyer. If all such shares are not sold to
the Buyer, the Transferor, at its option, may elect to sell on behalf of itself
and the Offerees such number of shares as the Buyer will purchase, Pro Rata
among the Transferor and the Offerees, as nearly as practicable. The material
terms of such sale, including, without limitation, price and form of
consideration, shall be as set forth in the Inclusion Notice. If at the end of
such 100-day period the Transferor has not completed the sale or other
disposition of all the Transferor Shares and all the Offerees' Restricted
Securities and/or Preferred Stock (if any) proposed to be sold, the Transferor
shall return to each of the Offerees its respective certificates, if any,
representing Restricted Securities and/or Preferred Stock which the Offerees
delivered for sale or other disposition pursuant to this Article III and which
were not sold pursuant thereto and the provisions of this Article III shall
continue to be in effect.
(b) Promptly after the consummation of the sale or other
disposition of the Transferor Shares and Restricted Securities and/or Preferred
Stock of the Offerees to the Buyer pursuant to the Article III Offer, the
Transferor shall notify the Offerees thereof, and the Buyer shall pay to the
Transferor and each of the Offerees their respective portions of the sales price
of the Restricted Securities and/or Preferred Stock sold or otherwise disposed
of pursuant thereto, and shall furnish such other evidence of the completion of
such sale or other disposition and the terms thereof as may be reasonably
requested by the Offerees.
(c) Notwithstanding anything to the contrary contained in this
Article III, except for the Transferor's obligation to return to each Offeree
any certificates representing the Restricted Securities and/or Preferred Stock,
there shall be no liability on the part of the Transferor to any Stockholder in
the event that the proposed sale pursuant to this Article III is not consummated
for whatever reason. Whether a sale of Restricted Securities and/or Preferred
Stock is effected pursuant to this Article III by the Transferor is in the sole
and absolute discretion of the Transferor.
3.3 CERTAIN TRANSFERS. The provisions of this Article III
shall apply to any Transfer or proposed Transfer of Restricted Securities and/or
Preferred Stock by any Stockholder other than: (a) pursuant to a registration
statement filed under the Securities Act, (b) to a
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Permitted Transferee who shall have executed a Joinder Agreement and thereby
become a party to this Agreement and (c) to any Person who shall have executed a
Joinder Agreement and thereby become a party to this Agreement, if such
Transfer, taken together with all other Transfers of Restricted Securities
and/or Preferred Stock by such Stockholder (not including Transfers described in
clauses (a) or (b) above), represent, in the aggregate, less than five percent
(5%) of the Common Stock, on a Fully Diluted Basis, or of the Preferred Stock,
as the case may be, held in the aggregate by such Stockholder on the Closing
Date, appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar event.
ARTICLE IV
REPURCHASE OF RESTRICTED SECURITIES OWNED
BY MANAGEMENT STOCKHOLDERS OR ADDITIONAL STOCKHOLDERS
4.1 SALE EVENT. In the event that any Management Stockholder
shall cease to be employed by Holding or any of its Subsidiaries for any reason,
or any Additional Stockholder that is a director of Holding or any of its
Subsidiaries shall cease to be such a director for any reason, or in each case,
including death, permanent disability, termination for cause or without cause,
retirement or otherwise (such termination being referred to herein as a "Sale
Event"), but in each case subject to Section 4.4, such Management Stockholder
(or his or her personal representative) or Additional Stockholder (or his or her
personal representative) shall promptly notify Holding and each other
Stockholder of the applicable Sale Event and, within ninety (90) days after
Holding's receipt of such notice, Holding or, at the option of Holding, any
employee, director or other designee of Holding, which employee, director or
other designee shall have been designated by a unanimous vote of the Board (a
"Holding Designee") may, at its option elect to purchase, exercisable by written
notice (a "Purchase Notice") delivered to such Management Stockholder (or his or
her personal representative) or Additional Stockholder (or his or her personal
representative) and, in each case, his or her respective Permitted Transferees
who hold Restricted Securities (collectively, "Sellers") (with a copy to the
Aetna Stockholders and the Sofedit Stockholders), and upon the giving of such
notice, Sellers shall be obligated to sell those Restricted Securities of
Sellers which are designated in the Purchase Notice.
4.2 PURCHASE PRICE. The purchase price for each share of
Common Stock to be purchased pursuant to Section 4.1 shall be (a) if the Sale
Event did not occur as a result of a termination for Cause the Fair Market Value
thereof as of the date of the Sale Event, (b) if the Sale Event occurred as a
result of a termination for Cause the lower of (x) the Fair Market Value thereof
as of the date of the Sale Event and (y) the Original Cost thereof. Such
purchase price shall be paid in cash or by certified or cashier's bank check.
Notwithstanding anything to the contrary contained herein, no provision of this
Agreement shall prevent or otherwise restrict the Board from determining (in its
discretion) that Holding will purchase Restricted Securities from Management
Stockholders or Additional Stockholders pursuant to Section 4.1 at a price per
share in excess of the purchase price specified in this Section 4.2.
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4.3 CLOSING. Subject to Section 4.4, the closing for all
purchases and sales of Restricted Securities provided for in this Article IV
shall be held at the principal executive offices of Holding at 10:00 a.m., local
time, on the 30th day after the determination of the purchase price in respect
thereof determined in accordance with Section 4.2 or at such other date and time
as shall have been agreed to by the Board and the Seller; provided, however,
that if any Seller who has become obligated to sell Restricted Securities is
deceased on such 30th day as aforesaid and such deceased person's personal
representative shall not have been appointed and qualified by such date, then
unless otherwise agreed to as provided above, the closing shall be postponed
until the 10th day after the appointment and qualification of such personal
representative.
All Restricted Securities to be sold pursuant to this Article
IV shall be delivered to the purchaser at the aforesaid closing free and clear
of all Liens. The purchaser will be entitled to receive customary
representations as to title, authority and capacity to sell and to require a
guaranteed signature of the Seller, as applicable. Each Seller hereby appoints
Holding as attorney-in-fact to transfer such Restricted Securities on the books
of Holding in the event of a sale pursuant to this Article IV. Such Sellers
shall take all such actions as Holding or any other purchaser shall request as
necessary to vest in Holding or any other purchaser at such closing good title
to such Restricted Securities, free and clear of all Liens.
4.4 POSTPONEMENT. Notwithstanding anything to the contrary
contained herein, in the event a purchase (or the payment of the purchase price)
by Holding pursuant to this Article IV would (a) violate or conflict with any
statute, rule, injunction, regulation, order, judgment or decree applicable to
Holding or any of its Subsidiaries or by which any of them or their respective
properties may be bound or affected, (b) result in any breach of, or constitute
a default (or an event which with notice or lapse of time, or both, would become
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the property or assets of Holding or any of its Subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, franchise
or other instrument or obligation to which Holding or any of its Subsidiaries is
a party or by which any of their respective properties is bound or affected or
(c) in the judgment of the Board, jeopardize the financial health of Holding or
its Subsidiaries or otherwise have a material adverse effect on the business,
condition (financial or otherwise), results of operations or assets or
properties of Holding, the rights of Holding to purchase the Restricted
Securities of the Sellers with respect to whom the Sale Event has occurred
pursuant to this Article IV shall be suspended, in the case of clauses (a) or
(b) above, until the date which falls thirty (30) days following such time as
such prohibition first lapses or is waived and no such default would be caused
and in the case of clause (c) above, until the date which falls thirty (30) days
following such time as the Board determines that such purchase (or payment of
the purchase price) would no longer jeopardize the financial health of Holding
on a consolidated basis or otherwise have a material adverse effect on Holding
on a consolidated basis. For the purposes of this Section 4.4 only, the date of
such lapse, waiver or determination shall be deemed the date of the relevant
Sale Event
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for purposes of the purchase and sale and determination of the Purchase Price of
Restricted Securities pursuant to this Article IV. Holding shall use its
reasonable efforts to obtain a waiver of any such prohibition but shall not be
obligated to incur any additional interest or other costs or charges or to make
any prepayment with respect to any indebtedness in connection with such efforts.
ARTICLE V
CERTAIN COVENANTS OF THE PARTIES
5.1 REGISTRATION OF COMMON STOCK. In the event of, and in
order to facilitate, a registration by Holding of Common Stock under the
Securities Act which will constitute a Qualifying Offering, each Stockholder
shall, at a meeting convened for the purpose of amending the Certificate, vote
(which vote shall become effective immediately prior to the closing of the sale
of Common Stock pursuant to such registration by Holding): (a) to remove from
the Certificate requirements, if any such requirements are at such time imposed
thereby, relating to preemptive rights with respect to Common Stock; and (b) to
increase the number of authorized shares of Common Stock and, if necessary,
change the number of issued and outstanding shares of Common Stock, whether by
stock split, stock dividend or otherwise, or change its par value or effect any
other reclassification, recapitalization or similar event relating to the Common
Stock; in the case of each of clauses (a) and (b) above, as recommended by a
majority of the members of the Board to facilitate such registration.
Notwithstanding the foregoing, nothing set forth herein shall be construed to
allow any stock of any class or series to be treated differently from any other
stock of the same class or series or to reduce the rights afforded under Article
VI hereof.
5.2 MANAGEMENT STOCKHOLDERS; ADDITIONAL STOCKHOLDERS. The
parties hereto agree that as a condition precedent to the issuance by Holding of
shares of Common Stock or of Equity Equivalents to any Person other than any
Aetna Stockholder, any Sofedit Stockholder or any Sofedit Institutional
Stockholder, Holding shall require such Person to execute a Joinder Agreement
and thereby enter into and become a party to this Agreement. From and after such
time, the term "Additional Stockholder" shall be deemed to include such other
Person. Nothing contained herein nor the ownership of any Restricted Securities
shall confer upon any Management Stockholder or Additional Stockholder the right
to employment or to remain in the employ of Holding or any of its Subsidiaries.
Notwithstanding the foregoing, to the extent approved by a majority of the Board
and specified in any Joinder Agreement (or amendment thereto) pursuant to which
any Additional Stockholder may become a party hereto, the provisions of this
Agreement may be varied to be more or less restrictive with respect to any such
Additional Stockholder or to reduce the rights afforded by Article VI hereof.
5.3 STOCKHOLDERS LIST; CERTAIN NOTICES. Upon the request of
any Sofedit Stockholder, Sofedit Institutional Stockholder, CVC Stockholder,
Prudential, Pruco, Berkshire or
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the State of Michigan, Holding shall deliver promptly to such Sofedit
Stockholder, Sofedit Institutional Stockholder, CVC Stockholder, Prudential,
Pruco, Berkshire or the State of Michigan, respectively, as the case may be, a
list setting forth the names of all Stockholders and the number of shares of
each series of Class A Common and Class B Common owned by each Stockholder. In
addition, Holding shall give each of the CVC Stockholders, each of the Sofedit
Stockholders and each of the Sofedit Institutional Stockholders prior written
notice of (a) the conversion of any shares of any class or series of Common
Stock or any Preferred Stock and (b) any record transfer of Restricted
Securities, setting forth the name of the transferee and the number and type of
Restricted Securities being so transferred.
5.4 REGULATORY COMPLIANCE COOPERATION.
(a) Before Holding redeems, purchases or otherwise
acquires, directly or indirectly, or converts or takes any action with respect
to the voting rights of, any shares of any class or series of its capital stock
or any securities convertible, exchangeable or exercisable for or into any
shares of any class or series of its capital stock, Holding will give written
notice of such pending action to CVC. Upon the written request of any CVC
Stockholder made within twenty (20) days after its receipt of any such notice,
stating that after giving effect to such action such CVC Stockholder would have
a Regulatory Problem (as defined below), Holding will defer taking such action
for such period (not to extend beyond forty-five (45) days after such CVC
Stockholder's receipt of Holding's original notice) as such CVC Stockholder
requests to permit it and its Affiliates to reduce the quantity of securities
owned by them in order to avoid the Regulatory Problem. In the event Holding or
any CVC Stockholder is precluded from taking any action under this Agreement
within any allotted period of time as a consequence of this Section, such period
of time shall be extended by the number of days during which Holding or such CVC
Stockholder is precluded from acting.
(b) In the event that CVC determines that it has a
Regulatory Problem, Holding agrees to take all such actions as are reasonably
requested by CVC in order to (i) effectuate and facilitate any transfer by the
CVC Stockholders of any securities of Holding then held by the CVC Stockholders
to any Person designated by CVC, such transfer to be at the expense of CVC only
to the extent that the expenses in facilitating such transfer were incurred
solely to cure a Regulatory Problem, (ii) permit the CVC Stockholders (or any of
their Affiliates) to exchange all or a portion of any voting security then held
by them on a share-for-share basis for shares of a non-voting security of
Holding, which non-voting security shall be identical in all respects to the
voting security exchanged for it, except that it shall be non-voting and shall
be convertible into a voting security on such terms as are requested by the CVC
Stockholders in light of regulatory considerations then prevailing, and (iii)
continue and preserve the respective allocation of the voting interests with
respect to Holding provided for herein, and with respect to CVC's ownership of
Holding's securities. Such actions may include, but shall not necessarily be
limited to, entering into such additional agreements, adopting such amendments
to the Certificate and By-laws of Holding and taking such additional actions as
are reasonably requested by CVC in order to effectuate the intent of the
foregoing.
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(c) In addition, Holding will not be a party to any
merger, consolidation, recapitalization or other transaction pursuant to which
CVC would be required to take any voting securities, or any securities
convertible, exchangeable or exercisable for or into voting securities, which
might reasonably be expected to cause CVC to have a Regulatory Problem. For
purposes of this Agreement, "Regulatory Problem" means any set of facts or
circumstances wherein it has been asserted by any governmental agency or other
authority or CVC reasonably believes that, such Person and such Person's
Affiliates own, control or have power over a greater quantity of securities of
any kind issued by Holding than are permitted under any requirement of any
governmental authority.
5.5 FINANCIAL DISCLOSURE. For so long as any of the Sofedit
Stockholders, Sofedit Institutional Stockholders, CVC, Prudential, Pruco,
Berkshire, the State of Michigan, Jerome Singer, Douglas A. Thal, Robert J.
Klein or Steven Singer owns any Restricted Securities or Equity Equivalents,
Holding shall deliver to the Sofedit Stockholders, Sofedit Institutional
Stockholders, CVC, Prudential, Pruco, Berkshire, the State of Michigan, Jerome
Singer, Douglas A. Thal, Robert J. Klein or Steven Singer, as the case may be:
(a) as soon as available but in any event within thirty (30) days after the end
of each monthly accounting period in each fiscal year, unaudited consolidating
and consolidated statements of income and cash flows of Holding and its
Subsidiaries for such monthly period and for the period from the beginning of
the fiscal year to the end of such month, and unaudited consolidating and
consolidated balance sheets of Holding and its Subsidiaries as of the end of
such monthly period, setting forth in each case comparisons to the annual budget
and to the corresponding period in the preceding fiscal year, and all such
statements shall be prepared in accordance with generally accepted accounting
principles, consistently applied, subject to the absence of footnote disclosures
and to normal year-end adjustments, and shall be accompanied by an Officer's
Certificate; (b) within forty-five (45) days after the end of each quarterly
accounting period in each fiscal year, unaudited consolidating and consolidated
statements of income and cash flows of Holding and its Subsidiaries for such
quarterly period, and unaudited consolidating and consolidated balance sheets of
Holding and its Subsidiaries as of the end of such quarterly period, setting
forth in each case comparisons to the annual budget and to the corresponding
period in the preceding fiscal year, and all such statements shall be prepared
in accordance with generally accepted accounting principles, consistently
applied, subject to the absence of footnote disclosures and to normal year-end
adjustments, and shall be accompanied by an Officer's Certificate; (c) within
ninety (90) days after the end of each fiscal year, audited consolidating and
consolidated statements of income and cash flows of Holding and its Subsidiaries
for such fiscal year, and audited consolidating and consolidated balance sheets
of Holding and its Subsidiaries as of the end of such fiscal year, setting forth
in each case comparisons to the annual budget and to the preceding fiscal year,
all prepared in accordance with generally accepted accounting principles,
consistently applied, and accompanied by (i) with respect to the consolidated
portions of such statements, an opinion of an independent accounting firm of
recognized national standing, (ii) a certificate from such accounting firm,
addressed to the Board, stating that in the course of its examination nothing
came to its attention that caused it to believe that there was any default by
Holding or any Subsidiary in the fulfillment of or compliance with any of the
terms, covenants, provisions or
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conditions of any material agreement to which Holding or any Subsidiary is a
party or, if such accountants have reason to believe any default by Holding or
any Subsidiary exists, a certificate specifying the nature and period of
existence thereof and (iii) a copy of such firm's annual management letter to
the Board; (d) promptly upon receipt thereof, any additional reports, management
letters or other detailed information concerning significant aspects of the
operations or financial affairs of Holding given to Holding by its independent
accountants (and not otherwise contained in other materials provided hereunder);
(e) at least thirty (30) days prior to the end of each fiscal year, an annual
budget prepared on a monthly basis for Holding and its Subsidiaries for the
following fiscal year (displaying anticipated statements of income and cash
flows and balance sheets), and following preparation thereof quarterly revisions
of such budget and any other significant budgets prepared by Holding or its
Subsidiaries, and within thirty (30) days after any monthly period in which
there is a material adverse deviation from the annual budget, an Officer's
Certificate explaining the deviation and what actions Holding has taken and
proposes to take with respect thereto; (f) promptly upon their becoming
available drafts of the annual financial statements of Holding and its
Subsidiaries, together with a draft report of Holding's independent public
accountants thereon, and will afford CVC reasonable opportunity to review and
comment on such drafts; and (g) with reasonable promptness, such other
information and financial data concerning Holding and its Subsidiaries as any
Person entitled to receive information under this Section 5.5 may reasonably
request (provided that any Stockholders may elect in writing not to receive any
such financials described in this Section 5.5). Additionally, a designee of the
Aetna Stockholders shall have the right to inspect all books and records of
Holding and its Subsidiaries.
5.6 PURCHASER REPRESENTATIVE. If Holding enters into any
negotiation or transaction involving the issuance of securities of another
Person to the Stockholders for which Rule 506 (or any similar rule then in
effect) promulgated under the Securities Act by the Commission may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), each Stockholder that is a natural
person will, at the request of Holding, appoint a purchaser representative (as
such term is defined in Rule 501 under the Securities Act) reasonably acceptable
to Holding. If any such Stockholder appoints the purchaser representative
designated by Holding, Holding will pay the fees of such purchaser
representative, but if any such Stockholder declines to appoint the purchaser
representative designated by Holding, such Stockholder will appoint, at his or
her own expense, another purchaser representative reasonably acceptable to
Holding.
ARTICLE VI
RIGHT OF OFFER
6.1 RIGHTS OF OFFER. Prior to Holding issuing or selling, or
Aetna Holdings selling, any New Common Stock to any Person, Holding or Aetna
Holdings, as the case may be, shall offer (the "New Common Stock Offer") each
Stockholder (the "New Common Stock
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Offerees") an opportunity to purchase any or all of its Pro Rata portion of such
New Common Stock on the same terms and conditions as the New Common Stock being
offered and, if such New Common Stock is to be issued as a part of a unit of
securities, Holding or Aetna Holdings, as the case may be, shall offer each such
New Common Stock Offeree an opportunity to purchase any or all of its Pro Rata
portion of such unit of securities (together with the New Common Stock, the "New
Common Stock Units") on the same terms and conditions as the New Common Stock
being offered; provided, however, that in the event any New Common Stock Offeree
does not purchase any or all of its Pro Rata portion of either New Common Stock
or New Common Stock Units, as the case may be, the other New Common Stock
Offerees shall have the right to purchase such portion, Pro Rata, until all of
such New Common Stock or New Common Stock Units, as the case may be, are
purchased or until such other New Common Stock Offerees or the CVC Stockholders
do not desire to purchase any more New Common Stock or New Common Stock Units,
as the case may be. Holding shall make such New Common Stock Offer by providing
each New Common Stock Offeree with a notice (the "New Common Stock Notice")
setting forth (i) each New Common Stock Offeree's Pro Rata portion of such New
Common Stock or of such New Common Stock Units, as the case may be, (ii) the
consideration to be paid for each share of New Common Stock or each unit of New
Common Stock Units, as the case may be, and (iii) all other material terms of
such New Common Stock Offer.
Notwithstanding the foregoing, if the issuance and sale is to any Sofedit
Stockholder, any Sofedit Institutional Stockholder or CVC and is in conjunction
with the borrowing of money from such Sofedit Stockholder, Sofedit Institutional
Stockholder, CVC or any of their respective Affiliates or the guaranteeing of
debt of Holding or its Subsidiaries by such Sofedit Stockholder, Sofedit
Institutional Stockholder, CVC or such Affiliate, then no New Common Stock
Offeree shall have any preemptive rights as set forth herein unless such New
Common Stock Offeree purchases or participates, on a pro rata basis, in the
related financing or guarantee, as the case may be, on the same terms as such
Sofedit Stockholder, Sofedit Institutional Stockholder, CVC, or such Affiliate,
as the case may be.
In order for any New Common Stock Offerees to accept the New
Common Stock Offer, such New Common Stock Offeree shall on or before twenty (20)
days following its receipt of a New Common Stock Notice deliver written notice
of its acceptance ("Acceptance Notice") to Holding and the other New Common
Stock Offerees (the expiration of such twenty (20) days being referred to herein
as the "Acceptance Date"). The Acceptance Notice shall set forth the maximum
number of New Common Stock or New Common Stock Units, as the case may be, that
such New Common Stock Offeree wishes to purchase, including any number which
would be allocated to such New Common Stock Offeree in the event any other New
Common Stock Offeree does not purchase all or any portion of its Pro Rata
portion.
Within one hundred twenty (120) days following the Acceptance
Date, Holding or Aetna Holdings, as the case may be, (i) shall issue or sell New
Common Stock or New Common Stock Units, as the case may be, to each New Common
Stock Offeree who timely accepted such New Common Stock Offer upon the terms
specified in such New Common Stock Offer, if
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<PAGE> 32
applicable, and (ii) may issue or sell New Common Stock or New Common Stock
Units, as the case may be, to any other Person or Persons in an amount not to
exceed the aggregate amount offered pursuant to the New Common Stock Offer (less
the aggregate amount of shares of New Common Stock or units of New Common Stock
Units, as the case may be, issued or sold to New Common Stock Offerees pursuant
to the foregoing clause (i)) and for a price which equals or exceeds the price
per share of New Common Stock or per unit of New Common Stock Units, as the case
may be, specified in the New Common Stock Offer.
ARTICLE VII
MISCELLANEOUS
7.1 GOVERNING LAW. The construction, validity and
interpretation of this Agreement shall be governed and construed in accordance
with the domestic laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York, except to the extent that the
General Corporation Law of the State of Delaware applies as a result of Holding
being incorporated in the State of Delaware, in which case the General
Corporation Law shall apply.
7.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and may be amended, modified or supplemented only by a written instrument duly
executed by Holding, the Sofedit Stockholders and the Aetna Stockholders;
provided that Holding shall provide twenty (20) days' prior written notice of
any such amendment not governed by the next proviso; and provided further that
(a) any amendment, modification or supplement that adversely and
disproportionately affects, in their capacity as Stockholders, the Sofedit
Institutional Stockholders, the Institutional Stockholders, Former Management
Stockholders, Management Stockholders or Additional Stockholders, as the case
may be, shall also require the consent of the Sofedit Institutional
Stockholders, the Institutional Stockholders, Former Management Stockholders,
Management Stockholders or Additional Stockholders, respectively, and (b) any
amendment, modification or supplement that adversely and disproportionately
affects less than all of the Sofedit Stockholders, Sofedit Institutional
Stockholders, Aetna Stockholders or Additional Stockholders, as the case may be,
shall also require the consent of the Sofedit Stockholders, Sofedit
Institutional Stockholders, Aetna Stockholders, or Additional Stockholders so
affected. In the event of an amendment, modification or supplement of this
Agreement in accordance with its terms, the Stockholders shall cause the Board
to meet within thirty (30) calendar days following such amendment, modification
or supplement, or as soon thereafter as is practicable for the purpose of
adopting any amendment to the Certificate and By-Laws of Holding that may be
required as a result of such amendment, modification or supplement to this
Agreement, and, if required, proposing such amendments to the stockholders
entitled to vote thereon. The Stockholders
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hereby agree to vote their shares of voting Common Stock to approve such
amendments to the Certificate and By-Laws of Holding.
7.3 TERM. This Agreement shall terminate upon the earliest to
occur of (i) a Qualifying Offering, (ii) a Sale of the Company pursuant to
clause (i) of the definition of "Sale of the Company", and (iii) upon the
distribution of any proceeds from a Sale of the Company to the Stockholders
pursuant to clause (ii) of the definition of "Sale of the Company".
7.4 CERTAIN ACTIONS. Unless otherwise expressly provided
herein, whenever any action is required under this Agreement by:
(i) the CVC Stockholders (as a group, as opposed to the
exercise by any such Stockholder of its individual rights hereunder),
it shall be by the affirmative vote of the holders of shares of Common
Stock representing more than fifty percent (50%) of the Common Stock
then held by the CVC Stockholders as a group, or as otherwise agreed in
writing by the CVC Stockholders as a group.
(ii) the Berkshire Stockholders (as a group, as opposed to the
exercise by any such Stockholder of its individual rights hereunder),
it shall be by the affirmative vote of the holders of shares of Common
Stock representing more than fifty percent (50%) of the Common Stock on
a Fully Diluted Basis then held by the Berkshire Stockholders, as a
group;
(iii) the Prudential Stockholders (as a group, as opposed to
the exercise by any such Stockholder of its individual rights
hereunder), it shall be by the affirmative vote of the holders of
shares of Common Stock representing more than fifty percent (50%) of
the Common Stock on a Fully Diluted Basis then held by the Prudential
Stockholders, as a group;
(iv) the Pruco Stockholders (as a group, as opposed to the
exercise by any such Stockholder of its individual rights hereunder),
it shall be by the affirmative vote of the holders of shares of Common
Stock representing more than fifty percent (50%) of the Common Stock on
a Fully Diluted Basis then held by the Pruco Stockholders, as a group;
(v) the Former Management Stockholders (as a group, as opposed
to the exercise by any such Stockholder of its individual rights
hereunder), it shall be by the affirmative vote of the holders of
shares of Common Stock representing more than fifty percent (50%) of
the Common Stock on a Fully Diluted Basis then held by the Former
Management Stockholders, as a group;
(vi) the Sofedit Stockholders (as a group, as opposed to the
exercise by any such Stockholder of its individual rights hereunder),
it shall be by the affirmative vote of the holders of shares of Common
Stock representing more than fifty percent (50%) of the
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Common Stock then held by the Sofedit Stockholders as a group, or as
otherwise agreed in writing by the Sofedit Stockholders as a group;
(vii) the Sofedit Institutional Stockholders (as a group, as
opposed to the exercise by any such Stockholder of its individual
rights hereunder), it shall be by the affirmative vote of the holders
of shares of Common Stock representing more than fifty percent (50%) of
the Common Stock then held by the Sofedit Institutional Stockholders as
a group, or as otherwise agreed in writing by the Sofedit Institutional
Stockholders as a group;
(viii) the Aetna Stockholders (as a group, as opposed to the
exercise by any such Stockholder of its individual rights hereunder),
it shall be by the affirmative vote of the holders of shares of Common
Stock representing more than fifty percent (50%) of the Common Stock
then held by the Aetna Stockholders as a group, or as otherwise agreed
in writing by the Aetna Stockholders as a group;
(ix) the State of Michigan Stockholders (as a group, as
opposed to the exercise by any such Stockholder of its individual
rights hereunder), it shall be by the affirmative vote of the holders
of shares of Common Stock representing more than fifty percent (50%) of
the Common Stock on a Fully Diluted Basis then held by the State of
Michigan Stockholders as a group;
(x) the Management Stockholders (as a group, as opposed to the
exercise by any such Stockholder of its individual rights hereunder),
it shall be by the Management Representative; or
(xi) the Additional Stockholders (as a group, as opposed to
the exercise by any such Stockholder of its individual rights
hereunder), it shall be by the affirmative vote of the holders of
shares of Common Stock representing more than fifty percent (50%) of
the Common Stock on a Fully Diluted Basis then held by the Additional
Stockholders as a group.
7.5 INSPECTION. For so long as this Agreement shall remain in
effect, this Agreement shall be made available for inspection by any Stockholder
at the principal executive offices of Holding.
7.6 RECAPITALIZATION, EXCHANGES, ETC., AFFECTING RESTRICTED
SECURITIES. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Restricted Securities, to any and all shares of
Holding capital stock or any successor or assign of Holding (whether by merger,
consolidation, sale of assets, or otherwise, including shares issued by a parent
corporation in connection with a triangular merger) which may be issued in
respect of, in exchange for, or in substitution of, Restricted Securities and
shall be appropriately adjusted
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for any stock dividends, splits, reverse splits, combinations, reclassifications
and the like occurring after the date hereof.
7.7 COMPLIANCE WITH REGULATIONS. Whenever a Stockholder is
entitled to purchase Restricted Securities pursuant to the provisions of this
Agreement, any closing time period specified in such provision shall be tolled
until any necessary governmental approval is received including without
limitation, approval under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, provided that such tolling period shall not exceed sixty (60) days.
7.8 WAIVER. No waiver by any party of any term or condition of
this Agreement, in one or more instances, shall be valid unless in writing, and
no such waiver shall be deemed to be construed as a waiver of any subsequent
breach or default of the same or similar nature.
7.9 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns (including without limitation transferees of
Restricted Securities); provided, however, that (a) nothing contained herein
shall be construed as granting any Stockholder the right to transfer any of its
Restricted Securities except in accordance with this Agreement, (b) any Third
Party which acquires Restricted Securities in accordance with Section 2.5 shall
be bound by and have the benefits of the provisions of Sections 2.1, 2.2, 2.4,
2.5, 2.6, 2.7, Article III, Sections 5.1, 5.5, 5.6 and 6.1 and Article VII, to
the same extent as the transferor of such Restricted Securities, but the
remaining provisions of this Agreement shall not inure to the benefit of, and
the provisions of Article IV shall not apply to the Restricted Securities of,
such Third Party, (c) none of the provisions of this Agreement shall apply to
any Transfer of Restricted Securities subsequent to a Transfer pursuant to a
registered public offering under the Securities Act made in accordance with the
Securities Act, (d) notwithstanding any Transfer of Restricted Securities by any
Stockholder to any other Stockholder, only the provisions of this Agreement
which are expressly applicable to CVC Stockholders, Sofedit Stockholders,
Sofedit Institutional Stockholders, Berkshire Stockholders, Prudential
Stockholders, Pruco Stockholders, State of Michigan Stockholders, Former
Management Stockholders or Additional Stockholders, respectively, shall be
applicable to such CVC Stockholders, Sofedit Stockholders, Sofedit Institutional
Stockholders, Berkshire Stockholders, Prudential Stockholders, Pruco
Stockholders, State of Michigan Stockholders, Former Management Stockholders,
Management Stockholders or Additional Stockholders, respectively, and to such
Restricted Securities in the hands of such CVC Stockholders, Sofedit
Stockholders, Sofedit Institutional Stockholders, Berkshire Stockholders,
Prudential Stockholders, Pruco Stockholders, State of Michigan Stockholders,
Former Management Stockholder, Management Stockholder or Additional Stockholder,
respectively.
7.10 REMEDIES. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages and costs (including
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reasonable attorneys' fees), will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.
7.11 INCOME TAX WITHHOLDING. Each Management Stockholder and
Additional Stockholder authorizes Holding to make any required withholding from
such Management Stockholder's (or the Additional Stockholder, as the case may
be) compensation for the payment of any and all income taxes and other sums that
may be due any governmental authority as a result of the receipt by either the
Management Stockholders of compensation income under Section 83 of the Internal
Revenue Code of 1986, as amended, or similar provisions of state or local law,
if required by applicable law, and agrees, if requested by Holding, and in lieu
of all or a portion of such withholding, to pay Holding in a lump sum such
amounts as Holding may be required to remit to any governmental authority on
behalf of Management Stockholder (or Additional Stockholder, as the case may be)
in respect of any such taxes and other sums.
7.12 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance here from and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
7.13 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
7.14 FURTHER ASSURANCES. Each party hereto shall cooperate and
shall take such further action and shall execute and deliver such further
documents as may be reasonably requested by any other party in order to carry
out the provisions and purposes of this Agreement. Any provision herein that by
its terms requires a Subsidiary of Holding to take any action or refrain from
taking any action shall be interpreted to require Holding to cause such
Subsidiary to take such action or to refrain from taking such action,
respectively, to the fullest extent permitted by law.
7.15 GENDER. Whenever the pronouns "he" or "his" are used
herein, they shall also be deemed to mean "she" or "hers" or "it" or "its"
whenever applicable. Words in the
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singular shall be read and construed as though in the plural, and words in the
plural shall be construed as though in the singular in all cases where they
would so apply.
7.16 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
7.17 NOTICES. (a) All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission or mailed (by registered or certified mail, return receipt
requested) or by reputable overnight courier, fee prepaid to the parties at the
following addresses or facsimile numbers:
(i) If to any CVC Stockholder, to:
Citicorp Venture Capital, Ltd.
399 Park Avenue
New York, New York 10043
Facsimile No.: 212-888-2940
Attn: David Y. Howe
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile No.: 212-309-6273
Attn: Philip H. Werner
(ii) If to any Berkshire Stockholder, to:
Berkshire Partners
One Boston Place, Suite 3425
Boston, MA 02108
Facsimile No.: 617-227-6105
Attn: Russell L. Epker
with a copy to:
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Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109-2881
Facsimile No.: 617-523-1231
Attn: Stephen W. Carr, P.C.
(iii) If to any Prudential Stockholder, to:
The Prudential Insurance Company of America
c/o Financial Restructuring Group
Gateway Center Four
100 Mulberry Street
Newark, NJ 07102
Facsimile No.: 201-802-2662
Attn: Managing Director
with copies to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Facsimile No.: 212-821-8111
Attn: Duncan J. Stewart
The Prudential Insurance Company of America
c/o Law Department
Gateway Center Four
100 Mulberry Street
Newark, NJ 07102
Facsimile No.: 201-802-3853
Attn: Jack Pfeilsticker
(iv) If to any Pruco Stockholder, to
Pruco Life Insurance Company
c/o Financial Restructuring Group
Gateway Center Four
100 Mulberry Street
Newark, NJ 07102
Facsimile No.: 201-802-2662
Attn: Managing Director
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<PAGE> 39
with copies to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Facsimile No.: 212-821-8111
Attn: Duncan J. Stewart
Pruco Life Insurance Company
c/o Law Department
Gateway Center Four
100 Mulberry Street
Newark, NJ 07102
Facsimile No.: 201-802-3853
Attn: Jack Pfeilsticker
(v) If to any State of Michigan Stockholder, to
Michigan Department of Treasury
450 West Allegan
Lansing, MI 48922
Facsimile No.: 517-335-3668
Attn: Thomas Hufnagel
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Facsimile No.: 212-821-8111
Attn: Duncan J. Stewart
(vi) If to the Aetna Stockholders, to the Persons set
forth in clauses (i) through (v) above and, in the
case of the Former Management Stockholders and the
Management Stockholders, to the address of such
Person set forth in the stock records of Holding
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(vii) If to the Sofedit Stockholders, to:
MS Acquisition Corp.
c/o Aetna Industries, Inc.
24331 Sherwood Avenue
Centerline, MI 48015-0067
Facsimile No.: 816-759-2209
Attn: Francis Barge
(viii) If to the Sofedit Institutional Stockholders, to:
MS Acquisition Corp.
c/o Aetna Industries, Inc.
24331 Sherwood Avenue
Centerline, MI 48015-0067
Facsimile No.: 816-759-2209
Attn: Francis Barge
(ix) If to Holding, to:
MS Acquisition Corp.
c/o Aetna Industries, Inc.
24331 Sherwood Avenue
Centerline, MI 48015-0067
Facsimile No.: 816-759-2209
Attn: Chief Executive Officer
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue - 14th Floor
New York, NY 10043
Facsimile No.: 212-888-2940
Attn: David Y. Howe
and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Facsimile No.: 212-309-6273
Attn: Philip H. Werner
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<PAGE> 41
(x) If to a Stockholder other than an Aetna Stockholder,
Sofedit Stockholder or Sofedit Institutional
Stockholder, to the address of such Person set forth
in the stock records of Holding.
(b) All such notices, requests and other communications will
(w) if delivered personally to the address as provided in this Section 7.17 be
deemed given upon delivery, (x) if delivered by facsimile transmission to the
facsimile number as provided in this Section 7.17 be deemed given upon receipt,
(y) if delivered by mail in the manner described above to the address as
provided in this Section 7.17, be deemed given upon the earlier of the third
business day following mailing or upon receipt and (z) if delivered by reputable
overnight courier to the address as provided in this Section 7.17, be deemed
given upon the earlier of the first business day following the date sent by such
reputable overnight courier or upon receipt (in each case regardless of whether
such notice, request or other communication is received by any other Person to
whom a copy of such notice is to be delivered pursuant to this Section 7.17).
Any party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto.
7.18 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
EACH OF THE PARTIES HERETO, OTHER THAN THE STATE OF MICHIGAN,
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK, AND IRREVOCABLY AGREES THAT ALL ACTIONS
OR PROCEEDINGS RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH
SUCH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH SUCH
PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTY AT THE
ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE FIFTEEN
(15) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO
OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY
OF THE OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS
MAY BE PERMITTED BY ANY APPLICABLE LAW.
\
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<PAGE> 42
7.19 WAIVER OF JURY TRIAL.
EACH PARTY, OTHER THAN THE STATE OF MICHIGAN, HEREBY WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. EACH SUCH PARTY ALSO WAIVES ANY BOND OR SURETY
OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH
PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH SUCH PARTY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
7.20 NO OTHER UNDERSTANDING. Each of the Sofedit Stockholders
and the Sofedit Institutional Stockholders represents, warrants and covenants
that no agreement or understanding (whether written or oral) exists or shall
exist between or among any Sofedit Stockholder, on the one hand, and any Sofedit
Institutional Stockholder, on the other hand, with respect to the voting of any
shares of capital stock of Holding.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
MS ACQUISITION CORP.
By:___________________________
Name:
Title:
AETNA HOLDINGS, INC.
By:___________________________
Name:
Title:
FORMER SOFEDIT INVESTORS
CEFI
By:___________________________
Name:
Title:
YACESE S.A.
By:___________________________
Name:
Title:
H.H.A. WAY
By:___________________________
Name:
Title:
[Signature Page to Stockholders Agreement]
<PAGE> 44
FORMER SOFEDIT INSTITUTIONAL
INVESTORS
COMPAGNIE DE FINANCEMENT
INDUSTRIEL S.A.
By:___________________________
Name:
Title:
JAFCO I SAINT HONORE S.A.
By:___________________________
Name:
Title:
JAFCO II SAINT HONORE S.A.
By:___________________________
Name:
Title:
TOCQUEVILLE EUROPE L.P.
By:___________________________
Name:
Title:
BIDASSOA INVESTISSEMENTS S.A.
By:___________________________
Name:
Title:
[Signature Page to Stockholders Agreement]
<PAGE> 45
CININDEV
By:___________________________
Name:
Title:
CFJPE S.A.
By:___________________________
Name:
Title:
OBERON S.A.
By:___________________________
Name:
Title:
EURO SYNERGIES S.A.
By:___________________________
Name:
Title:
VENTADOUR INVESTISSEMENTS S.A.
By:___________________________
Name:
Title:
COGEPA S.A.
By:___________________________
Name:
Title:
[Signature Page to Stockholders Agreement]
<PAGE> 46
SOFEDICI S.C.
By:___________________________
Name:
Title:
APAX PARTNER CLUB S.A.
By:___________________________
Name:
Title:
ALTAMIR S.A.
By:___________________________
Name:
Title:
APAX FRANCE IV S.A.
By:___________________________
Name:
Title:
CVC
CITICORP VENTURE CAPITAL, LTD.
By:___________________________
Name:
Title:
[Signature Page to Stockholders Agreement]
<PAGE> 47
CVC CO-INVESTORS
___________________________________
WILLIAM T. COMFORT
___________________________________
RICHARD M. CASHIN
___________________________________
DAVID F. THOMAS
___________________________________
THOMAS F. McWILLIAMS
___________________________________
DAVID Y. HOWE
___________________________________
MICHAEL A. DELANEY
___________________________________
JOHN WEBER
___________________________________
JAMES URRY
___________________________________
JOSEPH SILVESTRI
___________________________________
CHARLES CORPENING
[Signature Page to Stockholders Agreement]
<PAGE> 48
PRUDENTIAL
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:________________________________
Name:
Title:
PRUCO
PRUCO LIFE INSURANCE COMPANY
By:________________________________
Name:
Title:
BERKSHIRE FUND
THE BERKSHIRE FUND,
A LIMITED PARTNERSHIP
By: BERKSHIRE CAPITAL
ASSOCIATES,
LIMITED PARTNERSHIP
Its General Partner
By:_________________________________
A General Partner
BERKSHIRE GROUP
___________________________________
BRADLEY M. BLOOM
___________________________________
J. CHRISTOPHER CLIFFORD
___________________________________
RUSSELL L. EPKER
[Signature Page to Stockholders Agreement]
<PAGE> 49
___________________________________
CARL FERENBACH
___________________________________
RICHARD K. LUBIN
___________________________________
LEA ANNE S. OTTINGER
___________________________________
KEVIN T. CALLAGHAN
STATE OF MICHIGAN
STATE TREASURER OF THE
STATE OF MICHIGAN, AS
CUSTODIAN OF THE PUBLIC
SCHOOL EMPLOYEES'
RETIREMENT SYSTEM; STATE
EMPLOYEES' RETIREMENT
SYSTEM; MICHIGAN STATE
POLICE RETIREMENT SYSTEM;
JUDGES' RETIREMENT SYSTEM;
AND PROBATE JUDGES'
RETIREMENT SYSTEM
By:________________________________
Name:
Title:
[Signature Page to Stockholders Agreement]
<PAGE> 50
FORMER MANAGEMENT GROUP
___________________________________
JEROME SINGER
___________________________________
DOUGLAS A. THAL
___________________________________
ROBERT J. KLEIN
___________________________________
STEVEN SINGER
MANAGEMENT GROUP
___________________________________
UELI SPRING
___________________________________
HAROLD BROWN
___________________________________
GARY EASTERLY
___________________________________
EDWARD LAWSON
___________________________________
DANIEL PIERCE
[Signature Page to Stockholders Agreement]
<PAGE> 51
___________________________________
DAVID THAL
___________________________________
RALPH BREDENBECK
[Signature Page to Stockholders Agreement]
<PAGE> 52
CVC CO-INVESTORS, CONTINUED
CCT PARTNERS III, L.P.,
by its General Partner
By:____________________________
Name:
Title:
[Signature Page to Stockholders Agreement]
<PAGE> 53
ANNEX I
<TABLE>
<CAPTION>
Preferred Stock Common Stock
Holder Promissory Note (Series) (Series)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CEFI - 86,713(B) 963,433(A-1)
YACESE S.A. - 46,768(B) 427,760(A-1)
H.H.A. WAY S.A. - 25,422(B) 282,525(A-1)
Compagnie de Financement Industriel 2,562,055 13,052(B) 236,793(A-2)
Jafco I Saint Honore S.A. 980,488 4,995(B) 55,494(A-2)
Jafco II Saint Honore S.A. 902,132 4,596(B) 51,084(A-2)
Toqueville Europe LP 980,488 4,995(B) 55,494(A-2)
Bidassoa Investissements S.A. 1,070,702 5,454(B) 60,639(A-2)
Cinindev 837,695 4,267(B) 47,409(A-2)
CFJPE S.A. 3,957,009 20,158(B) 223,999(A-2)
Oberon S.A. 270,639 1,379(B) 15,344(A-2)
Euro Synergies S.A. 3,703,381 18,867(B) 209,574(A-2)
Ventadour Investissements S.A. 738,717 3,763(B) 41,804(A-2)
Cogepa S.A. 2,409,981 12,277(B) 136,439(A-2)
Sofedit S.C. 773,256 3,939(B) 43,734(A-2)
Apax Partner Club FPCR 36,601 187(B) 2,113(A-2)
Altamir SCA 387,659 1,975(B) 21,959(A-2)
Apax France IV FCPR 2,197,078 11,193(B) 124,403(A-2)
Fracis Barge 2,501,769 - -
Colette Barge 2,731,609 - -
Jerome Barge 5,222,547 - -
Felix Domenech 2,819,331 - -
Josette Demenech 1,690,636 - -
Cecile Domenech 564,348 - -
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 54
<TABLE>
<CAPTION>
Preferred Stock Common Stock
Holder Promissory Note (Series) (Series)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sebastien Domeneeh 564,348 - -
JRMH 3,065,531 - -
Citicorp Venture Capital, Ltd. - 81,000(A) 634,015(A-3)
William T. Comfort - 2,385(A) 18,668(A-3)
Richard M. Cashin - 2,385(A) 18,668(A-3)
David F. Thomas - 2,340(A) 18,316(A-3)
Thomas F. McWilliams - 675(A) 5,283(A-3)
David Howe - 540(A) 4,227(A-3)
Michael Delaney - 315(A) 2,466(A-3)
John Weber - 135(A) 1,057(A-3)
James Urry - 135(A) 1,057(A-3)
Joseph Silvestri - 45(A) 352(A-3)
Charles Corpening - 45(A) 352(A-3)
The Prudential Insurance Company of
America - 8,321.96(A) 65,175(A-3)
Pruco Life Insurance Company - 626.32(A) 4,905(A-3)
The Berkshire Fund, a Limited Partnership - 7,614.63(A) 59,636(A-3)
Bradley M. Bloom - 61(A) 478(A-3)
J. Christopher Clifford - 61(A) 478(A-3)
Russell L. Epker - 61(A) 478(A-3)
Carl Ferenbach - 61(A) 478(A-3)
Richard K. Lubin - 61(A) 478(A-3)
Lea Anne S. Ottinger - 27.66(A) 217(A-3)
Kevin T. Callaghan - 14.82(A) 116(A-3)
State of Michigan - 3,457.38(A) 27,077(A-3)
- ---------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 55
<TABLE>
<CAPTION>
Preferred Stock Common Stock
Holder Promissory Note (Series) (Series)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Jerome Singer - 1,083.79(A) 8,488(A-3)
Douglas A. Thal - 1,083.79(A) 8,488(A-3)
Robert J. Klein - 650.28(A) 5,093(A-3)
Steven Singer - 433.52(A) 3,395(A-3)
Ueli Spring - 650.27(A) 5,093(A-3)
Harold Brown - 234.10(A) 1,834(A-3)
Gary Easterly - 125.72(A) 984(A-3)
Edward Lawson - 125.72(A) 984(A-3)
Daniel Pierce - 125.72(A) 984(A-3)
David Thal - 59.61(A) 467(A-3)
Ralph Bredenbeck - 27.09(A) 212(A-3)
- ---------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 56
Exhibit A
Form of Joinder Agreement
Attention: Chief Executive Officer
Gentlemen:
In consideration of the [transfer][issuance] to the
undersigned of [a Warrant to purchase] _____ shares of [Class A] [Class B]
Common Stock, par value $.01 per share, [Describe any other security being
transferred] of MS Acquisition Corp., a Delaware corporation (the "Company"),
the undersigned [represents that it is a Permitted Transferee of [Insert name of
transferor] and]* agrees that, as of the date written below, [he] [she] [it]
shall become a party to[, and a Permitted Transferee as defined in,]* that
certain Stockholders Agreement dated as of April __, 1998, as such agreement may
have been amended from time to time (the "Agreement"), among the Company and the
persons named therein, and [as a Permitted Transferee shall be fully bound by,
and subject to, all of the covenants, terms and conditions of the Agreement that
were applicable to the undersigned's transferor,]* [shall be fully bound by, and
subject to, the provisions of Sections 2.1, 2.2, 2.4, 2.5, 2.6, 2.7 and 3.2 of
the Agreement that were applicable to the undersigned's transferor,]** [shall be
fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement,]*** as though an original party thereto and shall be deemed a
[CVC Stockholder] [Management Stockholder] [Institutional Stockholder] [Former
Management Stockholder] [Additional Stockholder] [Sofedit Stockholder] [Sofedit
Institutional Stockholder] for [all]* [solely for]** [all]*** purposes thereof.
Executed as of the day of , .
TRANSFEREE: __________________
Address: _____________________
_____________________
ACKNOWLEDGED AND ACCEPTED:
MS ACQUISITION CORP.
By: _______________________
Name:
Title:
* Include if transferee is a Permitted Transferee
** Include if transferee is a Third Party
*** Include if transferee is an Additional Stockholder
<PAGE> 1
EXHIBIT 10.3
EXECUTION COPY
MS ACQUISITION CORP.
REGISTRATION RIGHTS AGREEMENT
<PAGE> 2
TABLE OF CONTENTS
Page
RECITALS .................................................................1
ARTICLE I
DEFINITIONS......................................................2
1.1 Defined Terms in Stockholders Agreement.................2
1.2 Definitions.............................................2
1.3 Cross-References........................................4
ARTICLE II
DEMAND REGISTRATIONS.............................................5
2.1 Requests for Registration...............................5
2.2 Long-Form Registrations.................................6
2.3 Short-Form Registrations................................6
2.4 Effective Registration Statement........................6
2.5 Priority on Demand Registrations........................7
2.6 Selection of Underwriters...............................8
2.7 Black-Out Rights and Postponement.......................8
ARTICLE III
PIGGYBACK REGISTRATIONS..........................................9
3.1 Right to Piggyback......................................9
3.2 Piggyback Expenses......................................9
3.3 Priority on Primary Registrations.......................9
3.4 Priority on Secondary Registrations....................10
ARTICLE IV...............................................................11
HOLDBACK AGREEMENTS.............................................11
4.1 Holdback...............................................11
4.2 Company Holdback.......................................11
ARTICLE V................................................................11
REGISTRATION PROCEDURES.........................................11
ARTICLE VI...............................................................15
REGISTRATION EXPENSES...........................................15
6.1 Fees Generally.........................................15
6.2 Counsel Fees...........................................16
- i -
<PAGE> 3
Page
ARTICLE VII..............................................................16
UNDERWRITTEN OFFERINGS..........................................16
7.1 Demand Underwritten Offerings..........................16
7.2 Incidental Underwritten Offerings......................16
ARTICLE VIII.............................................................17
INDEMNIFICATION.................................................17
8.1 Indemnification by the Company.........................17
8.2 Indemnification by a Selling Stockholder...............18
8.3 Indemnification Procedure..............................19
8.4 Underwriting Agreement.................................20
8.5 Contribution...........................................20
8.6 Periodic Payments......................................21
ARTICLE IX...............................................................21
RULE 144 .......................................................21
ARTICLE X................................................................21
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.....................21
ARTICLE XI...............................................................22
MISCELLANEOUS...................................................22
11.1 No Inconsistent Agreements.............................22
11.2 Adjustments Affecting Registrable Securities...........22
11.3 Specific Performance...................................22
11.4 Actions Taken; Amendments and Waivers..................22
11.5 Successors and Assigns.................................23
11.6 Notices................................................23
11.7 Headings. ............................................23
11.8 Gender.................................................24
11.9 Invalid Provisions.....................................24
11.10 Governing Law..........................................24
11.11 Counterparts...........................................24
11.12 Consent to Jurisdiction and Service of Process.........24
11.13 Waiver of Jury Trial...................................25
Exhibit A - Original Registration Rights Agreement
Exhibit B - Form of Registration Rights Joinder Agreement
Exhibit C - Waiver Agreement
- ii -
<PAGE> 4
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of April 9,
1998 by and among, MS Acquisition Corp., a Delaware corporation (the "Company"),
each of the Persons whose name appears under the heading "Former Sofedit
Investor" on the signature pages hereto (individually, a "Former Sofedit
Investor", and collectively, the "Former Sofedit Investors"), each of the
Persons whose name appears under the heading "Former Sofedit Institutional
Investor" on the signature pages hereto (individually, a "Former Sofedit
Institutional Investor", and collectively, the "Former Sofedit Institutional
Investors"), Citicorp Venture Capital, Ltd., a New York corporation ("CVC"), and
each of the Persons whose name appears under the heading "CVC Co-investors" on
the signature pages hereto (together with CVC, the "CVC Investors", and
individually a "CVC Investor"), The Berkshire Fund, a Massachusetts limited
partnership ("Berkshire"), and each of the individuals listed under the heading
"Berkshire Group" on the signature pages hereto (individually, a "Berkshire
Group Member" and collectively, with Berkshire, the "Berkshire Group"), The
Prudential Insurance Company of America, a New Jersey mutual insurance company
("Prudential"), Pruco Life Insurance Company, an Arizona corporation ("Pruco"),
the various retirement systems of the State of Michigan listed on the signature
pages hereto under the heading "State of Michigan" (the "State of Michigan"; and
together with Berkshire, the Berkshire Group, Prudential and Pruco, the
"Institutional Investors"), each of the individuals whose name appears under the
heading "Former Management Group" on the signature pages hereto (individually, a
"Former Management Group Member" and collectively, the "Former Management
Group"), and each of the individuals whose name appears under the heading
"Management Group" on the signature pages hereto (individually, a "Management
Group Member" and collectively, the "Management Group". Capitalized terms used
and not otherwise defined herein have the respective meanings ascribed thereto
in Article I.
RECITALS
WHEREAS, the Company has executed and delivered that certain
Registration Rights Agreement dated August 13, 1996 among the Company and the
parties named on the signature pages thereto with respect to the capital stock
of the Company (the "Original Registration Rights Agreement"), a copy of which
is attached hereto as Exhibit A;
WHEREAS, the Original Registration Rights Agreement remains in
full force and effect as of the date hereof, subject to the waiver of certain
rights thereunder by certain of the parties hereto pursuant to a waiver
agreement (the "Waiver Agreement"), a copy of which is attached hereto as
Exhibit B.
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, the parties hereto are executing and delivering a Stockholders
Agreement among the parties hereto and dated the date hereof (as amended,
modified or supplemented from time to time, the "Stockholders Agreement"), and
in connection therewith, the Company has agreed to provide the other parties
hereto with the registration rights set forth in this Agreement;
2
<PAGE> 5
NOW THEREFORE, in connection with the Stockholders Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS IN STOCKHOLDERS AGREEMENT.
Unless otherwise defined herein, defined terms used in this
Agreement shall have the meanings set forth in the Stockholders Agreement.
1.2 DEFINITIONS.
The following capitalized terms, when used in this Agreement,
have the respective meanings set forth below (such definitions to be equally
applicable to both singular and plural forms of the terms defined):
"Additional Stockholder" means any Person who has executed a
Joinder Agreement pursuant to the Stockholders Agreement, and its direct and
indirect Permitted Transferees, so long as any such Person shall hold (either
directly or indirectly) Registrable Securities, and only to the extent that (i)
the Company has granted such person registration rights as a Stockholder
hereunder and (ii) such Person has executed a Registration Rights Joinder
Agreement.
"Commission" means the Securities and Exchange Commission and
any other similar or successor agency of the federal government administering
the Securities Act or the Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the Commission
thereunder.
"Initial Public Offering" means the first time a registration
statement filed under the Securities Act with the Commission respecting an
offering, whether primary or secondary, of Common Stock of the Company (or
securities convertible, exercisable or exchangeable for or into Common Stock of
the Company or rights to acquire Common Stock of the Company or such
securities), which is underwritten on a firmly committed basis, is declared
effective and the securities so registered are issued and sold.
"Registrable Securities" means, at any time, the shares of
Common Stock then issued and outstanding or which are issuable upon conversion,
exercise or exchange of the Series A Preferred Stock, the Series B Preferred
Stock, the Options or any other Equity
3
<PAGE> 6
Equivalents and any securities into which such Common Stock shall have been
changed or any securities resulting from any reclassification or
recapitalization of such Common Stock; provided, that "Registrable Securities"
shall not include any shares of Common Stock obtained or transferred pursuant to
an effective registration statement under the Securities Act or in a Rule 144
Transaction, and provided, further, that "Registrable Securities" shall not
include any shares of Common Stock which are held by a Person who is not a
Stockholder.
"Registration Rights Joinder Agreement" means the Registration
Rights Joinder Agreement in the form attached hereto as Exhibit C.
"Required CVC Stockholders" means, as of the date of any
determination thereof, CVC and CVC Stockholders that hold Registrable Securities
representing at such time at least a majority (by number of shares) of the
Registrable Securities, on a fully diluted basis, held by all CVC Stockholders.
"Required Institutional Stockholders" means, as of the date of
any determination thereof, Institutional Stockholders that hold Registrable
Securities representing at such time at least a majority (by number of shares)
of the Registrable Securities, on a fully diluted basis, held by all
Institutional Stockholders.
"Required Sofedit Stockholders" means, as of the date of any
determination thereof, the Sofedit Stockholders that hold Registrable Securities
representing at such time at least a majority (by number of shares) of the
Registrable Securities, on a fully diluted basis, held by all Sofedit
Stockholders.
"Required Sofedit Institutional Stockholders" means, as of the
date of any determination thereof, the Sofedit Institutional Stockholders that
hold Registrable Securities representing at such time at least a majority (by
number of shares) of the Registrable Securities, on a fully diluted basis, held
by all Sofedit Institutional Stockholders.
"Rule 144 Transaction" means a transfer of Restricted
Securities (A) complying with Rule 144 under the Securities Act as such Rule is
in effect on the date of such transfer (but not including a sale other than
pursuant to a "brokers transaction" as defined in clauses (1) and (2) of
paragraph (g) of such Rule as in effect on the date hereof) and (B) occurring at
a time when Restricted Securities are registered pursuant to Section 12 of the
Exchange Act (or any successor to such Section).
"Stockholders" means the Sofedit Stockholders, Sofedit
Institutional Stockholders, CVC Stockholders, Institutional Stockholders, the
Former Management Stockholders, the Management Stockholders, the Additional
Stockholders and each other Person party to the Original Registration Rights
Agreement and any transferee of any of the foregoing persons who has acquired
Registrable Securities in accordance with the Stockholders Agreement and who has
executed a Registration Rights Joinder Agreement.
4
<PAGE> 7
1.3 CROSS-REFERENCES.
The following defined terms, when used in this Agreement,
shall have the meaning ascribed to them in the corresponding Sections of this
Agreement listed below:
"Berkshire" -- Preamble
"Berkshire Group" -- Preamble
"Berkshire Group Member" -- Preamble
"Black-Out Notice" -- Section 2.7(b)
"Company" -- Preamble
"Controlling Person" -- Section 8.1
"CVC" -- Preamble
"CVC Co-investors" -- Preamble
"CVC Investor" -- Preamble
"Demand Registrations" -- Section 2.1
"Former Management Group" -- Preamble
"Former Management Group Member" -- Preamble
"Former Sofedit Institutional Investors" -- Preamble
"Former Sofedit Investor" -- Preamble
"Institutional Investors" -- Preamble
"Long-Form Registrations" -- Section 2.1
"Management Group" -- Preamble
"Management Group Member" -- Preamble
"Original Registration Rights Agreement" -- Recitals
"Piggyback Holders" -- Section 3.1
"Piggyback Registration" -- Section 3.1
"Pruco" -- Preamble
"Prudential" -- Preamble
"Registration Expenses" -- Section 6.1
"Requesting Investor" -- Section 2.1(a)
"Short-Form Registrations" -- Section 2.1
"State of Michigan" -- Preamble
"Stockholders Agreement" -- Recitals
"Waiver Agreement" -- Recitals
5
<PAGE> 8
ARTICLE II
DEMAND REGISTRATIONS
2.1 REQUESTS FOR REGISTRATION.
(a) As provided in Sections 2.2 and 2.3, from and after the
date that is ninety-one (91) days after the closing of an Initial Public
Offering, the Required Sofedit Stockholders, the Required Sofedit Institutional
Stockholders, the Required CVC Stockholders or the Required Institutional
Stockholders (each of which being, a "Requesting Investor") shall be entitled to
request registration under the Securities Act of all or part of their
Registrable Securities (i) on Form S-1 or any similar long-form registration
("Long-Form Registrations"), and (ii) on Form S-2 or S-3 or any similar
short-form registration ("Short-Form Registrations") if the Company qualifies to
use such short form; provided, however, that (a) prior to the date that is one
(1) year and ninety-one (91) days after the closing of an Initial Public
Offering, the Sofedit Institutional Stockholders shall not be entitled to
request registration as a Requesting Investor with respect to more than
thirty-five percent (35%) of the Registrable Securities held by the Sofedit
Institutional Stockholders as a group on the date hereof and (b) prior to the
date that is two (2) years and ninety-one (91) days after the closing of an
Initial Public Offering, the Sofedit Institutional Stockholders shall not be
entitled to request registration as a Requesting Investor with respect to more
than seventy percent (70%) of the Registrable Securities held by the Sofedit
Institutional Stockholders on the date hereof; provided, further, that the above
proviso shall in no way limit the rights of the Sofedit Institutional
Stockholders under Article III or the rights of the Sofedit Institutional
Stockholders to request inclusion in any Demand Registration requested by the
Sofedit Stockholders or the CVC Stockholders under this Section 2.1(a). Within
ten (10) days after receipt of any such request, the Company will give written
notice of such request to all Stockholders holding Registrable Securities.
Thereafter, the Company will use all reasonable efforts to effect the
registration under the Securities Act on the form requested by the applicable
Requesting Investors and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein by any Stockholder within thirty (30) days after the receipt
of the Company's notice, subject to the provisions of Section 2.5. All
registrations requested pursuant to this Section 2.1 are referred to herein as
"Demand Registrations."
(b) Any Requesting Investor that requests a Demand
Registration under this Article II may, at any time prior to the effective date
of the registration statement relating to such registration, revoke such request
by providing written notice to the Company; provided, however, that
notwithstanding such revocation, such Demand Registration shall be deemed a
request for purposes of Section 2.2 or 2.4 unless, after consultation with the
Company and any proposed underwriter, the Requesting Investor in good faith
determines that the Registrable Securities that it has requested to be
registered would not be sold pursuant to such Demand Registration within a
reasonable amount of time or at a price acceptable to such Requesting Investor.
6
<PAGE> 9
(c) Any request for a Demand Registration pursuant to this
Article II shall specify the number of shares of Registrable Securities proposed
to be sold by the Requesting Investor and the intended method of disposition
thereof.
(d) Notwithstanding the provisions of Section 2.1(a), (i) the
Required Sofedit Stockholders or (ii) the Required CVC Stockholders may request
that the Company effect an Initial Public Offering with gross proceeds to the
Company in the amount requested by the Required Sofedit Stockholders or the
Required CVC Stockholders, as the case may be, and the Company shall use all
reasonable efforts to effect such Initial Public Offering within ninety (90)
days after receipt of such request. No such request shall count toward the limit
on Long-Form Registrations provided in Section 2.2.
2.2 LONG-FORM REGISTRATIONS.
The Required Sofedit Stockholders will be entitled to request
pursuant to this Article II up to three (3) Long-Form Registrations, the
Required Sofedit Institutional Stockholders will be entitled to request pursuant
to this Article II up to three (3) Long-Form Registrations, the Required CVC
Stockholders will be entitled to request pursuant to this Article II up to three
(3) Long-Form Registrations, and the Required Institutional Stockholders will be
entitled to request pursuant to this Article II one (1) Long-Form Registration.
The Company will pay all Registration Expenses in connection with any such
Long-Form Registrations. All Long-Form Registrations (unless otherwise requested
by the relevant Requesting Investor) shall be underwritten registrations.
2.3 SHORT-FORM REGISTRATIONS.
In addition to the Long-Form Registrations provided pursuant
to Section 2.2, each of the Required Sofedit Stockholders, the Required Sofedit
Institutional Stockholders and the Required CVC Stockholders will be entitled to
request an unlimited number of Short-Form Registrations, and the Required
Institutional Stockholders will be entitled to request three (3) Short-Form
Registrations. The Company will pay all Registration Expenses in connection with
any Short-Form Registrations. Demand Registrations will be Short-Form
Registrations whenever the Company is qualified to use any applicable short
form. Once the Company has become subject to the reporting requirements of the
Exchange Act, the Company will use its reasonable best efforts to make
Short-Form Registrations available for the sale of Registrable Securities.
2.4 EFFECTIVE REGISTRATION STATEMENT.
No Demand Registration shall be deemed to have been effected
for purposes of Section 2.2:
7
<PAGE> 10
(i) unless a registration statement with respect thereto has
become effective;
(ii) if, after it has become effective, any stop order,
injunction or other order or requirement of the Commission or
other governmental agency or court for any reason, affecting
any of the securities covered by such registration statement,
is issued or threatened by the Commission or other
governmental agency or court;
(iii) if the Company delivers a Black-Out Notice with respect
to such requested registration;
(iv) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection
with such registration are not satisfied by reason of a
failure by or inability of the Company to satisfy any of such
conditions, or the occurrence of an event outside the
reasonable control of the relevant Requesting Investor;
(v) the revocation notice described in the proviso to Section
2.1(b) has been delivered by the Requesting Investor; or
(vi) if the Requesting Investor is not able to register and
sell at least ninety percent (90%) of the amount of
Registrable Securities which were requested to be included by
it in such registration;
provided that the Company will pay all Registration Expenses in connection with
any registration if pursuant to this Section 2.4 the registration is deemed not
to have been effected.
2.5 PRIORITY ON DEMAND REGISTRATIONS.
(a) The Company will not include in any Demand Registration
any securities which are not Registrable Securities without the written consent
of the Required Sofedit Stockholders (if the Required Sofedit Stockholders have
requested such Demand Registration), the Required Sofedit Institutional
Stockholders (if the Required Sofedit Institutional Stockholders have requested
such Demand Registration), the Required CVC Stockholders (if the Required CVC
Stockholders have requested such Demand Registration) or the Required
Institutional Stockholders (if the Required Institutional Stockholders have
requested such Demand Registration).
(b) If the Requesting Investors and other holders of
Registrable Securities request Registrable Securities to be included in a Demand
Registration that is an underwritten
8
<PAGE> 11
offering and the managing underwriters advise the Company in writing that in
their opinion the number of Registrable Securities requested to be included
exceeds the number of Registrable Securities that can be sold in such offering
within a price range acceptable to the Requesting Investors who have made such
Demand Registration, then the Company will include any securities to be sold in
such Demand Registration in the following order and priority:
(A) (i) first, the Registrable Securities owned by the
Requesting Investors that have requested such
registration, provided, that if the managing
underwriters determine in good faith that a lower
number of Registrable Securities should be included,
then only that lower number of Registrable Securities
requested to be included by the Requesting Investors
shall be included in such registration, and the
Requesting Investors shall participate in the
registration pro rata based upon their total
ownership, on a fully diluted basis, of Registrable
Securities, (ii) second, the number of Registrable
Securities requested to be included by other
Stockholders (whether requested pursuant to this
Agreement or the Original Registration Rights
Agreement), which, in the opinion of such
underwriters, can be sold, pro rata among the
respective holders based upon their total ownership,
on a fully diluted basis, of Registrable Securities
and provided, further, that if the managing
underwriters determine in good faith that a lower
number of Registrable Securities held by Management
Stockholders (as defined herein and as defined in the
Original Registration Rights Agreement) and/or
Additional Stockholders (as defined herein and as
defined in the Original Registration Rights
Agreement) than such pro rata portion should be
included, then such lower number shall be included
and, as a result thereof, a greater number of
Registrable Securities owned by the other
Stockholders may be sold; (iii) third, the securities
the Company proposes to sell and (iv) fourth, any
securities other than Registrable Securities to be
sold by Persons other than the Company included
pursuant to Section 2.5(a) hereof.
(B) Any Person other than Stockholders including any
securities in such registration pursuant to Article
II hereof must pay its share of the Registration
Expenses as provided in Article VI hereof.
2.6 SELECTION OF UNDERWRITERS.
The Requesting Investors that have requested such registration
will have the right to select the underwriters and the managing underwriter to
administer any Demand Registration (which underwriters and managing underwriter
shall be reasonably acceptable to the Company).
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2.7 BLACK-OUT RIGHTS AND POSTPONEMENT.
(a) The Company shall not be required to provide a Demand
Registration if the Company, within the 90-day period preceding the date of a
request for a Demand Registration, has effected a registration of securities in
which the Requesting Investors were entitled to participate without cutback
pursuant to Demand Registration rights under Article II hereof or Piggyback
Registration rights under Article III hereof.
(b) The Company may, upon written notice (a "Black-Out
Notice") to each Requesting Investor requesting a Demand Registration, require
such Requesting Investor to withdraw such Demand Registration upon the good
faith determination by the Company that such postponement is necessary (i) to
avoid disclosure of material non-public information or (ii) as a result of a
pending material financing or acquisition transaction. In each case, each of the
Requesting Investors may not request another Demand Registration for a period of
up to sixty (60) days, as specified by the Company in such Black-Out Notice. The
Company may only give a Black-Out Notice where the giving of such notice has
been specifically approved by the Company's Board of Directors. Upon receipt of
a Black-Out Notice, the Demand Registration shall be deemed to be rescinded and
retracted and shall not be counted as a Demand Registration for any purpose. The
Company may not deliver more than one Black-Out Notice in any twelve-month
period.
ARTICLE III
PIGGYBACK REGISTRATIONS
3.1 RIGHT TO PIGGYBACK.
Whenever the Company proposes (other than pursuant to a Demand
Registration or an Initial Public Offering (unless otherwise agreed by the
Company)) to register any of its equity securities under the Securities Act
(whether for the Company's own account (other than on Forms S-4 or S-8 or any
successor forms), or for the account of any other Person) (a "Piggyback
Registration"), the Company will give prompt written notice to each Stockholder
(the "Piggyback Holders") of its intention to effect such a registration, and
such notice shall offer the Piggyback Holders the opportunity to register on the
same terms and conditions such number of shares of Registrable Securities as
such Piggyback Holder may request. The Company will include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 30 days after the receipt by such
Piggyback Holder of the Company's notice, subject to the provisions of Sections
3.3 and 3.4.
3.2 PIGGYBACK EXPENSES.
The Registration Expenses of the holders of Registrable
Securities will be paid by the Company in all Piggyback Registrations.
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3.3 PRIORITY ON PRIMARY REGISTRATIONS.
If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration are such that the success of the offering would
be materially and adversely affected, the Company will include any securities to
be sold in such registration in the following order: (i) first, the securities
the Company proposes to sell, (ii) second, the Registrable Securities requested
to be included in such registration by the Piggyback Holders, provided that, if
the managing underwriters in good faith determine that a lower number of
Registrable Securities should be included, then the Company shall be required to
include in such registration only that lower number of Registrable Securities,
and the Piggyback Holders shall participate in the registration pro rata based
upon their total ownership, on a fully diluted basis, of Registrable Securities,
provided, further, that if the managing underwriters determine in good faith
that a lower number of Registrable Securities held by Management Stockholders
(as defined herein and as defined in the Original Registration Rights Agreement)
and/or Additional Stockholders (as defined herein and as defined in the Original
Registration Rights Agreement) than such pro rata portion should be included,
then such lower number shall be included and, as a result thereof, a greater
number of Registrable Securities owned by the other Stockholders shall be
included and (iii) third, other securities requested to be included in such
registration.
3.4 PRIORITY ON SECONDARY REGISTRATIONS.
If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration are such that the
success of the offering would be materially and adversely affected, the Company
will include any securities to be sold in such registration in the following
order: (i) first, the securities of such holders, (ii) second, the Registrable
Securities requested to be included in such registration by the Piggyback
Holders pursuant to Section 3.1 hereof, provided that, if the managing
underwriters in good faith determine that a lower number of Registrable
Securities should be included, then the Company shall be required to include in
such registration only that lower number of Registrable Securities, and the
Piggyback Holders shall participate in the registration pro rata based upon
their total ownership, on a fully diluted basis, of Registrable Securities,
provided, further, that if the managing underwriters determine in good faith
that a lower number of Registrable Securities held by Management Stockholders
(as defined herein and as defined in the Original Registration Rights Agreement)
and/or Additional Stockholders (as defined herein and as defined in the Original
Registration Rights Agreement) than such pro rata portion should be included,
then such lower number shall be included and, as a result thereof, a greater
number of Registrable Securities owned by the other Stockholders may be sold and
(iii) third, other securities requested to be included in such registration.
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ARTICLE IV
HOLDBACK AGREEMENTS
4.1 HOLDBACK.
Each holder of Registrable Securities agrees not to effect any
public sale or distribution of Registrable Securities, or any securities
convertible, exchangeable or exercisable for or into such securities, during the
seven days prior to, and the 90-day period beginning on, the effective date of
an Initial Public Offering or any underwritten Demand Registration or any
underwritten Piggyback Registration in which such holder had an opportunity to
participate without cutback under Article III hereof (in each case except as
part of such underwritten registration), unless the managing underwriters of the
registered public offering otherwise agree.
4.2 COMPANY HOLDBACK.
The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible,
exchangeable or exercisable for or into such securities, during the fourteen
(14) days prior to, and during the 90-day period beginning on, the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration in which holders of Registrable Securities are selling stockholders
(except as part of such underwritten registration or pursuant to registrations
on Forms S-4 or S-8 or any successor form), unless the managing underwriters of
such underwritten Demand Registration or underwritten Piggyback Registration
otherwise agree, and (ii) to use all reasonable efforts to cause each holder of
at least five percent (5%) (on a fully diluted basis) of its equity securities,
or any securities convertible, exchangeable or exercisable for or into such
securities, to agree not to effect any public sale or distribution of any such
securities during such period (except as part of such underwritten registration,
if otherwise permitted), unless the managing underwriters of such underwritten
Demand Registration or underwritten Piggyback Registration otherwise agree.
ARTICLE V
REGISTRATION PROCEDURES
Whenever the Stockholders have requested that any Registrable
Securities be registered pursuant to this Agreement, the Company will use all
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible (or, in the case
of clause (p) below, will not):
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities (such registration
statement to include all information which the holders of the Registrable
Securities to be registered thereby shall reasonably request) and use all
reasonable efforts to cause such registration statement to become effective,
provided that as
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promptly as practicable before filing a registration statement or prospectus or
any amendments or supplements thereto, the Company will (i) furnish to counsel
selected by the holders of a majority (by number of shares) of the Registrable
Securities covered by such registration statement (and, if any Sofedit
Stockholders or any CVC Stockholders have requested inclusion of any Registrable
Securities pursuant to Article II or Article III, to one counsel for such
Sofedit Stockholders and to one counsel for such CVC Stockholders) copies of all
such documents proposed to be filed, and the Company shall not file any such
documents to which such counsel shall have reasonably objected on the grounds
that such document does not comply in all material respects with the
requirements of the Securities Act, and (ii) notify each holder of Registrable
Securities covered by such registration statement of (x) any request by the
Commission to amend such registration statement or amend or supplement any
prospectus or (y) any stop order issued or threatened by the Commission, and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered;
(b) (i) 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 until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of distribution set
forth in such Registration Statement and (ii) 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 such number of conformed copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus and, in each case, including all exhibits thereto and documents
incorporated by reference therein) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller, provided, however, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this clause (d), (ii) subject itself to taxation in
any such jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(e) furnish to each seller of Registrable Securities a signed
copy, addressed to such seller (and the underwriters, if any) of an opinion of
counsel for the Company or special counsel to the selling stockholders, dated
the effective date of such registration statement (and, if
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<PAGE> 16
such registration statement includes an underwritten public offering, dated the
date of the closing under the underwriting agreement), reasonably satisfactory
in form and substance to such seller, covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of issuer's counsel delivered to
the underwriters in underwritten public offerings, and such other legal matters
as the seller (or the underwriters, if any) may reasonably request;
(f) notify each seller of Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of any event known to the Company as a result
of which the prospectus included in such registration statement, as then in
effect, contains an untrue statement of a material fact or omits to state any
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made, and, at
the request of any such seller, the Company will prepare and furnish to such
seller a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made and in the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective by the number of days
during the period from and including the date of the giving of such notice to
such seller to the date when the Company made available to such seller an
appropriately amended or supplemented prospectus;
(g) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and to enter into such customary agreements as may be required in
furtherance thereof, including without limitation listing applications and
indemnification agreements in customary form;
(h) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(i) enter into such customary arrangements and take all such
other actions as the holders of a majority (by number of shares) of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including without limitation use of its best efforts to effect a
stock split or a combination of shares);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information
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reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(k) subject to other provisions hereof, use all reasonable
efforts to cause such Registrable Securities covered by such registration
statement to be registered with or approved by such other governmental agencies
or authorities or self-regulatory organizations as may be necessary to enable
the sellers thereof to consummate the disposition of such Registrable
Securities;
(l) use all reasonable efforts to obtain a "comfort" letter,
dated the effective date of such registration statement (and, if such
registration includes an underwritten offering, dated the date of the closing
under the underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements, addressed to each seller,
and to the underwriters, if any, covering substantially the same matters with
respect to such registration statement (and the prospectus included therein) and
with respect to events subsequent to the date of such financial statements, as
are customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other financial matters as
such seller (or the underwriters, if any) may reasonably request;
(m) otherwise use all reasonable efforts to comply with all
applicable rules and regulations of the Commission and make available to its
security holders, in each case as soon as practicable, an earnings statement
covering a period of at least twelve months, beginning with the first month
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act;
(n) permit any holder of Registrable Securities, if such
holder determines, in its sole judgment, exercised in good faith, that it might
be deemed to be a controlling person of the Company (within the meaning of the
Securities Act or the Exchange Act), to participate in the preparation of any
registration statement covering such holder's Registrable Securities and to
include therein material, furnished to the Company in writing, which in the
reasonable judgment of such holder should be included and which is reasonably
acceptable to the Company;
(o) use all reasonable efforts to obtain the lifting at the
earliest possible time of any stop order suspending the effectiveness of any
registration statement or of any order preventing or suspending the use of any
preliminary prospectus;
(p) at any time file or make any amendment to a registration
statement, or any amendment of or supplement to a prospectus (including
amendments of the documents incorporated by reference into the prospectus), of
which each seller of Registrable Securities or the managing underwriters shall
not have previously been advised and furnished a copy or to which any sellers of
Registrable Securities, the managing underwriters, or counsel for such sellers
or for the underwriters shall reasonably object;
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(q) make such representations and warranties (subject to
appropriate disclosure schedule exceptions) to sellers of Registrable Securities
and the underwriters, if any, in form, substance and scope as are customarily
made by issuers to underwriters and selling holders, as the case may be, in
underwritten public offerings of substantially the same type; and
(r) if any proposed registration statement refers to any
holder by name or otherwise as the holder of any securities of the Company then
(whether or not such holder is or might be deemed to be a controlling person of
the Company), (i) the Company shall be required at the request of such holder to
insert therein language, in form and substance reasonably satisfactory to such
holder, the Company and the managing underwriters, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such holder by name or otherwise is not
required by the Securities Act, any similar Federal or state statute, or any
rule or regulation of any other regulatory body having jurisdiction over the
offering, then in force, the Company shall be required at the request of such
holder to delete the reference to such holder.
ARTICLE VI
REGISTRATION EXPENSES
6.1 FEES GENERALLY.
All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation internal expenses
(including without limitation all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance, the expenses
and fees for listing the securities to be registered on each securities exchange
on which similar securities issued by the Company are then listed, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including without limitation reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses") shall be borne as provided for in Sections 2.2, 2.3,
2.4, 2.5, 3.2 and this Article VI; provided, that each Stockholder shall pay any
underwriting fees, discounts or commissions attributable to the sale of its
Registrable Securities.
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6.2 COUNSEL FEES.
In connection with each Demand Registration, the Company will
reimburse the Requesting Investor for such Demand Registration for the
reasonable fees and disbursements of one counsel chosen by the relevant
Requesting Investor.
ARTICLE VII
UNDERWRITTEN OFFERINGS
7.1 DEMAND UNDERWRITTEN OFFERINGS.
If requested by the underwriters for any underwritten
offerings of Registrable Securities pursuant to a Demand Registration, the
Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to be satisfactory in substance and form to a
majority (by number of shares) of holders of Registrable Securities being
offered and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally included in agreements of
this type, including without limitation indemnities customarily included in such
agreements. The holders of the Registrable Securities will cooperate in good
faith with the Company in the negotiation of the underwriting agreement. The
holders of Registrable Securities to be distributed by such underwriters may be
parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. The Company shall
cooperate with any such holder of Registrable Securities in order to limit any
representations or warranties to, or agreements with, the Company or the
underwriters to be made by such holder only to those representations, warranties
or agreements regarding such holder, such holder's Registrable Securities and
such holder's intended method of distribution and any other representation
required by applicable law.
7.2 INCIDENTAL UNDERWRITTEN OFFERINGS.
If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by Article III of this
Agreement and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any holder of Registrable
Securities as provided in Article III of this Agreement, arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
such holder, subject to the limitations set forth in Article III hereof, among
the securities to be distributed by such underwriters. The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriters, and
may, at their option, require that any or all of the representations and
warranties by, and the other
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agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. The
Company shall cooperate with any such holder of Registrable Securities in order
to limit any representations or warranties to, or agreements with, the Company
or the underwriters to be made by such holder only to those representations,
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method of distribution and any other
representation required by applicable law.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY.
The Company agrees to indemnify and hold harmless, to the
fullest extent permitted by law, each of the holders of any Registrable
Securities covered by such registration statement, each other Person, if any,
who controls such holder within the meaning of the Securities Act or the
Exchange Act (each such Person, a "Controlling Person"), and each of their
respective directors, officers, managers, partners, members, stockholders and
other Controlling Persons, as follows:
(i) against any and all loss, liability, claim, damage or
expense arising out of or based upon an untrue statement or
alleged untrue statement of a material fact contained in any
registration statement (or any amendment or supplement
thereto), including all documents incorporated therein by
reference, or in any preliminary prospectus or final or
summary prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a 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;
(ii) against any and all loss, liability, claim, damage and
expense to the extent of the aggregate amount paid in
settlement of any litigation, investigation or proceeding by
any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement
or omission or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the
Company; and
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(iii) against any and all expense incurred by them in
connection with investigating, preparing or defending against
any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under clause (i)
or (ii) above;
provided, that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder expressly for use in the preparation of any registration statement
(or any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or final or summary
prospectus (or any amendment or supplement thereto); and provided, further, that
the Company will not be liable to any holder under the indemnity agreement in
this Section 8.1, with respect to any preliminary prospectus or the final
prospectus or the final prospectus as amended or supplemented, as the case may
be, to the extent that any such loss, liability, claim, damage or expense of
such controlling Person or holder results from the fact that such holder sold
Registrable Securities to a Person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the final prospectus
or of the final prospectus as then amended or supplemented, whichever is most
recent, if the Company has previously and timely furnished copies thereof to
such holder. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such holder, such Controlling Person
or any such director, officer, manager, partner, member, stockholder or other
Controlling Person and shall survive the transfer of such securities by such
seller.
8.2 INDEMNIFICATION BY A SELLING STOCKHOLDER.
In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder agrees to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 8.1 of this Agreement), to the extent permitted by law, the
Company, each Controlling Person of the Company, and each of their respective
directors, officers, managers, partners, members, stockholders and other
Controlling Persons, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged omission
was made in reliance upon and in conformity with written information that
relates only to such holder or the plan of distribution that is expressly
furnished to the Company by or on behalf of such holder for use in the
preparation of such registration statement, preliminary, final or summary
prospectus, amendment or supplement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company,
such holder, or any of their respective Controlling Persons, as the case may be,
or any
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of their respective directors, officers, managers, partners, members,
stockholders or other Controlling Persons and shall survive the transfer of such
securities by such holder. With respect to each claim pursuant to this Section
8.2, each holder's maximum liability under this Section shall be limited to an
amount equal to the net proceeds actually received by such holder (after
deducting any underwriting discount and expenses) from the sale of Registrable
Securities being sold pursuant to such registration statement or prospectus by
such holder.
8.3 INDEMNIFICATION PROCEDURE.
Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding involving a claim
referred to in Section 8.1 or Section 8.2 of this Agreement, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under Section
8.1 or Section 8.2 of this Agreement except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal fees and expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party's reasonable judgment an actual or potential conflict of interest between
such indemnified and indemnifying parties may exist in respect of such claim, in
which case the indemnifying party shall not be liable for the fees and expenses
of (i) more than one counsel (in addition to any local counsel) for all holders
of Registrable Securities, selected by a majority (by number of shares) of the
holders of Registrable Securities, or (ii) more than one counsel (in addition to
any local counsel) for the Company in connection with any one action or separate
but similar or related actions. An indemnifying party who is not entitled to
(pursuant to an immediately preceding sentence), or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel (in addition to any local counsel) for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party an actual or potential conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional counsel or
counsels. The indemnifying party will not, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not such
indemnified party or any Person who controls such indemnified party is a party
to such claim, action, suit or proceeding), unless such settlement, compromise
or consent includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding. Notwithstanding
anything to the contrary set forth herein, and
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<PAGE> 23
without limiting any of the rights set forth above, in any event any party will
have the right to retain, at its own expense, counsel with respect to the
defense of a claim.
8.4 UNDERWRITING AGREEMENT.
The Company and each holder of Registrable Securities
requesting registration shall provide for the foregoing indemnity (with
appropriate modifications) in any underwriting agreement with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of any governmental authority.
8.5 CONTRIBUTION.
If the indemnification provided for in Sections 8.1 and 8.2 of
this Agreement is unavailable (for any reason other than a determination of its
inapplicability by a court of competent jurisdiction) to hold harmless an
indemnified party under such Sections, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in Section 8.1 or
Section 8.2 of this Agreement in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand, and the
indemnified party on the other, in connection with statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations, including without limitation the
relative benefits received by each party from the offering of the securities
covered by such registration statement, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 8.5
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first and second sentences of this Section 8.5. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this Section 8.5 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim (which shall be limited as provided in Section 8.3 of this Agreement if
the indemnifying party has assumed the defense of any such action in accordance
with the provisions thereof) which is the subject of this Section 8.5. Promptly
after receipt by an indemnified party under this Section 8.5 of notice of the
commencement of any action against such party in respect of which a claim for
contribution may be made against an indemnifying party under this Section 8.5,
such indemnified party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in Section 8.3 of this Agreement
has not been given with respect to such
21
<PAGE> 24
action; provided that the omission to so notify the indemnifying party shall not
relieve the indemnifying party from any liability which it may otherwise have to
any indemnified party under this Section 8.5, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. The
Company and each holder of Registrable Securities agrees with each other and the
underwriters of the Registrable Securities, if requested by such underwriters,
(i) that the underwriters' portion of such contribution shall not exceed the
underwriting discount and (ii) that the amount of such contribution shall not
exceed an amount equal to the net proceeds actually received by such
indemnifying party from the sale of Registrable Securities in the offering to
which the losses, liabilities, claims, damages or expenses of the indemnified
parties relate. 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.
8.6 PERIODIC PAYMENTS.
The indemnification required by this Article VIII shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
ARTICLE IX
RULE 144
If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act, the Company
covenants that it will file the reports required to be filed by it under the
Securities Act and the Exchange Act (or, if the Company is not required to file
such reports, it will, upon the request of any holder of Registrable Securities,
make publicly available other information), and it will take such further action
as any holder of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holder to sell shares of
Registrable Securities without registration under the Securities Act in
compliance with (i) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
ARTICLE X
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any underwritten registration
hereunder unless such Person (i) agrees to sell such Person's securities on the
basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such
22
<PAGE> 25
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, escrow agreements and other
documents reasonably required under the terms of such underwriting arrangements
and consistent with the provisions of this Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 NO INCONSISTENT AGREEMENTS.
The Company represents and warrants that it does not currently
have, and covenants that it will not hereafter enter into, any agreement which
is inconsistent with, or would otherwise restrict the performance by the Company
of, its obligations hereunder.
11.2 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES.
The Company will not take any action, or fail to take any
action which it may properly take, with respect to its securities which would
adversely affect the ability of the holders of Registrable Securities to include
Registrable Securities in a registration undertaken pursuant to this Agreement
or which, to the extent within its control, would adversely affect the
marketability of such Registrable Securities in any such registration (including
without limitation effecting a stock split or a combination of shares).
11.3 SPECIFIC PERFORMANCE.
The parties hereto agree that irreparable damage would occur
in the event any provision of this Agreement was not performed in accordance
with the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or
equity; provided, however, that each of the parties agrees to provide the other
parties with written notice at least two business days prior to filing any
motion or other pleading seeking a temporary restraining order, a temporary or
permanent injunction, specific performance, or any other equitable remedy and to
give such other parties and their counsel a reasonable opportunity to attend and
participate in any judicial or administrative hearing or other proceeding held
to adjudicate or rule upon any such motion or pleading.
11.4 ACTIONS TAKEN; AMENDMENTS AND WAIVERS.
Except as otherwise provided herein, no modification,
amendment or waiver of any provision of this Agreement will be effective against
the Company or any holder of Registrable Securities, unless such modification,
amendment or waiver is approved in writing by a written instrument duly executed
by the Company, the CVC Stockholders and the Sofedit Stockholders; provided that
the Company shall provide twenty (20) days' prior written notice of any such
amendment not governed by the next proviso; and provided further that (a) any
23
<PAGE> 26
amendment, modification, or supplement that adversely and disproportionately
affects, in their capacity as holders of Registrable Securities, the Sofedit
Institutional Stockholders, the Institutional Stockholders, Former Management
Stockholders, Management Stockholders or Additional Stockholders, as the case
may be, shall also require the consent of the Sofedit Institutional
Stockholders, Institutional Stockholders, Former Management Stockholders,
Management Stockholders or Additional Stockholders, respectively, and (b) any
amendment, modification or supplement that adversely and disproportionately
affects less than all of the Sofedit Institutional Stockholders, Institutional
Stockholders, Former Management Stockholders, Management Stockholders or
Additional Stockholders, as the case may be, shall also require consent of the
Sofedit Institutional Stockholders, Institutional Stockholders, Former
Management Stockholders, Management Stockholders or Additional Stockholders so
affected. The failure of any party to enforce any of the provisions of this
Agreement will in no way be construed as a waiver of such provisions and will
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
11.5 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not; in addition, whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of purchasers or holders
of Registrable Securities are also for the benefit of, and enforceable by, any
subsequent holder of Registrable Securities, except to the extent reserved to or
by the transferor in connection with any such transfer; provided, that the
benefits of this Agreement shall inure to and be enforceable by any transferee
of Registrable Securities so long as such transferee shall have acquired such
securities in accordance with the terms of the Stockholders Agreement and shall
have executed a Registration Rights Joinder Agreement. The parties hereto agree
that in connection with the award of the Options to any employee, the Company
may allow such employee to execute a Registration Rights Joinder Agreement, and
thereby enter into and become a party to this Agreement as a Management
Stockholder hereunder.
11.6 NOTICES.
All notices, requests and other communications hereunder shall
be given in the manner set forth in the Stockholders Agreement.
11.7 HEADINGS.
The headings used in this Agreement have been inserted for
convenience of reference only and do not affect the provisions hereof.
24
<PAGE> 27
11.8 GENDER.
Whenever the pronouns "he" or "his" are used herein, they
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural, and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
11.9 INVALID PROVISIONS.
If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future law, and if the rights or
obligations of any party hereto under this Agreement will not be materially and
adversely affected thereby, (i) such provision will be fully severable, (ii)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
11.10 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
11.11 COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
11.12 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
EACH PARTY OTHER THAN THE STATE OF MICHIGAN, CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW
YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS
RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH SUCH PARTY
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
25
<PAGE> 28
AGREEMENT. EACH SUCH PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE PARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE
TO BECOME EFFECTIVE FIFTEEN (15) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH
LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR
PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS,
AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLE LAW.
11.13 WAIVER OF JURY TRIAL.
EACH PARTY, OTHER THAN THE STATE OF MICHIGAN, HEREBY WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. EACH SUCH PARTY ALSO WAIVES ANY BOND OR SURETY
OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH
PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH SUCH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 29
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
MS ACQUISITION CORP.
By:
-----------------------------------------
Name:
Title:
FORMER SOFEDIT INVESTORS
CEFI
By:
-----------------------------------------
Name:
Title:
YACESE S.A.
By:
-----------------------------------------
Name:
Title:
H.H.A. WAY
By:
-----------------------------------------
Name:
Title:
[Signature page to Registration Rights Agreement]
<PAGE> 30
SOFEDIT INSTITUTIONAL
INVESTORS
COMPAGNIE DE FINANCEMENT
INDUSTRIEL S.A.
By:
-----------------------------------------
Name:
Title:
JAFCO I SAINT HONORE S.A.
By:
-----------------------------------------
Name:
Title:
JAFCO II SAINT HONORE S.A.
By:
-----------------------------------------
Name:
Title:
TOCQUEVILLE EUROPE L.P.
By:
-----------------------------------------
Name:
Title:
BIDASSOA INVESTISSEMENTS S.A.
By:
-----------------------------------------
Name:
Title:
[Signature page to Registration Rights Agreement]
<PAGE> 31
CININDEV
By:
-----------------------------------------
Name:
Title:
CFJPE S.A.
By:
-----------------------------------------
Name:
Title:
OBERON S.A.
By:
-----------------------------------------
Name:
Title:
EURO SYNERGIES S.A.
By:
-----------------------------------------
Name:
Title:
VENTADOUR INVESTISSEMENTS S.A.
By:
-----------------------------------------
Name:
Title:
COGEPA S.A.
By:
-----------------------------------------
Name:
Title:
[Signature page to Registration Rights Agreement]
<PAGE> 32
SOFEDICI S.C.
By:
-----------------------------------------
Name:
Title:
APAX PARTNER CLUB S.A.
By:
-----------------------------------------
Name:
Title:
ALTAMIR S.A.
By:
-----------------------------------------
Name:
Title:
APAX FRANCE IV S.A.
By:
-----------------------------------------
Name:
Title:
CVC
CITICORP VENTURE CAPITAL, LTD.
By:
-----------------------------------------
Name:
Title:
[Signature page to Registration Rights Agreement]
<PAGE> 33
CVC CO-INVESTORS
-----------------------------------
WILLIAM T. COMFORT
-----------------------------------
RICHARD M. CASHIN
-----------------------------------
DAVID F. THOMAS
-----------------------------------
THOMAS F. McWILLIAMS
-----------------------------------
DAVID Y. HOWE
-----------------------------------
MICHAEL A. DELANEY
-----------------------------------
JOHN WEBER
-----------------------------------
JAMES URRY
-----------------------------------
JOSEPH SILVESTRI
-----------------------------------
CHARLES CORPENING
[Signature page to Registration Rights Agreement]
<PAGE> 34
BERKSHIRE FUND
THE BERKSHIRE FUND,
A LIMITED PARTNERSHIP
By: BERKSHIRE CAPITAL ASSOCIATES,
LIMITED PARTNERSHIP
Its General Partner
By:
-----------------------------------
A General Partner
BERKSHIRE GROUP
-----------------------------------
BRADLEY M. BLOOM
-----------------------------------
J. CHRISTOPHER CLIFFORD
-----------------------------------
RUSSELL L. EPKER
-----------------------------------
CARL FERENBACH
-----------------------------------
RICHARD K. LUBIN
-----------------------------------
LEA ANNE S. OTTINGER
-----------------------------------
KEVIN T. CALLAGHAN
[Signature page to Registration Rights Agreement]
<PAGE> 35
PRUDENTIAL
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
--------------------------------
Name:
Title:
PRUCO
PRUCO LIFE INSURANCE COMPANY
By:
--------------------------------
Name:
Title:
STATE OF MICHIGAN
STATE TREASURER OF THE STATE OF MICHIGAN,
CUSTODIAN OF THE PUBLIC SCHOOL EMPLOYEES'
RETIREMENT SYSTEM; STATE EMPLOYEES'
RETIREMENT SYSTEM; MICHIGAN STATE POLICE
RETIREMENT SYSTEM; JUDGES' RETIREMENT
SYSTEM; AND PROBATE JUDGES' RETIREMENT
SYSTEM
By:
--------------------------------
Name:
Title
[Signature page to Registration Rights Agreement]
<PAGE> 36
FORMER MANAGEMENT GROUP
----------------------------------
JEROME SINGER
----------------------------------
DOUGLAS A. THAL
--------------------------------
ROBERT J. KLEIN
--------------------------------
STEVEN SINGER
MANAGEMENT GROUP
--------------------------------
UELI SPRING
--------------------------------
HAROLD BROWN
-------------------------------
GARY EASTERLY
--------------------------------
EDWARD LAWSON
--------------------------------
DANIEL PIERCE
[Signature page to Registration Rights Agreement]
<PAGE> 37
--------------------------------
DAVID THAL
--------------------------------
RALPH BREDENBECK
[Signature page to Registration Rights Agreement]
<PAGE> 38
CVC CO-INVESTORS, CONTINUED
CCT PARTNERS III, L.P.,
by its General Partner
By:
-------------------------------
Name:
Title:
[Signature page to Registration Rights Agreement]
