Stockholders Agreement (2001)Full Document 

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                             STOCKHOLDERS AGREEMENT


                                      among


                             SCOVILL FASTENERS INC.


                                       and


                           THE INVESTORS PARTY HERETO







                           Dated as of August 3, 2001

   2
                                TABLE OF CONTENTS

Page ---- ARTICLE I DEFINITIONS SECTION 1.1. Definitions............................................................................ 1 ARTICLE II COVENANTS OF THE INVESTORS SECTION 2.1. Transfers by Investors................................................................. 3 SECTION 2.2. Tag-Along and Take-Along Provisions.................................................... 4 SECTION 2.3. Transfers to Comply with Laws.......................................................... 5 SECTION 2.4. Closing................................................................................ 5 SECTION 2.5. Restrictive Legend..................................................................... 5 ARTICLE III VOTING AND DIRECTORS SECTION 3.1. Voting and Election of Directors....................................................... 6 SECTION 3.2. Directors' and Officers' Insurance..................................................... 7 ARTICLE IV PREEMPTIVE RIGHTS SECTION 4.1. Preemptive Rights...................................................................... 7 ARTICLE V AFFILIATE TRANSACTIONS SECTION 5.1 Affiliate Transactions................................................................. 9
3 ARTICLE VI MISCELLANEOUS
SECTION 6.1. Inspection Rights...................................................................... 9 SECTION 6.2. Notices................................................................................ 9 SECTION 6.3. Additional Parties..................................................................... 10 SECTION 6.4. Amendments and Waivers................................................................. 10 SECTION 6.5. Successors and Assigns................................................................. 10 SECTION 6.6. Captions............................................................................... 10 SECTION 6.7. Counterparts; Effectiveness............................................................ 10 SECTION 6.8. GOVERNING LAW.......................................................................... 10 SECTION 6.9. Severability........................................................................... 10 SECTION 6.10. Entire Agreement....................................................................... 11
4 STOCKHOLDERS AGREEMENT STOCKHOLDERS AGREEMENT, dated as of August 3, 2001, by and among SCOVILL FASTENERS INC., a Delaware corporation (the "Company"), the parties identified as "Existing Investors" on the signature pages hereof, the parties identified as "New Investors" on the signature pages hereof and any parties identified on the signature pages of any joinder agreements executed and delivered pursuant to Section 6.3 of this Agreement. WHEREAS, pursuant to the Merger Agreement dated as of the date hereof by and between Scovill Holdings Inc. ("Holdings") and the Company, the Existing Investors are being issued shares of Common Stock in exchange for the cancellation of their shares of common stock of Holdings; WHEREAS, pursuant to the Exchange Agreement dated as of the date hereof, among Holdings, the Company, Saratoga Partners III, L.P., Saratoga Partners III, C.V., Saratoga Management Company, LLC and the noteholders listed on Exhibit A thereto (the "Exchange Agreement"), the New Investors are being issued shares of Common Stock and certain subordinated pay-in-kind bonds (the "New Bonds" (which term shall include any pay-in-kind bonds issued or issuable pursuant thereto)) in exchange for the cancellation of their 11 1/4% Senior Notes due 2007 (the "Old Notes") of the Company; WHEREAS, the Company and the Investors desire to provide for certain matters relating to the rights of the Investors; IN CONSIDERATION of the foregoing and of their mutual covenants set forth in this Agreement, the parties hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. Definitions. The following terms, as used herein, have the following meanings: "Affiliate" means, as to any Person, any other Person directly or indirectly Controlling, Controlled by or under direct or indirect common Control with such Person. "Board" means the Board of Directors of the Company. 5 -2- "Buyer" means a Person that is not an Investor or an Affiliate of an Investor that has offered to purchase or otherwise acquire for value shares of Capital Stock of the Company. "Capital Stock" means the Common Stock, any shares of Common Stock of the Company issued or issuable upon exercise of the Warrants and any shares of capital stock of the Company issued in exchange for any of the foregoing upon any reclassification, merger or other transaction involving the exchange of any shares, interests, participations or other equity interests in the Company therefor, or issued as a distribution thereon, and any other capital stock, shares, equity interests, options, rights or warrants to acquire capital stock, and participations or other equivalents of or interests in (however designated) equity of the Company, including any preferred stock and securities convertible into or exercisable for any such equity or interests of the Company now or hereafter authorized. "Cerberus" means Cerberus International, Ltd. "Common Stock" means the common stock, par value $0.01 per share, of the Company. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of securities, partnership interests or by contract, assignment or otherwise. The terms "Controlling" and "Controlled" shall have meanings correlative to the foregoing. "Greenwich" means, collectively, GSCP Recovery II, L.P., GSCP Recovery (US) L.L.C., Unione Italiana (U.K.) Reinsurance Company, Limited and Greenwich Street Capital Partners II, L.P., or any of their Affiliates.
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