EXHIBIT 10.3(A)
CONFORMED COPY
STOCKHOLDERS AGREEMENT dated as of March 1, 1995, among
FORT HOWARD CORPORATION, a Delaware corporation (the "Company"), and the other
parties to the Stockholders and Registration Rights Agreement, dated as of
August 1, 1988, as amended.
WHEREAS, FH Holdings Corp., formerly a Delaware corporation ("FH
Holdings Corp."), and certain of the parties hereto entered into a
Stockholders and Registration Rights Agreement, dated as of August 1, 1988
(the "1988 Agreement"), which Agreement has heretofore been amended or
otherwise modified pursuant to instruments dated as of September 21, 1988,
November 1, 1989 and July 31, 1990 and was amended and restated in its
entirety pursuant to an instrument dated as of December 7, 1990 (such
Agreement, as so amended and modified, the "1990 Stockholders Agreement"); and
WHEREAS, the Company and the other parties hereto desire to make
certain amendments to the 1990 Stockholders Agreement and to otherwise restate
the provisions thereof;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the 1990 Stockholders Agreement is hereby amended
and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.1. Definitions.
"Additional Sellers" shall have the meaning set forth in Section
4.1(a) hereof.
"Affiliate" shall have the meaning given to such term in Rule
12b-2 promulgated under the Exchange Act.
"Bankers Trust" means Bankers Trust New York Corporation, a
New York corporation.
"Bankers Trust Stock Purchase Agreement" means the Stock Purchase
Agreement dated as of August 1, 1988 between FH Holdings Corp. and Bankers
Trust, as amended from time to time.
"beneficial owner" shall have the meaning given to such term in
Rule 13d-3 promulgated under the Exchange Act.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized or
obligated by law to be closed.
"Cash Equivalents" means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States federal government or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date
of acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the date
of acquisition thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Ratings Group or Moody's
Investors Service, Inc.; or (iii) commercial paper maturing no more than one
year from the date of creation thereof and, at the time of acquisition, having
the highest rating obtainable from either Standard & Poor's Ratings Group or
Moody's Investors Service, Inc.
"Commission" means the Securities and Exchange Commission and any
successor commission or agency having similar powers.
"Common Stock" means common stock of the Company, par value $.01
per share.
"control" shall have the meaning given to such term in Rule 12b-2
promulgated under the Exchange Act.
"Direct Investors" means FPGT, Leeway and Bankers Trust.
"Duly Endorsed" means duly endorsed in blank by the person or
persons in whose name a stock certificate is registered or accompanied by a
duly executed stock assignment separate from the certificate with the
signature(s) thereon guaranteed by a commercial bank or trust company or a
member of a national securities exchange or of the NASD.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FPGT" means First Plaza Group Trust, as trustee for certain
pension funds.
"First Registration Period" means the period commencing on the
effective date of this amendment and restatement and terminating one year
thereafter.
"Fort Howard Equity Investors II" means Fort Howard Equity
Investors II, L.P., a Delaware limited partnership.
"Fully Diluted" means, with respect to Shares, all outstanding
Shares and Shares issuable in respect of Share Equivalents.
"Holder" means each person (other than the Company or any of its
subsidiaries) that, as a result of such Person's ownership of Shares or Share
Equivalents, is or shall have become a party to this Agreement, whether in
connection with the execution and delivery of the 1988 Agreement, the 1990
Agreement or any Purchase Agreement, pursuant to Section 7.10 hereof or
otherwise; provided, however, that for purposes of this Agreement, the term
"Holder" shall not include any person who owns solely Share Equivalents (and
has never owned Shares) on or prior to the effective date of this amendment
and restatement; and provided further, that for purposes of Sections 2.1, 2.4
and 2.5 of Article II hereof, the term "Holder" shall not include any
Management Investor other than Paul J. Schierl; and provided further, that for
purposes of Sections 2.4 and 2.5 of Article II hereof, the term "Holder" shall
not include The Nippon Housing Loan Co. or Kowa Real Estate Investment Co.
Ltd.
"June 27, 1990 Letter Agreements" means those certain letter
agreements dated June 27, 1990 between the Company and certain Management
Investors.
"Leeway" means Leeway & Co., as nominee for State Street Bank &
Trust Co., as trustee for a master pension trust.
"MEPA" means the Amended and Restated Management Equity
Participation Agreement dated as of August 8, 1988, by and among FH Holdings
Corp. and the other parties signatory thereto, as amended from time to time,
and giving effect to the June 27, 1990 Letter Agreements.
"MEP" means the Fort Howard Corporation Management Equity Plan, as
amended from time to time.
"Management Investor" means a party identified as a Management
Investor on a signature page to the MEPA or a person deemed to be a
"Management Investor" pursuant to the terms of the June 27, 1990 Letter
Agreements, or a person who purchased shares of Common Stock pursuant to the
MEP prior to the effective date of this amendment and restatement.
"Minimum Registration Amount" means that number of Registrable
Securities outstanding at the following designated times which represent the
following percentages of Fully Diluted Shares: (i) prior to the end of the
First Registration Period, the Registrable Securities then outstanding
representing not less than 15% of the Fully Diluted Shares; and (ii) following
the end of the First Registration Period, the Registrable Securities then
outstanding representing not less than 8% of the Fully Diluted Shares.
"Minimum Registration Request Percentage" means Registrable
Securities outstanding at the following designated times representing the
following percentages of Fully Diluted Shares: (i) at any time during the
First Registration Period, the Registrable Securities then outstanding
representing at least 51% of the Fully Diluted Shares or the Registrable
Securities then outstanding representing at least 5% of the Fully Diluted
Shares held by Management Investors and (ii) at any time following the First
Registration Period, the Registrable Securities then outstanding representing
at least 8% of the Fully Diluted Shares or the Registrable Securities then
outstanding representing at least 5% of the Fully Diluted Shares held by
Management Investors.
"Morgan Stanley" means Morgan Stanley Group Inc., a Delaware
corporation, and its Affiliates, but shall not include MSLEF.
"Morgan Stanley & Co." means Morgan Stanley & Co. Incorporated, a
Delaware corporation.
"Morgan Stanley Group" means Morgan Stanley Group Inc., a Delaware
corporation.
"MS/Fund Investors" means MSLEF and Morgan Stanley Group.
"MSLEF" means The Morgan Stanley Leveraged Equity Fund II, L.P., a
Delaware limited partnership.
"NASD" means the National Association of Securities Dealers, Inc.
"Newco" shall have the meaning set forth in Section 6.2 hereof.
"1995 Initial Public Offering" means the underwritten public
offering of Common Stock pursuant to a registration statement on Form S-1
filed with the Commission on November 23, 1994, as amended.
"1991 Subscription Agreement" means the Subscription Agreement
dated as of March 12, 1991, between the Company and Fort Howard Equity
Investors II.
"1990 Agreement" means the Agreement dated as of July 31, 1990,
between the Company and Paul J. Schierl and Carol A. Schierl, as amended from
time to time.
"1990 Subscription Agreement" means the Subscription Agreement
dated as of December 7, 1990, among the Company and FPGT and Leeway, as
amended from time to time.
"Permitted Transferees" has the meaning ascribed to it in the 1990
Agreement.
"person" means an individual, partnership, corporation, limited
liability partnership, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, or other entity of
whatever nature.
"Public Offering" means an underwritten public offering of equity
securities of the Company pursuant to an effective registration statement
under the Securities Act, other than a registration statement on Form S-8.
"Purchase Agreements" means, collectively, the MEPA, the
Agreements as defined in the MEP, the Securities Purchase Agreement, the
Bankers Trust Stock Purchase Agreement, the June 27, 1990 Letter Agreements,
the 1990 Agreement, the 1990 Subscription Agreement, the 1991 Subscription
Agreement and all other agreements providing for the purchase of Shares
heretofore entered into or which otherwise have been or hereafter will be
designated by the Company as "Purchase Agreements".
"Readily Marketable Securities" means those securities that are
(i) (A) debt or equity securities of or other interests in any person that are
traded on a national securities exchange, reported on by the National
Association of Securities Dealers Automated Quotation System or otherwise
actively traded over-the-counter or (B) debt securities of an issuer that has
debt or equity securities that are so traded or so reported on and which a
nationally recognized securities firm has agreed to make a market in, and (ii)
which are not subject to restrictions on transfer as a result of any
applicable contractual provisions or the provisions of the Securities Act or,
if subject to such restrictions under the Securities Act, are also subject to
registration rights reasonably acceptable to the Holders of a majority of the
Shares that are not held by the Controlling Stockholders (as determined
pursuant to Section 2.5(a)).
"Registrable Securities" means Shares and Share Equivalents
acquired pursuant to the Purchase Agreements or granted to Management
Investors by the Company or acquired upon the exercise of Registrable
Securities; provided, however, that securities shall cease to be Registrable
Securities if and when (i) a registration statement with respect to the
disposition of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of pursuant to
such effective registration statement, (ii) such securities shall have been
sold under circumstances in which all of the applicable conditions of Rule 144
(or any similar provisions then in force) under the Securities Act are met,
(iii) such securities shall have been otherwise transferred, if new
certificates or other evidences of ownership for such securities not bearing a
legend restricting further transfer and not subject to any stop transfer order
or other restrictions on transfer shall have been delivered by the Company and
subsequent disposition of such securities shall not require registration or
qualification of such securities under the Securities Act, or (iv) such
securities shall have ceased to be outstanding.
"Registration Expenses" means (i) all registration and filing
fees, (ii) fees and expenses of compliance with state securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities), (iii) printing
expenses, (iv) internal expenses (including, without limitation, all salaries
and expenses of officers and employees performing legal or accounting duties),
(v) fees and disbursements of counsel for the Company and customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to Section 4.4(h) hereof), (vii) fees and
expenses of any special experts retained by the Company in connection with
such registration, (viii) reasonable fees and expenses of one counsel (who
shall be reasonably acceptable to the Company) for the Holders, (ix) fees and
expenses of listing the Registrable Securities on a securities exchange, (x)
rating agency fees and (xi) fees and disbursements of underwriters customarily
paid by issuers or sellers of securities; but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, any out-of-pocket expenses of the Holders (or the
agents who manage their accounts) or any fees and expenses of underwriter's
counsel.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreement" means the Securities Purchase
Agreement dated as of August 1, 1988 among FH Holdings Corp., FPGT, Leeway and
the other parties signatory thereto, as amended from time to time.
"Share Equivalents" means securities of any kind issued by the
Company prior to the effective date of this amendment and restatement,
convertible into or exchangeable for Shares or options, warrants or other
rights to purchase or subscribe for shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock, issued by the
Company prior to the effective date of this amendment and restatement and
owned by a Holder.
"Shares" means any share of Common Stock acquired prior to the
effective date of this amendment and restatement.
"Third Party" means a prospective purchaser of Shares in an
arm's-length transaction from a Holder where such purchaser is not an
Affiliate of such Holder.
ARTICLE II
RESTRICTIONS ON TRANSFER
SECTION 2.1. General Restrictions. Each Holder may, directly or
indirectly, offer, sell, assign, transfer, grant a participation in, pledge or
otherwise dispose of any Shares (or solicit any offers to buy or otherwise
acquire, or take a pledge of any Shares), provided that such offer, sale,
assignment, transfer, grant, pledge or other disposition is in compliance with
the Securities Act, the Purchase Agreement to which such Holder is a party and
the restrictions contained in this Agreement.
SECTION 2.2. Legends.
(a) Each certificate evidencing outstanding Shares that is issued
to any Management Investor, other than Paul J. Schierl, shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THIS SECURITY MAY BE OFFERED, SOLD
OR TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF
SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
(b) Each certificate evidencing outstanding Shares that is issued
to (i) any Holder other than any Holder who is a Management Investor and (ii)
Paul J. Schierl, shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THIS SECURITY MAY BE OFFERED, SOLD
OR TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF
SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS
SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE [PURCHASE AGREEMENT], DATED AS
OF [DATE], AND THE STOCKHOLDERS AGREEMENT DATED AS OF MARCH
1, 1995, AS AMENDED, COPIES OF EACH OF WHICH MAY BE OBTAINED
FROM FORT HOWARD CORPORATION."
(c) In the event that any Shares or Share Equivalents shall cease
to be Registrable Securities, the Company shall, upon the written request of
the Holder thereof, issue to such Holder a new certificate evidencing such
Shares or Share Equivalents without the legend required by Section 2.2(a) or
the first and second sentences of the legend required by Section 2.2(b) hereof
endorsed thereon; provided, however, that, under the circumstances described
in clause (ii) or clause (iii) of the definition of Registrable Securities,
such request is accompanied by an opinion of counsel, reasonably acceptable to
the Company, that the Shares or Share Equivalents are no longer Registrable
Securities. In the event that any Shares or Share Equivalents shall cease to
be subject to the restrictions on transfer set forth in this Agreement and the
Purchase Agreements, the Company shall, upon the written request of the Holder
thereof, issue to such Holder a new certificate evidencing such Shares or
Share Equivalents without the third sentence of the legend required by Section
2.2(b) hereof endorsed thereon; provided, however, that such Holder, upon the
reasonable request of the Company or its transfer agent, provides an opinion
of counsel, reasonably acceptable to the Company, that the Shares or Share
Equivalents are no longer subject to the restrictions on transfer set forth in
this Agreement and the Purchase Agreements.
SECTION 2.3. [INTENTIONALLY OMITTED]
SECTION 2.4. Rights of Inclusion.
(a) (i) Subject to Section 2.5(c) hereof, no Holder or Holders
shall, individually or collectively, in any one transaction or any series of
similar transactions, directly or indirectly, sell or otherwise dispose of a
majority of the outstanding Shares then subject to this Section 2.4 to any
Third Party unless the terms and conditions of such sale or other disposition
to such Third Party shall include an offer to each of the other Holders and
their respective Permitted Transferees, if any (the "Section 2.4 Transfer
Offerees"), to include, at the option of each Section 2.4 Transfer Offeree, in
the sale or other disposition to the Third Party, such number of Shares owned
by each such Section 2.4 Transfer Offeree as determined in accordance with
this Section 2.4(a). If any Holder or Holders receive from a Third Party a
bona fide offer or offers to purchase or otherwise acquire (a "Section 2.4
Transfer Offer") that number of Shares (the "Section 2.4 Transfer Stock")
representing an amount greater than a majority of the outstanding Shares
subject to this Section 2.4, such Holders (collectively, the "Section 2.4
Offering Holder") shall then cause the Section 2.4 Transfer Offer to be
reduced to writing and shall provide written notice (the "Section 2.4 Transfer
Notice") of such Section 2.4 Transfer Offer to each of the Section 2.4
Transfer Offerees in the manner set forth in this Section 2.4 hereof. The
Section 2.4 Transfer Notice shall contain a true and correct copy of the
Section 2.4 Transfer Offer. In addition, the Section 2.4 Transfer Notice
shall identify the Third Party, the Section 2.4 Transfer Stock, the price
contained in the Section 2.4 Transfer Offer, all the other terms and
conditions of the Section 2.4 Transfer Offer and, in the case of a Transfer
Offer in which the consideration payable for Shares consists in part or in
whole of consideration other than cash, such information relating to such
consideration as the Company may reasonably determine. The Section 2.4
Transfer Offerees shall have the right and option, within 30 days after the
date the Section 2.4 Transfer Notice is given to such Section 2.4 Transfer
Offerees (the "Section 2.4 Notice Period"), to accept the Section 2.4 Transfer
Offer for up to such number of Shares as is determined in accordance with the
provisions of this Section 2.4(a). Each Section 2.4 Transfer Offeree which
desires to exercise such option shall provide the Section 2.4 Offering Holder
with written notice (specifying the number of shares of the Section 2.4
Transfer Stock as to which such Section 2.4 Transfer Offeree is accepting the
offer) and delivering to the Section 2.4 Offering Holder the certificate or
certificates representing the Shares to be sold or otherwise disposed of
pursuant to such offer by such Section 2.4 Transfer Offeree, together with a
limited power-of-attorney authorizing the Section 2.4 Offering Holder to sell
or otherwise dispose of such Shares pursuant to the terms of the Section 2.4
Transfer Offer. Delivery of such certificate or certificates representing the
Shares to be sold and the limited power-of-attorney authorizing the Section
2.4 Offering Holder to sell or otherwise dispose of such Shares shall
constitute an irrevocable acceptance of the Section 2.4 Transfer Offer by the
Section 2.4 Transfer Offeree.
(ii) Each Section 2.4 Transfer Offeree shall have the right
to sell pursuant to the Section 2.4 Transfer Offer Shares equal to the product
of (A) the total number of Shares then beneficially owned by such Section 2.4
Transfer Offeree, and (B) a fraction, the numerator of which shall be the
total number of Shares proposed to be sold by such Section 2.4 Offering
Holder, and the denominator of which shall be the total number of Shares
beneficially owned by such Section 2.4 Offering Holder (the "Section 2.4
Transfer Offeree Shares").
(iii) Promptly after the consummation of the sale or other
disposition of the Shares of the Section 2.4 Offering Holder and the Section
2.4 Transfer Offerees to the Third Party pursuant to the Section 2.4 Transfer
Offer, the Section 2.4 Offering Holder shall notify the Section 2.4 Transfer
Offerees thereof, shall remit to each of the Section 2.4 Transfer Offerees the
total sales price of the Shares of such Section 2.4 Transfer Offeree sold or
otherwise disposed of pursuant thereto, and shall furnish such other evidence
of the completion and time of completion of such sale or other disposition and
the terms thereof as may be reasonably requested by the Section 2.4 Transfer
Offerees.
(iv) If at the termination of the Notice Period any Section
2.4 Transfer Offeree shall not have accepted the offer contained in the
Section 2.4 Transfer Notice, such Section 2.4 Transfer Offeree will be deemed
to have waived any of and all of its rights under this Section 2.4 with
respect to the sale or other disposition of its Section 2.4 Transfer Offeree
Shares to such Third Party. The Section 2.4 Offering Holder shall have 60
days in which to sell the Section 2.4 Transfer Stock and the Section 2.4
Transfer Offeree Shares, not otherwise excluded pursuant to the previous
sentence, to the Third Party, at a price not higher than that contained in the
Section 2.4 Transfer Notice and on terms not more favorable to the Section 2.4
Offering Holder than were contained in the Section 2.4 Transfer Notice.
Promptly after any sale pursuant to this Section 2.4, the Offering Holder
shall notify the Company of the consummation thereof and shall furnish such
evidence of the completion thereof (including time of completion) of such sale
and of the terms thereof as the Company may request. If, at the end of such
60-day period, the Section 2.4 Offering Holder has not completed the sale of
all the Section 2.4 Transfer Stock and Section 2.4 Transfer Offeree Shares,
not otherwise excluded pursuant to this Section 2.4(a)(iv), the Section 2.4
Offering Holder shall return to such Section 2.4 Transfer Offerees all
certificates representing the Shares which such Section 2.4 Transfer Offerees
delivered for sale or other disposition pursuant to this Section 2.4(a), and
all the restrictions on sale or other disposition contained in this Agreement
with respect to Shares owned by the Section 2.4 Offering Holder shall again be
in effect.
(v) Notwithstanding anything contained in this Section
2.4(a), there shall be no liability on the part of the Section 2.4 Offering
Holder to any Section 2.4 Transfer Offeree in the event that the sale of
Shares pursuant to Section 2.4(a)(iv) is not consummated for whatever reason.
Whether to effect a sale of Shares pursuant to this Section 2.4(a) by the
Section 2.4 Offering Holder is in the sole and absolute discretion of such
Section 2.4 Offering Holder.
(b) The provisions of Section 2.4(a) hereof shall not be
applicable to any transfer of Shares (i) from any Holder effected in a
transaction through a broker-dealer over the facilities of the Nasdaq National
Market System or any exchange on which the Common Stock is listed or (ii) made
pursuant to a Public Offering.
SECTION 2.5. Rights to Compel Sale.
(a) If any Holder or Holders that collectively own a majority of
the outstanding Shares then subject to this Section 2.5 (collectively, the
"Controlling Stockholders") propose to sell to a Third Party for cash, Cash
Equivalents or Readily Marketable Securities all Shares held by them and their
respective Permitted Transferees, if any, to a Third Party (the "Section 2.5
Transfer Offer"), then (in addition to the right of the remaining Holders and
their respective Permitted Transferees, if any, to participate in such sale
pursuant to Section 2.4 hereof) the Controlling Stockholders may, at their
option, but subject to Section 2.5(d) hereof, require each and every one of
the remaining Holders and their respective Permitted Transferees, if any (the
"Remaining Holders"), to sell all Shares held by such Remaining Holders to the
Third Party, for the same consideration per Share and otherwise on the same
terms and conditions upon which the Controlling Stockholders sell their
Shares.
(b) (i) The Controlling Stockholders shall cause the Section 2.5
Transfer Offer to be reduced to writing and shall provide a written notice
(the "Section 2.5 Transfer Notice") of such Section 2.5 Transfer Offer to the
Company and the Company shall provide written notice of such Section 2.5
Transfer Offer to the Remaining Holders. The Section 2.5 Transfer Notice
shall contain written notice of the exercise of the Controlling Stockholders'
rights pursuant to Section 2.5(a) hereof, setting forth the consideration per
Share to be paid by the Third Party and the other terms and conditions of the
Section 2.5 Transfer Offer. Within 20 days following the date of the Section
2.5 Transfer Notice, each of the Remaining Holders shall deliver to a
representative of the Controlling Stockholders designated in the Section 2.5
Transfer Notice certificates representing the Shares held by such Remaining
Holder, Duly Endorsed, together with all other documents required to be
executed in connection with such Section 2.5 Transfer Offer or, if such
delivery is not permitted by applicable law, an unconditional agreement to
deliver such Shares pursuant to this Section 2.5(b) at the closing for such
Section 2.5 Transfer Offer against delivery to such Remaining Holder of the
consideration therefor. In the event that a Remaining Holder should fail to
deliver such certificates to the Controlling Stockholders, the Company shall
cause the books and records of the Company to show that such Shares are bound
by the provisions of this Section 2.5(b) and that such Shares shall be
transferred only to the Third Party upon surrender for transfer by the
Remaining Holder thereof.
(ii) If, within 120 days after the Controlling Stockholders
give the Transfer Notice, they have not completed the sale of all the Transfer
Stock, the Controlling Stockholders shall return to each of the Remaining
Holders all certificates representing Shares that such Remaining Holder
delivered for sale pursuant hereto, and all the restrictions on sale or other
disposition contained in the Agreement with respect to Shares owned by the
Controlling Stockholders shall again be in effect.
(iii) Promptly after the consummation of the sale of Shares
of the Controlling Stockholders and Remaining Holders pursuant to this Section
2.5, the Controlling Stockholders shall give notice thereof to the Remaining
Holders, shall remit to each of the Remaining Holders the total sales price of
the Shares of such Remaining Holders sold pursuant thereto, and shall furnish
such other evidence of the completion and time of completion of such sale or
other disposition and the terms thereof as may be reasonably requested by such
Remaining Holders.
(c) In the event that any Remaining Holder shall be required to
sell Shares pursuant to the provisions of Section 2.5 hereof, then the
provisions of Section 2.4 hereof shall not be applicable to such Remaining
Holder.
(d) Notwithstanding the foregoing provisions of this Section 2.5,
no Remaining Holder which is a trust under an employee benefit plan subject to
ERISA (an "ERISA Holder") shall be obligated to sell any Shares pursuant to
this Section 2.5 if such Remaining Holder determines in good faith, upon
advice of counsel, that there is a material risk that such sale would
constitute a prohibited or a party-in-interest transaction or would otherwise
contravene ERISA and gives the Controlling Stockholders notice thereof within
20 days after receiving a Section 2.5 Transfer Notice. Notwithstanding the
foregoing provisions of this Section 2.5(d), such ERISA Holder shall, if
requested by the Controlling Stockholders, use reasonable commercial efforts
to obtain an appropriate exemption from any such ERISA restriction or to
participate in restructuring such proposed transaction in such a manner that
such ERISA Holder can determine that no such material risk exists, and the
Controlling Stockholder, such ERISA Holder and the Company shall cooperate
with each other in such regard; provided, however, that neither of them shall
be required to take any action which it determines in good faith to be
contrary to its best interests.
SECTION 2.6. Improper Transfer. Any attempt to sell, assign,
transfer, grant a participation in, pledge or otherwise dispose of any Shares
not in compliance with this Agreement shall be null and void and neither the
Company nor any transfer agent shall give any effect in the Company's stock
records to such attempted sale, assignment, transfer, grant of a participation
in, pledge or other disposition.
ARTICLE III
CERTAIN AGREEMENTS REGARDING THE BOARD OF DIRECTORS
SECTION 3.1. Nomination of Directors and Certain Other Management
Rights. So long as MSLEF or Fort Howard Equity Investors II shall own shares
of Common Stock of the Company, MSLEF and Fort Howard Equity Investors II, as
the case may be, each shall have the following rights with respect to the
Company: (i) the right to have a designee nominated for election to the Board
of Directors at any annual meeting of the Company's shareholders, provided
that MSLEF or Fort Howard Equity Investors II, as the case may be, does not
already have a designee as a member of the Board of Directors at the time of
such annual meeting; (ii) in the event of a vacancy on the Board of Directors
created by the resignation, removal or death of a director nominated by MSLEF
or Fort Howard Equity Investors II, as the case may be, the right to have a
designee nominated for election to fill such vacancy; (iii) the right to
routinely consult with the management of the Company on matters relating to
the Company; (iv) the right to inspect the books and records of the Company;
(v) if MSLEF and Fort Howard Equity Investors II each do not have a designee
elected as a member of the Board of Directors of the Company or each do not
elect to have a designee nominated, the right to have a representative of
MSLEF and Fort Howard Equity Investors II attend the meetings of the Board of
Directors and to participate in discussions (but not vote) at such meetings;
and (vi) the right to inspect the properties and operations of the Company;
provided, however, that any such nominee of MSLEF or Fort Howard Equity
Investors II, as the case may be, shall be reasonably acceptable to the Board
of Directors of the Company. To the extent the Company's proxy statement for
any annual meeting includes a recommendation regarding the election of any
other nominees to the Company's Board of Directors, the Company agrees to
include a recommendation that the shareholders also vote in favor of the
foregoing nominees. The rights provided to MSLEF and Fort Howard Equity
Investors II in this Section 3.1 are intended to enable MSLEF and Fort Howard
Equity Investors II or any partner of MSLEF and Fort Howard Equity Investors
II to be operated as a "venture capital operating company" within the meaning
of the regulations of the Department of Labor set forth in 29 CFR Section
2510.3-101(d), and this Section 3.1 shall be interpreted accordingly.
ARTICLE IV
REGISTRATION RIGHTS
SECTION 4.1. Registration on Request of Holders.
(a) Subject to the Company's Right of First Refusal as provided
in Section 5.1(a) hereof, upon the written request of Holders of the Minimum
Registration Request Percentage of the Registrable Securities outstanding (the
"Selling Investors"), requesting that the Company effect the registration
under the Securities Act of not less than the Minimum Registration Amount of
Registrable Securities, and specifying the intended method of disposition
thereof, the Company will promptly give written notice of such requested
registration to all other Holders of Registrable Securities, and thereupon
will use its best efforts to effect, as expeditiously as possible, the
registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the Selling Investors of at least the Minimum
Registration Amount, then held by the Selling Investors and their
respective Permitted Transferees, if any; and
(ii) all other Registrable Securities which the Company has been
requested to register by any other Holder thereof by written request
received by the Company within five Business Days after the giving of
such written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities),
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided, however, that
(A) the Company shall not be obligated to file a registration
statement relating to a registration request under this Section 4.1(a)
within a period of six months after the effective date of any other
registration statement of the Company other than any registration
statement relating to Shares issuable upon exercise of employee stock
options or in connection with any employee benefit or similar plan of
the Company or in connection with an acquisition by the Company of
another company,
(B) with respect to any registration statement filed, or to be
filed, pursuant to this Section 4.1, if the Company shall furnish to the
Selling Investors a certified resolution of the Board of Directors
stating that in the Board of Directors' good faith judgment it would
(because of the existence of, or in anticipation of, any acquisition or
financing activity, or the unavailability for reasons beyond the
Company's control of any required financial statements, or any other
event or condition of similar significance to the Company) be
significantly disadvantageous (a "Disadvantageous Condition") to the
Company or its stockholders for such a registration statement to be
maintained effective, or to be filed and become effective, and setting
forth the general reasons for such judgment, the Company shall be
entitled to cause such registration statement to be withdrawn and the
effectiveness of such registration statement terminated, or, in the
event no registration statement has yet been filed, shall be entitled
not to file any such registration statement, until such Disadvantageous
Condition no longer exists (notice of which the Company shall promptly
deliver to the Selling Investors and any other holders selling
securities pursuant to an effective registration statement) and upon
receipt of any such notice of a Disadvantageous Condition such Selling
Investors and any other holders selling securities pursuant to an
effective registration statement (the "Additional Sellers") will
forthwith discontinue use of the prospectus contained in such
registration statement and, if so directed by the Company, each such
Holder will deliver to the Company all copies, other than permanent file
copies then in such Holder's possession, of the prospectus then covering
such Registrable Securities current at the time of receipt of such
notice and, in the event no registration statement has yet been filed,
all drafts of the prospectus covering such Registrable Securities, and
(C) subject to Section 4.1(f) hereof, the Company shall not be
obligated to pay any Registration Expenses in connection with more than
four registrations requested in the aggregate pursuant to this Section
4.1.
Unless the Holders of Registrable Securities (representing a majority of the
Fully Diluted Shares) then held by the Selling Investors and the Additional
Sellers and their Permitted Transferees, if any, shall otherwise consent in
writing, no other person (including the Company), other than another Holder of
Registrable Securities, shall be permitted to offer any securities under any
registration pursuant to this Section 4.1. Promptly after the expiration of
the five Business Day period referred to in Section 4.1(a)(ii) hereof, the
Company will notify all the Holders to be included in the registration of the
other Holders and the number of shares of Registrable Securities requested to
be included therein. A majority of the Selling Investors requesting a
registration under this Section 4.1(a) may, at any time prior to the effective
date of the registration statement relating to such registration, revoke such
request, without liability (except as set forth in Section 4.1(c) hereof) to
any of the other Selling Investors or to any other holders of Registrable
Securities requested to be registered pursuant to Section 4.1(a)(ii) hereof,
by providing a written notice to the Company revoking such request. In the
event that the Company shall give any notice of the withdrawal of a
registration statement contemplated by clause (B) above, the Company shall at
such time as it in good faith deems appropriate file a new registration
statement covering the Registrable Securities that were covered by such
withdrawn registration statement, and such registration statement shall be
maintained effective for such time as may be necessary so that the period of
effectiveness of such new registration statement, when aggregated with the
period during which such initial registration statement was effective, shall
be such time as may be otherwise required by this Agreement. There is no
limitation on the number of times that the Company may withdraw a registration
statement pursuant to this Section 4.1(a). Notwithstanding anything contained
in this Agreement to the contrary, nothing herein shall be construed as
requiring the Company to register any of its securities other than Shares.
(b) Registration Statement Form. If, pursuant to a registration
request under this Section 4.1, (i) the Company proposes to effect
registration by filing a registration statement on Form S-3 (or any successor
or similar short-form registration statement), (ii) such registration is in
connection with a Public Offering and (iii) the managing underwriter shall
advise the Company in writing that, in its opinion, the use of another form of
registration statement is of material importance to the success of such
proposed offering, then such registration shall be effected on such other
form.
(c) Expenses. The Company will pay all Registration Expenses in
connection with four registrations which are requested and become effective
pursuant to this Section 4.1. The Company shall not be liable for Registration
Expenses in connection with a registration that shall not have become
effective due to a revocation by the Selling Investors requesting such
registration under this Section 4.1. In such event, the obligation to pay the
Registration Expenses in connection with such revoked registration shall be
due and payable by the Selling Investors who initially requested and revoked
such registration and the obligation of the Company to pay all Registration
Expenses in connection with four registrations shall not be affected by such
revoked registration. However, each Holder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to a registration
requested pursuant to this Section 4.1.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 4.1 shall not be deemed to have been effected unless
the registration statement relating thereto (i) has become effective under the
Securities Act and any of the Registrable Securities of the Selling Investors
and their Permitted Transferees, if any, included in such registration have
actually been sold thereunder, and (ii) has remained effective for a period of
at least 90 days (or such shorter period in which all Registrable Securities
of the Selling Investors and the Additional Sellers and their respective
Permitted Transferees, if any, included in such registration have actually
been sold thereunder); provided, however, that if any effective registration
statement requested pursuant to this Section 4.1 is discontinued in connection
with a Disadvantageous Condition, such registration statement shall be at the
sole expense of the Company and shall not be included as one of the four
registrations which may be requested pursuant to Section 4.1 hereof; and
provided further, that if after any registration statement requested pursuant
to this Section 4.1 becomes effective (i) such registration statement is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court solely due to the actions
or omissions to act of the Company and (ii) less than 75% of the Registrable
Securities included in such registration have been sold thereunder, such
registration statement shall be at the sole expense of the Company and shall
not be included as one of the four registrations which may be requested
pursuant to Section 4.1 hereof.
(e) Selection of Underwriters. If any requested registration
pursuant to this Section 4.1 is in the form of a Public Offering, the Company
will select Morgan Stanley & Co. as the manager or, if Morgan Stanley & Co. so
desires, as the co-manager, that will administer the offering, provided that
Morgan Stanley & Co. shall perform such services as underwriter at the then
customary market rates for similar underwriting services. If Morgan Stanley &
Co. declines to act as manager or co-manager of the offering, the Holders of a
majority of the Registrable Securities then held by the Selling Investors and
their Permitted Transferees, if any, which are to be registered pursuant to
this Section 4.1 shall have the right to select the manager or co-managers
that will administer the offering.
(f) Pro Rata Participation in Requested Registrations. If a
requested registration pursuant to this Section 4.1 involves a Public Offering
and the managing underwriter shall advise the Company that, in its view, the
number of equity securities requested to be included in such registration
(including securities which the Company requests to be included which are not
Registrable Securities) exceeds the largest number of securities which can be
sold without having an adverse effect on such offering, including the price at
which such securities can be sold (the "Maximum Offering Size"), the Company
will include in such registration, in the priority listed below, up to the
Maximum Offering Size:
(i) Demand Registrants' Securities. First, Registrable
Securities requested to be included in such registration pursuant to
Section 4.1(a)(i) and Section 4.1(a)(ii) hereof be allocated (if
necessary for the offering not to exceed the Maximum Offering Size) pro
rata among the Holders requesting registration pursuant to Section
4.1(a)(i) and Section 4.1(a)(ii) hereof on the basis of the relative
number of Fully Diluted Shares represented by the Registrable Securities
each such Holder has requested to be included in such registration).
(ii) The Issuer's Securities. Second, the equity securities
proposed to be sold by the Company but only to the extent such
allocation would not result in the offering exceeding the Maximum
Offering Size.
(iii) Other Holders' Securities. Third, the equity securities
proposed to be sold by any other person to the extent that the Holders
of a majority of the Registrable Securities then held by the Selling
Investors and their Permitted Transferees, if any, have consented,
pursuant to Section 4.1(a) hereof, to the inclusion in such registration
of such securities of such other persons, shall be allocated (if
necessary for the offering not to exceed the Maximum Offering Size) pro
rata among all such other persons on the basis of the relative number of
securities each such person has requested to be included in such
registration or on such other basis as may be consented to by the
Company and the Selling Investors.
(g) If Registrable Securities representing at least 50% of the
number of Fully Diluted Shares requested to be registered by the Selling
Investors and their Permitted Transferees, if any, are not included in such
registration, then the Selling Investors and their Permitted Transferees, if
any, may request that the Company effect an additional registration under the
Securities Act of all or part of the Selling Investors' and such Permitted
Transferees', if any, Registrable Securities in accordance with the provisions
of this Section 4.1, and the Company shall pay the Registration Expenses in
connection with such additional registration (in addition to the four
registrations referred to in Section 4.1(a) hereof).
SECTION 4.2. Incidental Registration.
(a) If the Company at any time proposes to register any of its
equity securities (the "Priority Securities") under the Securities Act (other
than a registration (i) on Form S-8 or S-4 or any successor or similar forms,
(ii) relating to Shares issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company, (iii) in
connection with a direct or indirect acquisition by the Company of another
company, (iv) pursuant to a registration under Section 4.1 hereof, (v) of
preferred securities or convertible or exchangeable debt or equity securities,
or (vi) relating to any Shares purchased by certain parties in connection with
various put options and call options granted under the MEPA to the Electing
Parties (as defined therein)), whether or not for sale for its own account, in
a manner which would permit registration of Registrable Securities for sale to
the public under the Securities Act, it will each such time, subject to the
provisions of Section 4.2(b) hereof, give prompt written notice to all Holders
of record of Registrable Securities of its intention to do so and of such
Holders' rights under this Section 4.2, at least 30 days prior to the
anticipated filing date of the registration statement relating to such
registration; provided that, if such registration involves a Public Offering,
no such notice shall be required if the managing underwriter of the proposed
offering advises that the number of Priority Securities equals or exceeds the
Maximum Offering Size. Any such notice shall offer all such Holders the
opportunity to include in such registration statement such number of
Registrable Securities as each such Holder may request. Upon the written
request of any such Holder made within 20 days after the receipt of notice
from the Company (which request shall specify the number of Registrable
Securities intended to be disposed of by such Holder and the intended method
of disposition thereof), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holders thereof, to the
extent requisite to permit the disposition (in accordance with such intended
methods thereof) of the Registrable Securities so to be registered; provided
that (i) if such registration involves a Public Offering, all Holders of
Registrable Securities requesting to be included in the Company's registration
must sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to the Company; and (ii) if,
at any time after giving written notice of its intention to register any
securities pursuant to this Section 4.2(a) and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company shall give written notice to all Holders of Registrable Securities
and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (without
prejudice, however, to rights of Holders under Section 4.1 hereof). If a
registration pursuant to this Section 4.2(a) involves a Public Offering, any
Holder of Registrable Securities requesting to be included in such
registration may elect, in writing not less than five Business Days prior to
the effective date of the registration statement filed in connection with such
registration, not to register such securities in connection with such
registration. No registration effected under this Section 4.2 shall relieve
the Company of its obligations to effect registrations upon request under
Section 4.1 hereof. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 4.2, and each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to a registration statement
effected pursuant to this Section 4.2.
(b) Priority in Incidental Registrations. If a registration
pursuant to this Section 4.2 involves a Public Offering and the managing
underwriter advises the Company that, in its view, the number of equity
securities (including all Registrable Securities) which the Company, the
Holders and any other persons intend to include in such registration exceeds
the Maximum Offering Size, the Company will include in such registration, in
the following priority, up to the Maximum Offering Size:
(i) first, all the Priority Securities (including any to be sold
for the Company's own account or for other holders of Priority
Securities), with such priorities among them as the Company may
determine;
(ii) second, all Registrable Securities requested to be included
in such registration by the Holders pursuant to Section 4.2(a) hereof
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among the Holders requesting registration of
such Registrable Securities pursuant to Section 4.2(a) hereof on the
basis of the relative number of Fully Diluted Shares represented by the
Registrable Securities each such Holder has requested to be included in
such registration); and
(iii) third, the equity securities requested to be sold for the
account of any other persons (allocated, if necessary for the offering
not to exceed the Maximum Offering Size, pro rata among the persons
requesting registration of such equity securities on the basis of the
relative number of Fully Diluted Shares represented by the equity
securities each such person has requested to be included in such
registration).
SECTION 4.3. Holdback Agreements.
(a) Except as otherwise provided in Sections 4.3(c) and 4.3(d)
hereof, if any registration of Registrable Securities shall be in connection
with a Public Offering, each Holder of Registrable Securities and their
Permitted Transferees, if any, agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144, or any successor
provision, under the Securities Act, of any Registrable Securities, and not to
effect any such public sale or distribution of any other equity security of
the Company or of any security convertible into or exchangeable or exercisable
for any equity security of the Company (in each case, other than as part of
such Public Offering) during the 7 days prior to, and during the 120-day
period which begins on the effective date of such registration statement
(except as part of such registration) provided that each Holder of Registrable
Securities and their Permitted Transferees, if any, has received written
notice of such registration at least two Business Days prior to the
anticipated beginning of the 7-day period referred to above; provided,
however, that this Section 4.3(a) shall apply only to transactions in Common
Stock that is not held by third-party investment advisers who have
discretionary power to invest the assets of any Holder in publicly-traded
securities. The 120-day period referred to in this Section 4.3(a) may be
extended to 180 days upon the underwriters' reasonable request.
(b) If any registration of Registrable Securities shall be in
connection with a Public Offering, the Company agrees not to effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any subsidiary
of the Company or the acquisition by the Company or a subsidiary of the
Company of the capital stock or substantially all the assets of any other
person or in connection with an employee stock ownership or other benefit
plan) during the 7 days prior to, and during the 120-day period which begins
on, the effective date of such registration statement (except as part of such
registration).
(c) If a registration pursuant to Section 4.2 involves a Public
Offering of Priority Securities and except as otherwise provided in Section
4.3(d) hereof, each Holder and their Permitted Transferees, if any, agrees
(notwithstanding the fact that none of such Holder's or Permitted Transferee's
Registrable Securities are to be included as part of such offering) that,
without the prior written consent of Morgan Stanley & Co. (or in the case of
Morgan Stanley and its Affiliates and MSLEF, without the prior written consent
of the co-managers of such offering), it will not, during the 7 days prior to,
and during the 180-day period which begins on the effective date of the
registration statement relating to such offering, (i) offer, pledge, sell,
contract to sell, sell an option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (ii) enter into any swap or similar agreement that transfers,
in whole or in part, the economic risk of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise; provided, however, that this Section 4.3(c) shall not apply to
transactions in Common Stock other than the Shares that is held by a third-
party investment adviser who has discretionary power to invest the assets of
any Holder in publicly-traded securities; and provided further, that any
Holder who is a natural person and is not a Management Investor may,
notwithstanding anything to the contrary contained in this Section 4.3(c) or
Section 4.3(d), transfer shares of Common Stock which are not Shares by gift,
will, bequest or devise.
(d) Each Holder who is not a Management Investor agrees, in
connection with the 1995 Initial Public Offering and notwithstanding the fact
that none of such Holder's Registrable Securities are to be included as part
of such offering, that, without the prior written consent of Morgan Stanley &
Co. (or in the case of Morgan Stanley and its Affiliates and MSLEF, without
the prior written consent of the co-managers of such offering), it will not,
during the 7 days prior to, and during the one-year period which begins on,
the effective date of the registration statement relating to such offering,
(i) offer, pledge, sell, contract to sell, sell an option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (ii) enter into any swap or
similar agreement that transfers, in whole or in part, the economic risk of
ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise; provided, however, that this Section
4.3(d) shall not apply to transactions in Common Stock other than the Shares
that is held by a third-party investment adviser who has discretionary power
to invest the assets of any Holder in publicly-traded securities; and provided
further, that any Holder who is a natural person and is not a Management
Investor may, notwithstanding anything to the contrary contained in Section
4.3(c) or this Section 4.3(d), transfer shares of Common Stock which are not
Shares by gift, will, bequest or devise.
(e) The managers of the 1995 Initial Public Offering and of any
other Public Offering to which this Section 4.3 applies are expressly made
third party beneficiaries of the agreements contained in Sections 4.3(a),
4.3(c) and 4.3(d) hereof.
SECTION 4.4. Registration Procedures. Whenever Holders request
that any Registrable Securities be registered pursuant to Section 4.1 or 4.2
hereof, the Company will, subject to the provisions of such Sections, use its
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and
file with the Commission a registration statement on any form for which
the Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with
the intended method of distribution thereof, and use its best efforts to
cause such filed registration statement to become and remain effective
for a period of not less than 180 days.
(b) The Company will, if so requested, prior to filing a
registration statement or prospectus or any amendment or supplement
thereto, furnish to each Holder and each underwriter, if any, of the
Registrable Securities covered by such registration statement copies of
such registration statement as proposed to be filed, and thereafter the
Company will furnish to such Holder and underwriter, if any, such number
of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such
registration statement (including each preliminary prospectus) and such
other documents as such Holder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned
by such Holder.
(c) After the filing of the registration statement, the Company
will promptly notify each Holder of Registrable Securities covered by
such registration statement of 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.
(d) The Company will use its best efforts to (i) register or
qualify the Registrable Securities under such other state securities or
blue sky laws of such jurisdictions in the United States as any Holder
of Registrable Securities covered by such registration statement
reasonably (in light of such Holder's intended plan of distribution)
requests and (ii) cause such Registrable Securities to be registered
with or approved by such other governmental agencies or authorities as
may be necessary by virtue of the business and operations of the Company
and do any and all other acts and things that may be reasonably
necessary or advisable to enable such Holder to consummate the
disposition of the Registrable Securities owned by such Holder; provided
that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (d), (B) subject itself to taxation in
any such jurisdiction or (C) consent to general service of process in
any such jurisdiction.
(e) The Company will immediately notify each Holder of
Registrable Securities covered by such registration statement, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and promptly
make available to each such Holder any such supplement or amendment.
(f) The Company will enter into customary agreements (including
an underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities.
(g) The Company will make available for inspection by any Holder
of Registrable Securities covered by such registration statement, any
underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other
professional retained by any such Holder or underwriter (collectively,
the "Inspectors") all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers, directors
and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement. Records
which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records is necessary
to avoid or correct a misstatement or omission in such registration
statement or (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction. Each
Holder agrees that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as
the basis for any market transactions in the securities of the Company
or its Affiliates unless and until such is made generally available to
the public. Each Holder further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
(h) The Company will furnish to each Holder of Registrable
Securities covered by such registration statement and to each
underwriter, if any, a signed counterpart, addressed to such Holder or
underwriter, of (i) an opinion or opinions of counsel to the Company and
(ii) a comfort letter or comfort letters from the Company's independent
public accountants, each in customary form and covering such matters of
the type customarily covered by opinions or comfort letters, as the case
may be, as a majority of the Holders of the Registrable Securities
included in such registration statement or the managing underwriter
therefor reasonably requests.
(i) The Company will otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its securityholders, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning within
three months after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act.
(j) The Company will use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
The Company may require each Holder of Registrable Securities
included in such registration statement to promptly furnish in writing to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4.4(e)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4.4(e) hereof, and, if so directed
by the Company, such Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event that the Company shall give such notice, the Company
shall extend the period during which such registration statement shall be
maintained effective (including the period referred to in Section 4.4(a)
hereof) by the number of days during the period from and including the date of
the giving of notice pursuant to Section 4.4(e) hereof to the date when the
Company shall make available to the Holders a prospectus supplemented or
amended to conform with the requirements of Section 4.4(e) hereof.
SECTION 4.5. Indemnification by the Company. The Company agrees
to indemnify and hold harmless each Holder of Registrable Securities covered
by a registration statement, its officers, directors and agents, and each
person, if any, who controls such Holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by such Holder or on such
Holder's behalf expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such loss, claim, damage, liability or expense results
from the fact that a current copy of the prospectus (or, in the case of a
prospectus, the prospectus as amended or supplemented) was not sent or given
to the person asserting any such loss, claim, damage, liability or expense at
or prior to the written confirmation of the sale of the Registrable Securities
concerned to such person if it is determined that the Company has provided
such prospectus and it was the responsibility of such Holder to provide such
person with a current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) and such current copy of the prospectus (or
such amended or supplemented prospectus, as the case may be) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
Company also agrees to indemnify any underwriters of the Registrable
Securities, their officers and directors and each person who controls such
underwriters on substantially the same basis as that of the indemnification of
the Holders provided in this Section 4.5.
SECTION 4.6. Indemnification by Holders of Registrable Securities
and Underwriters. Each Holder of Registrable Securities included in any
registration statement agrees, severally but not jointly, to indemnify and
hold harmless the Company, its officers, directors and agents and each
person, if any, who controls the Company within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to such Holder, but only (i) with
respect to information furnished in writing by such Holder or on such Holder's
behalf expressly for use in any registration statement or prospectus relating
to the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus or (ii) to the extent that any loss, claim, damage,
liability or expense described in Section 4.5 results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the
prospectus as amended or supplemented) was not sent or given to the person
asserting any such loss, claim, damage, liability or expense at or prior to
the written confirmation of the sale of the Registrable Securities concerned
to such person if it is determined that it was the responsibility of such
Holder to provide such person with a current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) and such current copy
of the prospectus (or such amended or supplemented prospectus, as the case may
be) would have cured the defect giving rise to such loss, claim, damage,
liability or expense. Each such Holder also agrees to indemnify and hold
harmless underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.6. As a condition to including Registrable Securities in any
registration statement filed in accordance with Article IV hereof, the Company
may require that it shall have received an undertaking reasonably satisfactory
to it from any underwriter to indemnify and hold it harmless to the extent
customarily provided by underwriters with respect to similar securities.
SECTION 4.7. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2, such person (an "Indemnified Party") shall promptly notify
the person against whom such indemnity may be sought (the "Indemnifying
Party") in writing and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Party, and shall assume the payment of all fees and expenses;
provided that the failure of any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) in the reasonable
judgment of such Indemnified Party, representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for
the Indemnified Parties, such firm shall be designated in writing by the
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Party
is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability arising out of such
proceeding.
SECTION 4.8. Contribution. If the indemnification provided for
in this Article 4 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
the Holders of Registrable Securities covered by a registration statement on
the one hand and the underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Company and such
Holders on the one hand and the underwriters on the other from the offering of
the Registrable Securities, or if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of the Company and such Holders
on the one hand and of the underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii)
as between the Company on the one hand and each Holder of Registrable
Securities covered by a registration statement on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and
of each such Holder in connection with such statements or omissions, as well
as any other relevant equitable considerations. The relative benefits
received by the Company and such Holders on the one hand and the underwriters
on the other shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the Holders bear to the
total underwriting discounts and commissions received by the underwriters, in
each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and the Holders on the one hand and of the
underwriters on the other 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 Company and the Holders or by the underwriters.
The relative fault of the Company on the one hand and of each Holder on the
other 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
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.8 were determined by pro
rata 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 immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 4.8, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages which such underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no Holder shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities of
such Holder were offered to the public exceeds the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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. Each Holder's obligation to
contribute pursuant to this Section 4.8 is several in the proportion that the
proceeds of the offering received by such Holder bears to the total proceeds
of the offering received by all the Holders and not joint.
SECTION 4.9. Participation in Public Offering. No person may
participate in any Public Offering hereunder unless such person (a) agrees to
sell such person's securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
SECTION 4.10. Other Indemnification. Indemnification similar to
that specified herein (with appropriate modifications) shall be given by the
Company and each Holder of Registrable Securities with respect to any required
registration or other qualification of securities under any federal or state
law or regulation or governmental authority other than the Securities Act.
ARTICLE V
RIGHT OF FIRST REFUSAL
SECTION 5.1. Right of First Refusal.
(a) (i) Upon receipt of a registration request made by the
Selling Investors pursuant to Section 4.1(a) hereof, the Company (or any
person the Company may designate, a "Section 5.1 Designee") shall have the
right (a "Right of First Refusal") to purchase, pursuant to the procedures set
forth in this Section 5.1, all the Shares (the "First Refusal Shares") in
respect of which the Company has received such registration request. Subject
to Section 5.1(a)(ii), the Company or the Section 5.1 Designee shall have the
right to purchase the First Refusal Shares at a price per share equal to the
Fair Market Value of the Company's common stock by giving notice in writing to
such effect to the Selling Investors (the "Purchase Notice") within 10 days of
the Company's receipt of such registration request. For purposes of this
Section 5.1, "Fair Market Value" means the average daily closing price of the
Company's publicly traded shares on the Nasdaq National Market or such other
securities exchange on which the shares may be traded (as reported in The Wall
Street Journal) for the 45 trading days immediately preceding the Company's
delivery of the Purchase Notice. If the Company or the Section 5.1 Designee
elects not to purchase the First Refusal Shares or fails to deliver the
Purchase Notice by 5:00 p.m. (New York City time) on the tenth day after the
Company's receipt of such registration request, the Selling Investors shall be
entitled to the demand registration rights provided in Section 4.1. If the
tenth day after the Company's receipt of such registration request is not a
Business Day, the Company or the Section 5.1 Designee shall be entitled to
deliver the Purchase Notice by 5:00 p.m. (New York City time) on the next
succeeding Business Day.
(ii) A majority of the Selling Investors requesting the
registration in respect of which the Company delivered the Purchase Notice may
withdraw such registration request by giving notice in writing to such effect
to the Company (the "Withdrawal Notice") at any time prior to the date which
is five days after the date of delivery of the Purchase Notice.
(b) If the Company or the Section 5.1 Designee shall have
delivered the Purchase Notice (and no Withdrawal Notice shall have been
delivered), the closing of the purchase of the First Refusal Shares pursuant
to this Section 5.1 shall take place in New York City on the date specified in
the Purchase Notice which date shall neither be earlier than 5 days nor later
than 20 days after the date of delivery of the Purchase Notice. Promptly upon
receipt of the Purchase Notice, if no Withdrawal Notice shall have been
delivered, each Selling Investor of First Refusal Shares shall deliver to the
Company the certificates for such Shares, in form for transfer, Duly Endorsed,
against payment therefor. The Company or the Section 5.1 Designee, as the
case may be, shall make payment on the closing date by delivering to each
Selling Investor a certified check or wire transfer in immediately available
funds for the purchase price of such Selling Investor's First Refusal Shares,
against delivery of the certificates for such Shares, in form for transfer,
Duly Endorsed. If the Company or the Section 5.1 Designee, as the case may
be, shall fail to purchase the First Refusal Shares in accordance with this
Section 5.1(b), the Selling Investors shall be entitled to the demand
registration rights provided in Section 4.1.
(c) Notwithstanding the foregoing provisions of this Section 5.1,
no Selling Investor which is an ERISA Holder shall be obligated to sell any
First Refusal Shares pursuant to this Section 5.1 if such Selling Investor
determines in good faith, upon advice of counsel, that there is a material
risk that such sale would constitute a prohibited or a party-in-interest
transaction or would otherwise contravene ERISA and gives the Company notice
thereof within 20 days after receiving a Purchase Notice. Notwithstanding the
foregoing provisions of this Section 5.1(c), such ERISA Holder shall, if
requested by the Company, use reasonable commercial efforts (which shall be,
without limitation, reasonable as to time and expense) to obtain an
appropriate exemption from any such ERISA restriction or to participate in
restructuring such proposed transaction in such a manner that such ERISA
Holder can determine that no such material risk exists, and the Company and
such ERISA Holder shall cooperate with each other in such regard; provided
that neither of them shall be required to take any action which it determines
in good faith to be contrary to its best interests. If within 20 days of the
Company's receipt of such ERISA Holder's notice, such ERISA Holder shall
furnish to the Company a statement in writing that (i) after discussions with
the Department of Labor, it is determined that there is a risk that such sale
would constitute a prohibited or party-in-interest transaction or would
otherwise contravene ERISA and (ii) because of the time and expense involved
in obtaining an exemption from such ERISA restriction such sale is
commercially unreasonable or contrary to such ERISA Holder's best interests,
then such ERISA Holder shall be entitled to the demand registration rights
provided in Section 4.1 hereof; provided that any exercise of such
registration rights shall be subject to the provisions of Section 4.1,
including the Minimum Registration Amount.
ARTICLE VI
ADDITIONAL RIGHTS AND OBLIGATIONS OF HOLDERS
SECTION 6.1. Certain Matters. For purposes hereof, with respect
to Shares, and options to purchase Shares, of the Company held by Paul J.
Schierl, (a) Mr. Schierl shall be deemed a "Holder", (b) all references to the
"MEPA" and the "Purchase Agreements" shall be deemed to include the 1990
Agreement, and (c) all references to "Management Investors" shall be deemed to
include Mr. Schierl except where otherwise indicated, and except that for
purposes of clauses (ii) and (iii) of Section 7.12 hereof, Mr. Schierl shall
be deemed to be a "Direct Investor" and not a "Management Investor."
SECTION 6.2. Reorganization. In the event the Board of Directors
determines that it is in the best interest of the stockholders of the Company
to establish Newco (as defined below) then, in the event that any capital
stock, other securities or other interests are issued in respect of, in
exchange for, or in substitution of, any Shares held by Holders by reason of
any reorganization, recapitalization, reclassification, merger or
consolidation involving the Company in which a newly formed corporation or
partnership ("Newco") becomes the parent or holding company for or the
successor to the Company, each Holder hereby agrees to (i) in the event
stockholder approval is required to effect such reorganization, vote all
Shares beneficially owned by it in favor of such reorganization, and (ii)
exchange, or cause the exchange, of Shares held by it into the applicable
securities of Newco, such exchange to be made on a ratable basis among the
Holders. Any references in this Agreement to "Shares" shall include any
successor securities of Newco into which Shares may be exchanged in accordance
with this Section 6.2 and any references to "stockholders of the Company"
shall include the holders of such successor securities of Newco. All
references to the Company in this Agreement shall include Newco.
SECTION 6.3. Pro Rata Purchase. Notwithstanding anything in this
Agreement to the contrary, nothing herein shall prohibit the Company from
offering to purchase Shares from a Holder, and consummating the purchase
thereof, provided that any such offer (other than with respect to Shares held
by current or former employees of the Company or any of its subsidiaries
pursuant to any agreement between the Company and any such employee) is made
pro rata to each Holder.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
SECTION 7.2. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement. The Company has not previously entered into any agreement
with respect to any of its debt or equity securities granting any registration
rights to any person.
SECTION 7.3. Remedies. The Company acknowledges and agrees that
in the event of any breach of this Agreement by it, the Holders would be
irreparably harmed and could not be made whole by monetary damages. The
Company accordingly agrees (i) to waive the defense in any action for specific
performance that a remedy at law would be adequate, and (ii) that the Holders,
in addition to any other remedy to which they may be entitled at law or in
equity, shall be entitled to compel specific performance of this Agreement in
any action instituted in the United States District Court for the Southern
District of New York, or, in the event such Court would not have jurisdiction
for such action, in any court of the United States or any state thereof having
subject matter jurisdiction for such action. The Company consents to personal
jurisdiction in any such action brought in the United States District Court
for the Southern District of New York, or any such other court and to service
of process upon it in the manner set forth in Section 7.6 hereof.
SECTION 7.4. Frustration of Purpose. No Holder may do directly
or indirectly, including, without limitation, through the sale of capital
stock of its subsidiary or otherwise, that which is not permitted by the
Agreement. The Board of Directors, in its sole discretion, shall have the
right to make any determination pursuant to this Section 7.4, which
determination shall be final and binding upon all the parties hereto,
including, but not limited to, determinations with respect to certain sales of
Shares pursuant to the rights of first refusal contained in Section 5.1 hereof
and certain rights to compel the sale of Shares contained in Section 2.5
hereof.
SECTION 7.5. Entire Agreement. This Agreement, together with the
Purchase Agreements referred to herein, constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein, and there are no restrictions, promises, representations,
warranties, covenants, or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to herein or therein.
This Agreement and the Purchase Agreements supersede all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
SECTION 7.6. Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto
shall be in writing, shall be delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, or by overnight
delivery service, to the address of the party theretofore furnished to the
Company or to such other address as the party to whom notice is to be given
may provide in a written notice to the Company, a copy of which written notice
shall be on file with the Secretary. Notice shall be effective when sent by
registered or certified mail, return receipt requested, postage prepaid to the
party, and when received if delivered personally or otherwise by the party to
whom it is directed.
SECTION 7.7. Applicable Law. The laws of the State of Delaware
shall govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws.
SECTION 7.8. Severability. The invalidity or unenforceability of
any provisions of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in
such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it being
intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
SECTION 7.9. Termination. This Agreement shall terminate and be
of no further force or effect upon the earlier of: (i) such time as both
MSLEF and Fort Howard Equity Investors II cease to own any of the then
outstanding Shares or (ii) the tenth anniversary of this amendment and
restatement.
SECTION 7.10. Additional Holders. Each employee of the Company
or any direct or indirect subsidiary of the Company who becomes a holder of
Shares or Share Equivalents after August 8, 1988 shall, at the option of the
Company, become a party to this Agreement and be bound by its terms and be
able to enforce his rights as a Management Investor and as a Holder hereunder.
Each other person which enters into a Purchase Agreement on or after August 8,
1988 and becomes a holder of Shares or Share Equivalents shall, at the option
of the Company, become a party to this Agreement and be bound by its terms and
be able to enforce its rights as a Holder hereunder. If the Company so
determines, such employee or such other person shall enter into a
supplementary agreement with the Company to such effect. Each such
supplementary agreement shall become effective upon its execution by the
Company and the new holder of Shares or Share Equivalents, and it shall not
require the signatures or the consent of any other Holder. The supplementary
agreement between the Company and any new holder of Shares or Share
Equivalents may modify some of the terms of this Agreement as they affect the
rights and obligations of the new holder of Shares or Share Equivalents;
provided that the modified terms shall not be materially adverse to any of the
other Management Investors, Direct Investors or MS/Fund Investors.
SECTION 7.11. Other Agreements. Nothing contained in this
Agreement shall be deemed to be a waiver of, or release from, any obligations
any party hereto may have under, or any restrictions on the transfer of
Shares, Share Equivalents or other securities of the Company or any direct or
indirect subsidiary of the Company imposed by, any other agreement including,
but not limited to, the Purchase Agreements.
SECTION 7.12. Successors, Assigns, Transferees. The provisions
of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and permitted assigns.
Notwithstanding the foregoing, neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or any Holder, except as permitted by Section 2.4 or
Section 5.1 hereof, without the prior written consent of (i) the Holders of a
majority of the Shares then held by MSLEF and Morgan Stanley Group, (ii) the
Holders of a majority of the Shares then held by the Direct Investors and
their Permitted Transferees, (iii) the Holders of a majority of the Shares
then held by the Management Investors and (iv) the Company; provided, however,
that (A) the Company may assign any of its rights and remedies hereunder to
any Affiliate of the Company, and such Affiliate may assume any of its
obligations and liabilities, without obtaining the prior written consent of
the Holders specified in clauses (i), (ii) and (iii) of this Section 7.12; and
(B) if the provisions of this Agreement are no longer applicable to one or
more of the Holders specified in clauses (i), (ii) and (iii) of this Section
7.12, then the consent of such Holder or Holders shall not be required under
this Section 7.12.
SECTION 7.13. Defaults. A default by any party to this Agreement
in such party's compliance with any of the conditions or covenants hereof or
performance of any of the obligations of such party hereunder shall not
constitute a default by any other party.
SECTION 7.14. Amendments; Waivers. This Agreement may not be
amended, modified or supplemented and no waivers of or consents to departures
from the provisions hereof may be given unless consented to in writing by the
Company and the Holders specified in clauses (i) through (iii) inclusive of
Section 7.12 hereof; provided, however, that any amendment to Article II
hereof shall only require the written consent of a majority of the Holders
subject to Article II.
SECTION 7.15. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
SECTION 7.16. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the successful party shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
SECTION 7.17. Recapitalization, etc. In the event that any
capital stock or other securities are issued in respect of, in exchange for,
or in substitution of, any Shares by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial
or complete liquidation, stock dividend, split-up, sale of assets,
distribution to stockholders or combination of the Shares or any other change
not contemplated or provided for in Section 6.2 in the capital structure of
the Company, appropriate adjustments shall be made with respect to Article II
hereof so as to fairly and equitably preserve, as far as practicable, the
original rights and obligations of the parties hereto under this Agreement.
SECTION 7.18. Effectiveness. This amendment and restatement of
the 1990 Stockholders Agreement shall become effective upon the execution and
delivery hereof, pursuant to Section 7.14, by the Company and the Holders
specified in clauses (i) through (iii) inclusive of Section 7.12 hereof, and
thereupon, subject to Section 7.12, shall be binding on, and inure to the
benefit of, each holder of record of Shares or Share Equivalents as of the
date hereof that is a party to the 1990 Stockholders Agreement as of the date
hereof, a schedule of which is maintained in the records of the Company, and
their respective heirs, successors and permitted assigns, whether or not such
holders, other than the signatories to this amendment and restatement, shall
execute this amendment and restatement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
FORT HOWARD CORPORATION
By: /s/ James W. Nellen II
Name: James W. Nellen II
Title: Vice President, Secretary
and General Counsel
MORGAN STANLEY GROUP INC.
By: /s/ Charles B. Hintz
Name: Charles B. Hintz
Title: Treasurer
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC.,
General Partner
By: /s/ Frank V. Sica
Name: Frank V. Sica
Title: Vice President
FORT HOWARD EQUITY INVESTORS, L.P.,
a Delaware limited partnership
By: MORGAN STANLEY EQUITY
INVESTORS INC.,
General Partner
By: /s/ Frank V. Sica
Name: Frank V. Sica
Title: Vice President
FORT HOWARD EQUITY INVESTORS II,
L.P.
By: MORGAN STANLEY EQUITY
INVESTORS INC.,
General Partner
By: /s/ Frank V. Sica
Name: Frank V. Sica
Title: Vice President
MELLON BANK, N.A., TRUSTEE for First
Plaza Group Trust (as directed by
General Motors Investment Management
Corporation)
By: /s/ Patricia J. Veilleux
Name: Patricia J. Veilleux
Title: Associate Counsel
LEEWAY & CO.
By: STATE STREET BANK & TRUST CO.,
a partner
By: /s/ John Muir
Name: John Muir
Title: Assistant Secretary
DONALD H. DEMEUSE
/s/ Donald H. DeMeuse
KATHLEEN J. HEMPEL
/s/ Kathleen J. Hempel
MICHAEL T. RIORDAN
/s/ Michael T. Riordan
JAMES W. NELLEN II
/s/ James W. Nellen II