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EXHIBIT 10.2
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HUNTSMAN PACKAGING CORPORATION
STOCKHOLDERS' AGREEMENT
DATED AS OF MAY 31, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION........................................................1
1.1 DEFINITIONS...........................................................................1
1.2 RULES OF CONSTRUCTION.................................................................9
ARTICLE II ISSUANCES AND TRANSFERS OF SECURITIES....................................................9
2.1 ISSUANCES AND TRANSFERS OF SECURITIES.................................................9
2.2 CERTAIN TRANSFERS....................................................................10
2.3 CO-SALE RIGHTS.......................................................................10
2.4 RIGHT OF FIRST REFUSAL...............................................................11
2.5 REQUIRED SALE IN CONNECTION WITH A SALE OF THE COMPANY...............................12
ARTICLE III RIGHTS TO SUBSCRIBE FOR SECURITIES.....................................................14
3.1 GENERAL..............................................................................14
3.2 EXCLUDED SECURITIES..................................................................15
ARTICLE IV BOARD...................................................................................16
4.1 ELECTION OF DIRECTORS, VOTING........................................................16
4.2 VOTING AGREEMENT.....................................................................18
4.3 MEETINGS.............................................................................18
4.4 NOTICE OF MEETINGS...................................................................18
4.5 QUORUM FOR MEETINGS..................................................................18
ARTICLE V ADDITIONAL AGREEMENTS....................................................................19
5.1 INFORMATION RIGHTS...................................................................19
5.2 ACCESS TO RECORDS AND PROPERTIES.....................................................19
5.3 CONFIDENTIAL INFORMATION.............................................................19
5.4 CHANGE OF CONTROL....................................................................20
5.5 REGULATORY MATTERS...................................................................20
5.6 SPECIAL MEETINGS OF STOCKHOLDERS.....................................................20
5.7 NOTICE REQUIREMENTS IN CONNECTION WITH ACTION BY WRITTEN CONSENT.....................20
ARTICLE VI SECURITIES LAW COMPLIANCE; LEGENDS......................................................21
6.1 RESTRICTION ON TRANSFER AND UTAH BUSINESS CORPORATION ACT............................21
6.2 RESTRICTIVE LEGENDS..................................................................21
6.3 NOTICE OF TRANSFER...................................................................21
6.4 REMOVAL OF LEGENDS, ETC..............................................................22
6.5 ADDITIONAL LEGEND....................................................................22
ARTICLE VII AMENDMENT AND WAIVER...................................................................23
7.1 AMENDMENT............................................................................23
7.2 WAIVER...............................................................................23
ARTICLE VIII TERMINATION...........................................................................23
ARTICLE IX MISCELLANEOUS...........................................................................24
9.1 SEVERABILITY.........................................................................24
9.2 ENTIRE AGREEMENT.....................................................................24
9.3 INDEPENDENCE OF AGREEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES................24
9.4 SUCCESSORS AND ASSIGNS...............................................................24
9.5 COUNTERPARTS; FACSIMILE SIGNATURES; VALIDITY.........................................25
9.6 REMEDIES.............................................................................25
9.7 NOTICES..............................................................................25
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9.8 GOVERNING LAW........................................................................26
9.9 WAIVER OF JURY TRIAL.................................................................27
9.10 CONSENT TO JURISDICTION..............................................................27
9.11 FURTHER ASSURANCES...................................................................27
9.12 CONFLICTING AGREEMENTS...............................................................27
9.13 THIRD PARTY RELIANCE.................................................................27
9.14 REPURCHASE RIGHT OF THE COMPANY......................................................28
(ii)
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STOCKHOLDERS' AGREEMENT dated as of May
31, 2000, among HUNTSMAN PACKAGING CORPORATION,
a Utah corporation (the "Company"), and the
STOCKHOLDERS (as hereinafter defined).
Each Stockholder currently owns (or has the right to acquire)
the number of shares of the Common Stock and/or the Common Stock Warrants
(collectively, the "Warrants") issued pursuant to the Warrant Agreement, in each
case, as set forth opposite the name of such Stockholder on Schedule I. The
parties hereto desire to provide for the terms with respect to certain matters
regarding the relationship between the Company and the Stockholders and the
relationship among the Stockholders.
ACCORDINGLY, in consideration of the mutual covenants and
agreements contained in this Agreement, the sufficiency of which is hereby
acknowledged, the parties agree as set forth below.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
1.1 DEFINITIONS.
The capitalized terms used in this Agreement have the meanings set forth
below.
"Affiliate" means, with respect to any Person, a Person that
directly, or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such Person.
"Approved Sale" has the meaning ascribed to it in Section
2.5(a).
"Authorized Representative" has the meaning ascribed to it in
Section 5.2.
"Board" unless otherwise specified, means the Board of Directors
of the Company.
"Business Day" means any day that is not (a) Pioneer Day in the
State of Utah, (b) a Saturday, Sunday, or legal holiday or (c) a day on which
banks are not required to be open in New York, New York.
"By-laws" means the By-laws of the Company, as amended,
modified, supplemented or restated and in effect from time to time.
"Chase" means Chase Domestic Investments, L.L.C., a Delaware
limited liability company.
"Closing Date" has the meaning given to such term in the
Recapitalization Agreement.
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"Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stockholder" means, collectively, the Investor
Stockholders, the Trust Holders, the Warrantholders and the Management
Stockholders.
"Common Stock" means, collectively, all of the common stock of
the Company, of any class and any other class of capital stock of the Company
hereafter authorized that is not limited to a fixed sum or percentage of par or
stated value with respect to the rights of the holders thereof to participate in
dividends and in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"Common Stock Equivalent" means, at any time, one share of
Common Stock or the right to acquire, whether or not such right is immediately
exercisable, one share of Common Stock, whether evidenced by an option, warrant,
convertible security or other instrument or agreement including, without
limitation, the Warrants.
"Company" has the meaning ascribed to it in the Preamble.
"Control" means, (including, with correlative meaning, the terms
"controlling," "controlled by" and "under common control with") with respect to
any Person, the possession, directly or indirectly, of the power to direct or
cause the direction of the management, policies or investment decisions of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Directors" has the meaning ascribed to it in Section 4.1(d).
"Document(s)" means, individually or collectively, this
Agreement, the By-laws, the Registration Rights Agreement, the Restated Charter,
the Warrant Agreement and the Recapitalization Agreement.
"Drag Notice" has the meaning ascribed to it in Section 2.5(b).
"Equity Incentive Plan" means any Company option or similar plan
for the benefit of employees, officers, directors and/or consultants of the
Company (including, without limitation, the Company's 2000 Incentive Stock
Plan).
"Excluded Securities" has the meaning ascribed to it in Section
3.2.
"Excluded Stockholder Shares" means all shares of Common Stock
issued to Management Stockholders pursuant to the terms of the Restricted Stock
Agreements which have not been released from the Repurchase Option (as defined
in the Restricted Stock Agreements) on the date on which the calculation of
Stockholder Shares is being determined.
"Fair Market Value" shall mean, with respect to any Stockholder
Share, as of any date of determination, the fair value of each Stockholder Share
(or, with respect to a warrant or option, the fair value of each Stockholder
Share obtainable upon exercise thereof net of the exercise price), determined in
accordance with the terms hereof. At any time that the Fair
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Market Value shall be required to be determined hereunder, the Board shall make
a good faith determination (the "Board's Determination") of the fair market
value of each Stockholder Share within thirty (30) days of the delivery by the
Company of the Repurchase Notice (without taking into account that the
Stockholder Shares may be "restricted securities" and without any discount for
the minority position represented by the Stockholder Shares) and shall provide
within such 30-day period to the Management Stockholder or its Permitted
Transferees with respect to whose Stockholder Shares such determination is being
made, a written notice thereof which notice shall set forth supporting data in
respect of such calculation (the "Determination Notice"). The Management
Stockholder or such Permitted Transferee shall have thirty (30) days following
receipt of the Determination Notice within which to deliver to the Company a
written notice (the "Objection Notice") of an objection, if any, to the Board's
Determination, which Objection Notice shall set forth the Management
Stockholder's or such Permitted Transferee's good faith determination (the
"Stockholder's Determination") of the fair value of each Stockholder Share. The
failure by the Management Stockholder and/or such Permitted Transferee, as
applicable, to deliver the Objection Notice within such 30-day period shall
constitute such Person's acceptance of the Board's Determination as conclusive.
In the event of the timely delivery of an Objection Notice, the Company and the
Management Stockholder (and/or the applicable Permitted Transferees) shall
attempt in good faith to arrive at an agreement with respect to the Fair Market
Value, which agreement shall be set forth in writing within fifteen (15) days
following delivery of the Objection Notice. If the Company and the Management
Stockholder (and/or the applicable Permitted Transferees) are unable to reach an
agreement within such 15-day period, the matter shall be promptly referred for
determination to a regionally or nationally recognized investment banking or
valuation firm (the "Valuer") reasonably acceptable to the Company and the
Management Stockholder (and/or the applicable Permitted Transferees). The
Company and the Management Stockholder (and/or the applicable Permitted
Transferees) will cooperate with each other in good faith to select such Valuer.
The Valuer may select the Board's Determination or the Stockholder's
Determination as the Fair Market Value or may select any other number or value
(determined without taking into account that the Stockholder Shares may be
"restricted securities" and without any discount for the minority position
represented by such Stockholder Shares). The Valuer's selection will be
furnished to the Company and the Management Stockholder (and/or the applicable
Permitted Transferees) in writing and will be conclusive and binding upon the
Company and the Management Stockholder (and/or the applicable Permitted
Transferees). The fees and expenses of the Valuer shall be borne equally by the
Company, on the one hand, and the Management Stockholder (and/or the applicable
Permitted Transferees), on the other.
"First Refusal Offer" has the meaning ascribed to it in Section
2.4(b).
"GAAP" means generally accepted accounting principles in the
United States, as in effect from time to time, consistently applied.
"Initial Subscribing Stockholder" has the meaning ascribed to it
in Section 3.1(d).
"Investor Directors" means the directors appointed by the
Requisite Investor Holders pursuant to Section 4.1(a), from time to time.
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"Investor Stockholders" means, collectively, (a) the Persons
listed on Schedule I attached hereto under the heading "Investor Stockholders,"
(b) any Person who is or becomes a holder of Stockholder Shares and who is, at
the time of such Transfer, a Permitted Transferee of such Investor Stockholder,
(c) any successor to any Investor Stockholder and (d) any Person who becomes a
party to this Agreement as a Investor Stockholder pursuant to Sections 2.1 or
2.2(b).
"Joinder Agreement" has the meaning ascribed to it in Section
2.1.
"Management Directors" means the director(s) appointed pursuant
to Section 4.1(a), from time to time, who are not Investor Directors or Trust
Directors.
"Management Stockholders" means, collectively, (a) the Persons
listed on Schedule I attached hereto under the heading "Management
Stockholders," (b) any Person who is or becomes a holder of Stockholder Shares
and who is, at the time of such Transfer, a Permitted Transferee of such
Management Stockholder, (c) any successor to any Management Stockholder and (d)
any Person who becomes a party to this Agreement as a Management Stockholder
pursuant to Sections 2.1 or 2.2(b).
"New Investor" has the meaning ascribed to it in Section 3.1(c).
"Observer" has the meaning ascribed to it in Section 4.3.
"Offer" has the meaning ascribed to it in Section 2.4(b).
"Offered Securities" has the meaning ascribed to it in Section
3.1(a).
"Other Stockholders" has the meaning ascribed to it in Section
2.3(a).
"Percentage Ownership" means with respect to any Stockholder,
the fraction, expressed as a percentage, the numerator of which is the total
number of Stockholder Shares held by such Stockholder and the denominator of
which is the total number of Stockholder Shares issued and outstanding at the
time of determination (excluding, in each case any options, warrants or similar
Securities and Excluded Stockholder Shares, but specifically including in such
determination the issued or unissued Warrant Shares).
"Permitted Transfer" means (a) with respect to a Management
Stockholder, any Transfer by a Management Stockholder to (i) the spouse or any
lineal descendant (including adopted children) of such Management Stockholder,
(ii) any trust solely for the benefit of such Management Stockholder or the
spouse or lineal descendants (including adopted children) of such Management
Stockholder, (iii) a family trust, partnership or limited liability company
established solely for the benefit of such Management Stockholder or such
Management Stockholder's spouse or lineal descendants (including adopted
children) or for estate planning purposes provided such trust, family trust,
partnership or limited liability company remains under the Control of such
Management Stockholder, (iv) the estate of such Management Stockholder or (v)
any Transferee approved by the Requisite Common Holders, (b) with respect to a
Common Stockholder who is not a Management Stockholder any Transfer by such
Common Stockholder to (i) any Affiliates of such Stockholder or (ii) any
Transferee approved by the Requisite Common Holders, (c) with respect to a
Warrantholder, any Transfer made in compliance with
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Article II hereof and (d) with respect to Chase, any Transfer in connection with
its syndication of Stockholder Shares purchased on the Closing Date provided
such Transfer is executed within 120 days of the Closing Date; provided,
however, that, in each case, such Permitted Transfer must be made in accordance
with Section 2.2(b).
"Permitted Transferee" means any Person to whom a Permitted
Transfer is made.
"Person" shall be construed as broadly as possible and shall
include an individual or natural person, a partnership (including a limited
liability partnership), a corporation, an association, a joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated
organization and a governmental authority.
"Preemptive Offer Acceptance Notice" has the meaning ascribed to
it in Section 3.1(b).
"Preemptive Offer Notice" has the meaning ascribed to it in
Section 3.1(a).
"Preemptive Offer Period" has the meaning ascribed to it in
Section 3.1(a).
"Proportionate Percentage" means with respect to any
Stockholder, the fraction, expressed as a percentage, the numerator of which is
the total number of Stockholder Shares held by such Stockholder and the
denominator of which is the total number of Stockholder Shares issued and
outstanding at the time of determination held by all Offerees (excluding, in
each case any options, warrants or similar Securities and Excluded Stockholder
Shares, but specifically including in such determination any issued or unissued
Warrant Shares).
"Proposed Transferee" has the meaning ascribed to it in Section
2.4(b).
"Public Offering" means the closing of a public offering of
Common Stock pursuant to a registration statement declared effective under the
Securities Act, except that a Public Offering shall not include an offering of
securities to be issued as consideration in connection with a business
acquisition or an offering of securities issuable pursuant to an employee
benefit plan.
"Public Sale" means any sale, occurring simultaneously with or
after a Public Offering, of Securities to the public pursuant to an offering
registered under the Securities Act or to the public through a broker, dealer or
market maker (pursuant to the provisions of Rule 144 or otherwise).
"Qualified Public Offering" means an underwritten Public
Offering of shares of Common Stock registered pursuant to the Securities Act
involving aggregate gross proceeds to the Company of at least $100 million and
which values all Common Stock Equivalents of the Company at a pre-money
valuation of at least $500 million.
"Recapitalization Agreement" means the Recapitalization
Agreement, dated as of March 31, 2000, by and among the Company and the Persons
named therein, as such agreement may from time to time be amended, modified or
supplemented in accordance with its terms.
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"Refused Securities" has the meaning ascribed to it in Section
3.1(c).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, among the Company, the Stockholders and
other parties named therein, as amended, modified or supplemented from time to
time in accordance with the terms therein.
"Registration Statement" has the meaning given to such term in
the Registration Rights Agreement.
"Repurchase Notice" means the written notice of the Company
notifying a Management Stockholder of the Company's, or its designees, intent to
exercise its rights under Section 9.14 and the number of Stockholder Shares to
be repurchased.
"Requisite Common Holders" means, at any point in time, those
Common Stockholders who hold in the aggregate in excess of fifty percent (50%)
of the outstanding Common Stock Equivalents held by all Common Stockholders at
such time.
"Requisite Investor Holders" means, at any point in time, those
Investor Stockholders who hold in the aggregate in excess of fifty percent (50%)
of the outstanding Common Stock Equivalents held by all Investor Stockholders at
such time.
"Requisite Management Holders" means, at any point in time,
those Management Stockholders who hold in the aggregate in excess of fifty
percent (50%) of the outstanding Common Stock Equivalents held by all Management
Stockholders at such time.
"Requisite Trust Holders" means, at any point in time, those
Trust Holders who hold in the aggregate in excess of fifty percent (50%) of the
outstanding Common Stock Equivalents held by all Trust Holders at such time.
"Requisite Warrantholders" means, as of any date of
determination, Warrantholders holding Warrants or Warrant Shares representing at
least sixty percent (60%) of the Warrant Shares that are either (a) previously
issued and are then outstanding or (b) issuable upon exercise of Warrants then
outstanding.
"Restated Charter" means the amended and restated certificate or
articles of incorporation of the Company, as in effect at the time in question,
including any certificates of designation or articles of amendment filed with
the Secretary of State of the State of Utah pursuant to the terms thereof.
"Restricted Securities" means all Stockholder Shares, in each
case which have not theretofore been transferred in a Public Sale.
"Restricted Stock Agreements" means, collectively, the
Restricted Stock Purchase Agreements dated as of the date hereof between the
Company and each of Richard P. Durham, Jack E. Knott, Scott K. Sorensen and
Ronald G. Moffitt, and any similar agreements executed and delivered by the
Company and any employee of the Company after the date hereof, as each such
agreement is amended, modified or supplemented from time to time in accordance
with the terms thereof.
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"Rule 144" means Rule 144 (including Rule 144(k) and all other
subdivisions thereof) promulgated by the Commission under the Securities Act, as
such rule may be amended from time to time, or any similar or successor rule
then in force.
"Sale Notice" has the meaning ascribed to it in Section 2.3(a).
"Sale of the Company" means the sale of the Company (in one or a
series of transactions) to a third party or group of third parties, whether by
way of the sale of all or substantially all of the assets of the Company, sale
of Stockholder Shares (whether directly or indirectly or by way of merger,
consolidation, recapitalization, reorganization or otherwise) resulting in such
third party or parties acquiring voting Stockholder Shares which enable such
third party or parties to elect a majority of the Board.
"Securities" means "securities" as defined in Section 2(1) of
the Securities Act and includes, with respect to any Person, such Person's
capital stock or other equity interests or any options, warrants or other
securities that are directly or indirectly convertible into, or exercisable or
exchangeable for, such Person's capital stock or other equity or equity-linked
interests, including phantom stock and stock appreciation rights. Whenever a
reference herein to Securities is referring to any derivative Securities, the
rights of a Stockholder shall apply to such derivative Securities and all
underlying Securities directly or indirectly issuable upon conversion, exchange
or exercise of such derivative securities.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor Federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect from time
to time.
"Senior Subordinated Notes" means the Senior Subordinated Notes
issued pursuant to that certain Indenture, dated as of May 31, 2000, among the
Company, the Note Guarantors listed therein, and The Bank of New York, as
Trustee (as amended, modified or supplemented from time to time, the
"Indenture").
"Stockholder Shares" means (a) any Common Stock purchased or
otherwise acquired by any Stockholder, (b) any Warrants and Warrant Shares and
(c) any capital stock or other equity securities issued or issuable directly or
indirectly with respect to the securities referred to in clauses (a) and (b)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, reclassification, merger, consolidation
or other reorganization. As to any particular shares constituting Stockholder
Shares, such shares shall cease to be Stockholder Shares when they have been (x)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them or (y) sold to the public through
a broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act in a Public Sale.
"Stockholders" means the holders of Common Stock Equivalents in
each case, who are parties hereto, and shall include any other Person who
hereafter becomes a party to this Agreement as a Stockholder pursuant to a
Joinder Agreement executed and delivered pursuant to Section 2.1 or 2.2(b).
"Subscribing Stockholders" has the meaning ascribed to it in
Section 3.1(a).
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"Subsidiary" means, at any time, with respect to any Person (the
"Subject Person"), (a) any Person of which either (x) more than fifty percent
(50%) of the Securities or other interests entitled to vote in the election of
directors or comparable Persons performing similar functions (excluding
Securities or other interests entitled to vote only upon the failure to pay
dividends thereon or other contingencies) or (y) more than a 50% interest in the
profits or capital of such Person, are at the time owned or controlled directly
or indirectly by the Subject Person or through one or more Subsidiaries of the
Subject Person or by the Subject Person and one or more Subsidiaries of the
Subject Person or (b) any Person whose assets, or portions thereof, are
consolidated with the assets of the Subject Person and are recorded on the books
of the Subject Person for financial reporting purposes in accordance with GAAP.
"Tag-Along Notice" has the meaning ascribed to it in Section
2.3(b).
"Transfer" of Securities shall be construed broadly and shall
include any issuance, sale, assignment, transfer, participation, gift, bequest,
distribution, or other disposition thereof, or any pledge or hypothecation
thereof, placement of a lien thereon or grant of a security interest therein or
other encumbrance thereon, in each case whether voluntary or involuntary or by
operation of law or otherwise. Notwithstanding anything to the contrary
contained herein, Transfer shall not include (a) an exchange of Warrants
effectuated in accordance with Section 4.2 of the Warrant Agreement, (b) the
exercise of the right to acquire Common Stock pursuant to the terms of any
option or other convertible security granted by the Company or (c) the sale or
transfer of Stockholder Shares by any Management Stockholder to the Company or
any of its designees hereunder or pursuant to any employment, option or
restricted stock purchase agreement (including, without limitation, a Restricted
Stock Purchase Agreement) between the Company and such Management Stockholder or
any plan relating to the foregoing.
"Transferee" means a Person acquiring Securities through a
Transfer.
"Transferor" means a Person Transferring Securities.
"Transferring Stockholder" has the meaning ascribed to it in
Section 2.3(a).
"Trust Directors" means the directors appointed by the Requisite
Trust Holders pursuant to Section 4.1(a), from time to time
"Trust Holders" means, collectively, (a) the Persons listed on
Schedule I attached hereto under the heading "Trust Holders," (b) any Person who
is or becomes a holder of Stockholder Shares and who is, at the time of such
Transfer, a Permitted Transferee of such Trust Holder, (c) any successor to any
Trust Holder and, (d) any Person who becomes a party to this Agreement as a
Trust Holder pursuant to Sections 2.1 or 2.2(b).
"Warrant Agreement" means the Warrant Agreement, dated as of the
date hereof, among the Company and the Stockholders named therein, as amended,
modified or supplemented from time to time in accordance with the terms therein.
"Warrant Shares" has the meaning ascribed to such term in the
Warrant Agreement.
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"Warrantholders" means, collectively, (a) the Persons listed on
Schedule I attached hereto under the heading "Warrantholders," (b) any Person
who is or becomes a holder of Stockholder Shares and who is, at the time of such
Transfer, a Permitted Transferee of such Warrantholder, (c) any successor to any
Warrantholder and, (d) any Person who becomes a party to this Agreement as a
Warrantholder pursuant to Sections 2.1 or 2.2(b).
"Warrants" has the meaning set forth in the Preamble to this
Agreement.
1.2 RULES OF CONSTRUCTION.
The use in this Agreement of the term "including" means "including,
without limitation." The words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole, including the schedules
and exhibits, as the same may from time to time be amended, modified,
supplemented or restated, and not to any particular section, subsection,
paragraph, subparagraph or clause contained in this Agreement. All references to
sections, schedules and exhibits mean the sections of this Agreement and the
schedules and exhibits attached to this Agreement, except where otherwise
stated. The title of and the section and paragraph headings in this Agreement
are for convenience of reference only and shall not govern or affect the
interpretation of any of the terms or provisions of this Agreement. The use
herein of the masculine, feminine or neuter forms shall also denote the other
forms, as in each case the context may require. Where specific language is used
to clarify by example a general statement contained herein, such specific
language shall not be deemed to modify, limit or restrict in any manner the
construction of the general statement to which it relates. The language used in
this Agreement has been chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party. Unless
expressly provided otherwise, the measure of a period of one month or year for
purposes of this Agreement shall be that date of the following month or year
corresponding to the starting date, provided that if no corresponding date
exists, the measure shall be that date of the following month or year
corresponding to the next day following the starting date. For example, one
month following February 18 is March 18, and one month following March 31 is May
1.
ARTICLE II
ISSUANCES AND TRANSFERS OF SECURITIES
2.1 ISSUANCES AND TRANSFERS OF SECURITIES.
The Company shall not, without the prior written consent of the
Requisite Investor Holders, issue or sell, or otherwise permit or record the
Transfer of, any Stockholder Share to any Person (other than pursuant to a
Public Sale) unless such Person is already a party to this Agreement or first
executes and delivers to the Company a joinder agreement in substantially the
form attached hereto as Exhibit A (a "Joinder Agreement"), pursuant to which
such Person will thereupon become a party to, and be bound by and obligated to
comply with the terms and provisions of, this Agreement.
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2.2 CERTAIN TRANSFERS.
(a) The provisions regarding Transfers of Securities
contained in this Article II shall apply to all Stockholder Shares now owned or
hereafter acquired by a Stockholder, including Stockholder Shares acquired by
reason of original issuance, dividend, distribution, exchange, conversion and
acquisition of outstanding Stockholder Shares from another Person, and such
provisions shall apply to any Stockholder Shares obtained by a Stockholder upon
the exercise, exchange or conversion of any option, warrant or other derivative
Security.
(b) Except for Transfers that constitute Public Sales, no
Stockholder shall Transfer any Stockholder Shares to a Person not already a
party to this Agreement as a Stockholder unless and until (i) such Person
executes and delivers to the Company a Joinder Agreement, pursuant to which such
Person will thereupon become a party to, and be bound by and obligated to comply
with the terms and provisions of, this Agreement, as a Stockholder hereunder and
(ii) such Transfer is a Permitted Transfer or is made in compliance with this
Article II. No Person who is not a Stockholder hereunder who acquires
Stockholder Shares in a Public Sale shall be permitted or required to execute a
Joinder Agreement.
(c) None of Richard P. Durham, Scott K. Sorensen or Ronald
G. Moffitt shall Transfer, or permit any Person to Transfer, other than in a
Permitted Transfer, any interest in Durham Capital, Ltd., Sorensen Capital, LLC,
Ronald G. Moffitt IRA (DLJ Securities Corp. Custodian) or Moffitt Capital, LLC,
respectively, unless such Transfer is consented to in writing by the Requisite
Investor Holders. Each of Richard P. Durham, Scott K. Sorensen and Ronald G.
Moffitt severally represent and warrant to the Company that he has the
respective ability to enforce the Transfer restrictions contained in this
Section 2.2(c).
(d) Notwithstanding anything to the contrary contained
herein, no Warrantholder shall Transfer any Warrants or Warrant Shares to any
Person who is not primarily a financial institution.
2.3 CO-SALE RIGHTS.
(a) After satisfying the obligations set forth in Section
2.4, if at any time a Stockholder (other than a Warrantholder, solely with
respect to the Warrants and Warrant Shares) proposes to Transfer, other than
pursuant to a Permitted Transfer, any Stockholder Shares (in each case, such
Stockholder shall be deemed, a "Transferring Stockholder"), then at least thirty
(30) days prior to the closing of such Transfer, such Transferring Stockholder
shall deliver a written notice (the "Sale Notice") to all holders of Stockholder
Shares (other than such Transferring Stockholder) (the "Other Stockholders")
offering such Other Stockholders the option to participate in such proposed
Transfer. Such Sale Notice shall specify in reasonable detail the identity of
the prospective Transferee and the terms and conditions of the Transfer.
(b) Any Other Stockholder may, within fifteen (15) days of
the receipt of a Sale Notice, give written notice (each, a "Tag-Along Notice")
to the Transferring Stockholder stating that such Other Stockholder wishes to
participate in such proposed Transfer and specifying the amount and class of
Stockholder Shares such Other Stockholder desires to include in such proposed
Transfer. Such Other Stockholder shall include, at such Other Stockholder's
option, (i)
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Stockholder Shares of the same class of Stockholder Shares being transferred by
the Transferring Stockholder or (ii) if the Stockholder Shares described in the
Sale Notice are Common Stock Equivalents, then such Other Stockholders may
include Warrants held by such Other Stockholder and the Transferring Stockholder
shall use all commercially reasonable efforts to cause the Warrants to be
transferred without exercise thereof; provided that the consideration received
on such Transfer by such Other Stockholder will be net of any exercise price of
such Warrants.
(c) If none of the Other Stockholders gives the Transferring
Stockholder a timely Tag-Along Notice with respect to the Transfer proposed in
the Sale Notice, the Transferring Stockholder may thereafter Transfer the
Stockholder Shares specified in the Sale Notice on the same terms and conditions
set forth in the Sale Notice. If one or more Other Stockholders give the
Transferring Stockholder a timely Tag-Along Notice, then the Transferring
Stockholder shall use all reasonable efforts to cause the prospective
Transferee(s) to agree to acquire all Stockholder Shares identified in all
Tag-Along Notices that are timely given to the Transferring Stockholder, upon
the same terms and conditions as applicable to the Transferring Stockholder's
Stockholder Shares. If the prospective Transferee(s) are unwilling or unable to
acquire all Stockholder Shares proposed to be included in such sale upon such
terms, then the Transferring Stockholder may elect either to cancel such
proposed Transfer or to allocate the maximum number of Stockholder Shares that
each prospective Transferee is willing to purchase among the Transferring
Stockholder and the Stockholders giving timely Tag-Along Notices in proportion
to such Stockholders' Percentage Ownership.
(d) Each Transferring Stockholder shall cooperate in any
reasonable manner to allow any Other Stockholder to Transfer Warrants held by
such Other Stockholder pursuant to the Tag-Along Notice in lieu of Transferring
Common Stock pursuant to Section 2.3(b) hereof.
2.4 RIGHT OF FIRST REFUSAL.
(a) Except to the extent otherwise expressly permitted
herein, no Stockholder (other than a Warrantholder, solely with respect to the
Warrants and the Warrant Shares) shall Transfer, other than pursuant to a
Permitted Transfer, any Stockholder Shares except in compliance with the
procedures set forth in this Section 2.4 (and the other applicable provisions of
this Agreement).
(b) If any Stockholder shall receive a bona fide written
offer (an "Offer"), from a Person (a "Proposed Transferee") to purchase all or a
portion of the Stockholder Shares then owned by such Stockholder and such
Stockholder desires to accept the Offer, such Stockholder (the "Offeror") shall,
before accepting the Offer, first deliver to the Company and each of the other
Stockholders (other than the Offeror and any Stockholder owning less than ten
percent (10%) of the outstanding Common Stock (the "Offerees")) a written notice
(the "Notice of Offer"), which shall include all relevant terms of the Offer and
shall be irrevocable for a period of thirty (30) days after delivery thereof
(the "Offer Period"), offering (the "First Refusal Offer") to the Offerees all
of the Stockholder Shares proposed to be Transferred by the Offeror at the
purchase price and on the terms specified in the Offer. The Offeror shall also
furnish to the Offerees such additional information in the Offeror's possession
relating to the Offer as the Offerees may reasonably request. The Offerees shall
have the first right and option, for a period
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of thirty (30) days after delivery of the Notice of Offer by the Offeror, (x) to
accept all, or any portion, of their respective Proportionate Percentages of the
Stockholder Shares so offered at the purchase price and on the terms stated in
the Notice of Offer and (y) to offer, in any written notice of acceptance, to
purchase any Stockholder Shares not accepted by the other Offerees, in which
case the Stockholder Shares not accepted by the other Offerees shall be deemed,
on the same terms and conditions, to be re-offered from time to time during such
thirty (30) day period to, and accepted by, the other Offerees who exercised
their option under this clause (y) pro rata in accordance with their respective
Proportionate Percentages (computed without including the other Offerees who
have not exercised their option to purchase Stockholder Shares under this clause
(y)), until all such Stockholder Shares are fully subscribed or until all such
other Offerees have subscribed for all such offered Stockholder Shares which
they desire to purchase.
(c) Transfers of Stockholder Shares under the terms of this
Section 2.4 shall be made at the offices of the Company on a mutually
satisfactory Business Day within fifteen (15) days after the expiration of the
Offer Period. Delivery of certificates or other instruments evidencing such
Stockholder Shares, duly endorsed for transfer and free and clear of all liens,
claims and other encumbrances, shall be made on such date against payment of the
purchase price therefor.
(d) If the Offerees shall not have accepted all of the
Stockholder Shares offered for sale pursuant to the Notice of Offer, then the
Offeror may Transfer to the Proposed Transferee that number of the Stockholder
Shares not accepted by the Offerees in accordance with the terms set forth in
the Notice of Offer, at any time within ninety (90) days after the expiration of
the First Refusal Offer required by Section 2.4(a). Any such Transfer shall be
in compliance with Section 2.2 and Section 2.3. In the event the Stockholder
Shares are not Transferred by the Offeror to the Proposed Transferee on such
terms during such 90-day period, the restrictions of this Section 2.4 shall
again become applicable to any Transfer of Stockholder Shares by the Offeror.
2.5 REQUIRED SALE IN CONNECTION WITH A SALE OF THE COMPANY.
(a) Option. Subject to the provisions of this Section 2.5,
if the Board approves a Sale of the Company (an "Approved Sale"), each
Stockholder shall consent to and raise no objections against the Approved Sale,
and if the Approved Sale is structured as a sale of the issued and outstanding
capital stock of the Company (whether by merger, recapitalization, consolidation
or sale or Transfer of Stockholder Shares or otherwise), then each Stockholder
shall waive any dissenters rights, appraisal rights or similar rights in
connection with such Sale of the Company and each Stockholder shall agree to
sell its Stockholder Shares on the terms and conditions approved by the Board.
Each Stockholder shall take all necessary and desirable actions in connection
with the consummation of the Approved Sale, including, but not limited to, the
execution of such agreements and instruments and other actions necessary to
provide the representations, warranties, indemnities, covenants, conditions,
escrow agreements and other provisions and agreements relating to such Approved
Sale. In the event that any Stockholder fails for any reason to take any of the
foregoing actions after reasonable notice thereof, he, she or it hereby grants
an irrevocable power of attorney and proxy to the Chairman of the Board of the
Company or an assignee of such Person to take all necessary actions and execute
and deliver all documents deemed by such Person to effectuate the terms of this
Section 2.5. The restrictions on
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Transfers of Stockholder Shares set forth in Sections 2.1, 2.2, 2.3 and 2.4
shall not apply in connection with an Approved Sale. Notwithstanding anything to
the contrary contained herein, prior to the second anniversary of the date
hereof, a Sale of the Company that is not approved by all of the Investor
Directors and all of the Trust Directors shall not be deemed to be an "Approved
Sale."
(b) Procedure. The Company shall deliver written notice to
each Stockholder setting forth in reasonable detail the terms (including price,
time and form of payment) of any Approved Sale (the "Drag Notice"). Within
twenty (20) days following receipt of the Drag Notice, each of such Stockholders
shall deliver to the Company written notice setting forth such holders'
agreement to consent to and raise no objections against, or impediments to, the
Approved Sale (including, waiving all dissenter's and similar rights) and (ii)
if the Approved Sale is structured as a sale of stock, to sell its Stockholder
Shares on the terms and conditions set forth in the Drag Notice.
(c) Conditions to Obligation. The obligations of the
Stockholders to participate in any Approved Sale pursuant to this Section 2.5
are subject to the satisfaction of the following conditions:
(i) (x) if any Stockholders are given an option as
to the form and amount of consideration to be received with respect to
shares in a class, all holders of shares of such class will be given the
same option and (y) each Stockholder shall receive the same amount of
consideration per Stockholder Share;
(ii) subject to Section 2.5(d), as applicable, all
holders of then-currently exercisable Common Stock Equivalents will be
given an opportunity to either (A) exercise such rights prior to the
consummation of an Approved Sale (but only to the extent such Common
Stock Equivalents are then vested or would be vested on an accelerated
basis pursuant to the Equity Incentive Plan or other relevant plan) and
participate in such sale as Stockholders or (B) upon the consummation of
the Approved Sale, receive in exchange for such currently exercisable
Common Stock Equivalents consideration equal to the product of (x) the
same amount of consideration per Stockholder Share (of the same class as
that for which the Common Stock Equivalent is exercisable) received by
the holders of such class of capital stock in connection with the
Approved Sale (less the exercise price per Common Stock Equivalent) and
(y) the number of Common Stock Equivalents (but only to the extent such
Common Stock Equivalents are then vested);
(iii) no Stockholder shall be obligated to pay more
than his, her or its pro rata share (based upon the number of Common
Stock Equivalents held by such Stockholder) of reasonable expenses
incurred in connection with a consummated Approved Sale to the extent
such expenses are incurred for the benefit of all Stockholders and are
not otherwise paid by the Company or the acquiring party (expenses
incurred by or on behalf of a Stockholder for its, her or his sole
benefit not being considered expenses incurred for the benefit of all
Stockholders); and
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(iv) in the event that the Stockholders are required
to provide any representations or indemnities in connection with an
Approved Sale (other than representations and indemnities on a several
basis concerning each Stockholder's valid ownership of his, her or its
Stockholder Shares and/or Common Stock Equivalents, free of all liens
and encumbrances, enforceability and each Stockholder's authority,
power, and right to enter into and consummate agreements relating to
such Approved Sale without violating applicable law or any other
agreement), then each Stockholder shall not be liable for more than his,
her or its pro rata share (based upon the number of Common Stock
Equivalents held by such Stockholder) of any liability for
misrepresentation or indemnity (except in respect of such several
representations and warranties) and such liability shall not exceed the
total purchase price received by such Stockholder (net of broker fees)
from such purchaser for his, her or its Stockholder Shares and/or Common
Stock Equivalents (including the exercise price thereof), and, to the
extent that an indemnification escrow has been established, such
liability shall be satisfied solely out of any funds escrowed for such
purpose prior to recourse against such Stockholder.
(d) Ability to Transfer Warrants. Each Stockholder shall
cooperate in any reasonable manner to allow any Stockholder to Transfer any
Warrants held by such Stockholder pursuant to the Drag Notice in lieu of
Transferring Common Stock; provided that the consideration received on such
Transfer by such Stockholder will be net of any exercise price of such Warrants.
ARTICLE III
RIGHTS TO SUBSCRIBE FOR SECURITIES
3.1 GENERAL.
(a) Prior to the occurrence of a Qualified Public Offering,
in the event that the Company proposes to issue any equity Securities (the
"Offered Securities"), other than Excluded Securities, the Company shall deliver
to each holder of Stockholder Shares (collectively, the "Subscribing
Stockholders") a written notice (which notice shall state the number or amount
of the Offered Securities proposed to be issued, the purchase price therefor and
any other terms or conditions of the proposed issuance, including any linked or
grouped Securities which comprise Offered Securities) of such issuance (the
"Preemptive Offer Notice")) at least thirty (30) days prior to the date of the
proposed issuance (the "Preemptive Offer Period").
(b) Each Subscribing Stockholder shall have the option
(provided, however, that the Company may exclude for all purposes hereunder any
Subscribing Stockholder who is not an accredited investor (as such term is
defined in Rule 501 under the Securities Act)), exercisable at any time during
the Preemptive Offer Period by delivering written notice to the Company (a
"Preemptive Offer Acceptance Notice") (i) to subscribe for the number or amount
of such Offered Securities up to its Percentage Ownership of the total number or
amount of Offered Securities proposed to be issued and (ii) to offer to
subscribe (in cash and or such other terms and conditions set forth in the
Preemptive Offer Notice) for up to its Percentage Ownership of the Offered
Securities not subscribed for by other Subscribing Stockholders (as further
described below). Any Offered Securities not subscribed for by a Subscribing
Stockholder shall be
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deemed to be re-offered to and accepted by the Subscribing Stockholders
exercising their options specified in clause (ii) of the immediately preceding
sentence with respect to the lesser of (A) the amount specified in their
respective Preemptive Offer Acceptance Notices and (B) an amount equal to their
respective Percentage Ownerships (computed without including Stockholders who
have not exercised their option specified in clause (ii) of the immediately
preceding sentence) with respect to such deemed re-offer. Such deemed re-offer
and acceptance procedures described in the immediately preceding sentence shall
be deemed to be repeated until either (x) all of the Offered Securities are
accepted by the Subscribing Stockholders or (y) no Subscribing Stockholders
desire to subscribe for more Offered Securities. The Company shall notify each
Subscribing Stockholder within five (5) days following the expiration of the
Preemptive Offer Period of the number or amount of Offered Securities which such
Subscribing Stockholder has subscribed to purchase.
(c) If Preemptive Offer Acceptance Notices are not given by
the Subscribing Stockholders for all the Offered Securities, the Company may
issue the part of such Offered Securities as to which Preemptive Offer
Acceptances Notices have not been given by the Subscribing Stockholders (the
"Refused Securities") to any Person (a "New Investor") in accordance with the
terms and conditions set forth in the Preemptive Offer Notice. Upon the closing,
the Subscribing Stockholders shall purchase from the Company, and the Company
shall sell to, the Subscribing Stockholders, the Offered Securities with respect
to which Preemptive Offer Acceptance Notices were delivered by the Stockholders,
at the terms specified in the Preemptive Offer Notice. In each case, any Refused
Securities not purchased by one or more New Investors in accordance with this
Section 3.1 within 120 days after the date of the Preemptive Offer Notice may
not be sold or otherwise disposed of until they are again offered to the
Subscribing Stockholders under the procedures specified in this Section 3.1.
(d) Notwithstanding anything to the contrary contained
herein, the Company may, in order to expedite the issuance of the Offered
Securities hereunder, issue all of the Offered Securities to one or more
Stockholders (the "Initial Subscribing Stockholders"), without complying with
the provisions of this Section 3.1, provided that the Initial Subscribing
Stockholders agree to offer to sell to the other Stockholders (who are
accredited investors (as such term is defined in Rule 501 under the Securities
Act)) their respective Percentage Ownerships of the Offered Securities on the
same terms and conditions as issued to the Initial Subscribing Stockholders. The
Initial Subscribing Stockholders shall offer to sell the Offered Securities to
the other Stockholders (who are accredited investors (as such term is defined in
Rule 501 under the Securities Act)) within thirty (30) days after the closing of
the purchase of the Offered Securities by the Initial Subscribing Stockholders.
The Initial Subscribing Stockholders shall offer to sell the Offered Securities
to the other Stockholders in a manner which provides such other Stockholders
with rights substantially similar to the rights outlined in Sections 3.1(b) and
3.1(c).
3.2 EXCLUDED SECURITIES.
The rights of the Subscribing Stockholders under Section 3.1 shall not
apply to the following Securities issued by the Company (the "Excluded
Securities"):
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(a) Securities of the Company issued or granted pursuant to
the Equity Incentive Plan;
(b) Securities of the Company issued upon the exercise,
conversion or exchange of any Common Stock Equivalents outstanding on the
Closing Date and other derivative Securities of the Company, in each case issued
in compliance with (or not otherwise in violation of) this Article III;
(c) Securities of the Company issued as a stock dividend or
distribution or upon any stock split, recapitalization or other subdivision or
combination of Common Stock;
(d) Securities of the Company issued to sellers in
connection with a Board-approved acquisition or merger by the Company;
(e) Securities of the Company issued in a Public Offering;
and
(f) Securities of the Company issued as a bona-fide "equity
kicker" to a lender or placement agent in connection with a debt financing.
ARTICLE IV
BOARD
4.1 ELECTION OF DIRECTORS, VOTING.
(a) Subject to the provisions of Section 4.1(c) hereof and
as otherwise stated herein, each holder of Stockholder Shares hereby covenants
and agrees to vote all of his, her or its Stockholder Shares to cause (i) the
number of directors constituting the Board to be seven (7) and (ii) the Company
to comply with all obligations under the Documents. At each annual meeting of
the holders of any class of Stockholder Shares, and at each special meeting of
the holders of any class of Stockholder Shares called for the purpose of
electing directors of the Company, and at any time at which holders of any class
of Stockholder Shares shall have the right to, or shall, vote for or consent in
writing to the election of seven (7) directors of the Company, then, and in each
such event, the holders of Stockholder Shares shall vote all of the Stockholder
Shares owned by them for, or consent in writing with respect to such shares in
favor of, the election of a Board constituted as follows:
(i) four (4) representatives designated by the
Requisite Investor Holders, the initial representatives of whom shall be
Donald J. Hofmann, Jr., Timothy J. Walsh, John M. B. O'Connor and
Richard D. Waters;
(ii) two (2) representatives designated by the
Requisite Trust Holders, the initial representatives of whom shall be
Richard P. Durham and Scott K. Sorensen; and
(iii) one (1) representative appointed by the Board,
who shall be a member of the senior management of the Company, the
initial representative of whom shall be Jack E. Knott.
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At the request of the Requisite Investor Holders, the number of members
constituting the Board shall be increased to nine (9) in which event each holder
of Stockholder Shares hereby covenants and agrees to vote all of his, her or its
Stockholder Shares to cause (i) the number of directors constituting the Board
to be nine (9) and (ii) the Company to comply with all obligations under the
Documents. Thereafter, at each annual meeting of the holders of any class of
Stockholder Shares, and at each special meeting of the holders of any class of
Stockholder Shares called for the purpose of electing directors of the Company,
and at any time at which holders of any class of Stockholder Shares shall have
the right to, or shall, vote for or consent in writing to the election of nine
(9) directors of the Company, then, and in each such event, the holders of
Stockholder Shares shall vote all of the Stockholder Shares owned by them for,
or consent in writing with respect to such shares in favor of, the election of a
Board constituted as follows:
(i) five (5) representatives designated by the
Requisite Investor Holders;
(ii) two (2) representatives designated by the
Requisite Trust Holders; and
(iii) (A) one (1) representative who shall be the
Chief Executive Officer of the Company and (B) one (1) representative
appointed by the other members of the Board, who shall be a member of
the senior management of the Company.
Notwithstanding anything to the contrary contained herein, the number of members
constituting the Board may be increased from time to time, in accordance with
the Restated Charter and By-laws provided that at all times the Requisite
Investor Holders shall be entitled to designate a majority of the members of the
Board. At no time may any individual serve as an appointee of more than one
class of Stockholders hereunder.
(b) Any committee created by the Board shall have at least
one Investor Director as a member.
(c) The holders of Stockholder Shares shall vote their
shares (i) to remove any director whose removal is required by the party or
parties with the power to nominate such director and (ii) to fill any vacancy
created by the removal, resignation or death of a director, in each case for the
election of a new director designated, if approval is required, in accordance
with the provisions of this Section 4.1. Vacancies of the Board shall be filled
within thirty (30) days of the date such vacancy is created or immediately
before the first action to be taken by the Board after the date such vacancy is
created.
(d) The Company shall pay the reasonable out-of-pocket
expenses incurred by each of the Investor Directors, the Trust Directors and the
Management Directors (collectively the "Directors") in connection with (i)
attending the meetings of the Board and all committees thereof and (ii)
conducting any other Company business requested by the Company. So long as any
Director serves on the Board and for three (3) years thereafter, the Company
shall maintain directors and officers indemnity insurance coverage reasonably
satisfactory to the Directors, and the Company's Restated Charter and By-laws
shall provide for indemnification and exculpation of Directors to the fullest
extent permitted under applicable law.
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4.2 VOTING AGREEMENT.
Each Stockholder shall use all reasonable efforts to cause each Director
nominated by such Stockholder to vote for the election to the Board of all
individuals designated in accordance with Section 4.1.
4.3 MEETINGS.
The Warrantholders shall have the right to have one representative
designated by the Requisite Warrantholders (the "Observer") present at all
meetings of the Board and all committees of the Board. The Company will give the
Observer reasonable prior notice (it being agreed that substantially the same
prior notice given to the members of the Board shall be deemed reasonable prior
notice) of the time and place of any proposed meeting of the Board or any
applicable committee thereof. The Company will deliver to the Observer copies of
all material documentation distributed from time to time to the members of the
Board or any applicable committee thereof, at such time as such documents are so
distributed to them, including copies of any written consent. The Company
reserves the right to withhold any information and to exclude the Observer from
any meeting or portion thereof if the Company reasonably determines in good
faith that (i) access to such information or attendance at such meeting could be
reasonably expected to adversely affect the attorney-client privilege between
the Company and its counsel or (ii) such disclosure is prohibited by an
agreement with a third party; provided that in the case of this clause (ii), the
Company will use commercially reasonable efforts to provide such information or
allow the Observer to attend such meeting, which requirement shall be satisfied
if the Observer is offered the opportunity to obtain such information or attend
such meeting by undertaking to be bound by the confidentiality restrictions on
substantially the same terms (including any standstill provisions) as are
applicable to the Company. Notwithstanding anything to the contrary contained in
this Agreement, the Observer may not use or disclose any information received by
the Observer, except on a confidential basis within the Observer's employer or
firm or to the extent required by law or unless and except to the extent that
such use or disclosure could have been made by a director of the Company in
compliance with all laws and duties applicable to a director as such under such
circumstances. The Company shall pay the reasonable out-of-pocket expenses
incurred by the Observer in connection with (i) attending the meetings of the
Board and all committees thereof and (ii) conducting any other Company business
requested by the Company.
4.4 NOTICE OF MEETINGS.
Notice of any meeting of the Board shall be deemed to be effective at
the earliest of the following: (1) when received; (2) five (5) days after it is
mailed; (3) the date shown on the return receipt if sent by registered or
certified mail, return receipt requested, and the receipt is signed by or on
behalf of the director or (4) when it is sent (with confirmation of sending) to
the telecopier number or e-mail address provided by that Director to the
Company.
4.5 QUORUM FOR MEETINGS.
A majority of the number of Directors prescribed by resolution (or if no
number is prescribed, the number in office immediately before the meeting
begins), shall constitute a
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quorum for the transaction of business at any meeting of the Board of Directors,
unless the Restated Charter requires a greater number.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 INFORMATION RIGHTS.
Until the consummation of a Qualified Public Offering, the Company shall
furnish to each Stockholder holding in excess of ten percent (10%) of the
outstanding Stockholder Shares, simultaneously with the delivery to the holders
of the Company's Senior Subordinated Notes, all reports and documents prepared
for or delivered to such holders by the Company or any of its Authorized
Representatives under the Indenture.
5.2 ACCESS TO RECORDS AND PROPERTIES.
Until the consummation of a Qualified Public Offering, the Company shall
permit any Stockholder (other than Management Stockholders) and his, her or its
employees, counsel and other authorized representatives, (collectively,
"Authorized Representatives") during normal business hours and upon reasonable
advance notice (which shall not be less than one-day's prior notice) to (a)
visit and inspect the assets and properties of the Company, (b) examine the
books of accounts and records of the Company and (c) make copies of such records
and (d) discuss all aspects of the Company with any officers, employees or
accountants of the Company; provided, however, that such investigation shall not
unreasonably interfere with the operations of the Company. The Company will
instruct its accountants to discuss such aspects of the financial condition of
the Company with any such holder and its Authorized Representatives as such
Stockholder may reasonably request, and to permit such holder and its Authorized
Representatives to inspect, copy and make extracts from such financial
statements, analyses, and other documents and information (including
electronically stored documents and information) prepared by the accountants
with respect to the Company as such holder may reasonably request. All costs and
expenses incurred by such Stockholder and its Authorized Representatives in
connection with exercising such rights of access shall be borne by such Persons,
and all out-of-pocket costs and expenses incurred by the Company in complying
with any extraordinary requests by such Persons and its representatives in
connection with exercising such access rights shall be borne by such Persons.
5.3 CONFIDENTIAL INFORMATION.
Except as otherwise required by law, each Stockholder and Authorized
Representative shall hold in confidence all nonpublic information of the Company
provided or made available to such Stockholder and Authorized Representative
pursuant to this Article V until such time as such information has become
publicly available other than as a consequence of any breach by such Stockholder
or Authorized Representative of its confidentiality obligations hereunder
(provided that such information may be disclosed to any other Stockholder or
Authorized Representative who is bound by this provision) and shall not use such
information for any
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purpose other than exercise of its rights as a holder of Stockholder Shares and
its rights under the Documents.
5.4 CHANGE OF CONTROL.
The Company shall not, and the Stockholders shall insure that the
Company does not, effect a Change of Control (as defined in the Restated
Charter) until all requirements set forth in Section 3.3 (b)(iv) of the Restated
Charter have been satisfied or waived.
5.5 REGULATORY MATTERS.
(a) COOPERATION OF OTHER STOCKHOLDERS. Each Stockholder
agrees to cooperate with the Company in all reasonable respects in complying
with the terms and provisions of the letter agreement between the Company and
Chase, a copy of which is attached hereto as Exhibit B, regarding regulatory
matters (the "Regulatory Sideletter"), including without limitation, voting to
approve amending the Company's Restated Charter, the Company's by-laws or this
Agreement in a manner reasonably acceptable to the Stockholders and Chase or any
Affiliate of Chase entitled to make such request pursuant to the Regulatory
Sideletter in order to remedy a Regulatory Problem (as defined in the Regulatory
Sideletter). Anything contained in this Section 5.5 to the contrary
notwithstanding, no Stockholder shall be required under this Section 5.5 to take
any action that would adversely affect in any material respect such
Stockholder's rights under this Agreement or as a Stockholder of the Company.
(b) COVENANT NOT TO AMEND. The Company and each Stockholder
agree not to amend or waive the voting or other provisions of the Company's
Restated Charter, the Company's by-laws or this Agreement if such amendment or
waiver would cause Chase or any its Affiliates to have a Regulatory Problem (as
defined in the Regulatory Sideletter). Chase agrees to notify the Company as to
whether or not it would have a Regulatory Problem promptly after Chase has
notice of such amendment or waiver.
5.6 SPECIAL MEETINGS OF STOCKHOLDERS.
Notwithstanding Section 16-10a-702 of the Utah Revised Business
Corporation Act, a special meeting of the stockholders may only be called in the
manner provided in the Bylaws of the Company or if the holders of Common Stock
representing at least ten (10%) of the Common Stock entitled to be cast on any
issue proposed to be considered at the proposed special meeting sign, date, and
deliver to the Company's secretary one or more written demands for the meeting,
stating the purpose or purposes for which it is held.
5.7 NOTICE REQUIREMENTS IN CONNECTION WITH ACTION BY WRITTEN CONSENT.
Unless written consents of all shareholders entitled to vote on a matter
have been obtained, the Company shall give notice of any shareholder approval
without a meeting taken under Section 16-10a-704 of the Utah Revised Business
Corporation Action within ten (10) days of the taking of the corporate action by
written consent to:
(1) Those shareholders entitled to vote who have not
consented in writing; and
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(2) those shareholders not entitled to vote and to whom the
Utah Revised Business Corporation Act requires notice be given.
Such notice shall contain or be accompanied by the same material that
would have been required if a formal meeting had been called to consider the
action.
ARTICLE VI
SECURITIES LAW COMPLIANCE; LEGENDS
6.1 RESTRICTION ON TRANSFER AND UTAH BUSINESS CORPORATION ACT.
In addition to any other restrictions on the Transfer of any Stockholder
Shares contained in this Agreement, the Stockholders shall not Transfer any
Restricted Securities except in compliance with the conditions specified in this
Article VI. This Agreement is intended to be governed by Section 16-10a-627 and
Section 16-10a-732 of the Utah Business Corporation Act.
6.2 RESTRICTIVE LEGENDS.
Each certificate for the Restricted Securities shall (unless otherwise
provided by the provisions of Section 6.4) be stamped or otherwise imprinted
with a legend in substantially the following terms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY
LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS."
6.3 NOTICE OF TRANSFER.
The holder of any Restricted Securities, by his, her or its acceptance
or purchase thereof, agrees, prior to any Transfer of any such Restricted
Securities (except pursuant to an effective Registration Statement), to give
written notice to the Company of such holder's intention to effect such Transfer
and agrees to comply in all other respects with the provisions of this Article
VI. Each such notice shall describe the manner and circumstances of the proposed
Transfer and, if reasonably requested by the Company, shall be accompanied by
the written opinion, addressed to the Company, of counsel for the holder of such
Restricted Securities (which counsel shall be reasonably satisfactory to the
Company and which counsel may be the in-house counsel of such holder), stating
that in the opinion of such counsel (which opinion shall be reasonably
satisfactory to the Company) such proposed Transfer does not involve a
transaction requiring registration of such Restricted Securities under the
Securities Act. Subject to complying with the other applicable provisions
hereof, such holder of Restricted Securities shall be entitled to consummate
such Transfer in accordance with the terms of the notice delivered by him, her
or it to the Company if the Company does not reasonably object (on the basis
that such Transfer violates the provisions of this Article VI) to such Transfer
within five (5) days after the delivery of such notice. Each certificate or
other instrument evidencing the Restricted Securities issued
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upon the Transfer of any Restricted Securities (and each certificate or other
instrument evidencing any untransferred balance of such Restricted Securities)
shall bear the legend set forth in Section 6.2) unless (i) in such opinion of
such counsel registration of future transfer is not required by the applicable
provisions of the Securities Act or (ii) the Company shall have waived the
requirement of such legend.
6.4 REMOVAL OF LEGENDS, ETC.
Notwithstanding the foregoing provisions of this Article VI, the
restrictions imposed by Sections 6.1, 6.2 and 6.3 upon the transferability of
any Restricted Securities shall cease and terminate when (a) such Restricted
Securities are sold or otherwise disposed of in accordance with the intended
method of disposition by the seller or sellers thereof set forth in a
Registration Statement or are sold or otherwise disposed of in a transaction
contemplated by Section 6.3 which does not require that the Restricted
Securities transferred bear the legend set forth in Section 6.2, or (b) the
holder of such Restricted Securities has met the requirement of Transfer of such
Restricted Securities pursuant to subparagraph (k) of Rule 144. Whenever the
restrictions imposed by Sections 6.1, 6.2 and 6.3 shall terminate, as herein
provided, the holder of any Restricted Securities shall be entitled to receive
from the Company, without expense, a new certificate not bearing the restrictive
legend set forth in Section 6.2 and not containing any other reference to the
restrictions imposed by Sections 6.1, 6.2 and 6.3.
6.5 ADDITIONAL LEGEND.
(a) Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the Transfer of any Stockholder
Shares (if such shares remain Stockholder Shares as defined herein after such
Transfer) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS' AGREEMENT DATED AS OF MAY 31, 2000 (THE "AGREEMENT"),
AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE
COMPANY'S STOCKHOLDERS. THE TERMS OF SUCH STOCKHOLDERS' AGREEMENT
INCLUDES, AMONG OTHER THINGS, RESTRICTIONS ON TRANSFERS. A COPY OF SUCH
STOCKHOLDERS' AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY
TO THE HOLDER HEREOF UPON WRITTEN REQUEST. THE AGREEMENT IS INTENDED TO
BE AN AGREEMENT GOVERNED BY SECTION 16-10a-732 AND SECTION 16-10a-627 OF
THE UTAH BUSINESS CORPORATION ACT."
(b) The Company shall imprint such legends on certificates
evidencing shares outstanding prior to the date hereof. The legend set forth
above shall be removed from the certificates evidencing any shares which cease
to be Stockholder Shares in accordance with the terms of this Agreement.
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ARTICLE VII
AMENDMENT AND WAIVER
7.1 AMENDMENT.
Except as expressly set forth herein, the provisions of this Agreement
may only be amended or waived with the prior written consent of (a) the Company,
(b) the Requisite Trust Holders and (c) the Requisite Investor Holders;
provided, however, that (i) any such amendment, modification, or waiver that
would adversely affect the rights hereunder of any Stockholder, in its capacity
as a Stockholder, without similarly affecting the rights hereunder of all
Stockholders of the same class, in their capacities as Stockholders of such
class, shall not be effective as to such Stockholder without its prior written
consent, (ii) any such amendment, modification, or waiver that would adversely
affect the rights hereunder of the Warrantholders as a class, without similarly
affecting the rights hereunder of other classes of Stockholders, shall not be
effective as to the Warrantholders without the prior written consent of the
Requisite Warrantholders, and (iii) Schedule I to this Agreement shall be deemed
to be automatically amended from time to time to reflect Transfers of Securities
made in compliance with Article II without requiring the consent of any party,
and the Company will, from time to time, distribute to the Stockholders a
revised Schedule I to reflect any such changes.
7.2 WAIVER.
No course of dealing between the Company and the Stockholders (or any of
them) or any delay in exercising any rights hereunder will operate as a waiver
of any rights of any party to this Agreement. The failure of any party to
enforce any of the provisions of this Agreement will in no way be construed as a
waiver of such provisions and will not affect the right of such party thereafter
to enforce each and every provision of this Agreement in accordance with its
terms
ARTICLE VIII
TERMINATION
The provisions of this Agreement, except as otherwise expressly provided
herein, shall terminate upon the first to occur of (a) the twentieth anniversary
of the date hereof, (b) the dissolution, liquidation or winding-up of the
Company, (c) the Sale of the Company or a Qualified Public Offering or (d) the
approval of such termination by (i) the Company, (ii) the Requisite Trust
Holders (iii) the Requisite Management Holders, (iv) the Requisite Investor
Holders and (v) the Requisite Warrantholders. Anything contained herein to the
contrary notwithstanding, as to any particular Stockholder, this Agreement shall
no longer be binding or of further force or effect as to such Stockholder,
except as otherwise expressly provided herein, as of the date such Stockholder
has Transferred all of such Stockholder's interest in the Stockholder Shares and
the Transferees of such Stockholder Shares have, if required by Section 2.2(b)
hereof, executed Joinder Agreements.
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ARTICLE IX
MISCELLANEOUS
9.1 SEVERABILITY.
It is the desire and intent of the parties hereto that the provisions of
this Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
9.2 ENTIRE AGREEMENT.
This Agreement and the other Documents or agreements referred to herein
and to be executed and delivered in connection herewith embody the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof and thereof and supersede and preempt any and all prior and
contemporaneous understandings, agreements, arrangements or representations by
or among the parties, written or oral, which may relate to the subject matter
hereof or thereof in any way. Other than this Agreement, the other Documents and
the other agreements or instruments referred to herein and to be executed and
delivered in connection herewith, there are no other agreements continuing in
effect relating to the subject matter hereof, including preemptive rights,
rights of first refusal, voting of capital stock of the Company or election of
members of the Board.
9.3 INDEPENDENCE OF AGREEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES.
All agreements and covenants hereunder shall be given independent effect
so that if a certain action or condition constitutes a default under a certain
agreement or covenant, the fact that such action or condition is permitted by
another agreement or covenant shall not affect the occurrence of such default,
unless expressly permitted under an exception to such initial agreement or
covenant. In addition, all representations and warranties hereunder shall be
given independent effect so that if a particular representation or warranty
proves to be incorrect or is breached, the fact that another representation or
warranty concerning the same or similar subject matter is correct or is not
breached will not affect the incorrectness of or a breach of a representation
and warranty hereunder. The exhibits and schedules attached hereto are hereby
made part of this Agreement in all respects.
9.4 SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, this Agreement will bind and inure
to the benefit of and be enforceable by the Company and its successors and
assigns and the Stockholders and any
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subsequent holders of Stockholder Shares and the respective successors and
assigns of each of them, so long as they hold Stockholder Shares. None of the
provisions hereof shall create, or be construed or deemed to create, any right
to employment in favor of any Person by the Company or any of its Subsidiaries.
9.5 COUNTERPARTS; FACSIMILE SIGNATURES; VALIDITY.
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and binding. The
failure of any Stockholder to execute this agreement does not make it invalid as
against any other Stockholder.
9.6 REMEDIES.
(a) Each Stockholder shall have all rights and remedies
reserved for such Stockholder pursuant to this Agreement and all rights and
remedies which such holder has been granted at any time under any other
agreement or contract and all of the rights which such holder has under any law
or equity. Any Person having any rights under any provision of this Agreement
will be entitled to enforce such rights specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law or equity.
(b) The parties hereto agree that if any parties seek to
resolve any dispute arising under this Agreement pursuant to a legal proceeding,
the prevailing parties to such proceeding shall be entitled to receive
reasonable fees and expenses (including reasonable attorneys' fees and expenses)
incurred in connection with such proceedings.
(c) It is acknowledged that it will be impossible to measure
in money the damages that would be suffered by any party hereto if any Person
also party hereto fails to comply with any of the obligations imposed on it upon
them in this Agreement or in the Restated Charter or By-laws and that in the
event of any such failure, the aggrieved party will be irreparably damaged and
will not have an adequate remedy at law. Any such aggrieved party shall,
therefore, be entitled to equitable relief, including specific performance, to
enforce such obligations, and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
9.7 NOTICES.
All notices, claims, requests, demands or other communications which are
required or otherwise delivered hereunder shall be deemed to be sufficient and
duly given if contained in a written instrument (a) personally delivered or sent
by telecopier, (b) sent by nationally-recognized overnight courier guaranteeing
next Business Day delivery or (c) sent by first class registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
(a) if to the Company, to:
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Huntsman Packaging Corporation
500 Huntsman Way
Salt Lake City, Utah 84108
Telephone: 801-532-5200
Telecopier: 801-584-5783
Attention: Chief Executive Officer
with copies to:
Chase Domestic Investments, L.L.C.
c/o Chase Capital Partners
1221 Avenue of the Americas, 40th Floor
New York, New York 10020
Telephone: 212-899-3400
Telecopier: 212-899-3401
Attention: Timothy J. Walsh
and
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza, 41st Floor
New York, New York 10112
Telephone: 212-408-2400
Telecopier: 212-728-5950
Attention: Ilan S. Nissan, Esq.;
(b) if to any Trust Holder or Management Holder, to it at
its address set forth on Schedule I attached hereto;
(c) if to any Investor Stockholder or Warrantholder, to it
at its address set forth on Schedule I attached hereto;
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (i) when delivered, if
personally delivered or sent by telecopier, (ii) on the first Business Day after
dispatch, if sent by nationally recognized, overnight courier guaranteeing next
Business Day delivery and (iii) on the third Business Day following the date on
which the piece of mail containing such communication is posted, if sent by
mail.
9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of New York without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws
of any jurisdiction other than the State of New York, except that to the extent
this Agreement relates to the internal affairs of the Company which internal
affairs of the Company shall be governed by and construed in accordance with the
domestic laws of the State of Utah.
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9.9 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
9.10 CONSENT TO JURISDICTION.
Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or the transactions contemplated hereby. Each of the parties hereto
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth in Section 9.7
shall be effective service of process for any action, suit or proceeding in the
State of New York with respect to any matters to which it has submitted to
jurisdiction in this Section 9.10. Each of the parties hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby and thereby in (a) the Supreme Court of the State of New York, New York
County or (b) the United States District Court for the Southern District of New
York, and hereby and thereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
9.11 FURTHER ASSURANCES.
Each party hereto shall do and perform or cause to be done and performed
all such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the provisions of this Agreement,
the Documents and the consummation of the transactions contemplated hereby.
9.12 CONFLICTING AGREEMENTS.
No Stockholder shall enter into any stockholder agreements or
arrangements of any kind with any Person with respect to any Stockholder Shares
on terms inconsistent with the provisions of this Agreement (whether or not such
agreements or arrangements are with other Stockholders or with Persons that are
not parties to this Agreement), including agreements or arrangements with
respect to the acquisition or disposition of Stockholder Shares in a manner
which is inconsistent with this Agreement.
9.13 THIRD PARTY RELIANCE.
Anything contained herein to the contrary notwithstanding, except for
Section 5.4 hereof the covenants of the Company contained in this Agreement (a)
are being given by the Company as an inducement to the Stockholders to enter
into this Agreement and the other Documents (and the Company acknowledges that
the Stockholders have expressly relied thereon) and (b) are solely for the
benefit of the Stockholders. Accordingly, no third party (including, without
limitation, any holder of capital stock of the Company) or anyone acting on
behalf of any thereof
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other than the Stockholders, shall be a third party or other beneficiary of such
covenants and no such third party shall have any rights of contribution against
the Stockholders or the Company with respect to such covenants or any matter
subject to or resulting in indemnification under this Agreement or otherwise.
The agreements set forth in Section 5.4 hereof shall be for the benefit of the
holders of the Company's Series A Cumulative Exchangeable Redeemable Preferred
Stock and, accordingly, the holders thereof shall be third party beneficiaries
of Section 5.4, entitled to fully enforce any failure of the parties hereto to
comply therewith, in accordance with the terms and provisions of this Agreement.
9.14 REPURCHASE RIGHT OF THE COMPANY.
(a) Unless otherwise covered in the Management Stockholder's
written employment agreement with the Company, in the event that a Management
Stockholder's employment with the Company is terminated for whatever reason, the
Company or its designee shall have the right (but not the obligation), upon
delivery of a Repurchase Notice to the Management Stockholder, to repurchase
from such Management Stockholder and (each of his or her Permitted Transferees)
all or any part of the Stockholder Shares owned by such Management Stockholder
(and each of his or her Permitted Transferees) at any time. The price per
Stockholder Share to be paid by the Company shall be the Fair Market Value as of
the last day of the calendar month ending on, or immediately before, the date
the Management Stockholder's employment with the Company is terminated. The
purchase price to be paid by the Company for any repurchase of Stockholder
Shares pursuant to this Section 9.14 shall be paid in cash.
(b) The purchasers of any Stockholder Shares pursuant to
this Section 9.14 will be entitled to require all of the sellers of Stockholder
Shares to provide representations and warranties from such seller regarding (i)
such seller's power, authority and legal capacity to enter into such sale and to
transfer valid right, title and interest in such Stockholder Shares, (ii) such
seller's ownership of such Stockholder Shares and the absence of any liens,
pledges, and other encumbrances on such Stockholder Shares and (iii) the absence
of any violation, default, or acceleration of any agreement or instrument
pursuant to which such seller or the assets of such seller are bound as the
result of such sale.
(c) Should the Company or any of its designees elect to
exercise the repurchase rights pursuant to this Section 9.14 and any seller
fails to deliver all of such Stockholder Shares in accordance with the terms
hereof, the purchaser of such Stockholder Shares hereunder may, at its option,
in addition to all other remedies it may have, deposit the repurchase price in
an escrow account administered by an independent third party (to be held for the
benefit of and payment over to such seller in accordance herewith), whereupon
the Company shall by written notice to such seller (i) cancel on its books the
certificates(s) representing such Stockholder Shares registered in the name of
such seller and (ii) issue to the purchaser, in lieu thereof, new certificate(s)
representing such Stockholder Shares registered in the purchaser's name, and all
of the seller's right, title, and interest in and to such Stockholder Shares
shall terminate in all respects.
* * * * *
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IN WITNESS WHEREOF, the undersigned have duly executed this
Stockholders' Agreement as of the date first written above.
HUNTSMAN PACKAGING
CORPORATION
By:
/s/ SCOTT K. SORENSEN
---------------------------------
Name: Scott K. Sorensen
Title: Chief Financial Officer
CHASE DOMESTIC
INVESTMENTS, L.L.C.
By: Chase Capital Investments, L.P.,
its sole Member
By: Chase Capital Partners,
as Investment Manager
By:
/s/ TIMOTHY J. WALSH
---------------------------------
Name: Timothy J. Walsh
Title: General Partner
THE CHRISTENA KAREN H. DURHAM
TRUST
By:
/s/ MARK DRESCHLER
---------------------------------
Name: Mark Dreschler
Title: Trustee
33
DURHAM CAPITAL, LTD.
By:
/s/ RICHARD P. DURHAM
---------------------------------
Name: Richard P. Durham
Title:
FIRST UNION CAPITAL PARTNERS, LLC
By:
/s/ ROBERT G. CALTON III
---------------------------------
Name: Robert G. Calton III
Title: Senior Vice President
SORENSEN CAPITAL, LLC
By:
/s/ SCOTT K. SORENSEN
---------------------------------
Name: Scott K. Sorensen
Title:
MOFFITT CAPITAL, LLC
By:
/s/ RONALD G. MOFFITT
---------------------------------
Name: Ronald G. Moffitt
Title:
RONALD G. MOFFITT IRA (DLJ
SECURITIES CORP CUSTODIAN)
By:
/s/ RONALD G. MOFFITT
---------------------------------
Name: Ronald G. Moffitt
Title:
34
NEW YORK LIFE CAPITAL PARTNERS, L.P.
BY: NYLCAP MANAGER LLC,
ITS INVESTMENT MANAGER
By:
/s/ STEVE BENEVENTO
---------------------------------
Name: Steve Benevento
Title: Its Authorized Representative
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By:
/s/ RICHARD A. STRAIT
---------------------------------
Name: Richard A. Strait
Title: Its Authorized Representative
/s/ JACK E. KNOTT
-------------------------------------
Jack E. Knott
/s/ RICHARD P. DURHAM
-------------------------------------
Richard P. Durham
/s/ SCOTT K. SORENSEN
-------------------------------------
Scott K. Sorensen
/s/ RONALD G. MOFFITT
-------------------------------------
Ronald G. Moffitt
35
SCHEDULE I
STOCKHOLDERS
NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
INVESTOR STOCKHOLDERS
Chase Domestic Investments, L.L.C. 317,306
c/o Chase Capital Partners
1221 Avenue of the Americas, 40th Floor
New York, New York 10020
Telephone: 212-899-3400
Telecopier: 212-899-3401
Attention: Timothy Walsh
with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza, 41st Floor
New York, New York 10112
Telephone: 212-408-2400
Telecopier: 212-728-5950
Attention: Ilan S. Nissan, Esq.
- --------------------------
(1) In addition to the Stockholder Shares, each of Chase Domestic Investments,
L.L.C., First Union Capital Partners, LLC, New York Life Capital Partners, L.P.
and The Northwestern Mutual Life Insurance Company own, respectively, 52,000
shares, 24,000 shares, 12,000 shares and 12,000 shares of the Company's Series A
Cumulative Exchangeable Redeemable Preferred Stock, no par value.
-i-
36
NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
First Union Capital Partners, LLC 6,210
301 South College Street
One First Union Center, 5th Floor
Charlotte, NC 28288-0732
Telephone: 704-715-1481
Telecopier: 704-374-6711
Attention: Robert G. Calton III
with a copy to:
Kennedy Covington Lobdell &
Hickman, L.L.P.
Bank of America Corporate Center, Suite 4200
100 North Tryon Street
Charlotte, North Carolina 28202-4006
Attention: J. Norfleet Pruden, III
Telephone: 704--331-7442
Telecopier: 704-331-7598
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NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
New York Life Capital Partners, L.P. 12,419
51 Madison Avenue
Suite 3009
New York, New York 10010
Attention: Steve Benevento
Telephone: 212-576-7000
Telecopier: 212-576-5591
with a copy to:
Office of the General Counsel
New York Life Insurance Company
51 Madison Avenue
Suite 1104
New York, New York 10010
Attention: Steve Benevento
Telephone: 212-576-7000
Telecopier: 212-576-8340
and a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue, 19th Floor
New York, New York 10022
Attention: Edward D. Sopher, Esq.
Telephone: 212-872-1026
Telecopier: 212-407-3226
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NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
The Northwestern Mutual Life Insurance Company 6,210
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Dave Barras
Telephone: 414-299-1618
Telecopier: 414-299-7124
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue, 19th Floor
New York, New York 10022
Attention: Edward D. Sopher, Esq.
Telephone: 212-872-1026
Telecopier: 212-407-3226
TRUST HOLDERS
The Christena Karen H. Durham Trust 158,917
500 Huntsman Way
Salt Lake City, Utah 84108
Telephone: 801-584-5700
Telecopier: 801-584-5783
Attention: Richard P. Durham
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: 312-558-5600
Telecopier: 312-558-5700
Attention: John L. MacCarthy
MANAGEMENT STOCKHOLDERS
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NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
Durham Capital, Ltd. and Richard P. Durham 42,789
500 Huntsman Way
Salt Lake City, Utah 84108
Telephone: 801-584-5700
Telecopier: 801-584-5783
Attention: Richard P. Durham
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: 312-558-5600
Telecopier: 312-558-5700
Attention: John L. MacCarthy
Jack E. Knott 7,750
72 Brinker Road
Barrington Hills, Illinois 60010
Telephone: 847-382-0873
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: 312-558-5600
Telecopier: 312-558-5700
Attention: John L. MacCarthy
Sorensen Capital, LLC and Scott K. Sorensen 14,173
3276 E. Walker Oaks Court
Salt Lake City, Utah 84121
Telephone: 801-943-4707
Attention: Scott K. Sorensen
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40
NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: 312-558-5600
Telecopier: 312-558-5700
Attention: John L. MacCarthy
Moffitt Capital, LLC and Ronald G. Moffitt 4,882
6758 S. Vista Grande Drive
Salt Lake City, Utah 84121
Telephone: 801-942-2443
Attention: Ronald G. Moffitt
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: 312-558-5600
Telecopier: 312-558-5700
Attention: John L. MacCarthy
Ronald G. Moffitt IRA (DLJ Securities Corp. Custodian) 1,700
6758 S. Vista Grande Drive
Salt Lake City, Utah 84121
Telephone: 801-942-2443
Attention: Ronald G. Moffitt
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: 312-558-5600
Telecopier: 312-558-5700
Attention: John L. MacCarthy
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NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
WARRANTHOLDERS
Chase Domestic Investments, L.L.C. 22,486
c/o Chase Capital Partners
1221 Avenue of the Americas, 40th Floor
New York, New York 10020
Telephone: 212-899-3400
Telecopier: 212-899-3401
Attention: Richard D. Waters
with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza, 41st Floor
New York, New York 10112
Telephone: 212-408-2400
Telecopier: 212-728-5950
Attention: Frederick M. Bachman, Esq.
First Union Capital Partners, LLC 5,189
301 South College Street
One First Union Center, 5th Floor
Charlotte, NC 28288-0732
Telephone: 704-715-1481
Telecopier: 704-374-6711
Attention: Robert G. Calton III
with a copy to:
Kennedy Covingotn Lobdell &
Hickman, L.L.P.
Bank of America Corporate Center, Suite 4200
100 North Tryon Street
Charlotte, North Carolina 28202-4006
Attention: J. Norfleet Pruden, III
Telephone: 704--331-7442
Telecopier: 704-331-7598
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NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
New York Life Capital Partners, L.P. 10,378
51 Madison Avenue
Suite 3009
New York, New York 10010
Attention: Steve Benevento
Telephone: 212-576-7000
Telecopier: 212-576-5591
with a copy to:
Office of the General Counsel
New York Life Insurance Company
51 Madison Avenue
Suite 1104
New York, New York 10010
Attention: Steve Benevento
Telephone: 212-576-7000
Telecopier: 212-576-8340
and a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue, 19th Floor
New York, New York 10022
Attention: Edward D. Sopher, Esq.
Telephone: 212-872-1026
Telecopier: 212-407-3226
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NUMBER OF
STOCKHOLDER
NAME AND ADDRESS OF STOCKHOLDER SHARES(1)
The Northwestern Mutual Life Insurance Company 5,189
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Dave Barras
Telephone: 414-299-1618
Telecopier: 414-299-7124
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue, 19th Floor
New York, New York 10022
Attention: Edward D. Sopher, Esq.
Telephone: 212-872-1026
Telecopier: 212-407-3226
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EXHIBIT A
JOINDER AGREEMENT
The undersigned is executing and delivering this Joinder
Agreement pursuant to the Stockholders' Agreement dated as of May 31, 2000 (as
the same may hereafter be amended, the "Stockholders' Agreement"), among
Huntsman Packaging Corporation, a Utah company (the "Company") and the
Stockholders named therein.
By executing and delivering this Joinder Agreement to the
Company, the undersigned hereby agrees to become a party to, to be bound by, and
to comply with the provisions of the Stockholders' Agreement in the same manner
as if the undersigned were an original signatory to such agreement.
The undersigned agrees that the undersigned shall be [a] [an]
[Investor Stockholder] [Management Stockholder] [Trust Holder] [Warrantholder],
as such term is defined in the Stockholders' Agreement.(2)
Accordingly, the undersigned has executed and delivered this
Joinder Agreement as of the __ day of ______, _______.
-----------------------------
Signature of Stockholder
-----------------------------
Print Name of Stockholder
- -----------------------------
(2) TYPE OF STOCKHOLDER SHALL BE THE SAME AS THE TRANSFEROR OF THE TRANSFERRED
COMMON STOCK.
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EXHIBIT B
REGULATORY
AGREEMENT dated as of May 31, 2000, by and
between CHASE DOMESTIC INVESTMENTS, L.L.C., a
Delaware limited liability company (the "the
Investor"), and HUNTSMAN PACKAGING CORPORATION,
a Utah corporation (the "Company")
WHEREAS, the Investor is a regulated entity and an indirect subsidiary of
The Chase Manhattan Corporation and in connection therewith the Investor is
subject to various regulations that may impose restrictions on the type and
terms of the Investor's investment in the Company;
NOW THEREFORE, in connection with the foregoing, the parties hereby agree
as set forth below.
SECTION 1. REGULATORY COOPERATION.
(a) In the event that the Investor reasonably determines that it has a
Regulatory Problem, the Company agrees to take all such actions as are
reasonably requested by the Investor in order (i) to effectuate and facilitate
any transfer by the Investor of any securities of the Company then held by the
Investor to any Person designated by the Investor, (ii) to permit the Investor
(or any of its Affiliates) to exchange all or any portion of the voting
securities then held by such Person on a share-for-share basis for shares of a
class of non-voting securities of the Company, which non-voting securities shall
be identical in all respects to such voting securities, except that such new
securities shall be non-voting and shall be convertible into voting securities
on such terms as are requested by the Investor and reasonably acceptable to the
Company in light of regulatory considerations then prevailing and (iii) to grant
the Investor or its designee the reasonable equivalent of any voting rights
arising out of the Investor's ownership of voting securities and/or provided for
in the Stockholders Agreement that were diminished as a result of the transfers
and amendments referred to above. If the Investor elects to transfer securities
of the Company in order to avoid a Regulatory Problem to an Affiliate subject to
limitations on its voting or total ownership interest in the Company, the
Company and such Affiliate shall enter into such mutually acceptable agreements
as such Affiliate may reasonably request in order to assist such Affiliate in
complying with Laws to which it is subject. Such agreements may include
restrictions on the redemption, repurchase or retirement of securities of the
Company that would result or be reasonably expected to result in such Affiliate
holding more voting securities or total securities (equity and debt) than it is
permitted to hold under such laws and regulations.
(b) In the event the Investor has the right to acquire any of the
Company's securities from the Company or any other Person (as the result of a
preemptive offer, pro rata offer or otherwise), and the Investor reasonably
determines that it has a Regulatory
46
Problem, at the Investor's request the Company will offer to sell to the
Investor non-voting securities (or, if the Company is not the proposed seller,
will arrange for the exchange of any voting securities for non-voting securities
immediately prior to or simultaneous with such sale) on the same terms as would
have existed had the Investor acquired the securities so offered and immediately
requested their exchange for non-voting securities pursuant to Section 1(a).
(c) In the event that any Affiliate of the Company ever offers to
issue any of its securities to the Investor, then the Company will cause such
Affiliate to enter into an agreement with the Investor substantially similar to
this Agreement.
SECTION 2. CROSS MARKETING ACTIVITIES.
(a) Neither the Company nor any of its subsidiaries (i) offers or
markets, directly or through any arrangement, any product or service of any
Depository Institution which the Company knows is owned by The Chase Manhattan
Corporation, or (ii) permits any of its products or services to be offered or
marketed, directly or through any arrangement, by or through any Depository
Institution which the Company knows is owned by The Chase Manhattan Corporation.
(b) The Company shall give the Investor thirty (30) days prior notice
before taking any affirmative steps which would cause the representations and
warranties contained in this Section 2 to be untrue.
(c) The Company shall use its best efforts to notify the Investor
promptly at any time in which the Company reasonably believes the
representations contained in this Section 2 to be untrue whether as a result of
the Company's affirmative action or otherwise.
SECTION 3. LENDING ACTIVITIES.
The Company will use reasonable efforts to notify the Investor if it or
any of its subsidiaries enters into a loan facility, credit facility, debt
financing, line of credit or any other extension of credit from any Depository
Institution which the Company knows is owned by The Chase Manhattan Corporation
at least 30 days prior thereto. Any failure by the Company to comply with this
Section 3 shall not be deemed to be a violation of, or default under, this
Section 3.
SECTION 4. DEFINITIONS.
"Affiliate" means, with respect to any Person, (a) a director or
executive officer of such Person or any Person identified in clause (c) below,
and (b) any other Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with such
Person. When such term is used in the context of a Regulatory Problem, it also
has the meaning ascribed to it in any Law.
"Law," with respect to any Person, means all provisions of all laws,
statutes, ordinances, rules, regulations, permits, certificates or orders of any
governmental
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authority applicable to such Person or any of its assets or property or to which
such Person or any of its assets or property is subject, and all judgments,
injunctions, orders and decrees of all courts and arbitrators in proceedings or
actions in which such Person is a party or by which it or any of its assets or
properties is or may be bound or subject.
"Control" means, with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Depository Institution" means an institution organized under the laws
of the United States, any State of the United States, the District of Colombia,
any territory of the United States, Puerto Rico, Guam, American Samoa, or the
Virgin Islands which both (i) accepts demand deposits or deposits that the
depositor may withdraw by check or similar means for payment to third parties or
others; and (ii) is engaged in the business of making commercial loans. The
Chase Manhattan Corporation is not a Depository Institution.
"Person" shall be construed as broadly as possible and shall include
an individual or natural person, a partnership (including a limited liability
partnership), a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental authority.
"Regulatory Problem" means any set of facts or circumstances in which
the Investor's ownership of securities issued by the Company (a) gives rise to a
material violation of Law by the Investor or any of its Affiliates, or gives
rise to a reasonable belief by the Investor that such a violation is likely to
occur or (b) gives rise to a limitation in Law that will impair materially the
ability of the Investor or any Affiliate to conduct its business or gives rise
to a reasonable belief by the that such a limitation is likely to arise.
"Stockholders Agreement" means the Stockholders Agreement to be
entered into on the date of the Closing among the Company and certain
shareholders of the Company.
SECTION 5. AMENDMENTS; BENEFIT.
The terms and provisions of this Agreement may not be modified or
amended, unless pursuant to a written agreement executed by each of the parties
hereof. This Agreement shall be for the benefit of the Investor and its
Affiliates and shall apply to each acquisition of securities issued by the
Company to the Investor or its Affiliates.
SECTION 6. COUNTERPARTS, FACSIMILE SIGNATURES.
This Agreement may be executed in any number of counterparts,
including by means of facsimile, and each counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CHASE DOMESTIC INVESTMENTS,
L.L.C.
By: Chase Capital Investments, L.P.,
as Sole Member
By: Chase Capital Partners,
as Investment Manager
By:
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Name: Timothy J. Walsh
Title: General Partner
HUNTSMAN PACKAGING CORPORATION
By:
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Name: Richard P. Durham
Title: Chief Executive Officer and
President