AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT, dated as of
August 24, 1998 (the "Agreement"), among (i) VSI Acquisition II Corporation, a
Delaware corporation (the "Corporation"), (ii) BCP Volume L.P., a Delaware
limited partnership ("BCP Volume"), and BCP Offshore Volume L.P., a Cayman
Islands exempted limited partnership ("BOCP Volume", and together with BCP
Volume, "Blackstone"), (iii) VSI Management Direct L.P., a Delaware limited
partnership ("Management Direct", and together with Blackstone, the "Blackstone
Group"), (iv) General Electric Capital Corporation, a New York corporation
("GECC"), (v) Recreational Services L.L.C., a Delaware limited liability company
("GE LLC"; and together with its members, the "GE Capital Group"), and (vi) the
additional signatories who have entered into the supplementary agreements
referred to in Section 8.15 (collectively, the "Other Stockholders").
WHEREAS, Blackstone, Management Direct and the Corporation are
parties to the Stockholders' Agreement, dated as of December 21, 1995 (the
"Existing Stockholders' Agreement");
WHEREAS, pursuant to a Share Exchange Agreement dated as of
July 27, 1998 among the Corporation, the Blackstone Group and the and the other
members of GE LLC (the "Exchange Agreement"), the GE LLC became a stockholder of
the Corporation on the date hereof;
WHEREAS, pursuant to a limited liability company agreement,
the GE Capital Group transferred their shares to GE LLC; and
WHEREAS, the Blackstone Group and the Corporation have agreed
to amend and restate the Existing Stockholders' Agreement and GE LLC wishes to
enter into the Existing Stockholders' Agreement as so amended and restated;
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. For the purposes of this Agreement, the following terms have
the meanings specified or referred to in this Section 1 (defined terms in the
singular to have correlative meaning in the plural and vice versa):
"Acquisition": shall mean any expenditure by the Corporation
or its Subsidiaries to acquire, by purchase or otherwise, the business or fixed
assets of, or stock or other evidence of beneficial ownership of, any other
Person.
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"Affiliate": as defined in the Exchange Agreement.
"Beneficial Owner": has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Exchange Act (as in effect on the Closing Date),
whether or not applicable, except that a "Person" shall be deemed to have
"beneficial ownership" of all Shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
"Business Day": any day that is not a Saturday or Sunday or a
day on which banking institutions are required or permitted to be closed in the
State of New York.
"Capital Expenditures": shall mean expenditures incurred by
the Corporation and its Subsidiaries that, in accordance with generally accepted
accounting principles, are or should be included in "purchase of property and
equipment", "purchase of location contract rights" or similar items reflected in
the statement of cash flows of the Corporation and its Subsidiaries.
"Capital Stock": with respect to any corporation, any and all
shares, interests, rights to purchase, warrants, options, participation or other
equivalents of or interests (however designated) in stock issued by that
corporation including any indebtedness convertible into, or exchangeable for,
stock of such corporation.
"Closing Date": August 24, 1998.
"Code": the United States Internal Revenue Code of 1986, as
amended, and any successor law, in each such case as supplemented or interpreted
by all relevant Treasury Regulations, interpretive opinions of the Internal
Revenue Service and judicial interpretations.
"Commission": the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock": common stock, par value $.01 per share, of
the Corporation.
"Control": (including with correlative meanings, the terms
"controlled by" or "under common control with") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Controlling Stockholder": Blackstone and, if the percentage
of the outstanding shares of Common Stock owned by Blackstone exceeds the
percentage of the outstanding shares of Common Stock owned by GE LLC by less
than 8%, GE LLC.
"Encumbrance": any charge, claim, lien, community property
interest, condition, option, pledge, security interest, right of first refusal,
equitable interest or restriction of any kind, including any restriction on
voting, transfer, receipt of income or exercise of other attributes of
ownership.
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"Exchange Act": the Securities Exchange Act of 1934, as
amended, or any successor law and the regulations and rules issued pursuant to
that Act or any successor law.
"Financing": shall have the meaning set forth in Section 6.1.
"GAAP": generally accepted accounting principles in the
United States of America as from time to time in effect.
"Group": collectively, the Blackstone Group and the GE
Capital Group.
"Initial Public Offering": means an initial underwritten
public offering of Common Stock pursuant to an effective registration statement
under the Securities Act.
"Observer": shall have the meaning set forth in Section 2.1.
"Permitted Transferee":
(a) as to any Stockholder who is a natural Person, (i) the successors in
interest to such Stockholder, in the case of a Transfer upon the death of such
Stockholder, (ii) such Stockholder's spouse, parents and descendants (whether by
blood or adoption, and including stepchildren) and the spouses of such Person,
(iii) such Stockholder, with respect to the disposition of the community
property interest of such Stockholder's spouse in all or any part of the Shares
upon the death of such spouse, and any transferee occasioned by the incompetence
of such Stockholder and (iv) in the case of a Transfer during such Stockholder's
lifetime, any Person in which no Person has any interest (directly or
indirectly) except for any of such Stockholder, such Stockholder's spouse,
parents and descendants (whether by blood or adoption, and including
stepchildren) and the spouses of such Persons; provided that in respect of any
Transfer by a Stockholder during such Stockholder's lifetime pursuant to clause
(ii) or (iv), such Stockholder shall retain voting power over all of the
outstanding Shares being Transferred; and provided further, that, in the case of
a Transfer to a Person (such as a partnership or a trust) as to which a
governing instrument exists, (x) such Stockholder shall furnish a copy of such
governing instrument to the Corporation in advance, (y) the Corporation shall be
reasonably satisfied that the terms of such governing instrument shall not be
inconsistent with the terms of this Agreement and (z) during the period that
such Shares are held by such Person, the relevant Stockholder shall ensure that
the terms of such governing instrument shall not be amended in any manner that
results in such governing instrument being inconsistent with the terms of this
Agreement;
(b) as to any Stockholder that is a trust, all the beneficiaries of which are
natural Persons (i) such beneficiaries or the grantor of the trust, in each case
as of the date the Stockholder became a party to this Agreement or, (ii) any
Person related to such a beneficiary or grantor in the manner described in
clause (a) of this definition;
(c) as to any Stockholder, a bank or other financial institution to whom Shares
are Transferred by way of pledge or to whom Shares are Transferred upon the
foreclosure thereof;
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provided, however, that as to any Stockholder, any such pledge must be approved
in advance by Blackstone and GE LLC;
(d) as to any Stockholder that is a corporation or a limited liability company,
all controlled Affiliates of such Stockholder at the date of transfer;
(e) as to GE LLC, any member of such entity on a pro rata basis or on a basis
substantially consistent with such entity's limited liability company agreement
as it exists on the date hereof; and
(f) as to BOCP Volume and BCP Volume, any partner of such entity on the date
hereof, on a pro rata basis or on a basis substantially consistent with such
entity's partnership agreement as it exists on the date hereof.
provided, in each such case, that prior written notice of any such Transfer is
given to the Corporation by such Stockholder and that the Permitted Transferee
shall agree in advance of such Transfer to be designated as a Stockholder and to
be bound by the terms of this Agreement pursuant to a written agreement
reasonably satisfactory to the Corporation.
"Person": any individual, corporation (including any
non-profit corporation), general or limited partnership, partnership, limited
liability company, joint venture, estate, trust, association, organization,
labor union, government or any agency or political subdivision thereof or any
other entity.
"Public Offering": an underwritten public offering of equity
securities pursuant to an effective registration statement under the Securities
Act.
"Registrable Stock": the shares of Common Stock held by the
Stockholders; provided that such shares shall cease to be Registrable Stock when
(i) a registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of under such registration statement, (ii) they shall have been
distributed to the public pursuant to Rule 144 or Rule 144A, or (iii) they shall
have ceased to be outstanding.
"Rule 144": Rule 144 (or any successor provision) under the
Securities Act.
"Rule 144A": Rule 144A (or any successor provision) under the
Securities Act.
"Securities Act": the Securities Act of 1933, as amended, or
any successor law and the regulations and rules issued pursuant to that Act.
"Shares": the shares of Common Stock, the options and the
warrants hereafter issued to or otherwise acquired by the Stockholders
(including acquisitions of such securities concurrently with the execution of
this Agreement and acquisitions of any such securities after the date hereof
whether or not pursuant to the terms hereof and including issuances of any such
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securities pursuant to any option or warrant existing on the date hereof or
issued subsequent to the date hereof) and all shares of Capital Stock or other
securities (including convertible securities and the securities into which such
convertible securities convert) of the Corporation or any successor of the
Corporation issued or issuable in respect thereof as a result of any stock
dividend on, or stock split or reclassification or conversion of, or in exchange
for, any such Common Stock or issued or issuable with respect to such Common
Stock, options or warrants in connection with any merger or reorganization or
similar transaction involving the Corporation.
"Stockholders": Blackstone, Management Direct, GE LLC and the
Other Stockholders and their respective transferees who become subject to this
Agreement.
"Subsidiary": shall have the meaning set forth in the
Exchange Agreement.
"Transfer": any direct or indirect disposition of an interest
whether by sale, exchange, merger, consolidation, transfer, assignment,
conveyance, distribution, pledge, inheritance, gift, mortgage, the creation of
any security interest in, or Encumbrance upon, any other disposition of any kind
and in any manner, by operation of law or otherwise, or any other transfer or
agreement which would result in a change in the percentage of the Corporation's
Capital Stock owned or considered owned by a Stockholder or a Beneficial Owner
as determined for purposes of Section 382 of the Code.
"Treasury Regulations": the regulations adopted under the
Code by the United States Secretary of the Treasury, as in effect from time to
time.
"Voting Stock": capital stock of any class or classes of the
Corporation, the holders of which are entitled, in the absence of contingencies,
to participate generally in the election of the members of the Board of
Directors of the Corporation.
ARTICLE II
CERTAIN VOTING AGREEMENTS
2.1. Board of Directors. So long as this Agreement shall remain in effect:
(a) Each Stockholder agrees that it shall vote all of its Voting Stock at any
regular or special meeting of stockholders or in any written consent executed in
lieu of such meeting of stockholders so as to elect and, during such period, to
continue in office the Board of Directors of the Corporation that consists of:
(A) the Chairman of the Corporation, (B) unless the individual referred to in
clause (A) is a partner of Management Direct, one designee of Management Direct,
provided that Management Direct, prior to designating such director in its sole
discretion, shall consult with Blackstone as to the identity of such designee,
(C) three designees (unless Blackstone is no longer the sole Controlling
Stockholder, in which case two designees) of Blackstone and (D) if Blackstone is
no longer the sole Controlling Stockholder, two designees of GE LLC. Each
Stockholder shall take all action necessary to insure that the Corporation's
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Certificate of Incorporation and By-Laws do not, at any time, conflict with the
provisions of this Agreement.
(b) If GE LLC, Blackstone or Management Direct shall notify the other
Stockholders of its desire to remove, with or without cause, any director of the
Corporation previously designated by it, each Stockholder shall vote all of the
Voting Stock owned or held of record by it so as to remove such director.
(c) If any director previously designated by Blackstone, Management Direct or GE
LLC ceases to serve on the Board of Directors of the Corporation (whether by
reason of death, resignation, removal or otherwise), the Stockholders who
designated such director shall be entitled to designate a successor director to
fill the vacancy created thereby.
(d) The Corporation agrees that GE LLC has the right, which
right shall continue until GE LLC has the right to designate directors pursuant
to Section 2.1(a), to appoint one individual to be an observer (an "Observer")
at meetings of the Board of Directors of the Corporation. GE LLC shall deliver a
written notice of such appointment to the Corporation, which notice shall
contain the address of the Observer. The Observer shall have the right to
receive notice of, and attend and participate in, discussions at each regular
and special meeting of the Board of Directors of the Corporation and shall be
entitled to receive at the same time they are provided to the directors of the
Corporation copies of any information concerning the Corporation that is
provided to each of the directors with respect to such meetings, provided that
such Observer acknowledges and agrees that he will be bound to satisfy the same
duties and obligations of loyalty and confidentiality with respect to such
information that the directors must satisfy. The Observer will be reimbursed for
out-of-pocket expenses under the same terms and in the same amounts as provided
to the directors. The Observer will have no voting rights with respect to the
Board of Directors or any other rights relating thereto not expressly set forth
above. The rights pursuant to this Section 2.1(d) may be assigned to a
transferee of GE LLC, provided that such transferee owns on a fully diluted
basis an aggregate number of shares of Common Stock not less than one-third
(1/3) of the number of shares of Common Stock owned by GE LLC on the date hereof
(subject to appropriate adjustment to reflect stock splits and similar events)
and GE LLC owns on a fully diluted basis an aggregate number of shares of Common
Stock less than such transferee.
2.2. Meetings and Consents. In order to effectuate the provisions of Section
2.1, each Stockholder agrees that when any action or vote is required to be
taken by such Stockholder pursuant to this Agreement, such Stockholder shall use
its best efforts to call, or cause the appropriate officers and directors of the
Corporation, to call, a special or annual meeting of stockholders of the
Corporation, or execute or cause to be executed a consent in writing in lieu of
a meeting to effectuate such stockholder action.
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ARTICLE III
CERTAIN CORPORATE ACTIONS
3.1. Stockholder Vote. So long as GE LLC owns 20% or more of the outstanding
Common Stock, the Corporation and its Subsidiaries shall not take any of the
following actions without the prior written consent of both Blackstone and GE
LLC:
(a) entering into, amending or waiving the provisions of any agreements or
transactions with Blackstone or its Affiliates except as expressly provided for
in this Agreement or in the Exchange Agreement, and except (i) the execution and
performance of any transaction or agreement contemplated by the Exchange
Agreement, (ii) the payment of reasonable and customary regular fees and
reimbursements of expenses to directors of the Corporation who are not employees
of the Corporation, (iii) transactions which are reasonable and customary in
light of industry practice with regard to portfolio companies owned by Persons
such as Blackstone and its Affiliates, provided that each such transaction is
not in excess of $500,000 individually and $1,000,000 in the aggregate in any
one year period, (iv) the payment of a monitoring fee of $250,000 per year to an
Affiliate of Blackstone and $167,000 per year to GECC and (v) the payment to
Blackstone or any of its Affiliates of any transaction, structuring or similar
fee equal to up to 1% of the total equity value of any company or business
acquired by the Corporation or any of its Subsidiaries so long as GECC is also
paid a proportional fee based on GE LLC's Common Stock ownership relative to
Blackstone's Common Stock ownership.
(b) except as provided in the Exchange Agreement, any redemption or offer to
purchase made by the Corporation for any of Blackstone's Capital Stock, or any
recapitalization, reclassification, consolidation, spin-off, split or
subdivision, or combination of Blackstone's Shares that would not afford to GE
LLC the same type and amount of consideration per Share on a pro rata basis with
Blackstone;
(c) the approval of any amendment to any provision of the
certificate of incorporation or by-laws of the Corporation; provided,
however, that subject to Section 4.7, the Corporation shall have the
right to increase the authorized Shares and to create new specific
series of preferred stock without the prior written consent of GE LLC
pursuant to this Section 3.1;
(e) the dissolution or the adoption of a plan of liquidation
of, or the voluntary election to commence bankruptcy or insolvency
proceedings under applicable laws with respect to, the Corporation;
(f) the appointment of the Chief Executive Officer, Chief
Operating Officer or Chief Financial Officer of the Corporation;
(g) the modification of any stock option or similar incentive
plan, bonus or other compensation or benefit plan existing on the date
hereof;
(h) any material change in the Corporation's principal line of
business; or
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(i) any commitment by the Corporation or any of its
Subsidiaries to do any of the foregoing.
3.2. Annual Budget. At least 60 days prior to the commencement of each fiscal
year of the Corporation, the Corporation shall prepare and present to Blackstone
and GE LLC an annual budget for the forthcoming fiscal year.
3.3. Board Approval of Certain Transactions. In addition to
those actions or transactions ordinarily requiring approval of the Boards of
Directors, the following actions of the Corporation and its Subsidiaries, shall
require the affirmative vote of a majority of the respective Boards of
Directors:
(i) the annual budget of each of the Corporation and its
Subsidiaries;
(ii) any expenditure, or related series of expenditures, which
would exceed any provision therefor under the annual budget;
(iii) any Capital Expenditure, or related series of Capital
Expenditures, totalling in excess of $2 million;
(iv) any Acquisition;
(v) the sale or other disposition of all or substantially all
of the assets of the Corporation;
(vi) the consolidation or merger of the Corporation with or
into any other Person, or the consolidation or merger of any Person
with or into the Corporation; and
(vii) a leveraged recapitalization or reorganization.
ARTICLE IV
TRANSFERS
4.1. Limitations on Transfer. (a) Each Stockholder hereby agrees that, except
for Transfers effected pursuant to an effective registration statement filed
under the Securities Act, no Transfer shall occur (other than a Transfer to the
Corporation or another Stockholder as permitted or required by this Agreement or
the Exchange Agreement) unless the Corporation has been furnished with (i)
written notice describing the manner and terms of such Transfer, the identity of
the transferee and such other information as the Corporation may reasonably
request and (ii) an opinion in form and substance reasonably satisfactory to the
Corporation of counsel reasonably satisfactory to the Corporation that (A) such
Transfer is exempt from the provisions of Section 5 under the Securities Act and
(B) that (x) no registration or qualification under the applicable or "blue sky"
laws of any jurisdiction is required in connection with such Transfer or (y)
compliance with applicable state securities or "blue sky" laws has been
effected.
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(b) Each Stockholder hereby agrees that, except for Transfers in connection with
a Public Offering, Transfers pursuant to Rule 144 under the Securities Act, and
Transfers pursuant to Section 4.5, no Transfer shall occur unless the transferee
shall agree to become a party to, and be bound to the same extent as its
transferor by the terms of, this Agreement.
(c) Notwithstanding anything contained herein to the contrary, each Stockholder
hereby agrees that no Transfer of Shares owned by it shall occur prior to the
first anniversary of the Closing Date, other than pursuant to Sections 4.4 or
4.5 or pursuant to a Public Offering and other than to a Permitted Transferee.
After the first anniversary of the Closing Date, Shares owned by each
Stockholder may be Transferred subject to Sections 4.1(a) and 4.1(b) and
Sections 4.4, 4.5 or 4.6, as applicable.
4.2. Effect of Void Transfers. In the event of any purported
Transfer of any Shares in violation of the provisions of this Agreement, such
purported Transfer shall be void and of no effect and neither the Corporation
nor any transfer agent shall give effect to such Transfer.
4.3. Legend on Securities. Each certificate representing
Shares issued to any Stockholder shall bear the following legend on the face
thereof (in addition to any legend required by state securities or "blue sky"
laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND ARE SUBJECT TO AN AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT AMONG BCP VOLUME, L.P., BCP OFFSHORE VOLUME,
L.P., VSI MANAGEMENT DIRECT, L.P., GENERAL ELECTRIC CAPITAL
CORPORATION, RECREATIONAL SERVICES L.L.C. AND CERTAIN OTHER
STOCKHOLDERS AND VSI ACQUISITION II CORPORATION, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE CORPORATION. A COPY OF SUCH
STOCKHOLDERS' AGREEMENT IS AVAILABLE FOR INSPECTION AT THE
CORPORATION'S PRINCIPAL OFFICES. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SUCH STOCKHOLDERS' AGREEMENT AND (A) PURSUANT TO A REGISTRATION
STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) IF THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE RULES AND REGULATIONS THEREUNDER. THE HOLDER OF THIS
CERTIFICATE, BY ACCEPTANCE OF THIS
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CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF
SUCH STOCKHOLDERS' AGREEMENT."
4.4. Tag-Along Rights. (a) With respect to any proposed
Transfer by either GE LLC or Blackstone (in such capacity, a "Transferring
Stockholder") of Shares permitted hereunder, other than (x) a Public Offering,
(y) in accordance with Rule 144 under the Securities Act or (z) to a Permitted
Transferee, so long as this Agreement shall remain in effect and the
Transferring Stockholder beneficially owns on a fully diluted basis an aggregate
number of shares of Common Stock not less than one-third (1/3) of the number of
shares of Common Stock owned by the Transferring Stockholder on the date hereof
(subject to appropriate adjustment to reflect stock splits and similar events),
the Transferring Stockholder shall have the obligation, and each other
Stockholder shall have the right, to require the proposed transferee to purchase
from such other Stockholder (in such capacity, a "Tagging Stockholder") a number
of Shares (of the same type or class as the Shares proposed to be Transferred by
the Transferring Stockholder) up to the product (rounded up to the nearest whole
number) of (i) the quotient determined by dividing (A) the aggregate number of
Shares owned by such Tagging Stockholder by (B) the aggregate number of Shares
owned by the Transferring Stockholder and all Tagging Stockholders, and (ii) the
total number of Shares proposed to be directly or indirectly Transferred to the
transferee in the contemplated Transfer, and at the same price per Share and
upon the same terms and conditions (including without limitation time of payment
and form of consideration) as to be paid and given to the Transferring
Stockholder; provided, that in order to be entitled to exercise its right to
sell Shares to the proposed transferee pursuant to this Section 4.4, each
Tagging Stockholder must agree to make to the transferee the same
representations, warranties, covenants, indemnities and agreements as the
Transferring Stockholder agrees to make in connection with the proposed Transfer
of the Shares of the Transferring Stockholder; provided further, that all
representations and warranties shall be made by each Tagging Stockholder and the
Transferring Stockholder severally and not jointly and that the liability of the
Transferring Stockholder and each Tagging Stockholder (whether pursuant to a
representation, warranty, covenant, indemnification provision or agreement) for
liabilities in respect of the Corporation shall be evidenced in writings
executed by them and the transferee and shall be borne by each of them on a pro
rata basis; provided further, that the Transferring Stockholder shall consult
with the Tagging Stockholders with respect to the negotiations with the proposed
transferee of the terms of the proposed Transfer.
(b) The Transferring Stockholder shall give notice to each
Tagging Stockholder of each proposed Transfer giving rise to the rights of the
Tagging Stockholder set forth in the first sentence of Section 4.4(a) at least
30 days prior to the proposed consummation of such Transfer, setting forth the
number and type of Shares proposed to be so transferred, the name and address of
the proposed transferee, the proposed amount and form of consideration and other
terms and conditions of payment offered by the proposed transferee, and a
representation that the proposed transferee has been informed of the tag-along
rights provided for in this Section 4.4 and has agreed to purchase Shares in
accordance with the terms hereof. The tag-along rights provided by this Section
4.4 must be exercised by the Tagging Stockholder within 10 Business Days
following receipt of the notice required by the preceding sentence, by delivery
of a written notice to the Transferring Stockholder indicating such Tagging
Stockholder's desire to exercise its rights and specifying the number of Shares
it desires to sell. The Transferring Stockholder
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shall be entitled under this Section 4.4 to Transfer to the proposed transferee
the number of Shares equal to the difference between the number referred to in
clause (ii) of paragraph (a) above and the aggregate number of Shares set forth
in the written notices, if any, delivered by the Tagging Stockholders pursuant
to the preceding sentence (up to the maximum number of Shares beneficially owned
by such Tagging Stockholder required to be purchased by the proposed transferee
pursuant to the first sentence of Section 4.4(a)). If the proposed transferee
fails to purchase Shares from any Tagging Stockholder that has properly
exercised its tag-along rights under Section 4.4(a), then the Transferring
Stockholder shall not be permitted to make the proposed Transfer, and any such
attempted Transfer shall be void and of no effect, as provided in Section 4.2
hereof.
(c) If any Tagging Stockholder exercises its rights under
Section 4.4(a), the closing of the purchase of the Shares with respect to which
such rights have been exercised shall take place concurrently with the closing
of the sale of the Transferring Stockholder's Shares.
(d) If a Tagging Stockholder has not complied with the terms
of this Section 4.4, such Tagging Stockholder shall not be permitted to exercise
its rights pursuant to this Section 4.4.
4.5. Drag-Along Rights. If a Controlling Stockholder receives
an offer from a Person other than another Stockholder or its Affiliates (a
"Third Party") to purchase all, but not less than all, of the outstanding Shares
owned by the Stockholders and such offer is accepted by all Controlling
Stockholders, so long as this Agreement shall remain in effect and such
Controlling Stockholder beneficially owns on a fully diluted basis an aggregate
number of shares of Common Stock not less than one-third (1/3) of the number of
shares of Common Stock owned by such Controlling Stockholder on the date hereof
(subject to appropriate adjustment to reflect stock splits and similar events),
then each Stockholder hereby agrees that it will Transfer all Shares owned by it
to such Third Party on the terms of the offer so accepted by such Controlling
Stockholder, including the same per Share consideration; provided, that all
representations and warranties shall be made by each Stockholder severally and
not jointly and that the liability of each Stockholder (whether pursuant to a
representation, warranty, covenant, indemnification provision or agreement) for
liabilities in respect of the Corporation shall be evidenced in writings
executed by them and the transferee and shall be borne by each of them on a pro
rata basis; provided further, that the Controlling Stockholder shall consult
with the other Stockholders with respect to the negotiations with the proposed
transferee of the terms of the proposed Transfer.
4.6. Right of First Offer. (a) If any Stockholder other than a
Controlling Stockholder (such Stockholder, the "ROFO Offeror") desires to sell
all or any portion of the Shares (the "ROFO Shares") then owned by the ROFO
Offeror (other than sales of Shares by the Management Stockholders to GE LLC or
Blackstone or sales pursuant to a Public Offering or transfers to Permitted
Transferees or pursuant to Sections 4.4 or 4.5) the ROFO Offeror shall provide
the Corporation, GE LLC and each Controlling Stockholder with a written notice
(the "ROFO Notice") setting forth: (i) the number and class of Shares to be
offered and (ii) the material terms and conditions of the proposed sale,
including the cash price (the "Offering Price") at which the ROFO Offerer
proposes to sell the ROFO Shares. The ROFO Notice shall also contain an
irrevocable offer to sell the ROFO Shares to the Corporation and, if the
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Corporation shall decline to purchase all or any portion of the ROFO Shares, the
Controlling Stockholders (or their assignees) at a cash price equal to the price
contained in, and upon substantially the same terms and conditions as the terms
and conditions contained in, the ROFO Notice. At any time within 45 days after
the date of the receipt by the Corporation and the Controlling Stockholders of
the ROFO Notice, the Corporation shall have the option to exercise its right to
purchase or, if the Corporation shall decline to purchase all or any portion of
the ROFO Shares, each Controlling Stockholder shall have the right to exercise
such option to purchase (or assign its right to any party) the portion of the
ROFO Shares that the Corporation does not wish to purchase, at the same cash
price and on such substantially the same terms and conditions as set forth in
the ROFO Notice (allocated between the Controlling Stockholders in proportion to
the relative number of shares of Common Stock held by each Controlling
Stockholder).
(b) If the option to purchase the ROFO Shares is exercised
pursuant to Section 4.6(a), within 45 days after the date of the receipt by the
Corporation and the Controlling Stockholders of the ROFO Notice, the Corporation
and/or the Controlling Stockholders (or their assignees) shall deliver payment
by wire transfer of immediately available funds to the ROFO Offeror against
delivery of certificates or other instruments representing the ROFO Shares so
purchased free and clear of any Encumbrances, appropriately endorsed by the ROFO
Offeror. If the Corporation and/or the Controlling Stockholders (or their
assignees) have not given notice of its or their intention to exercise such
right to purchase within the 30 day period after the date of the receipt by the
Corporation and the Controlling Stockholders of the ROFO Notice or has not
tendered the purchase price for the ROFO Shares in the manner set forth above
within such 45 day period, the ROFO Offeror shall be free for a period of 120
days from the end of such 30 day or 45 day period, as the case may be, to sell
the ROFO Shares to a Qualified Purchaser (as defined below) on terms which are
no more favorable in any material respect to such Qualified Purchaser than the
terms and conditions set forth in the ROFO Notice. If for any reason such ROFO
Offeror does not sell the ROFO Shares to a Qualified Purchaser on such terms and
conditions or if such ROFO Offeror wishes to sell the ROFO Shares on terms which
are more favorable in any material respect to a Qualified Purchaser than those
set forth in the ROFO Notice, the provisions of this Section 4.6 shall again be
applicable to the ROFO Shares; provided that, such ROFO Offeror may not deliver
another ROFO Notice until 12 months have elapsed since the date of the previous
ROFO Notice. As used in this Section 4.6, "Qualified Purchaser" means any Person
so long as (i) such Person shall not be, directly or indirectly, engaged in any
contract food service business which is in direct competition with the
Corporation and (ii) a Controlling Stockholder shall not have unreasonably
objected to such Person based on the Controlling Stockholder's and its
Affiliates' prior experience with such Person.
4.7. Participation Rights. (a) So long as this Agreement shall remain in effect,
the Corporation shall not issue (an "Issuance") additional shares of Capital
Stock to Blackstone unless, prior to such Issuance, the Corporation notifies
each other Stockholder in writing of the proposed Issuance and grants to each
other Stockholder the right (the "Right") to subscribe for and purchase
additional shares of the same class of Capital Stock at the same price and upon
the same terms and conditions as apply to the Issuance in an amount such that
immediately after giving effect to the Issuance and exercise of the Right, the
shares of Capital Stock of such class owned by such Stockholder (rounded to the
nearest whole share) shall represent the same
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percentage of the aggregate number of shares of Common Stock outstanding on a
fully diluted basis as was owned by such Stockholder immediately prior to the
Issuance (without regard to any shares that may be issued to parties other than
Blackstone at the time of the Issuance). The Corporation shall not issue any
Capital Stock to any Affiliate of Blackstone.
(b) The Right may be exercised by a Stockholder at any time by written notice to
the Corporation within 10 Business Days after the date on which such Stockholder
receives notice from the Corporation of the proposed Issuance, and the closing
of the purchase and sale pursuant to the exercise of the Right (the
"Participation Closing") shall occur concurrently with the closing of the
Issuance. Notwithstanding the foregoing, the Right shall not apply to any
Issuance to all holders of Common Stock on a pro rata basis.
(c) In order to enable Management Direct (on behalf of its individual partners
who are employees or directors of the Corporation or its Subsidiaries at such
time only) to exercise the Right and the individual members of GE LLC who are
employees or directors of the Corporation or its Subsidiaries at such time only
and who elect to exercise the Right (the "Individual Members"), the Corporation
shall (subject to applicable contractual obligations, including any provisions
of any credit facility to which the Corporation is a party) lend, concurrent
with the Participation Closing, to Management Direct and each Individual Member
an amount (the "Loan") sufficient to exercise the Right. The Loan shall be
evidenced by a Note (in a form reasonably acceptable to the Corporation) that
(i) shall accrue interest at the applicable federal rate, as defined in Section
1274(d) of the Code, as set from time to time, (ii) shall be without recourse to
Management Direct and each Individual Member and shall be secured by a pledge of
the shares held by Management Direct (on behalf of its individual partners who
are employees or directors of the Corporation or its Subsidiaries at such time
only) and each Individual Member, and (iii) shall provide that principal,
interest and all other amounts due thereon shall be due upon any sale, transfer
or other disposition of such Shares to the extent of the cash proceeds realized
therefrom.
4.8. Cooperation of the Corporation. In the case of any proposed Transfer under
Section 4.1, the Corporation shall use reasonable efforts to comply with any
such applicable state securities or "blue sky" laws, but shall in no event be
required, in connection therewith, to qualify to do business in any jurisdiction
where it is not then qualified or to take any action that would subject it to
tax or to the general service of process in any jurisdiction where it is not
then subject. The restrictions on Transfer contained in Section 4.1 shall be in
addition to, and not by way of limitation of, any other restrictions on Transfer
contained in any other article or section of this Agreement.
4.9. Rule 144 Acknowledgment. Each Stockholder acknowledges that such Person is
familiar with Rule 144 and that such Person has been advised that Rule 144
permits, only under certain circumstances, the resale of restricted securities
such as the Shares subject hereto, but that Rule 144 may not in the future
become available to permit resales by such Person of any Shares. Each
Stockholder understands that, to the extent that Rule 144 is not available, such
Person shall be unable to sell any Shares without either registration under the
Securities Act or the existence of another exemption from such registration
requirement, and that the Corporation has no obligation whatsoever (except as
set forth herein) to any Stockholder to register any Shares.
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4.10. Restrictions Cumulative. The restrictions on Transfer
imposed by Section 4.4 on any Stockholder shall be in addition to, and not in
lieu of, the restrictions on transfer imposed by Sections 4.1, 4.2, 4.5 and 4.6
of this Agreement to the extent the same are otherwise applicable to such
Stockholder.
ARTICLE V
REGISTRATION RIGHTS
5.1. Required Registrations. (a) Upon receipt of a written request from
Blackstone requesting that the Corporation effect the registration of its shares
of Common Stock, the Corporation shall as expeditiously as possible use its best
efforts to effect the registration under the Securities Act of all shares of
Common Stock that the Corporation has been so requested to register for sale,
all to the extent required to permit the disposition (in accordance with the
intended method or methods thereof, as aforesaid) of the shares of Common Stock
so registered; provided that, the Corporation shall not be required to effect
more than three registrations pursuant to this paragraph.
(b) Upon receipt of a written request from GE LLC requesting
that the Corporation effect the registration of its shares of Common Stock, the
Corporation shall as expeditiously as possible use its best efforts to effect
the registration under the Securities Act of all shares of Common Stock that the
Corporation has been so requested to register for sale, all to the extent
required to permit the disposition (in accordance with the intended method or
methods thereof, as aforesaid) of the shares of Common Stock so registered;
provided that, (i) such written notice may not be delivered prior to the third
anniversary of the Closing Date and (ii) the Corporation shall not be required
to effect more than one registration pursuant to this paragraph.
5.2. Piggyback Registration. (a) Each time the Corporation is planning to file a
registration statement under the Securities Act in connection with the proposed
offer and sale of Common Stock by Blackstone or GE LLC (the "Requesting
Stockholder"), the Corporation will give prompt written notice thereof to all
Stockholders other than the Requesting Stockholder (the "Piggy-Back
Stockholders") regarding their rights under this Section 5.2, at least 30 days
prior to the anticipated filing date of such registration statement; provided,
however, that any proposed offer and sale of Common Stock solely by the
Corporation shall not trigger the provisions of this Section 5.2. Upon the
written request of any Piggy-Back Stockholder made within 10 Business Days after
the receipt of any such notice from the Corporation, but subject to paragraph
(b) below, the Corporation will include in such registration statement for the
account of such PiggyBack Stockholder a number of shares of Common Stock equal
to the number of shares requested by such Piggy-Back Stockholder to be included
in such registration statement but in no event greater than the number of shares
calculated by multiplying (x) the number of shares of Common Stock owned by such
Piggy-Back Stockholder by (y) a fraction, the numerator of which is the number
of shares of Common Stock being registered for the account of the Requesting
Stockholder in such registration statement and the denominator of which is the
aggregate number of shares of Common Stock owned by the Requesting Stockholder
(the number of shares of such Piggy-Back Stockholder so registered being
referred to as the "Piggy-Back Shares") so as to
15
permit the disposition of the Piggy-Back Shares to be registered; provided, that
(i) if, at any time after giving written notice of its intention to register any
Common Stock and prior to the effective date of the registration statement filed
in connection with such registration, either the Corporation or the Requesting
Stockholder, shall determine for any reason not to proceed with the proposed
registration, the Corporation may at its election give written notice of such
determination to the Piggy-Back Stockholders and thereupon shall be relieved of
its obligation to register any Piggy-Back Shares in connection with such
registration, and (ii) if such registration involves an underwritten offering,
each Piggy-Back Stockholder must sell its shares to the underwriters on the same
terms and conditions as apply to the Requesting Stockholder.
(b) If a registration pursuant to this Section 5.2 involves an underwritten
offering and the managing underwriter or underwriters in good faith advise the
Corporation in writing that, in their opinion, the number of shares of Common
Stock which the Corporation, the Stockholders and any other Persons intend to
include in such registration exceeds the largest number of shares of Common
Stock which can be sold in such offering without having an adverse effect on
such offering (including the price at which the shares of Common Stock can be
sold), then the Corporation will include in such registration (i) first, 100% of
the shares of Common Stock the Corporation proposes to sell for its own account,
if any, and (ii) second, to the extent that the number of shares of Common Stock
which the Corporation proposes to sell is less than the number of shares of
Common Stock which the Corporation has been advised can be sold in such offering
without having the adverse effect referred to above, the number of shares of
Common Stock to be included in such offering will be allocated pro rata among
the Piggy-Back Stockholders and the Requesting Stockholder on the basis of the
relative number of shares of Common Stock then held by each such Person.
5.3. Registration Procedures. If the Corporation is required by the provisions
of this Article VI to use its best efforts to effect the registration of any of
its securities under the Securities Act, the Corporation shall, as expeditiously
as possible:
(a) prepare and file with the
Commission a registration statement
with respect to such securities and
use its best efforts to cause such
registration statement to become
and remain effective for a period
of time required for the
disposition of such securities by
the holders thereof;
(b) prepare and file with the
Commission such amendments and
supplements to such registration
statement and the prospectus used
in connection therewith as may be
necessary to keep such registration
statement effective and to comply
with the provisions of the
Securities Act with respect to the
sale or other disposition of all
securities covered by such
registration statement until the
earlier of such time as all of such
securities have been disposed of in
a public offering or the expiration
of 180 days;
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(c) furnish to such selling security
holders such number of copies of a
summary prospectus or other
prospectus, including a preliminary
prospectus, in conformity with the
requirements of the Securities Act,
and such other documents, as such
selling security holders may
reasonably request;
(d) use its best efforts to register or
qualify the securities covered by
such registration statement under
such other securities or blue sky
laws of such jurisdictions within
the United States and Puerto Rico
as each holder of such securities
shall request (provided, however,
the Corporation shall not be
obligated to qualify as a foreign
corporation to do business under
the laws of any jurisdiction in
which it is not then qualified or
to file any general consent to
service of process), and do such
other reasonable acts and things as
may be required of it to enable
such holder to consummate the
disposition in such jurisdiction of
the securities covered by such
registration statement;
(e) furnish, at the request of any
holder requesting registration of
the Registrable Stock pursuant to
Section 5.1, on the date that such
shares of Registrable Stock are
delivered to the underwriters for
sale pursuant to such registration
or, if such Registrable Stock is
not being sold through
underwriters, on the date that the
registration statement with respect
to such shares of Registrable Stock
becomes effective, (1) an opinion,
dated such date, of the independent
counsel representing the
Corporation for the purposes of
such registration, addressed to the
underwriters, if any, and if such
Registrable Stock is not being sold
through underwriters, then to the
holders making such request,
stating that such registration
statement has become effective
under the Securities Act and that
(i) the registration statement, the
related prospectus, and each
amendment or supplement thereto,
comply as to form in all material
respects with the requirements of
the Securities Act and the
applicable rules and regulations of
the Commission thereunder (except
that such counsel need express no
opinion as to financial or
statistical information contained
therein), (ii) the descriptions in
the registration statement or the
prospectus, or any amendment or
supplement thereto, of all legal
matters and contracts and other
legal documents or instruments are
accurate and fairly
17
present the information required to
be shown, and (iii) such counsel has
no reason to believe that either the
registration statement or the
prospectus, or any amendment or
supplement thereto (other than
financial or statistical information
as to which such counsel need make
no statement) contains any untrue
statement of a material fact or
omits to state a material fact
required to be stated therein or
necessary to make the statements
therein, in light of the
circumstances in which made, not
misleading; and (2) a letter dated
such date, from the independent
certified public accountants of the
Corporation, addressed to the
underwriters, if any, and if such
Registrable Stock is not being sold
through underwriters, then to the
holder making such request and, if
such accountants refuse to deliver
such letter to such holder, then to
the Corporation stating that they
are independent certified public
accountants within the meaning of
the Securities Act and that, in the
opinion of such accountants, the
financial statements and other
financial data of the Corporation
included in the registration
statement or the prospectus, or any
amendment or supplement thereto,
comply as to form in all material
respects with the applicable
accounting requirements of the
Securities Act. Such opinion of
counsel shall additionally cover
such other legal matters with
respect to the registration in
respect of which such opinion is
being given as such holders of
Registrable Stock may reasonably
request. Such letter from the
independent certified public
accountants shall additionally cover
such other financial matters
(including information as to the
period ending not more than five
Business Days prior to the date of
such letter) with respect to the
registration in respect of which
such letter is being given as the
holders holding a majority of the
Registrable Stock being so
registered may reasonably request;
(f) 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) use its best efforts to cause appropriate members of
senior management to participate in customary road show presentations;
and
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, but not
later than 18 months after the effective date of the
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registration statement, an earnings statement covering the period of at
least 12 months beginning with the first full month after the effective
date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
It shall be a condition precedent to the obligation of the
Corporation to take any action pursuant to this Article V in respect of the
securities which are to be registered at the request of any holder thereof that
such holder shall furnish to the Corporation such information regarding the
securities held by such holder and the intended method of disposition thereof as
the Corporation shall reasonably request and as shall be required in connection
with the action taken by the Corporation.
5.4. Other Registration-Related Matters.
(a) Each Stockholder agrees that it shall not effect any sales of Common Stock
during the 14 days prior to or the 90 day period beginning on the effective date
of a registration statement (whether pursuant to Article V or otherwise, except
as part of such registration) if and to the extent reasonably requested in
writing (with reasonable prior notice) by the managing underwriter of the
underwritten public offering.
(b) The Corporation agrees not to effect any sales of Common Stock during the 14
days prior to and the 90 day period beginning on the effective date of any
registration statement in which any Stockholder is participating in connection
with an underwritten public offering of Common Stock, if and to the extent
reasonably requested in writing (with reasonable prior notice) by the managing
underwriter of the underwritten public offering.
(c) The Corporation may require any Person that is selling shares of Common
Stock in a Public Offering pursuant to Article V to furnish to the Corporation
such information regarding such Person and the distribution of the shares of
Common Stock which are included in a Public Offering as may from time to time
reasonably be requested in writing in order to comply with the Securities Act.
(d) The Corporation will pay all reasonable out-of-pocket costs and expenses
incurred in connection with the registration of Common Stock pursuant to Article
V that are customarily paid by a company providing registration rights.
5.5. Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Stock under the
Securities Act pursuant to this Article V, the Corporation shall indemnify and
hold harmless the holder of such Registrable Stock, such holder's directors and
officers, and each other Person (including each underwriter) who participated in
the offering of such Registrable Stock and each other Person, if any, who
controls such holder or such participating Person within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such holder or any such director or officer or participating
Person or controlling Person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims,
19
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or (ii) any alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse such holder or such director, officer or participating Person or
controlling Person for any legal or any other expenses reasonably incurred by
such holder or such director, officer or participating Person or controlling
Person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Corporation shall not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or alleged
omission made in such registration statement, preliminary prospectus, prospectus
or amendment or supplement in reliance upon and in conformity with written
information furnished to the Corporation by such holder specifically for use
therein or so furnished for such purposes by any underwriter. Such indemnity
shall remain in full force and effect regardless of any investigation made by,
or on behalf of, such holder or such director, officer or participating Person
or controlling Person, and shall survive the transfer of such securities by such
holder.
(b) Each holder of any Registrable Stock, by acceptance thereof, agrees to
indemnify and hold harmless the Corporation, its directors and officers and each
other Person, if any, who controls the Corporation within the meaning of the
Securities Act against any losses, claims, damages or liabilities, joint or
several, to which the Corporation or any such director or officer or any such
Person may become subject under the Securities Act or any other statute or at
common law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of, or are based upon, information in writing
provided to the Corporation by such holder of such Registrable Stock contained,
on the effective date thereof, in any registration statement under which
securities were registered under the Securities Act at the request of such
holder, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto; provided, however, that each holder of such
Registrable Stock shall not be liable to the extent that any such loss, claim,
damage or liability, in the aggregate, exceeds such holder's proceeds actually
received in respect of the securities sold by such holder of Registrable Stock.
(c) Subject to Section 5.3, if the indemnification provided for in this Section
5.5 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties'
20
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.5 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
5.6. Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Common Stock to be registered pursuant to
Section 5.1 shall be selected by the Stockholder initially requiring such
registration, provided, such managing underwriter or underwriters shall be
reasonably acceptable to the Corporation.
ARTICLE VI
PAYMENT OF FEES, EXPENSES AND INDEBTEDNESS,
AND REDEMPTION OF COMMON STOCK
6.1. Financing. (a) The Corporation shall use its reasonable best efforts as
soon as practicable to consummate a financing on or prior to the first
anniversary of the Closing Date (the "Financing") which shall be sufficient to
pay or redeem the instruments referred to below. If the Financing is effected,
the Corporation shall apply the proceeds thereof (net of expenses) to pay or
redeem as a appropriate the following instruments in the order of priority of
and on the basis set forth below:
(i) all fees and expenses of the Financing and all accrued fees and expenses
incurred in connection with the transactions contemplated by the Exchange
Agreement;
(ii) all indebtedness for borrowed money of the Corporation and its Subsidiaries
incurred on or after June 30, 1998;
(iii) all indebtedness for borrowed money of the Corporation and its
Subsidiaries (other than Service America Corporation and its Subsidiaries)
incurred prior to June 30, 1998;
(iv) indebtedness for borrowed money of Service America Corporation and its
Subsidiaries incurred prior to June 30, 1998 in an amount equal to 66.7% of the
amount of indebtedness repaid pursuant to clause (iii) above;
(v) all other indebtedness for borrowed money of Service America Corporation and
its Subsidiaries; and
21
(vi) in accordance with the priorities and other terms set forth in Section 2.3
of the Exchange Agreement.
provided, however, that the Corporation shall not consummate the Financing if
the proceeds thereof are not sufficient to pay all of the amounts described in
the foregoing clauses (i), (ii), (iii) and (iv).
(b) If the Financing does occur and the proceeds thereof are
not sufficient to fully pay all of the amounts described or referred to in
clauses (i), (ii), (iii), (iv), (v) and (vi) of paragraph (a), GECC agrees to
convert all indebtedness owed by the Corporation and its Subsidiaries to GECC
and its Affiliates into a subordinated note of the Corporation with market terms
to be agreed between Blackstone and GECC (including the payment of interest at
an initial rate of 10% per year, increasing by .5% every six months, up to a
maximum interest rate of 14% per year), which terms shall be satisfactory to the
financial institutions providing and/or arranging such Financing. Such interest
shall be payable in cash unless objected to by such financial institutions.
ARTICLE VII
TERMINATION
This Agreement shall terminate, and thereby become null and
void, in full on the earliest date on which Blackstone and its Permitted
Transferees who agree to become a party to this Agreement do not collectively
own in the aggregate at least one-third of the number of shares of Common Stock
(subject to appropriate adjustment to reflect stock splits and similar events)
owned by Blackstone on the date hereof. A Stockholder shall cease to be deemed a
Stockholder hereunder, and shall no longer be a party to this Agreement, at such
time as such Stockholder ceases to own any Shares.
ARTICLE VIII
MISCELLANEOUS
8.1. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to principles of conflicts of law, except to the extent that the internal
laws of the State of Delaware are mandatorily applicable.
8.2. Entire Agreement; Amendments. This Agreement (including the exhibits
hereto) constitutes the entire agreement of the parties with respect to the
subject matter hereof. This Agreement may be modified or amended by the
affirmative vote of a majority in interest of the Stockholders hereto, provided,
however, that any proposed amendment that purports to treat a Stockholder
differently than the other Stockholders shall require the consent of such
Stockholder, and provided further, however, that this Agreement may not be
modified or amended except with
22
the prior written consent of any Stockholder who owns on a fully diluted basis
an aggregate number of shares of Common Stock not less than 10% of the
outstanding shares of Common Stock.
8.3. Specific Performance. Due to the fact that the securities of the
Corporation cannot be readily purchased or sold in the open market, and for
other reasons, the parties shall be irreparably damaged in the event that this
Agreement is not specifically enforced. Without intending to limit the remedies
available to any of the parties hereto, each of the parties hereto agrees that
damages at law will be an insufficient remedy in the event such party violates
the terms of Articles IV, and each of the parties hereto further agrees that
each of the other parties hereto may apply for and have injunctive or other
equitable relief in any court of competent jurisdiction to restrain the breach
or threatened breach of, or otherwise specifically to enforce, any of such
party's agreements set forth in such Articles.
8.4. Representations. Each of the parties hereto represents that this Agreement
has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.
8.5. Waiver. No waiver of any breach or default hereunder shall be considered
valid unless in writing, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature. Anything in this
Agreement to the contrary notwithstanding, any waiver, consent or other
instrument under or pursuant to this Agreement signed by, or binding upon, a
Stockholder shall be valid and binding upon any and all persons or entities
(other than the Corporation) who may, at any time, have or claim any rights
under or pursuant to this Agreement in respect of the Shares originally acquired
by such Stockholder.
8.6. Additional Securities Subject to Agreement. Each Stockholder agrees that
any other Shares which it shall hereafter acquire by means of a stock split,
stock dividend, distribution or otherwise (other than pursuant to a Public
Offering) shall be subject to the provisions of this Agreement to the same
extent as if held on the date hereof. If any of the Stockholders is issued any
warrants, rights, calls, options or other securities exchangeable or exercisable
for or convertible into Shares, the Stockholders agree to amend this Agreement
to the extent necessary to reflect such issuance in a manner consistent with the
terms and conditions hereof.
8.7. Other Stockholders' Agreements. None of the Stockholders shall enter into
any stockholder agreement or other arrangement of any kind with any Person with
respect to the Shares, and none of the Stockholders has previously entered into
such an agreement that remains in full force and effect as of the date hereof,
which is inconsistent with the provisions of this Agreement or which may impair
its ability to comply with this Agreement.
8.8. Successors, Assigns and Transferees. Except as otherwise provided herein,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and transferees permitted
hereunder (except for transferees that are transferred Shares pursuant to a
Public Offering, pursuant to Rule 144 under the Securities Act or pursuant to
Section 4.1(d) or 4.5), each of which shall agree in writing to become a party
to this Agreement and be bound to the same extent hereby as the transferor that
has transferred the
23
Shares to such transferees; provided, that if a Stockholder transfers a portion
of its Shares to a transferee which is entitled to rights of the transferee
hereunder, then such transferee(s) of such transferor shall exercise such rights
as a single group with that transferor and its Affiliates.
8.9. Severability. If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
8.10. Headings. The section headings contained herein are for the purposes of
convenience of reference only and are not intended to define or limit the
contents of said sections.
8.11. Further Assurances. Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be
reasonably requested by any other party in order to carry out the provisions and
purposes of this Agreement.
8.12. Gender. Whenever the pronouns "he" or "his" are used herein they shall
also be deemed to mean "she" or "hers" or "it" or "its" whenever applicable.
Words in the singular shall be read and construed as though in the plural and
words in the plural shall be construed as though in the singular in all cases
where they would so apply.
8.13. Notices. Any notice or other communication to be given hereunder by any
party to any other party shall be in writing and delivered in person or by
courier or by facsimile transmission or by mail, postage prepaid, as follows:
(a) if to the Corporation, to
VSI Acquisition II Corporation
c/o Volume Services, Inc.
201 East Main Street
Spartanburg, South Carolina 29306
Attention: Chief Operating Officer
Telecopier No.: (864) 598-8694
(b) if to a Stockholder, to the address
of such Stockholder as it appears on
Exhibit A hereto, or at such other
place as such Stockholder shall have
designated by notice as herein
provided to the Corporation.
8.14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original for all purposes, but
all of which shall constitute but one and the same instrument.
24
8.15. Additional Other Stockholder. Any Person who holds Shares or options
exercisable for Shares must become a party to this Agreement as an Other
Stockholder and must become bound hereby by entering into this Agreement or a
supplementary agreement with the Corporation agreeing to be bound by the terms
hereof. Each such supplementary agreement shall become effective upon its
execution by the Corporation and such Person, and it shall not require the
signature or consent of any other party hereto.
25
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
VSI ACQUISITION II CORPORATION
By: /s/ Lawrence A. Hatch
-----------------------------
Name: Lawrence A. Hatch
Title: Chairman and CEO
RECREATIONAL SERVICES L.L.C.
By: /s/ Peter C. Keenoy
--------------------------------------------
Name: General Electric Capital Corporation,
as Managing Member
GENERAL ELECTRIC CAPITAL CORPORATION
(for purposes of Articles VI and VIII)
By: /s/ Peter C. Keenoy
--------------------------------------------
Name: Peter C. Keenoy
Title: Duly Authorized Signatory
26
BCP VOLUME L.P.
By: Blackstone Capital Partners II
Merchant Banking Fund L.P.
By: Blackstone Management
Associates II L.L.C.,
as General Partner
By: /s/ Howard A. Lipson
--------------------------
Name: Howard A. Lipson
Title: Attorney-in-Fact
BCP OFFSHORE VOLUME L.P.
By: Blackstone Offshore Capital
Partners II L.P.
By: Blackstone Management
Associates II L.L.C.,
as General Partner
By: /s/ Howard A. Lipson
-------------------------
Name: Howard A. Lipson
Title: Attorney-in-Fact
By: Blackstone Service (Cayman)
LDC, as Administrative
General Partner
By: /s/ Howard A. Lipson
-------------------------
Name: Howard A. Lipson
Title: Attorney-in-Fact
27
VSI MANAGEMENT DIRECT L.P.
By: VSI Management I L.L.C.
By: /s/ Lawrence A. Hatch
-------------------------------------
Larry A. Hatch,
as Managing Member
By: Blackstone Management Associates II
L.L.C., as Managing Member
By: /s/ Howard A. Lipson
---------------------------------
Howard A. Lipson
as Attorney-in-Fact
EXHIBIT A
List of Stockholders
Name and Address Class and Number of Shares Owned
General Electric Capital Corporation 0
201 High Ridge Road
Stamford, CT 06927-5100
Attention: Peter Keenoy
Recreational Services L.L.C. 150.074
201 High Ridge Road
Stamford, CT 06927-5100
Attention: Peter Keenoy
BCP Volume L.P. 278.69539
c/o Blackstone Management
Associates II L.P.
118 North Bedford Road
Suite 300
Mount Kisco, New York 10549
Attention: Howard A. Lipson
BCP Offshore Volume L.P. 72.30019
c/o Blackstone Management
Associates II L.P.
118 North Bedford Road
Suite 300
Mount Kisco, New York 10549
Attention: Howard A. Lipson
VSI Management Direct L.P. 25.07772
c/o Volume Services, Inc.
201 East Main Street
Spartanburg, South Carolina 29306
Attention: CEO, Volume Services, Inc.