Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration Statement 130 712K
2: EX-3.1 Amended and Restated Certificate of Incorporation 7 22K
3: EX-3.2 Certification of Designations, Preference and 22 84K
Rights
4: EX-3.3 By-Laws of Lpa Holding Corp. 15 61K
5: EX-3.4 Restated Certificate of Incorporation 43 140K
6: EX-3.5 Amended and Restated Bylaws 28 101K
7: EX-4.1 Indenture 107 386K
8: EX-10.1 Purchase Agreement 33 125K
16: EX-10.10 Rebecca L. Perry Employment Agreement 10 40K
17: EX-10.11 Phillip M. Kane Employment Agreement 10 40K
18: EX-10.12 Credit Agreement 81 376K
19: EX-10.13 Pledge Agreement 17 76K
20: EX-10.14 Security Agreement 30 112K
21: EX-10.15 Parent Guarantee Agreement 6 30K
22: EX-10.16 Subsidiary Guarantee Agreement 11 47K
23: EX-10.17 Indemnity, Subrogation & Contribution Agreement 8 33K
9: EX-10.2 Exchange and Registration Rights Agreement 23 99K
10: EX-10.3 Agreement and Plan of Merger 47 188K
11: EX-10.5 Stockholders Agreement 35 106K
12: EX-10.6 1998 Stock Option Plan 20 71K
13: EX-10.7 Preferred Stock Registration Rights Agreement 18 64K
14: EX-10.8 Registration Rights Agreement 22 70K
15: EX-10.9 Employment Agreement 13 52K
24: EX-12.1 Computation of Ratios 1 12K
25: EX-21.1 Subsidiaries of Registrant 1 10K
26: EX-23.2 Independent Auditors' Consent and Report on 1 12K
Schedules
27: EX-25.1 Form T-1 7 30K
28: EX-27.1 Financial Data Schedule 2± 15K
29: EX-99.1 Letter of Transmittal 15 67K
30: EX-99.2 Notice of Guaranteed Delivery 3 17K
31: EX-99.3 Offer to Exchange 2 16K
32: EX-99.4 Offer to Exchange 2 17K
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LPA HOLDING CORP.
(a Delaware corporation)
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STOCKHOLDERS AGREEMENT
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May 11, 1998
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ATTACHMENTS
EXHIBITS
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Exhibit A Joinder Agreement
Exhibit B Amended and Restated
Certificate of Incorporation
Exhibit C Rollover Option Amendments
SCHEDULES
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Schedule I Stockholders
STOCKHOLDERS AGREEMENT dated as of
May 11, 1998, among LPA HOLDING
CORP., a Delaware corporation (the
"Corporation"), VESTAR/LPT LIMITED
PARTNERSHIP, a Delaware limited
partnership ("Vestar"), LPA
INVESTMENT LLC, a Delaware limited
liability company ("LPA Investment"),
and the management stockholders
listed on Schedule I hereto (the
"Management Stockholders").
It is deemed to be in the best interests of the
Corporation and the Stockholders that provision be made for the
continuity and stability of the business and policies of the Corporation,
and, to that end, the Corporation and the Stockholders hereby set forth
their agreement with respect to the Shares owned by them.
ACCORDINGLY, in consideration of the mutual covenants
and agreements contained in this Agreement, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
1.1. Definitions.
Capitalized terms used in this Agreement have the
meanings ascribed to them below. Capitalized terms used but not defined
in this Agreement have the meanings ascribe to them in the Merger
Agreement:
"Affiliate" means, with respect to any Person, (i) a
director or executive officer of such Person, (ii) a spouse, parent,
sibling or descendant of such Person (or a spouse, parent, sibling or
descendant of any director or executive officer of such Person), and
(iii) any other Person that, directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with
such Person. For purposes of this Agreement, the term "control"
(including, with correlative meaning, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to
any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise. When such term is used in the context of a Regulatory Problem,
it
shall have also the meaning ascribed to it under any Applicable Law.
"Applicable Law" means, as to any Person, all
provisions of laws, statutes, ordinances, rules, regulations, permits,
certificates or orders of any Governmental Authority applicable to such
Person or any of its assets or property and all judgments applicable to
such Person.
"Approved Sale" has the meaning ascribed to it in
Section 3.3(a).
"Bylaws" means the Bylaws of the Corporation as
amended, modified supplemented and restated and in effect from time to
time.
"Certificate of Incorporation" means the Second Amended
and Restated Certificate of Incorporation of the Corporation as filed
with the Secretary of State of Delaware immediately after the Effective
Time.
"Common Stock" means, collectively, the Class A Common
Stock, $.01 par value, of the Corporation and the Class B Common Stock,
$.01 par value, of the Corporation.
"Common Stock Equivalent" means the right to acquire,
whether or not immediately exercisable, one share of Common Stock,
whether evidenced by an option, warrant, convertible security or other
instrument or agreement.
"Common Stock Percentage" means, with respect to a
Stockholder, the fraction, expressed as a percentage, the numerator of
which is the total number of shares of Common Stock held by such
Stockholder (including Common Stock issuable upon exercise or conversion
of Securities held by such Stockholder which are convertible or
exercisable at the time in question) and the denominator of which is the
total number of shares of Common Stock outstanding and Common Stock
issuable upon exercise or conversion of Securities then outstanding and
exercisable or convertible.
"Control Person" means, with respect to any Person, any
Person that, directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with such Person.
"Corporation" has the meaning ascribed to it in the
Caption.
"Excluded Securities" has the meaning ascribed to it in
Section 4.2.
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"Independent Director" has the meaning ascribed to it
in Section 2.2(c).
"Joinder Agreement" has the meaning ascribed to it in
Section 3.1.
"LPA Investment" has the meaning ascribed to it in the
Caption.
"LPA Investment Stockholders" means LPA Investment and
any direct or indirect transferee thereof that shall become a party to
this Agreement in accordance with the terms hereof.
"LPA Investment Directors" has the meaning ascribed to
it in Section 2.2(a).
"Management Director" has the meaning ascribed to it in
Section 2.2(b).
"Management Stockholders" has the meaning set forth in
the Caption to this Agreement and shall include any other Person who is a
full-time employee of the Corporation or any Subsidiary of the
Corporation and who has become a party to this Agreement.
"Management Stock Option Plan" means any stock option
plan approved by the Board of Directors of the Corporation or a committee
thereof.
"Notice of Acceptance" has the meaning ascribed to it
in Section 4.1(b).
"Offer" has the meaning ascribed to it in Section
4.1(a).
"Offered Securities" has the meaning ascribed to it in
Section 4.1(a).
"Permitted Transfer" has the meaning ascribed to it in
Section 3.1(b).
"Person" shall be construed broadly and shall include
an individual, a partnership, a corporation, an association, a joint
stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.
"Public Offering" means the closing of a public
offering of Securities pursuant to a registration statement declared
effective under the Securities Act, except that a Public Offering shall
not include an offering made in connection with a business acquisition or
an employee benefit plan.
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"Public Sale" means any sale, occurring simultaneously
with or after a Public Offering, of Securities to the public pursuant to
an offering registered under the Securities Act or to the public through
a broker, dealer or market maker pursuant to the provisions of Rule 144.
"Qualified Public Offering" means the sale by one or
more Persons in an underwritten Public Offering registered under the
Securities Act of equity Securities of the Corporation (or its successor)
which results in the aggregate gross proceeds to the Corporation from
such sales (before underwriters' discounts and selling commissions)
greater than or equal to $25,000,000.
"Qualified Stockholder" means any Stockholder which, at
the time in question, has a Common Stock Percentage of 2% or more.
"Refused Securities" has the meaning ascribed to it in
Section 4.1(c).
"Registration Rights Agreement" means the Registration
Rights Agreement dated as of the date hereof entered into simultaneously
with the execution and delivery of this Agreement between the Corporation
and the parties named therein.
"Regulated Holder" has the meaning ascribed to it in
Section 6.1(a).
"Regulatory Problem" means, with respect to any
Stockholder or any member of the Investor, (i) any set of facts or
circumstance wherein it has been asserted by any governmental regulatory
agency (or such Stockholder or member, as applicable, believes that there
is a substantial risk of such assertion) that such Stockholder or member,
as applicable, is not entitled to hold, or exercise any significant right
with respect to, the Securities of the Corporation or the Investor,
respectively, which it holds or (ii) a Voting Regulatory Problem.
"Requisite LPA Investment Stockholders" means those LPA
Investment Stockholders who hold in the aggregate in excess of 50 percent
of the outstanding shares of Common Stock (including shares of Common
Stock issuable upon exercise or conversion of Securities) held by the LPA
Investment Stockholders.
"Requisite Management Stockholders" means the
Management Stockholders who hold in the aggregate in excess of 50 percent
of the outstanding shares of Common Stock (including shares of Common
Stock issuable
upon exercise or conversion of Securities) held by Management
Stockholders.
"Requisite Stockholders" means the Stockholders who
hold in the aggregate in excess of 50 percent of the outstanding shares
of Common Stock (including shares of Common Stock issuable
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upon exercise or conversion of Securities) held by all Stockholders.
"Requisite Vestar Stockholders" means those Vestar
Stockholders who hold in the aggregate in excess of 50 percent of the
outstanding shares of Common Stock (including shares of Common Stock
issuable upon exercise or conversion of Securities) held by Vestar
Stockholders.
"Restricted Shares" shall mean the Shares, options, and
any shares of capital stock received in respect thereof, in each case
which have not theretofore been transferred in a Public Sale.
"Rule 144" means Rule 144 promulgated by the Securities
and Exchange Commission under the Securities Act, as such rule may be
amended from time to time, or any similar rule then in force.
"Sale of the Corporation" means (i) the sale or
transfer by the Corporation of all or substantially all of its assets,
(ii) any merger or consolidation of the Corporation in which its capital
stock is exchanged for cash, stock, debt or other marketable securities
of another entity, or (iii) any sale of Stock of the Corporation or any
merger or consolidation of the Corporation in which the holders of the
Corporation's outstanding capital Stock possessing the authority to
elect, nominate or designate a majority of the Corporation's Board of
Directors immediately prior to the merger do not continue to own the
Corporation's outstanding capital stock possessing the authority to
elect, nominate or designate a majority of the surviving entity's Board
of Directors immediately after such transaction.
"Sale Notice" has the meaning ascribed to it in Section 3.2.
"Securities" means "securities" as defined in Section
2(1) of the Securities Act and includes, with respect to any Person, such
Person's capital stock or other equity interests or any options, warrants
or other securities that are directly or indirectly convertible into, or
exercisable or exchangeable for, such Person's capital stock or other
equity interests. Whenever a reference herein to Securities is referring
to any derivative Securities, the rights of a Stockholder shall apply to
such derivative Securities and all underlying Securities directly or
indirectly issuable upon conversion, exchange or exercise of such
derivative Securities.
"Securities Act" means the Securities Act of 1933, as
amended, or any similar federal law then in force.
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"Securities and Exchange Commission" means the
Securities and Exchange Commission and includes any governmental body or
agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange
Act of 1934, as amended, or any similar federal law then in force.
"Shares" means collectively, shares of Common Stock and
Common Stock Equivalents.
"Stock" means the Common Stock and any and all other
equity Securities (including derivative Securities therefor) of the
Corporation.
"Stockholders" means the Management Stockholders, the
Vestar Stockholders and the LPA Investment Stockholders and shall include
any Person who hereafter becomes a party to this Agreement as a
Stockholder pursuant to a Joinder Agreement executed and delivered
pursuant to Section 3.1.
"Subsidiary" means, with respect to any Person, any
corporation of which the shares of stock having a majority of the general
voting power in electing the board of directors of such corporation are,
at the time as of which any determination is being made, owned by such
Person either directly or indirectly through Subsidiaries.
"Tag-Along Notice" has the meaning ascribed to it in
Section 3.2.
"Transfer" shall be construed broadly and shall include
any transfer (whether voluntary, involuntary or by operation of law) of
securities or any interest therein, including without limitation, by way
of issuance, sale, participation, pledge, gift, bequeath, intestate
transfer, distribution, liquidation, merger or consolidation.
"Transferring Stockholder" has the meaning ascribed to
it in Section 3.2.
"Vestar" has the meaning ascribed to it in the Caption.
"Vestar Stockholder" means Vestar and any direct or
indirect transferee thereof that shall become a party to this Agreement
in accordance with the terms hereof.
"Voting Regulatory Problem" shall exist when a Person
and such Person's Affiliates would own, control or have the power
(including voting rights) over a greater quantity of Securities of any
kind issued by the Corporation or any other Person than are permitted
under any Applicable Law.
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1.2 Rules of Construction.
(a) The use in this Agreement of the term "including"
means "including, without limitation." The words "herein," "hereof,"
"hereunder" and other words of similar import refer to this Agreement as
a whole, including the schedules and exhibits, as the same may from time
to time be amended or supplemented, and not to any particular section,
subsection, paragraph, subparagraph or clause contained in this
Agreement. All references to sections, schedules and exhibits mean the
sections of this Agreement and the schedules and exhibits attached to
this Agreement.
(b) Unless otherwise expressly set forth herein,
whenever the term "best efforts" is used, such efforts shall not include
any obligation to incur substantial expenses or liabilities.
(c) The title of and the section and paragraph headings
in this Agreement are for convenience of reference only and shall not
govern the interpretation of any of the terms or provisions of this
Agreement.
(d) The use herein of the masculine, feminine or neuter
forms shall also denote the other forms, as in each case the context may
require.
(e) Where specific language is used to clarify by
example a general statement contained herein, such specific language
shall not be deemed to modify, limit or restrict in any manner the
construction of the general statement to which it relates. The language
used in this Agreement has been chosen by the parties to express their
mutual intent, and no rule of strict construction shall be applied
against any party.
ARTICLE II
BOARD OF DIRECTORS
2.1. Number of Directors.
Each Stockholder, shall from time to time take such
action, in his capacity as a stockholder of the Corporation and including
the voting of the Shares owned or controlled by such Stockholder, as may
be necessary to cause the Corporation to be managed by a Board consisting
of between five and seven Directors, as such number is designated from
time to time by the Requisite LPA Investment Stockholders. Each Director
shall have the right to cast one vote on all actions of the Board, except
that the director nominated by LPA Investment in respect of the shares of
Class B Common Stock held by LPA Investment shall be entitled to three
votes on all actions of the Board.
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2.2. Election of Directors.
Each Stockholder in his capacity as a stockholder of
the Corporation, shall, promptly after the execution of this Agreement
and at any time and from time to time thereafter that Directors of the
Corporation are to be elected, take such action as may be necessary to
provide for the election of the Directors nominated as follows:
(a) three Directors to be nominated by LPA Investment
in respect of the Class A Common Stock held by LPA Investment (the "LPA
Investment Class A Directors"), who initially shall be Mitchell J. Blutt,
M.D., Stephen P. Murray and Brian J. Richmand.
(b) one Director to be nominated by LPA Investment in
respect of the Class B Common Stock held by LPA Investment (the "LPA
Investment Class B Director" and, collectively with the LPA Investment
Class A Directors, the "LPA Investment Directors"), who initially shall
be Robert E. King;
(c) one Director to be nominated by the Requisite
Management Stockholders, which Director shall serve only for so long as
such Person is an employee of the Corporation or one of its Subsidiaries
(the "Management Director"), who initially shall be James R. Kahl; and
(d) if the Board consists of more than five persons,
the remaining Directors shall be individuals who are not employees,
directors, officers or Affiliates of the Corporation or any Stockholder
thereof (the "Independent Director") to be mutually selected by the
Requisite LPA Investment Stockholders and the Requisite Management
Stockholders.
The execution and delivery of this Agreement by those
Stockholders entitled to vote for the election of Directors of the
Corporation constitutes such Stockholders' approval by written consent of
the election of the Directors of the Corporation of the nominees set
forth in this Section 2.2.
2.3. Meetings of the Board of Directors.
The Board of Directors of the Corporation shall call,
and use their best efforts to have, regular meetings not less than
quarterly. The Corporation shall pay the reasonable out-of-pocket
expenses incurred by each Board member designated pursuant to Section 2.2
in connection with attending the meetings of the Board and any committees
thereof.
2.4. Covenant to Vote.
Each of the Stockholders agrees to vote, in person or
by proxy, all of the Stock issued by the Corporation and owned by such
Stockholder and entitled to vote at any annual or special
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meeting of the stockholders of the Corporation called for the purpose of
voting on the election of Directors, or to execute a written consent in
lieu thereof, in favor of the election of the Directors nominated in
accordance with Section 2.2 hereof.
2.5. Removal of Directors.
(a) At all times (i) the Requisite LPA Investment
Stockholders shall have the right to remove, without cause, all or any of
the LPA Investment Directors, (ii) the Requisite Management Stockholders
shall have the right to remove, without cause, the Management Director,
(iii) the Requisite LPA Investment Stockholders or the Requisite
Management Stockholders each shall have the right to remove, without
cause, all or any of the Independent Directors and (iv) any Management
Director who is an employee and who ceases to be employed by the
Corporation or its Subsidiaries shall be removed upon the termination of
such Management Director's employment.
(b) In the event that any Stockholders acting as
described in Section 2.5(a) above shall, in accordance with their rights
specified herein, remove any Director or Directors with respect to whom
they have such right, then each of the other Stockholders hereby agrees
to join with such acting Stockholders in such removal as described above,
and in causing the Corporation either to promptly hold a special meeting
of stockholders and to vote, in person or by proxy, all of his securities
issued by the Corporation and entitled to vote at such meeting or to
execute a written consent in lieu thereof, as the case may be, in favor
of such removal.
2.6. Vacancies.
In the event a vacancy is created on the Board by
reason of the death, removal or resignation of any Director, each of the
Stockholders hereby agrees, in its capacity as a stockholder of the
Corporation, to elect, or to use its best efforts to cause the remaining
Directors to elect, a Director to fill such vacancy in accordance with
the selection procedures set forth in Section 2.2 hereof. Such election
shall occur upon the earlier of (i) the first meeting of the Board, or
the next presentation of a written consent of the Board in lieu of a
meeting, after such vacancy occurs or (ii) the first meeting of the
stockholders or the next presentation of a written consent of the
stockholders in lieu of a meeting, after such vacancy occurs. Each
Stockholder also hereby agrees to vote all of the Securities issued by
the Corporation and owned by such Stockholder and entitled to vote at
such first meeting of stockholders, in person or by proxy, or pursuant to
such first written consent of stockholders, if necessary, in favor of
removing any Director elected to fill such vacancy other than in
accordance with the selection procedures of Section 2.2 hereof.
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2.7. Subsidiaries.
The Corporation agrees that the Management Director and
at least two LPA Investment Directors shall be entitled to serve as
directors of each Subsidiary of the Corporation and on each committee of
the Board and each committee of each Subsidiary.
2.8. No Inconsistent Agreements.
Each Stockholder represents that he has not granted and
is not a party to any proxy, voting trust or other agreement which is
inconsistent with or conflicts with the provisions of this Agreement, and
no Stockholder shall grant any proxy or become party to any voting trust
or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement.
2.9. Approval of Certificate of Incorporation.
The execution and delivery of this Agreement by each of
the Stockholders shall constitute its approval as the stockholders of the
Corporation of the Certificate of Incorporation.
ARTICLE III
TRANSFER OF STOCK
3.1. General.
(a) The provisions regarding Transfers of Stock
contained in this Article III shall apply to all Shares now owned or
hereafter acquired by a Stockholder, including Shares acquired by reason
of dividend, distribution, exchange or conversion, additional issuances
of Shares, and acquisitions of outstanding Shares from another Person,
and such provisions shall apply to any Shares obtained by a Stockholder
upon the exercise, exchange or conversion of any option, warrant or other
Share. Without the consent of the Requisite Stockholders, no Stockholder
shall Transfer any Shares (i) if such Transfer (x) is either (A) to the
Company, an Affiliate of the Company, any Stockholder or any holder of
Stock prior to the date hereof or (B) prior to the end of the sixth month
immediately following the date hereof and (y) in the opinion of the
Corporation's accountants, such Transfer would adversely affect the
ability of the Corporation to use recapitalization accounting with
respect to the transactions contemplated by the Merger Agreement, (ii) if
such Transfer is to a Person, or an Affiliate of a Person, engaged in the
child care or early education business or (iii) if such Transfer is to a
Person not already a party to this Agreement as a Stockholder, unless and
until such Person executes and delivers to the
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Corporation a Joinder Agreement in substantially the form set forth in
Exhibit A hereto or in form and substance reasonably acceptable to the
Corporation pursuant to which such Person shall agree to become a party
to, and to be bound by and to comply with the provisions of, this
Agreement and the Registration Rights Agreement, in each case in the same
capacity and to the same extent as the Stockholder Transferring such
Shares. Any Transfer of Shares that is not made in compliance with the
provisions of this Article III shall be void ab initio.
(b) Except for Permitted Transfers and Transfers made
pursuant to Sections 3.2 or 3.3 hereof, no Transfer by a Stockholder of
any Shares of the Corporation will be valid, and the Corporation will not
be required to record any such Transfer on its books, without the prior
written consent of the Company's Board of Directors, which consent shall
not be unreasonably withheld. As used herein, a "Permitted Transfer"
shall mean any Transfer by a Management Stockholder (i) to the spouse or
lineal descendant (including adopted children) of such Person, (ii) to
any trust solely for the benefit of any of the foregoing or (iii) to the
estate of such Person; provided, however, that in each case such
Permitted Transfer is made in accordance with Section 3.1(a) and (x) such
Transferee agrees in writing to be bound by the Stockholders Agreement in
the same capacity and to the same extent as the Transferor and (y) the
Transferor retains all power to vote the transferred Shares.
3.2. Co-Sale Rights.
If at any time after the date hereof one or more LPA
Investment Stockholders, or any of its or their Control Persons acting
together (the "Transferring Stockholder"), proposes to Transfer, directly
or indirectly, Shares representing more than 15% of the outstanding
Common Stock of the Corporation (including Common Stock Equivalents), in
one transaction or a series of related transactions, to a person who is
not a Control Person of such Investor, then at least fifteen (15) days
prior to the closing of such Transfer, such Transferring Stockholder
shall deliver a written notice (the "Sale Notice") to the other
Stockholders (the Stockholders receiving a Sale Notice pursuant to this
sentence being collectively referred to herein as the "Other
Stockholders"). Such Sale Notice shall specify in reasonable detail the
identity of the prospective transferee(s) and the terms and conditions of
the Transfer. Any such Other Stockholder may, within 10 days of the
receipt of the Sale Notice, give written notice (each, a "Tag-Along
Notice") to the Transferring Stockholder that such Other Stockholder
wishes to participate in such proposed Transfer and specifying the amount
and class of Common Stock such Other Stockholder desires to include in
such proposed Transfer. Any Other Stockholder desiring to participate in
such proposed Transfer must include Shares of the same class as the
Shares proposed to be transferred in the Sale Notice. Any Shares included
in any Tag-Along Notice
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shall be transferred upon the terms and conditions set forth in the Sale
Notice. If none of the Other Stockholders gives the Transferring
Stockholder a timely Tag-Along Notice with respect to the Transfer
proposed in the Sale Notice, the Transferring Stockholder may thereafter
transfer the Shares specified in the Sale Notice on substantially the
same terms and conditions set forth in the Sale Notice. If one or more
Other Stockholders give the Transferring Stockholder a timely Tag-Along
Notice, then the Transferring Stockholder shall use all reasonable
efforts to cause each prospective transferee to agree to acquire all
Shares identified in all Tag-Along Notices that are timely given to the
Transferring Stockholder, upon the same terms and conditions as
applicable to the Transferring Stockholder's Shares. If such prospective
transferee is unwilling or unable to acquire all of such additional
Shares upon such terms, then the Transferring Stockholder may elect
either to cancel such proposed Transfer or to allocate the maximum number
of Shares that each prospective transferee is willing to purchase among
the Transferring Stockholder and the Other Stockholders giving timely
Tag-Along Notices in the proportion that each such Stockholder's
(including the Transferring Stockholder's) Common Stock Percentage bears
to the total Common Stock Percentages of the Transferring Stockholder and
all Other Stockholders giving a timely Tag-Along Notice with respect to
such Transfer (e.g., if the Sale Notice contemplated a sale of a 20%
Common Stock Percentage by the Transferring Stockholder, and if the
Transferring Stockholder at such time owns a 30% Common Stock Percentage
and one Other Stockholder who owns a 20% Common Stock Percentage elects
to participate, then the Transferring Stockholder would be entitled to
sell 12% Common Stock Percentage (30%/50% x the 20% Common Stock
Percentage) and the Other Stockholder would be entitled to sell an 8%
Common Stock Percentage (20%/50% x the 20% Common Stock Percentage).
3.3. Drag-Along Rights.
(a) If the LPA Investment Stockholders approve a Sale
of the Corporation (an "Approved Sale"), all Stockholders shall consent
to and raise no objections against the Approved Sale, and if the Approved
Sale is structured as (A) a merger or consolidation of the Corporation,
or a sale of all or substantially all of the Corporation's assets, each
Stockholder shall waive any dissenters rights, appraisal rights or
similar rights in connection with such merger, consolidation or asset
sale, or (B) a sale of the Stock of the Corporation, the Stockholders
shall agree to sell their Shares on the terms and conditions approved by
the LPA Investment Stockholders. Subject to the satisfaction or waiver of
the other conditions set forth herein, the Stockholders shall take all
necessary and desirable actions approved by the LPA Investment
Stockholders as the case may be, in connection with the consummation of
the Approved Sale, including the execution of such agreements and such
instruments and other actions reasonably necessary to (1) provide the
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representations, warranties, indemnities, covenants, conditions,
non-compete agreements (the terms of which shall not exceed three years
from the date of the closing of such transaction), escrow agreements and
other provisions and agreements relating to such Approved Sale and (2)
effectuate the allocation and distribution of the aggregate consideration
upon the Approved Sale as set forth below. The Stockholders shall be
permitted to sell their Shares pursuant to an Approved Sale without
complying with the provisions of Sections 3.1 and 3.2 of this Agreement.
(b) The obligations of the Stockholders pursuant to
this Section 3.3(b) are subject to the satisfaction of the following
conditions:
(i) Upon the consummation of the Approved Sale, all of
the Stockholders shall receive the same proportion of the aggregate
consideration from such Approved Sale that such holders would have
received if such aggregate consideration had been distributed by the
Corporation in complete liquidation pursuant to the rights and
preferences set forth in the Certificate of Incorporation as in effect
immediately prior to such Approved Sale (giving effect to applicable
orders of priority);
(ii) If any Stockholders of a class are given an option
as to the form and amount of consideration to be received, all
holders of such class will be given the same option;
(iii) No Stockholder shall be obligated to make any
out-of-pocket expenditure prior to the consummation of the
Approved Sale and no Stockholder shall be obligated to pay more
than his pro rata share (based upon the amount of consideration
received) of reasonable expenses incurred in connection with a
consummated Approved Sale to the extent such costs are incurred
for the benefit of all Stockholders and are not otherwise paid
by the Corporation or the acquiring party (costs incurred by or
on behalf of a Stockholder for its or his sole benefit will not
be considered costs of the transaction hereunder), provided that
a Stockholder's liability for such expenses shall be capped at
the total purchase price received by such Stockholder for his
Shares and no Stockholder shall be obligated to pay any expenses
in cash in excess of the cash proceeds received by such
Stockholder in connection with the Approved Sale;
(iv) In the event that the Stockholders are required
to provide any representations or indemnities in connection with
the Approved Sale (other than representations and indemnities on
a several basis concerning each Stockholder's valid ownership of
his Shares, free of all liens and encumbrances (other than those
arising under applicable
13
securities laws), and each Stockholder's authority, power, and
right to enter into and consummate such purchase or merger
agreement without violating any other agreement), then each
Stockholder shall not be liable for more than his pro rata share
(based upon the amount of consideration received) of any
liability for misrepresentation or indemnity and such liability
shall not exceed the total purchase price received by such
Stockholder for his Shares, such liability shall be first
satisfied solely out of any funds escrowed for such purpose and
no Stockholder shall be obligated to pay any amount in cash
pursuant to any such indemnity in excess of the cash proceeds
received by such Stockholder from time to time in connection
with the Approved Sale; and
(v) If the Corporation or the LPA Investment
Stockholders, or their representatives, enter into any
negotiation or transaction for which Rule 506 under the
Securities Act (or any similar rule then in effect) may be
available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization),
each Stockholder who is not an accredited investor (as such term
is defined in Rule 501 under the Securities Act) will, at the
request of the Corporation or the LPA Investment Stockholders,
appoint a purchaser representative (as such term is defined in
Rule 501 under the Securities Act) reasonably acceptable to the
Corporation and such Stockholders.
3.4. Termination of Transfer Limitations.
Notwithstanding the foregoing provisions of this Article
III, the provisions of this Article III shall terminate upon consummation
of a Qualified Public Offering or a Sale of the Corporation.
ARTICLE IV
RIGHTS TO SUBSCRIBE FOR SECURITIES
4.1. General.
(a) Except in the case of Excluded Securities (as
hereinafter defined), the Corporation shall not issue, sell or exchange,
agree to issue, sell or exchange, or reserve or set aside for issuance,
sale or exchange, any (i) shares of Common Stock, (ii) any other equity
security of the Corporation, (iii) any debt security of the Corporation
which by its terms is convertible into or exchangeable for any equity
security of the Corporation or has an equity kicker or other
participation rights, (iv) any security of the Corporation that is a
14
combination of debt and equity or (v) any option, warrant or other right
to subscribe for, purchase or otherwise acquire any equity security or
any such debt security of the Corporation (subsections (i) through (v),
collectively, the "Offered Securities"), unless in each case, the
Corporation shall have first offered to sell such Offered Securities to
each Qualified Stockholder up to such Qualified Stockholder's Common
Stock Percentage of such securities, at a price and on such other terms
as shall have been specified by the Corporation in writing delivered to
such Stockholder (the "Offer"), which Offer by its terms shall remain
open (but may be modified or revoked) for a period of 5 business days
from the date it is delivered by the Corporation (the "Offer Period").
(b) Notice of each Qualified Stockholder's intention to
accept, in whole or in part, an Offer shall be evidenced by a writing
signed by such Qualified Stockholder and delivered to the Corporation
prior to the end of the Offer Period, setting forth such portion of the
Offered Securities as such Qualified Stockholder elects to purchase (the
"Notice of Acceptance"); provided, however, that if any Qualified
Stockholder chooses to purchase a portion, but not all, of the Offered
Securities, such Qualified Stockholder must purchase a ratable portion of
each class of the Offered Securities (if more than one class is offered).
(c) In the event the Corporation materially amends the
terms of the Offer at any time, the Offer Period shall be extended for a
period of not less than 3 business days.
(d) In the event that Notices of Acceptance are not
given by the Qualified Stockholders in respect of all the Offered
Securities, the Corporation shall have 90 days from the expiration of the
Offer Period to sell all or any part of such Offered Securities as to
which Notices of Acceptance have not been given by the Qualified
Stockholders (the "Refused Securities") to any other Person(s), but only
upon terms and conditions in all respects, including, without limitation,
unit price and interest rates, which are no more favorable, in the
aggregate, to such other Person(s) or less favorable to the Corporation
than those set forth in the Offer. Upon the closing, which shall include
full payment to the Corporation, of the sale to such other Person(s) of
all the Refused Securities, the Qualified Stockholders shall purchase
from the Corporation, and the Corporation shall sell to the Qualified
Stockholders, the Offered Securities in respect of which Notices of
Acceptance were delivered to the Corporation by the Qualified
Stockholders, at the terms specified in the Offer.
(e) In each case, any Offered Securities not purchased
by the Stockholders or any other Person(s) in accordance with Section
4.1(d) may not be sold or otherwise disposed of until
15
they are again offered to the Stockholders under the procedures specified
in Sections 4.1(a), 4.1(b) and 4.1(d).
(f) Notwithstanding anything to the contrary contained
in this Section 4.1, the Corporation shall not be obligated to offer any
Offered Securities to a Qualified Stockholder who is not an "accredited
investor" as such term is defined in Rule 501 of the Securities Act if,
in the reasonable judgment of the Corporation (i) inclusion of such
Qualified Stockholder would result in unnecessary delay or (ii) a sale to
such Qualified Stockholder would violate any rule of, or regulation or
provision promulgated under, the Securities Act.
4.2. Excluded Securities.
The rights of the Stockholders under this Article IV
shall not apply to the following securities (the "Excluded Securities"):
(i) shares of Common Stock issued to, or upon
exercise of, options granted to officers, employees or Directors
of, or consultants to, the Corporation pursuant to any
Management Stock Option Plan;
(ii) any Securities issued by the Corporation as an
"equity kicker" in connection with a debt financing and any
securities issued upon conversion or exercise thereof;
(iii) any Securities issued by the Corporation in
connection with an acquisition;
(iv) any Securities issued by the Corporation in
a public offering or a Rule 144A transaction;
(v) Shares issued as a stock dividend or upon any
stock split or other subdivision or combination of the Common
Stock;
(vi) shares of redeemable preferred stock issued to
LPA Investment in connection with the financing of the Merger;
(vii) Shares of Class A Common Stock issued in exchange
for Shares of Class B Common Stock;
(viii) Shares of Class B Common Stock issued in exchange
for Shares of Class A Common Stock; and
(ix) Securities issued in a transaction in which the
Requisite LPA Investment Stockholders and the Requisite Vestar
Stockholders have agreed in writing to waive their
16
rights under this Article IV and do not purchase such Securities
in such transaction.
4.3. Termination.
Notwithstanding the foregoing provisions of this
Article IV, the provision of this Article IV shall terminate upon the
consummation of a Qualified Public Offering or a Sale of the Corporation.
ARTICLE V
INFORMATION RIGHTS; COVENANTS
5.1. Access to Records.
The Corporation shall afford each Qualified
Stockholder, and their respective employees, counsel and other authorized
representatives, during normal business hours, reasonable access, upon
reasonable advance notice, to all of the books, records and properties of
the Corporation and to all officers and employees of the Corporation;
provided, however, that such investigation shall not unreasonably
interfere with the operations of the Corporation. Each Qualified
Stockholder shall use its best efforts to maintain the confidentiality of
any confidential and proprietary information regarding the Company and
its subsidiaries; provided, however, that the foregoing shall in no way
limit or otherwise restrict the ability of such Qualified Stockholder or
such authorized representatives to disclose any such information
concerning the Corporation which it may be required to disclose (i) to
its partners or limited partners to the extent required to satisfy its
fiduciary obligations to such Persons, or (ii) otherwise pursuant to or
as required by law.
5.2. Financial Reports.
The Corporation shall furnish each Qualified
Stockholder with the following:
(a) Quarterly Reports. As soon as available, but not
later than 45 days after the end of each quarterly accounting period, (i)
an unaudited consolidated financial report of the Corporation, prepared
in accordance with generally accepted accounting principles consistently
applied, except that such financial statements contained in such report
need not include footnotes and may be subject to normal year-end audit
adjustments, including, a statement of cash flows and a statement of
operations for such quarterly accounting period and (ii) a report by
management of the Corporation of the operating and financial highlights
of the Corporation and its Subsidiaries for
17
the three prior monthly accounting periods, which shall include (A) a
comparison between operating and financial results and budget and (B) an
analysis of the operations of the Corporation and its Subsidiaries for
the prior quarter.
(b) Annual Audit. As soon as available, but not later
than 90 days after the end of each fiscal year of the Corporation,
audited consolidated financial statements of the Corporation, which shall
include a statement of cash flows and a statement of operations for such
fiscal year and a balance sheet as of the last day thereof, each prepared
in accordance with generally accepted accounting principles, consistently
applied, and accompanied by the report of a "Big 5" firm of independent
certified public accountants selected by the Board of Directors of the
Corporation (the "Accountants"). The Corporation and its Subsidiaries
shall maintain a system of accounting sufficient to enable its
Accountants to render the report referred to in this Section 5.2(b).
(c) Miscellaneous. Promptly upon becoming available:
(i) upon request, copies of all financial statements,
reports, press releases, notices, proxy statements and other
documents sent by the Corporation or its Subsidiaries to its
stockholders generally or released to the public and copies of
all regular and periodic reports, if any, filed by the
Corporation or its Subsidiaries with the Securities and Exchange
Commission or any securities exchange;
(ii) upon request, copies of all reports prepared for
or delivered to the management of the Corporation or its
Subsidiaries by its Accountants; and
(iii) any other routinely collected financial or other
information available to management of the Corporation or its
Subsidiaries (including, without limitation, routinely collected
statistical data).
ARTICLE VI
REGULATORY MATTERS
6.1. Regulatory Compliance Cooperation.
(a) If a Regulated Holder determines that it has a
Regulatory Problem, the Corporation agrees to take all such actions as
are reasonably requested by such Regulated Holder (i) to effectuate and
facilitate any transfer by such Regulated Holder of any Securities of the
Corporation then held by such Regulated Holder to any Person designated
by such Regulated
18
Holder, (ii) to permit such Regulated Holder (or any Affiliate of such
Regulated Holder) to exchange all or any portion of the voting Securities
then held by such Person on a share-for-share basis for shares of a class
of nonvoting Securities of the Corporation, which nonvoting Securities
shall be identical in all respect to such voting Securities, except that
such new Securities shall be nonvoting and shall be convertible into
voting Securities on such terms as are requested by such Regulated Holder
in light of regulatory considerations then prevailing and (iii) to
continue and preserve the respective allocation of the voting interests
with respect to the Corporation provided for in the Certificate of
Incorporation and this Agreement and with respect to such Regulated
Holder's ownership of the Corporation's voting Securities. Such actions
may include, without limitation, (x) entering into such additional
agreements as are reasonably requested by such Regulated Holder to permit
any Person(s) designated by such Regulated Holder to exercise any voting
power which is relinquished by such Regulated Holder upon any exchange of
voting Securities for nonvoting Securities of the Corporation; and (y)
entering into such additional agreements, adopting such amendments to
this Agreement, the Certificate of Incorporation and the Bylaws of the
Corporation and taking such additional actions as are reasonably
requested by such Regulated Holder in order to effectuate the intent of
the foregoing. As used herein, "Regulated Holder" means any Stockholder
that is, directly or indirectly, (i) a "small business investment
company" licensed by the United States Small Business Administration
under the Small Business Investment Act of 1958, as amended, (ii) a
Regulation Y Holder (as defined below), (iii) subject to any similar,
related or successor laws and regulations regulating banks, bank holding
companies, small business investment companies and their respective
subsidiaries and/or (iv) any Person who owns a majority of the interests
of any Person described in clauses (i) through (iii) above. The
Corporation shall be entitled to assume that no Stockholder, other than
LPA Investment, is a Regulated Holder unless the Corporation receives
written notice to the contrary from any Regulated Holder.
(b) If a Regulated Holder elects to Transfer Securities
of the Corporation to an Affiliate who is, or upon such Transfer would
become, a Regulation Y Holder (as defined below) in order to avoid or
cure a Regulatory Problem, the Corporation and the other Stockholders
shall enter into such agreements with such Regulated Holder and its
Affiliates as it may reasonably request in order to assist such Regulated
Holder and its Affiliates in complying with all Applicable Laws. Such
agreements may include restrictions on the conversion, redemption,
repurchase or retirement of Securities of the Corporation that would
result or be reasonably expected to result in such Regulated Holder or
its Affiliates holding more voting securities or total Securities (debt
and equity) than it is permitted to hold under such Applicable Laws. As
used herein, "Regulation Y Holder" means any
19
Stockholder that is (or that is a subsidiary of a bank holding company
that is) subject to the various provisions of Regulation Y of the Board
of Governors of the Federal Reserve Systems, 12 C.F.R., Part 225 (or any
successor to Regulation Y), so long as such Regulation Y Holder shall
hold such Securities.
(c) If a Regulated Holder has the right or opportunity
to acquire any of the Corporation's Securities from the Corporation, any
other Regulated Holder or any other Person (as the result of a preemptive
offer, pro rata offer or otherwise), at such Regulated Holder's request
the Corporation will offer to sell (or if the Corporation is not the
seller, to cooperate with the seller and such Regulated Holder to permit
such seller to sell) such non-voting Securities on the same terms as
would have existed had such Regulated Holder acquired the Securities so
offered and immediately requested their exchange for non-voting
Securities pursuant to Section 6.1(a) above.
(d) Before the Corporation redeems, purchases or
otherwise acquires, directly or indirectly, or converts or takes any
action with respect to the voting rights of, any Securities, the
Corporation shall give written notice of such pending action to each
Regulated Holder. Upon the written request of any Regulated Holder made
within 10 days after its receipt of such notice stating that after giving
effect to such action such Regulated Holder would have a Voting
Regulatory Problem, the Corporation shall defer taking such action for
such period (not to extend beyond 45 days after such Regulated Holder's
receipt of the Corporation's original notice) as such Regulated Holder
requests to permit it and its Affiliates to reduce the quantity of the
Corporation's Securities they own or take other appropriate action in
order to avoid the Voting Regulatory Problem. In addition, the
Corporation shall not be a party to any merger, consolidation,
recapitalization or other transaction pursuant to which any Regulated
Holder would be required to take any voting Securities, or any Securities
convertible into, or exchangeable or exercisable for, voting Securities,
which might reasonably be expected to cause such Regulated Holder to have
a Voting Regulatory Problem.
6.2. Cooperation of Other Stockholders.
Each Stockholder agrees to cooperate with the
Corporation in complying with Section 6.1 above, including without
limitation, voting to approve amending the Certificate of Incorporation,
this Agreement or the Bylaws in a manner reasonably requested by the
Stockholder requesting such amendment.
6.3. Covenant Not to Amend.
The Corporation and each Stockholder agree not to amend
or waive the voting or other provisions of the Certificate of
20
Incorporation, this Agreement or the Bylaws if such amendment or waiver
would cause any Stockholder to have a Regulatory Problem, provided that
any such Stockholder notifies the Corporation that it would have a
Regulatory Problem promptly after it has notice of such amendment or
waiver.
6.4. Certain Information Rights and Related Covenants.
(a) Upon the request of any Regulated Holder, the
Corporation will promptly:
(i) provide to such Person and the U.S. Small Business
Administration (the "SBA") access to its books and
records for the purpose of confirming the use of the
proceeds of such Person's financing and for all other
purposes required by the SBA;
(ii) provide to such Person and the SBA a certificate of
its chief financial officer (1) verifying the use of such
proceeds and (2) certifying compliance by the Corporation with
the provisions of this Agreement (provided that such certificate
may be truthfully given);
(iii) provide to such Person an assessment, in form and
substance satisfactory to such Person, of the economic impact of
such Person's financing, specifying the full-time equivalent
jobs created or retained, the impact of the financing on the
Corporation's business in terms of expanded revenue and taxes
and other appropriate economic benefits, including, but not
limited to, technology development or commercialization,
minority business development, urban or rural business
development, expansion of exports and assistance to
manufacturing firms;
(iv) provide to such Person such financial statements
and other information as such Person may from time to time
reasonably request for the purpose of assessing the
Corporation's financial condition; and
(v) furnish to such Person all information requested
by it in order for it to prepare and file SBA Form 468 or to
prepare an assessment of the economic impact of such Person's
financing, and any other information requested or required by
any governmental agency asserting jurisdiction over such Person.
(b) For a period of one year following the date hereof,
neither the Corporation nor any of its Subsidiaries will change its
business activity if such change would render the Corporation ineligible
as a "Small Concern" under the Small Business Investment Act and the
regulations thereunder.
21
(c) The Corporation will at all times comply with the
non-discrimination requirements of 13 C.F.R., Parts 112, 113 and 117.
(d) The Corporation will promptly notify each Regulated
Holder from time to time if the number of shareholders increases above or
decreases below 50.
ARTICLE VII
SECURITIES LAW COMPLIANCE; LEGENDS
7.1. Restriction on Transfer.
In addition to any other restrictions on the Transfer
of any Stock contained in this Agreement, the Stockholders shall not
Transfer Restricted Shares except in compliance with the conditions
specified in this Article VII.
7.2. Restrictive Legends.
Each certificate for the Restricted Shares shall
(unless otherwise provided by the provisions of Section 7.4) be stamped
or otherwise imprinted with a legend in substantially the following
terms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933 OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SAID ACT OR LAWS."
7.3. Notice of Transfer.
The holder of any Restricted Shares, by its acceptance
or purchase thereof, agrees, prior to any Transfer of any such Restricted
Shares (except pursuant to an effective registration statement), to give
written notice to the Corporation of such holder's intention to effect
such transfer and agrees to comply in all other respects with the
provisions of this Article VII. Each such notice shall describe the
manner and circumstances of the proposed Transfer and, unless waived by
the Corporation, shall be accompanied by the written opinion, addressed
to the Corporation, of counsel for the holder of such Restricted Shares
(which counsel shall be reasonably satisfactory to the Corporation),
stating that in the opinion of such counsel (which opinion shall be
reasonably satisfactory to the Corporation) such proposed Transfer does
not involve a transaction requiring registration or qualification of such
Restricted Shares under the
22
Securities Act or the securities laws of any state of the United States.
Subject to complying with the other applicable provisions hereof, such
holder of Restricted Shares shall be entitled to consummate such Transfer
in accordance with the terms of the notice delivered by it to the
Corporation if the Corporation does not object (on the basis that such
transfer violates the provisions of this Article VII) to such transfer
within five days after the delivery of such notice. Each certificate or
other instrument evidencing the securities issued upon the transfer of
any Restricted Shares (and each certificate or other instrument
evidencing any untransferred balance of such securities) shall bear the
legend set forth in Section 7.2 unless (i) in such opinion of such
counsel registration of future transfer is not required by the applicable
provisions of the Securities Act or the securities laws of any state of
the United States or (ii) the Corporation shall have waived the
requirement of such legend.
7.4. Removal of Legends, Etc.
Notwithstanding the foregoing provisions of this
Article VII, the restrictions imposed by Sections 7.1, 7.2, and 7.3 upon
the transferability of any Restricted Shares shall cease and terminate
when (i) any such Restricted Shares are sold or otherwise disposed of in
accordance with the intended method of disposition by the seller or
sellers thereof set forth in a registration statement or are sold or
otherwise disposed of in a transaction contemplated by Section 7.3 which
does not require that the securities transferred bear the legend set
forth in Section 7.2, or (ii) the holder of such Restricted Shares has
met the requirement of transfer of such Restricted Shares pursuant to
subparagraph (k) of Rule 144. Whenever the restrictions imposed by
Sections 7.1, 7.2 and 7.3 shall terminate, as herein provided, the holder
of any Restricted Shares shall be entitled to receive from the
Corporation, without expense, a new certificate not bearing the
restrictive legend set forth in Section 7.2 and not containing any other
reference to the restrictions imposed by Sections 7.1, 7.2 and 7.3.
7.5. Additional Legend.
Each certificate evidencing Shares and each certificate
issued in exchange for or upon the Transfer of any Shares (if such Shares
remain Shares as defined herein after such Transfer) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
ALSO SUBJECT TO A STOCKHOLDERS AGREEMENT DATED AS OF
MAY 11, 1998, AMONG THE ISSUER OF SUCH SECURITIES (THE
"CORPORATION") AND CERTAIN OF THE CORPORATION'S
STOCKHOLDERS AND A REGISTRATION RIGHTS AGREEMENT DATED
MAY 11, 1998 AMONG THE
23
CORPORATION AND THE OTHER PARTIES NAMED THEREIN. THE
TERMS OF SUCH STOCKHOLDERS AGREEMENT AND REGISTRATION
RIGHTS AGREEMENTS INCLUDE, AMONG OTHER THINGS, VOTING
AGREEMENTS, REPURCHASE AGREEMENTS AND RESTRICTIONS ON
TRANSFERS. COPIES OF SUCH AGREEMENTS WILL BE FURNISHED
WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER HEREOF
UPON WRITTEN REQUEST."
The Corporation shall imprint such legends on certificates evidencing
Shares outstanding prior to the date hereof. The legend set forth above
shall be removed from the certificates evidencing any Shares which cease
to be Shares in accordance with the terms of this Agreement.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1. Representations and Warranties of the Corporation.
The Corporation hereby represents and warrants to the
Stockholders that as of the date of this Agreement:
(a) it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, it
has full corporate power and authority to execute, deliver and perform
this Agreement and to consummate the transactions contemplated hereby,
and the execution, delivery and performance by it of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action;
(b) this Agreement has been duly and validly executed
and delivered by the Corporation and constitutes a legal and binding
obligation of the Corporation, enforceable against the Corporation in
accordance with its terms; and
(c) the execution, delivery and performance by the
Corporation of this Agreement and the consummation by the Corporation of
the transactions contemplated hereby will not, with or without the giving
of notice or lapse of time, or both (i) violate any provision of law,
statute, rule or regulation to which the Corporation is subject, (ii)
violate any order, judgment or decree applicable to the Corporation, or
(iii) conflict with, or result in a breach or default under, any term or
condition of the Corporation's Certificate of Incorporation or Bylaws or
any agreement or instrument to which the Corporation is a party or by
which it is bound.
24
8.2. Representation and Warranties of the Stockholders.
Each Stockholder (as to himself or itself only)
represents and warrants to the Corporation and the other Stockholders
that, as of the time such Stockholder becomes a party to this Agreement:
(a) this Agreement (or the Joinder Agreement executed
by such Stockholder, as the case may be) has been duly and validly
executed and delivered by such Stockholder and constitutes a legal and
binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms; and
(b) the execution, delivery and performance by such
Stockholder of this Agreement and the consummation by such Stockholder of
the transactions contemplated hereby will not, with or without the giving
of notice or lapse of time, or both (i) violate any provision of law,
statute, rule or regulation to which the Stockholder is subject, (ii)
violate any order, judgment or decree applicable to such Stockholder, or
(iii) conflict with, or result in a breach or default under, any term or
condition of any agreement or other instrument to which such Stockholder
is a party or by which such Stockholder is bound, except for such
violations, conflicts, breaches or defaults that would not, in the
aggregate, materially affect the Stockholder's ability to perform its
obligations hereunder.
ARTICLE IX
MISCELLANEOUS
9.1. Severability.
Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other
jurisdiction, and such invalid, void or otherwise unenforceable
provisions shall be null and void. It is the intent of the parties,
however, that any invalid, void or otherwise unenforceable provisions be
automatically replaced by other provisions which are as similar as
possible in terms to such invalid, void or otherwise unenforceable
provisions but are valid and enforceable to the fullest extent permitted
by law.
9.2. Entire Agreement.
This related agreement embodies the complete agreement
and understanding among the parties hereto with respect to the
25
subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in
any way.
9.3. Successors and Assigns.
Except as otherwise provided herein, this Agreement
will bind and inure to the benefit of and be enforceable by the
Corporation and its successors and assigns and the Stockholders and any
subsequent holders of Shares and the respective successors and assigns of
each of them, so long as they hold Shares. None of the provisions hereof
shall create, or be construed or deemed to create, any right to
employment in favor of any Person by the Corporation or any of its
Subsidiaries. This Agreement is not intended to create any third party
beneficiaries.
9.4 Counterparts.
This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will
constitute one and the same agreement. It shall not be necessary in
making proof of this Agreement to produce or account for more than one
such counterpart.
9.5. Remedies.
(a) Each Stockholder shall have all rights and remedies
reserved for such Stockholder pursuant to this Agreement, the Certificate
of Incorporation and Bylaws and all rights and remedies which such holder
has been granted at any time under any other agreement or contract and
all of the rights which such holder has under any law or equity. Any
Person having any rights under any provision of this Agreement will be
entitled to enforce such rights specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise
all other rights granted by law or equity.
(b) The parties hereto agree that if any parties seek
to resolve any dispute arising under this Agreement pursuant to a legal
proceeding, the prevailing parties to such proceeding shall be entitled
to receive reasonable fees and expenses (including reasonable attorneys'
fees and expenses) incurred in connection with such proceedings.
(c) It is acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail
to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate
26
remedy at law. Any such person shall, therefore, be entitled to
injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any
of the provisions of this Agreement, none of the parties hereto shall
raise the defense that there is an adequate remedy at law.
9.6. Notices.
All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when
delivered personally to the recipient, (b) one business day after being
sent by reputable overnight courier (charges prepaid) (regardless of
whether the recipient refuses to accept delivery), (c) five business days
after being sent to the recipient by certified or registered mail, return
receipt requested and postage prepaid (regardless of whether the
recipient refuses to accept delivery) or (d) when sent to the recipient
by facsimile (followed promptly by personal, courier or certified or
registered mail delivery). The address for each Stockholder is set forth
on Schedule I attached hereto. The Corporation's address is:
LPA Holding Corp.
14 Corporate Woods
8717 West 110th Street, Suite 300
Overland Park, KS 66210
Fax: (913) 345-9601
Phone: (913) 345-1250
Attention: James R. Kahl
President
9.7. Amendment and Waiver.
(a) Except as expressly set forth herein, the
provisions of this Agreement may only be amended or waived with the prior
written consent of the Requisite Stockholders; provided, however, that
any amendment or waiver which adversely affects the rights of the Vestar
Stockholders hereunder must be approved by the Requisite Vestar
Stockholders and any amendment or waiver which adversely affects the
rights of the Management Stockholders must be approved by the Requisite
Management Investors.
(b) No course of dealing between the Corporation, its
Subsidiaries and the Stockholders (or any of them) or any delay in
exercising any rights hereunder will operate as a waiver of any rights of
any party to this Agreement.
(c) For purposes of this Agreement, Shares held by the
Corporation or any Subsidiaries (whether for issuance under the
Management Stock Option Plan or otherwise) will not be deemed to be
outstanding.
27
(d) 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.
9.8. Governing Law.
All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and
construed and enforced in accordance with the domestic laws of the State
of Delaware, without giving effect to any choice or conflict of law
provision or rule (whether in the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. In furtherance of the
foregoing, the internal law of the State of Delaware will control the
interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive
law of some other jurisdiction would ordinarily apply.
9.9. Further Assurances.
Each party hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to
carry out the provisions of this Agreement and the consummation of the
transactions contemplated hereby.
9.10. Jurisdiction; Venue; Process.
Each party to this Agreement agrees that jurisdiction
and venue in any action brought by any party hereto pursuant to this
Agreement shall properly (but not exclusively) lie in any state court
located in the State of Delaware or any federal court located in the
State of New York. By execution and delivery of this Agreement, each
party hereto irrevocably submits to the jurisdiction of such courts for
himself and in respect of his property with respect to such action. Each
party hereto irrevocably agrees that venue would be proper in such court,
and hereby waives any objection that such court is an improper or
inconvenient forum for the resolution of such action. Each party further
agrees that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute
valid and lawful service of process against him, without necessity for
service by any other means provided by statute or rule of court.
28
9.11. Conflicting Agreements.
No Stockholder shall enter into any stockholder
agreements or arrangements of any kind with any Person with respect to
any Securities of the Corporation on terms inconsistent with the
provisions of this Agreement (whether or not such agreements or
arrangements are with other Stockholders or with Persons that are not
parties to this Agreement), including but not limited to, agreements or
arrangements with respect to the acquisition or disposition of Securities
of the Corporation in a manner which is inconsistent with this Agreement.
9.12. Mutual Waiver of Jury Trial.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR
DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS
RELATED HERETO.
9.13. Rollover Option Amendments.
Each Stockholder agrees that to the extent that such
Stockholder owns Rollover Options, Sections 3.3 and 3.4 of each
Non-Qualified Stock Option Agreement relating to such Rollover Options is
hereby amended to read in its entirety as set forth in Exhibit C hereto.
To the extent of any conflict between this Agreement and the
Non-Qualified Stock Option Agreement, this Agreement shall control.
* * * * *
29
IN WITNESS WHEREOF, the undersigned have duly executed
this Stockholders Agreement as of the date set forth above.
LPA HOLDING CORP.
By:
--------------------------------------
Name:
Title:
VESTAR/LPT LIMITED PARTNERSHIP
By: VESTAR/LP Investment
Limited Partnership
By:
--------------------------------------
Name:
Title:
LPA INVESTMENT LLC
By:
--------------------------------------
Name:
Title:
EXHIBIT A
Joinder Agreement
By executing and delivering this Joinder Agreement to
the Corporation, the undersigned hereby agrees to become a party to, to
be bound by, and to comply with the provisions of the Stockholders
Agreement (the "Stockholders Agreement") and the Registration Rights
Agreement (the "Registration Rights Agreement"), each dated as of May 11,
1998, among the Corporation and the Stockholders named therein, as a
"Stockholder" (as such term is used therein), in the same manner as if
the undersigned were an original signatory to the Stockholders Agreement
and the Registration Rights Agreement. In connection therewith, effective
as of the date hereof the undersigned hereby makes the representations
and warranties contained in Section 8.2 of the Stockholders Agreement and
represents and warrants that such person is not a person which itself is,
or would cause the Corporation to be, disqualified under Rule 262
promulgated under the Securities Act of 1933.
Accordingly, the undersigned has executed and delivered
this Joinder Agreement as of the __ day of ____________, 199__.
By:
-----------------------------------
Name:
Title:
EXHIBIT B
See attached.
Schedule I
Stockholders Shares of
------------ Common Stock
------------
Vestar/LPT Limited Partnership
c/o Vestar Capital Partners
1227 17th Street, Suite 1660
Denver, CO 80202
Phone: (303) 292-6300
Fax: (303) 292-6639
Attention: James P. Kelley
Investor
LPA Investment LLC
c/o Chase Capital Partners
380 Madison Avenue, 12th Floor
New York, N.Y. 10017
Attention: Stephen Murray
Fax: (212) 622-3101
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-4’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 6/5/98 | | | | | | | None on these Dates |
| | 5/11/98 | | 1 | | 33 |
| List all Filings |
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