Exhibit 2.3
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STOCKHOLDERS' AGREEMENT
dated as of May 18, 1998
among
XXXXXX AMERICAN INVESTMENT CORP.,
VESTAR CAPITAL PARTNERS III, L.P.,
A&M INVESTMENT ASSOCIATES #7, LLC,
THE CO-INVESTORS NAMED HEREIN,
THE ORIGINAL EQUITY HOLDERS NAMED HEREIN
and
THE MANAGEMENT INVESTORS NAMED HEREIN
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions; Interpretation. . . . . . . . . . . 5
SECTION 2. VOTING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Election of Directors. . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Other Voting Matters . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. TRANSFERS AND ISSUANCES . . . . . . . . . . . . . . . . . . . 9
3.1 Limitations on Transfer. . . . . . . . . . . . . . . . . . . . . . 9
3.2 Transfers to Affiliates. . . . . . . . . . . . . . . . . . . . . . 9
3.3 Effect of Void Transfers . . . . . . . . . . . . . . . . . . . . . 10
3.4 Legend on Securities . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Public Offerings, etc. . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Drag-Along Rights. . . . . . . . . . . . . . . . . . . . . . . . . 13
3.8 Participation Right. . . . . . . . . . . . . . . . . . . . . . . . 14
3.9 Rights of First Refusal. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . 16
4.1 Demand Registration. . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Incidental Registration. . . . . . . . . . . . . . . . . . . . . . 17
4.3 Registration Procedures. . . . . . . . . . . . . . . . . . . . . . 19
4.4 Underwritten Offerings . . . . . . . . . . . . . . . . . . . . . . 22
4.5 Preparation; Reasonable Investigation. . . . . . . . . . . . . . . 23
4.6 Limitations, Conditions and Qualifications to Obligations under
Registration Covenants . . . . . . . . . . . . . . . . . . . . . . 23
4.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.8 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.9 Participation in Underwritten Registrations. . . . . . . . . . . . 27
4.10 Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.11 Holdback Agreements. . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Additional Securities Subject to Agreement . . . . . . . . . . . . 28
5.2 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Injunctive Relief. . . . . . . . . . . . . . . . . . . . . . . . . 28
5.4 Other Stockholders' Agreements . . . . . . . . . . . . . . . . . . 28
5.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 Successors, Assigns and Transferees. . . . . . . . . . . . . . . . 29
5.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.8 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.11 Governing Law, Etc.. . . . . . . . . . . . . . . . . . . . . . . . 31
5.12 Additional Management Investors. . . . . . . . . . . . . . . . . . 32
5.13 Additional Stockholders. . . . . . . . . . . . . . . . . . . . . . 32
5.14 Certain Information. . . . . . . . . . . . . . . . . . . . . . . . 32
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STOCKHOLDERS' AGREEMENT, dated as of May 18, 1998, among Xxxxxx
American Investment Corp. (the "COMPANY"), Vestar Capital Partners III, L.P.
("VESTAR"), A&M Investment Associates #7, LLC ("XXXXXXX & MARSAL"), the parties
identified on the signature pages hereto as Co-Investors (the "CO-INVESTORS"),
the parties identified on the signature pages hereto as Original Equity Holders
(the "ORIGINAL EQUITY HOLDERS") and the parties identified on the signature
pages hereto or to the supplementary agreements referred to in Section 5.12 as
Management Investors (the "MANAGEMENT INVESTORS").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, as of the Closing Date Vestar, Xxxxxxx & Marsal, the
Co-Investors, the Original Equity Holders and the Management Investors are the
holders of all of the outstanding shares of capital stock of the Company and
other outstanding securities exercisable or exchangeable for or convertible into
voting stock of the Company; and
WHEREAS, the parties hereto wish to enter into certain agreements with
respect to the holdings by Vestar, Xxxxxxx & Marsal, the Co-Investors, the
Original Equity Holders and the Management Investors and their respective
permitted transferees of capital stock of the Company and securities exercisable
or exchangeable for or convertible into capital stock of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, terms defined in the
heading and the recitals shall have their respective assigned meanings, and the
following capitalized terms shall have the meanings ascribed to them below:
"AFFILIATE" shall mean, (a) with respect to any Person, (i) any Person
that directly or indirectly controls, is controlled by or is under common
control with, such Person, or (ii) any director, officer, partner, member
or employee of such Person or any Person specified in clause (i) above, or
(iii) any Immediate Family Member of any Person specified in clause (i) or
(ii) above; and (b) shall also include, with respect to any Person who is
an individual, a trust the beneficiaries of which, or a corporation or
partnership the stockholders or limited or general partners of which,
include only such individual and such individual's Immediate Family
Members.
"AGREEMENT" shall mean this Stockholders' Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"BENEFICIAL OWNER" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.
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"BOARD OF DIRECTORS" shall mean, unless otherwise specified hereunder,
the Board of Directors of the Company.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday, federal
or New York State holiday or other day on which commercial banks in New
York City are authorized or required by law to close.
"BY-LAWS" shall mean the By-Laws of the Company as in effect on the
date hereof, as the same may be amended from time to time in accordance
with the terms thereof and hereof.
"CAUSE" shall mean (i) wilful malfeasance or wilful misconduct by a
director in connection with the performance of his duties as such, (ii) the
commission by a director of (a) any felony or (b) a misdemeanor involving
moral turpitude or (iii) a determination by a court of competent
jurisdiction in the United States that such director, as such or in any
other capacity (whether or not relating to the Company), breached a
fiduciary duty owed by him or her to another Person.
"CDR PARTICIPATIONS" shall mean CDR Participations, a French public
agency.
"CDR SAS" shall mean Consortium de Realisation SAS, a French public
agency.
"CERTIFICATE OF INCORPORATION" shall mean the Restated Certificate of
Incorporation of the Company as in effect on the date hereof, as the same
may be amended from time to time in accordance with the terms thereof and
hereof.
"CLOSING DATE" shall mean the date of the sale of Common Stock and the
Junior Preferred Stock to the Initial Investors pursuant to their Stock
Subscription Agreements.
"COMMON STOCK" shall mean the common stock, par value $.01 per share,
of the Company.
"COMMON STOCK EQUIVALENTS" shall mean any warrants, rights, calls,
options or other securities exchangeable or exercisable for or convertible
into Common Stock.
"COMMON STOCK REQUEST" shall have the meaning set forth in Section
4.1(a).
"CUSTODY AGREEMENT AND POWER OF ATTORNEY" shall have the meaning set
forth in Section 4.2(c).
"EQUITY INTERESTS" shall have the meaning set forth in Section 3.8(a).
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"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as the same
may be amended from time to time.
"EXEMPT TRANSFERS" shall mean, collectively, (i) the pledge by SAEPIC
of 14,558 shares of Common Stock owned by it in favor of SES pursuant to
that certain Pledge Agreement, dated September 20, 1993, by and between
SAEPIC and SES, together with any Transfer of such shares to SES in
connection with any foreclosure by SES upon any or all of such shares
pursuant to such Pledge Agreement and (ii) the pledge by SAEPIC of 10,141
shares of Common Stock owned by it in favor of CDR Participations pursuant
to that certain Pledge Agreement, dated September 20, 1993, by and between
SAEPIC and CDR Participations, together with any Transfer of such shares to
CDR in connection with any foreclosure by CDR Participations upon any or
all of such shares pursuant to such Pledge Agreement.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"HOLBETON LIMITED" shall mean Holbeton Limited, a Jersey corporation.
"IMMEDIATE FAMILY MEMBER" shall mean, with respect to any Person, a
spouse, parent, child or sibling of such Person.
"INDEPENDENT DIRECTOR" shall mean any director of the Company who is
not an Affiliate of any Stockholder or an employee of the Company or any of
its Affiliates.
"INITIAL INVESTORS" shall mean Vestar, Xxxxxxx & Marsal, the
Co-Investors and the Management Investors.
"ISSUANCE" shall have the meaning set forth in Section 3.8(a).
"JUNIOR PREFERRED STOCK" shall mean the Class C Junior Preferred
Stock, par value $.01 per share, of the Company.
"MAJORITY SELLING STOCKHOLDERS" shall have the meaning set forth in
Section 4.7.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"OFFER" shall have the meaning set forth in Section 3.9.
"OFFEREE" shall have the meaning set forth in Section 3.9.
"OFFEROR" shall have the meaning set forth in Section 3.9.
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"PERMITTED TRANSFEREE" shall mean any Person to whom an Initial
Investor (or any direct or indirect Permitted Transferee thereof) transfers
Securities in accordance with the terms of this Agreement and the Stock
Subscription Agreement by which such transferor is bound (other than
pursuant to a Public Offering or pursuant to Rule 144 under the Securities
Act) and who becomes a party to, and is bound to the same extent as its
transferor by the terms of, this Agreement.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, trust, joint stock company, business trust,
unincorporated association, joint venture, Governmental Authority or other
entity of any nature whatsoever.
"PRIMARY SUBSIDIARIES" shall mean Xxxxxx American Group, Inc. and
Xxxxxx American Corp.
"PUBLIC OFFERING" shall mean the sale of Securities to the public
pursuant to an effective registration statement filed under the Securities
Act, which results in an active trading market in such Securities (it being
understood that such an active trading market shall be deemed to exist if,
without limitation, such Securities are listed on a national securities
exchange or on NASDAQ).
"REQUESTING COMMON STOCKHOLDER" shall have the meaning set forth in
Section 4.1(a).
"RIGHT" shall have the meaning set forth in Section 3.8(a).
"SAEPIC" shall mean Societe Anonyme d'Etudes et de Participations
Industrielles et Commerciales, a French corporation.
"SALE NOTICE" shall have the meaning set forth in Section 3.9.
"SEC" shall mean the Securities and Exchange Commission.
"SES" shall mean SES, a French corporation.
"SECURITIES" shall mean shares of Junior Preferred Stock, Series A
Preferred Stock or Common Stock or Common Stock Equivalents, whether owned
on the date hereof or hereafter acquired.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as the same may be
amended from time to time.
"SELLING STOCKHOLDERS" shall have the meaning set forth in Section
4.3(c).
"SERIES A PREFERRED STOCK" shall mean the Series A Senior Preferred
Stock, par value $.01 per share, of the Company.
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"STOCKHOLDERS" shall mean Vestar, Xxxxxxx & Marsal, the Co-Investors,
the Original Equity Holders and the Management Investors and their
respective Permitted Transferees.
"STOCK SUBSCRIPTION AGREEMENTS" shall mean, collectively, the
Subscription Agreement, dated as of March 30, 1998 among Vestar, Xxxxxxx &
Marsal, Inc. and the Company (including the Assignment and Assumption with
respect thereto among such parties and the Co-Investors) and the Management
Stock Subscription Agreements between the Company and the Management
Investors, respectively.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation,
partnership, association or other business entity of which fifty percent
(50%) or more of the total voting power of shares of capital stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof, or fifty percent (50%)
or more of the equity interest therein, is at the time owned or controlled,
directly or indirectly, by any Person or one or more of the other
Subsidiaries of such Person or a combination thereof.
"TAGGING PREFERRED STOCKHOLDER" shall have the meaning set forth in
Section 3.5(b).
"TAGGING STOCKHOLDER" shall have the meaning set forth in Section
3.5(a).
"THIRD PARTY" shall mean any Person other than the Stockholders and
their Affiliates.
"TRANSFER" shall mean any transfer, sale, assignment, exchange,
mortgage, pledge, hypothecation or other disposition of any Securities or
any interest therein.
"TRANSFERRING PREFERRED STOCKHOLDER" shall have the meaning set forth
in Section 3.5(b).
"TRANSFERRING STOCKHOLDER" shall have the meaning set forth in Section
3.5(a).
1.2 OTHER DEFINITIONAL PROVISIONS; INTERPRETATION. (a) The words
"hereof", "herein", and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, Subsection, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(b) The headings in this Agreement are included for convenience of
reference only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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(d) For purposes of comparing the beneficial ownership of any Person
on the date of execution and delivery of this Agreement to the level of such
ownership at any later time, the level of ownership on such later date shall be
adjusted to eliminate the effect of any subdivision of the Common Stock, any
combination of the Common Stock, any issuance of Common Stock or Common Stock
Equivalents by reason of any reclassification (including, without limitation,
any reclassification in connection with a merger or consolidation), or any
dividend payable in Common Stock or Common Stock Equivalents.
SECTION 2. VOTING AGREEMENTS
2.1 ELECTION OF DIRECTORS. (a) Subject to Section 2.3, each
Stockholder hereby agrees that so long as this Agreement shall remain in effect,
such Stockholder will vote all of the voting Securities owned or held of record
by such Stockholder so as to elect and, during such period, to continue in
office a Board of Directors of the Company and each Primary Subsidiary of the
Company, each consisting solely of the following:
(i) 4 designees of Vestar (so long as Vestar and its Affiliates,
but not any other Permitted Transferee of any thereof,
beneficially own on a fully diluted basis an aggregate
number of shares of Common Stock not less than one-half
(1/2) of the number of shares of Common Stock beneficially
owned on a fully diluted basis by Vestar on the date of
execution and delivery of this Agreement) or, if the
foregoing condition is not satisfied, 3 designees of Vestar
(so long as Vestar and its Affiliates, but not any other
Permitted Transferee of any thereof, beneficially own on a
fully diluted basis an aggregate number of shares of Common
Stock not less than one-third (1/3) of the total number of
shares of Common Stock beneficially owned on a fully diluted
basis by Vestar on the date of its execution and delivery of
this Agreement) or, if the foregoing condition is not
satisfied, 2 designees of Vestar (so long as Vestar and its
Affiliates, but not any other Permitted Transferee of any
thereof, beneficially own on a fully diluted basis an
aggregate number of shares of Common Stock not less than
one-fifth (1/5) of the total number of shares of Common
Stock beneficially owned by Vestar on the date of its
execution and delivery of this Agreement) or, if the
foregoing condition is not satisfied, 1 designee of Vestar
(so long as Vestar and its Affiliates, but not any other
Permitted Transferee of any thereof, beneficially own on a
fully diluted basis an aggregate number of shares of Common
Stock not less than one-tenth (1/10) of the number of shares
of Common Stock beneficially owned on a fully diluted basis
by Vestar on the date of its execution and delivery of this
Agreement);
(ii) 2 designees of the Management Investors and Xxxxxxx & Marsal
(such designees to be selected by the holders of a majority
of the shares of Common Stock beneficially owned by such
Stockholders on a fully
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diluted basis) (so long as the Management Investors and
Xxxxxxx & Marsal and their respective Affiliates, but not
any other Permitted Transferee of any thereof, beneficially
own on a fully diluted basis an aggregate number of shares
of Common Stock not less than one-half (1/2) of the number
of shares of Common Stock beneficially owned on a fully
diluted basis by the Management Investors and Xxxxxxx &
Marsal on the date of their execution and delivery of this
Agreement) or, if the foregoing condition is not satisfied,
1 designee of the Management Investors and Xxxxxxx & Marsal
(such designees to be selected by the holders of a majority
of the shares of Common Stock beneficially owned by such
Stockholders on a fully diluted basis) (so long as the
Management Investors and Xxxxxxx & Marsal and their
respective Affiliates, but not any other Permitted
Transferee of any thereof, beneficially own on a fully
diluted basis an aggregate number of shares of Common Stock
not less than one-fifth (1/5) of the number of shares of
Common Stock beneficially owned on a fully diluted basis by
the Management Investors and Xxxxxxx & Marsal on the date of
their execution and delivery of this Agreement); and
(iii) 3 Independent Directors designated by Vestar.
(b) If at any time during the period specified in paragraph (a)
above, Vestar, or the Management Investors and Xxxxxxx & Marsal (based on the
action of holders of a majority of the shares of Common Stock beneficially owned
by the Management Investors and Xxxxxxx & Marsal on a fully diluted basis),
shall notify the other Stockholders of its or their desire to remove, with or
without Cause, any director of the Company or of any Primary Subsidiary of the
Company previously designated by it or them, each Stockholder shall vote all of
the voting Securities owned or held of record by it so as to remove such
director.
(c) If at any time during the period specified in paragraph (a)
above, any director previously designated by Vestar, or the Management Investors
and Xxxxxxx & Marsal, ceases to serve on the Board of Directors of the Company
or any Primary Subsidiary of the Company (whether by reason of death,
resignation, removal or otherwise), the Stockholder who designated such director
shall be entitled to designate a successor director to fill the vacancy created
thereby. If at any time during the period specified in paragraph (a) above an
Independent Director ceases to serve on the Board of Directors of the Company or
any Primary Subsidiary of the Company (whether by reason of death, resignation,
removal or otherwise), a successor director to fill the vacancy created thereby
shall be designated as provided in clause (iii) of paragraph (a) above. Subject
to Section 2.3, each Stockholder agrees that such Stockholder will vote all of
the voting Securities owned or held of record by such Stockholder so as to elect
any such director.
(d) The parties hereto hereby agree that any individual designated as
a director of the Company or of any Primary Subsidiary of the Company may be
removed for Cause pursuant to the Company's (or such Primary Subsidiary's)
by-laws and applicable law with or without the consent of the Stockholder which
designated such individual. No such removal of
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an individual designated pursuant to this Section 2.1 shall affect any of the
Stockholders' rights to designate a different individual pursuant to this
Section 2.1.
(e) So long as he is the chief executive officer of the Company Xx.
Xxxxxx will be the Chairman of the Board of Directors and a designee pursuant to
clause (ii) of paragraph (a) above.
(f) No fees shall be paid by the Company or any of its Subsidiaries to
any member of the Board of Directors in his capacity as such other than
Independent Directors designated pursuant to clause (iii) of paragraph (a)
above; PROVIDED that the foregoing shall not limit reimbursement of expenses in
accordance with the expense reimbursement policy of the Company and its
Subsidiaries.
2.2 OTHER VOTING MATTERS. Each Stockholder other than the Original
Equity Holders hereby agrees that, so long as this Agreement shall remain in
effect and Vestar and its Affiliates, but not any other Permitted Transferee of
any thereof, beneficially own on a fully diluted basis an aggregate number of
shares of Common Stock not less than half (1/2) of the number of shares of
Common Stock beneficially owned on a fully diluted basis by Vestar on the date
of its execution and delivery of this Agreement, such Stockholder will vote all
of the Securities owned or held of record by such Stockholder to ratify, approve
and adopt any and all actions adopted or approved by the Board of Directors of
the Company, except that such Stockholder may vote such Stockholder's shares of
Series A Preferred Stock or Junior Preferred Stock, if any, in such
Stockholder's sole discretion with respect to any matter on which holders of
such preferred stock are entitled to vote as a separate class pursuant to
applicable law, the Certificate of Incorporation of the Company or the
certificate of designations or any other specified designations, rights,
preferences, or powers of such preferred stock.
2.3 EXCEPTIONS. Notwithstanding the foregoing provisions of Section
2.1, none of CDR Participations, CDR SAS, Holbeton Limited and SES and their
respective Affiliates shall be required to vote in favor of the election of
Xxxxxxx Xxxxxxxxx, any of his immediate family members, or any employee, officer
or director of any entity which Xxxxxxx Xxxxxxxxx and his immediate family
members control.
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SECTION 3. TRANSFERS AND ISSUANCES
3.1 LIMITATIONS ON TRANSFER. (a) Each of Xxxxxxx & Marsal, the
Co-Investors, the Original Equity Holders and the Management Investors hereby
agrees that no Transfer shall occur at any time prior to the earlier to occur of
(x) the fifth anniversary of the Closing Date and (y) a Public Offering, except
for Transfers pursuant to Section 3.2, 3.5 or 3.7, Transfers in connection with
a Public Offering, Exempt Transfers and Transfers approved in advance in writing
by Vestar (so long as Vestar and its Affiliates hold any Securities) and the
Company.
(b) Each Stockholder hereby agrees that, except for Transfers effected
pursuant to an effective registration statement filed under the Securities Act,
no Transfer shall occur unless the Company has been furnished with an opinion in
form and substance reasonably satisfactory to the Company of counsel reasonably
satisfactory to the Company that such Transfer is exempt from the provisions of
Section 5 under the Securities Act.
(c) Each of Xxxxxxx & Marsal, the Co-Investors, the Original Equity
Holders and the Management Investors hereby agrees that, except for Transfers in
connection with a Public Offering, Transfers pursuant to Section 3.7 and
Transfers pursuant to Rule 144 under the Securities Act, no Transfer shall occur
unless the transferee shall agree to become a party to, and be bound to the same
extent as its transferor by the terms of, this Agreement pursuant to the
provisions of Section 5.6.
3.2 TRANSFERS TO AFFILIATES. Notwithstanding any other provision of
this Agreement to the contrary, each Stockholder (other than the Management
Investors) and its Affiliates (but not any other Permitted Transferee of any
thereof) shall be entitled from time to time, without compliance with Section
3.5, to Transfer any or all of the Securities beneficially owned by it to any of
its Affiliates who agree to become a party to, and be bound to the same extent
as its transferor by the terms of, this Agreement pursuant to the provisions of
Section 5.6; PROVIDED that any such Transfer by any of the Co-Investors or any
of their Affiliates shall require the prior written consent of Vestar so long as
Vestar and its Affiliates hold any Securities. A Management Investor shall be
entitled, without compliance with Section 3.5, to Transfer Securities
beneficially owned by him on the specific terms and subject to the restrictions
and conditions set forth in any Stock Subscription Agreement to which he is a
party. Any Transfer by Vestar to its partners of any or all of the Securities
beneficially owned by it (including a distribution of such Securities to
Vestar's partners upon a liquidation of Vestar or otherwise) shall be deemed to
be a Transfer to Affiliates of Vestar for purposes of this Section 3.2. Any
Transfer by A&M to its stockholders or members of any or all of the Securities
beneficially owned by it (including a distribution of such Securities to such
stockholders or members upon a liquidation of A&M or otherwise) shall be deemed
to be a Transfer to Affiliates of A&M for purposes of this Section 3.2, PROVIDED
that Xxxxx Xxxxxx and/or Xxxx Xxxxxxx retains sole voting control over such
Securities (including following any subsequent Transfer otherwise permitted
hereunder by any such stockholder or member to any of its Affiliates), whether
through a voting trust or otherwise.
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3.3 EFFECT OF VOID TRANSFERS. In the event of any purported Transfer
of any Securities in violation of the provisions of this Agreement, such
purported Transfer shall be void and of no effect and the Company shall not give
effect to such Transfer.
3.4 LEGEND ON SECURITIES. Each certificate representing Securities
issued to any Stockholder shall bear the following legend on the face thereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND ARE SUBJECT TO A STOCKHOLDERS' AGREEMENT AMONG
XXXXXX AMERICAN INVESTMENT CORP., VESTAR CAPITAL PARTNERS III, L.P.,
A&M INVESTMENT ASSOCIATES #7, LLC AND THE OTHER STOCKHOLDERS PARTIES
THERETO [AND A MANAGEMENT STOCK SUBSCRIPTION AGREEMENT/NON-QUALIFIED
STOCK OPTION SUBSCRIPTION AGREEMENT BETWEEN THE MANAGEMENT INVESTOR
PARTY THERETO AND THE COMPANY], [A COPY] [COPIES] OF WHICH [IS] [ARE]
ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT [AND
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT/NON-QUALIFIED STOCK OPTION
SUBSCRIPTION AGREEMENT] AND (A) PURSUANT TO A REGISTRATION STATEMENT
EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) IF THE
COMPANY HAS BEEN FURNISHED WITH AN OPINION REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO THE COMPANY OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF
SUCH STOCKHOLDERS' AGREEMENT [AND MANAGEMENT STOCK SUBSCRIPTION
AGREEMENT/NON-QUALIFIED STOCK OPTION SUBSCRIPTION AGREEMENT],
INCLUDING RESTRICTIONS RELATING TO THE EXERCISE OF ANY VOTING RIGHTS
GRANTED BY THE SECURITIES."
3.5 TAG-ALONG RIGHTS. (a) So long as this Agreement shall remain in
effect, unless (x) a Public Offering of Common Stock shall have occurred or (y)
Vestar and its Affiliates, but not any other Permitted Transferee of any
thereof, beneficially own on a fully diluted basis an aggregate number of shares
of Common Stock less than one-third (1/3) of the number of shares of Common
Stock beneficially owned on a fully diluted basis by Vestar on
11
the date of its execution and delivery of this Agreement, with respect to any
proposed Transfer by any of Vestar and its Affiliates (but not any other
Permitted Transferee of any thereof) (in such capacity, a "TRANSFERRING
STOCKHOLDER") of Common Stock, other than as provided in Sections 3.2 and 3.6,
the Transferring Stockholder shall have the obligation, and each other
Stockholder and its Permitted Transferees shall have the right, to require the
proposed transferee to purchase from each Stockholder and its Permitted
Transferees having and exercising such right (a "TAGGING STOCKHOLDER") a number
of shares of Common Stock up to the product (rounded up to the nearest whole
number) of (i) the quotient determined by dividing the aggregate number of
shares of Common Stock beneficially owned on a fully diluted basis by such
Tagging Stockholder and sought by the Tagging Stockholder to be included in the
contemplated Transfer by the aggregate number of shares of Common Stock
beneficially owned on a fully diluted basis by the Transferring Stockholder plus
the aggregate number of shares of Common Stock beneficially owned on a fully
diluted basis by all Tagging Stockholders and sought by all Tagging Stockholders
to be included in the contemplated Transfer and (ii) the total number of shares
of Common Stock proposed to be directly or indirectly Transferred to the
Transferee in the contemplated Transfer, and at the same price per share of
Common Stock and upon the same terms and conditions (including without
limitation time of payment and form of consideration) as to be paid and given to
the Transferring Stockholder, PROVIDED that in order to be entitled to exercise
its right to sell shares of Common Stock to the proposed transferee pursuant to
this Section 3.5, a Tagging Stockholder must agree to make to the Transferee the
same representations, warranties, covenants, indemnities and agreements as the
Transferring Stockholder agrees to make in connection with the proposed transfer
of the shares of Common Stock of the Transferring Stockholder (except that in
the case of representations and warranties pertaining specifically to the
Transferring Stockholder, a Tagging Stockholder shall make the comparable
representations and warranties pertaining specifically to itself, and except
that in the case of covenants or agreements capable of performance only by
certain Stockholders, such covenants or agreements shall be made only by such
certain Stockholders) and PROVIDED FURTHER that all representations, warranties,
covenants, agreements and indemnities made by the Transferring Stockholder and
the Tagging Stockholders pertaining specifically to themselves shall be made by
each of them severally and not jointly and PROVIDED FURTHER that each of the
Transferring Stockholder and each Tagging Stockholder shall be severally (but
not jointly) liable for breaches of representations, warranties, covenants and
agreements of or (in the case of representations and warranties) pertaining to
the Company and its Subsidiaries, and for indemnification obligations arising
out of or relating to any such breach or otherwise pertaining to the Company and
its Subsidiaries, on a pro rata basis, such liability of each such Stockholder
not to exceed such Stockholder's pro rata portion of the gross proceeds of the
sale. Any Tagging Stockholder that is a holder of Common Stock Equivalents and
wishes to participate in a sale of Common Stock pursuant to this Section 3.5(a)
shall convert into or exercise or exchange such number of Common Stock
Equivalents for Common Stock as may be required therefor on or prior to the
closing date of such Transfer.
(b) So long as this Agreement shall remain in effect, unless (x) a
Public Offering of Common Stock shall have occurred or (y) Vestar and its
Affiliates, but not any other Permitted Transferee of any thereof, beneficially
own on a fully diluted basis an aggregate number of shares of Common Stock less
than one-third (1/3) of the number of
12
shares of Common Stock beneficially owned on a fully diluted basis by Vestar on
the date of its execution and delivery of this Agreement, with respect to any
proposed Transfer by any of Vestar and its Affiliates (but not any other
Permitted Transferee of any thereof) (in such capacity, a "TRANSFERRING
PREFERRED STOCKHOLDER"), of Junior Preferred Stock, other than as provided in
Sections 3.2 and 3.6, the Transferring Preferred Stockholder shall have the
obligation, and each other Stockholder and its Permitted Transferees which holds
Junior Preferred Stock shall have the right, to require the proposed transferee
to purchase from each such Stockholder and its Permitted Transferees having and
exercising such right (a "TAGGING PREFERRED STOCKHOLDER") a number of shares of
Junior Preferred Stock up to the product (rounded up to the nearest whole
number) of (i) the quotient determined by dividing the aggregate liquidation
preference of all shares of Junior Preferred Stock owned by such Tagging
Preferred Stockholder and sought by the Tagging Preferred Stockholder to be
included in the contemplated Transfer by the aggregate liquidation preference of
all shares of Junior Preferred Stock owned by the Transferring Preferred
Stockholder plus the aggregate number of shares of Junior Preferred Stock
beneficially owned on a fully diluted basis by all Tagging Preferred
Stockholders and sought by all Tagging Preferred Stockholders to be included in
the contemplated Transfer and (ii) the total number of shares of Junior
Preferred Stock proposed to be directly or indirectly Transferred to the
Transferee in the contemplated Transfer, and at the same price per share of
Junior Preferred Stock and upon the same terms and conditions (including without
limitation time of payment and form of consideration) to be given to the
Transferring Preferred Stockholder, PROVIDED that in order to be entitled to
exercise its right to sell shares of Junior Preferred Stock to the proposed
transferee pursuant to this Section 3.5, a Tagging Preferred Stockholder must
agree to make to the Transferee the same representations, warranties, covenants,
indemnities and agreements as the Transferring Preferred Stockholder agrees to
make in connection with the proposed transfer of Junior Preferred Stock of the
Transferring Stockholder (except that in the case of representations and
warranties pertaining specifically to the Transferring Preferred Stockholder, a
Tagging Preferred Stockholder shall make the comparable representations and
warranties pertaining specifically to itself, and except that in the case of
covenants or agreements capable of performance only by certain Stockholders,
such covenants or agreements shall be made only by such certain Stockholders)
and PROVIDED FURTHER that all representations, warranties, covenants, agreements
and indemnities made by the Transferring Preferred Stockholder and the Tagging
Preferred Stockholders pertaining specifically to themselves shall be made by
each of them severally and not jointly and PROVIDED FURTHER that each of the
Transferring Preferred Stockholder and each Tagging Preferred Stockholder shall
be severally (but not jointly) liable for breaches of representations,
warranties, covenants and agreements of or (in the case of representations and
warranties) pertaining to the Company and its Subsidiaries, and for
indemnification obligations arising out of or relating to any such breach or
otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis,
such liability of each such Stockholder not to exceed such Stockholder's
pro rata portion of the gross proceeds of the sale.
(c) The Transferring Stockholder or Transferring Preferred
Stockholder, as the case may be, shall give notice to all relevant Stockholders
and their Permitted Transferees of each proposed Transfer giving rise to the
rights of the Tagging Stockholders or Tagging Preferred Stockholders set forth
in the first sentence of Section 3.5(a) or (b), as the case may
13
be, at least 30 days prior to the proposed consummation of such Transfer,
setting forth the name of the Transferring Stockholder or Transferring Preferred
Stockholder, the number of shares of Common Stock and/or Junior Preferred Stock
proposed to be so Transferred, the name and address of the proposed transferee,
the proposed amount and form of consideration and other terms and conditions
offered by the proposed transferee, and a representation that the proposed
transferee has been informed of the tag-along rights provided for in this
Section 3.5 and has agreed to purchase shares of Common Stock and/or Junior
Preferred Stock in accordance with the terms hereof. The tag-along rights
provided by this Section 3.5 must be exercised by each Tagging Stockholder or
Tagging Preferred Stockholder within 15 days following receipt of the notice
required by the preceding sentence, by delivery of a written notice to the
Transferring Stockholder or Transferring Preferred Stockholder, as the case may
be, indicating such Tagging Stockholder's or Tagging Preferred Stockholder's
desire to exercise its rights and specifying the number of shares of Common
Stock and/or Junior Preferred Stock it desires to sell. The Transferring
Stockholder or Transferring Preferred Stockholder, as the case may be, shall be
entitled under this Section 3.5 to Transfer to the proposed transferee the
number of Securities equal to the difference between the number referred to in
clause (ii) of paragraph (a) or (b) above and the aggregate number of shares of
Common Stock and/or Junior Preferred Stock set forth in the written notices, if
any, delivered by the Tagging Stockholders or Tagging Preferred Stockholders
pursuant to the preceding sentence (up to the maximum number of shares of Common
Stock and/or Junior Preferred Stock beneficially owned by such Tagging
Stockholder or Tagging Preferred Stockholder required to be purchased by the
proposed transferee pursuant to the first sentence of Section 3.5(a) or (b)).
If the proposed transferee fails to purchase shares of Common Stock or, as the
case may be, Junior Preferred Stock from any Tagging Stockholder or Tagging
Preferred Stockholder that has properly exercised its tag-along rights, then the
Transferring Stockholder or Transferring Preferred Stockholder, as the case may
be, shall not be permitted to make the proposed Transfer, and any such attempted
Transfer shall be void and of no effect, as provided in Section 3.3 hereof.
(d) If any of the Tagging Stockholders and Tagging Preferred
Stockholders exercise their rights under Section 3.5(a) or (b), the closing of
the purchase of the Common Stock or, as the case may be, Junior Preferred Stock
with respect to which such rights have been exercised shall take place
concurrently with the closing of the sale of the Transferring Stockholder's or,
as the case may be, Transferring Preferred Stockholder's Common Stock and/or
Junior Preferred Stock. No Transfer shall occur pursuant to this Section 3.5
unless the transferee shall agree to become a party to, and be bound to the same
extent as its transferor by the terms of, this Agreement pursuant to the
provisions of Section 5.6.
3.6 PUBLIC OFFERINGS, ETC. The provisions of Sections 3.5 and 3.7
shall not be applicable to offers and sales of Securities in a Public Offering
or pursuant to Rule 144 under the Securities Act.
3.7 DRAG-ALONG RIGHTS. So long as this Agreement shall remain in
effect, unless (x) a Public Offering of Common Stock shall have occurred or (y)
Vestar and its Affiliates, but not any other Permitted Transferee of any
thereof, beneficially own on a fully diluted basis an aggregate number of shares
of Common Stock less than one-third (1/3) of the
14
number of shares of Common Stock beneficially owned on a fully diluted basis by
Vestar on the date of its execution and delivery of this Agreement, if any of
Vestar and its Affiliates receives an offer from a Third Party to purchase
(whether pursuant to a sale of stock, a merger or otherwise) all, but not less
than all, outstanding shares of Common Stock or Junior Preferred Stock, as the
case may be, subject to this Agreement (other than shares not being purchased in
order to preserve the availability of recapitalization accounting treatment) and
such offer is accepted by Vestar, then each Stockholder hereby agrees that it
will Transfer all shares of Common Stock or Junior Preferred Stock, as the case
may be, owned by it to such Third Party on the terms of the offer so accepted by
Vestar, including making the same representations, warranties, covenants,
indemnities and agreements that Vestar agrees to make (except that, in the case
of representations and warranties pertaining specifically to Vestar, each other
Stockholder shall make the comparable representations and warranties pertaining
specifically to itself, and except that, in the case of covenants or agreements
capable of performance only by certain Stockholders, such covenants or
agreements shall be made only by such certain Stockholders, and provided that
all representations, warranties, covenants, agreements and indemnities made by
the Stockholders pertaining specifically to themselves shall be made by each of
them severally and not jointly and provided further that each Stockholder shall
be severally (but not jointly) liable for breaches of representations,
warranties, covenants and agreements of or (in the case of representations and
warranties) pertaining to the Company and its Subsidiaries, and for
indemnification obligations arising out of or relating to any such breach or
otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis,
such liability of each such Stockholder not to exceed such Stockholder's
pro rata portion of the gross proceeds of the sale).
3.8 PARTICIPATION RIGHT. (a) So long as this Agreement shall remain
in effect, unless (x) a Public Offering of Common Stock shall have occurred or
(y) Vestar and its Affiliates, but not any other Permitted Transferee of any
thereof, beneficially own on a fully diluted basis an aggregate number of shares
of Common Stock less than one-third (1/3) of the number of shares of Common
Stock beneficially owned on a fully diluted basis by Vestar on the date of its
execution and delivery of this Agreement, the Company shall not issue nor permit
any of its Subsidiaries to issue (an "ISSUANCE") additional shares of Common
Stock, Common Stock Equivalents or common stock or common stock equivalents of
such Subsidiary to any Initial Investor or Original Equity Holder or any
Affiliate of an Initial Investor or Original Equity Holder (but excluding any
other Permitted Transferee of any thereof) unless, prior to such Issuance, the
Company notifies each other Initial Investor or Original Equity Holder in
writing of the proposed Issuance and grants to such other Initial Investor or
Original Equity Holder or, at such other Initial Investor's or Original Equity
Holder's election, one of its Affiliates (but not any other Permitted Transferee
thereof) the right (the "RIGHT") to subscribe for and purchase up to a portion
of such additional shares of Common Stock or common stock or such additional
shares or units of Common Stock Equivalents or common stock equivalents
(collectively, "EQUITY INTERESTS") so issued at the same price and upon the same
terms and conditions (including, in the event such Equity Interests are issued
as a unit together with other securities, the purchase of such other securities)
as issued in the Issuance such that:
15
(i) in the case of an Issuance in which shares of Common Stock or
Common Stock Equivalents are to be issued, immediately after giving effect
to the Issuance and full exercise of the Right (including, for purposes of
this calculation, the issuance of shares of Common Stock upon conversion,
exchange or exercise of any Common Stock Equivalent issued in the Issuance
or subject to the Right), the shares of Common Stock beneficially owned by
each such other Initial Investor or Original Equity Holder and its
Affiliates on a fully diluted basis (rounded to the nearest whole share)
shall represent the same percentage of the aggregate number of shares of
Common Stock outstanding on a fully diluted basis as was beneficially owned
by such Initial Investor or Original Equity Holder and its Affiliates
immediately prior to the Issuance; and
(ii) in the case of an Issuance in which shares of such common
stock or common stock equivalents of a Subsidiary are to be issued, each
such other Initial Investor or Original Equity Holder and its Affiliates
shall have the Right to acquire a percentage of such common stock or common
stock equivalents to be issued in the Issuance equal to the percentage of
shares of Common Stock on a fully diluted basis that was beneficially owned
by such Initial Investor or Original Equity Holder and its Affiliates
immediately prior to the Issuance.
(b) The Right may be exercised by each such other Initial Investor or
Original Equity Holder at any time by written notice to the Company received by
the Company within 10 Business Days after the date on which such Initial
Investor or Original Equity Holder receives notice from the Company of the
proposed Issuance, and the closing of the purchase and sale pursuant to the
exercise of the Right shall occur at least 10 Business Days (but not later than
180 days) after the Company receives notice of the exercise of the Right and
prior to or concurrently with the closing of the Issuance. Notwithstanding the
foregoing, the Right shall not apply to (1) any Issuance, PRO RATA, to all
holders of Common Stock, (2) any Issuance upon the conversion, exercise or
exchange of any Common Stock Equivalent outstanding on the Closing Date pursuant
to the terms thereof, (3) any Issuance to a Management Investor pursuant to a
stock option or other employee benefit plan of the Company or one of its
Subsidiaries or (4) any Issuance pursuant to a bona fide underwritten public
offering pursuant to an effective registration statement under the Securities
Act.
3.9 RIGHTS OF FIRST REFUSAL. If, at any time on or after the fifth
anniversary of the Closing Date and, in each case, prior to a Public Offering,
Xxxxxxx & Marsal, a Co-Investor, an Original Equity Holder or a Management
Investor or any of their respective Permitted Transferees (an "OFFEREE")
receives a bona fide offer to purchase any or all of its Securities (the
"OFFER") from a third party (the "OFFEROR") which such Offeree wishes to accept
(other than a Transfer pursuant to Section 3.2), such Offeree shall cause the
Offer to be reduced to writing and shall notify the Company in writing of its
wish to accept the Offer (the "SALE NOTICE"). The Sale Notice shall contain an
irrevocable offer to sell such Securities to the Company (in the manner set
forth below) at a purchase price equal to the price contained in, and otherwise
on the same terms and conditions of, the Offer, and shall be accompanied by a
true copy of the Offer (which shall identify the Offeror). At any time within
30 Business Days after the date of the receipt by the Company of the Sale
Notice, the
16
Company shall have the right and option to commit to purchase, or to arrange for
one or more third parties designated by the Company to purchase, all of the
Securities covered by the Offer either (i) for the same consideration and on the
same terms and conditions as the Offer or (ii) if the Offer includes any
consideration other than cash, then, at the sole option of the Company, at the
equivalent all cash price, determined in good faith by a majority of the members
of the Company's Board of Directors which are not employees or Affiliates of any
of the Company and its Subsidiaries (other than by reason of being a director of
any thereof), any Original Equity Holder, any Co-Investor, Vestar or Xxxxxxx &
Marsal, and otherwise on the same terms and conditions as the Offer. If the
option referred to in the preceding sentence is exercised, on or prior to the
60th Business Day after the date of receipt by the Company of the Sale Notice
the Company (or its designees) shall pay the relevant cash consideration by
delivering a certified bank check or checks in (or, if the Offeree so elects at
least three Business Days prior to the closing date in a writing specifying the
Offeree's bank account and other wire transfer instructions, by wire
transferring) the appropriate amount and shall deliver the relevant non-cash
consideration to the Offeree against delivery at the principal office of the
Company of certificates representing the Securities being purchased,
appropriately endorsed by the Offeree (subject, in the case of an Offeree who is
a Management Investor, to the provisions of Sections 6.1 and 6.2 of the Stock
Subscription Agreement, or similar provisions of any other agreement, to which
such Offeree is a party). If, at the end of the aforementioned 30 Business Day
period, the Company (or its designees) has not exercised its option in the
manner set forth above, or if, after exercising such option, the Company
notifies the Offeree that neither it nor its designee will purchase Securities
pursuant to the provisions of Section 6.1 or 6.2 of the Stock Subscription
Agreement, or similar provisions of any other agreement, to which such Offeree
is a party, the Offeree may during the succeeding 30 Business Day period sell
not less than all of the Securities covered by the Offer to the Offeror at a
price and on terms no less favorable to the Offeree than those contained in the
Offer. Such Offeror shall agree in a writing in form and substance reasonably
satisfactory to the Company to become a party hereto and be bound to the same
extent as the Offeree by the provisions hereof other than this Section 3.9.
Promptly after such sale, the Offeree shall notify the Company of the
consummation thereof and shall furnish such evidence of the completion and time
of completion of such sale and of the terms thereof as may reasonably be
requested by the Company. If, at the end of 30 Business Days following the
expiration of the 30 Business Day period for the Company (or its designees) to
commit to purchase the aforementioned Securities, the Offeree has not completed
the sale of such Securities as aforesaid, all the restrictions on transfer
contained herein shall again be in effect with respect to such Securities.
SECTION 4. REGISTRATION RIGHTS
4.1 DEMAND REGISTRATION.
(a) COMMON STOCK REQUEST. Upon the written request (a "COMMON STOCK
REQUEST") of any of Vestar and its Affiliates and, if Vestar and its Affiliates
shall cease to beneficially own any shares of Common Stock or if Vestar shall
give its prior written consent thereto, any Permitted Transferee of any of
Vestar and its Affiliates, at any time after the Closing Date (each of such
Persons a "REQUESTING COMMON STOCKHOLDER"), that the Company
17
effect the registration under the Securities Act of all or part of the shares of
Common Stock owned or to be acquired upon conversion, exercise or exchange of
Common Stock Equivalents by such Requesting Common Stockholder, the Company will
use its best efforts to effect the registration under the Securities Act of such
shares.
(b) REGISTRATION STATEMENT FORM. Registrations under this Section
4.1 shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Company and (ii) as shall permit the disposition of the Common
Stock being registered in accordance with the intended method or methods of
disposition specified in the request for such registration. The Company agrees
to include in any such registration statement all information which, in the
opinion of counsel to the underwriters, the Requesting Common Stockholder and
the Company, is required to be included.
(c) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 4.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective, or
(ii) if after it has become effective, such registration is interfered with by
any stop order, injunction or other order or requirement of the SEC or other
Governmental Authority for any reason not attributable to the Requesting Common
Stockholder or any of its Affiliates and has not thereafter become effective.
(d) LIMITATIONS ON REGISTRATION ON REQUEST. Notwithstanding anything
in this Section 4.1 to the contrary, in no event will (i) the Company be
required to effect more than one registration pursuant to Section 4.1(a) within
any 360 day period, or (ii) Vestar and its Affiliates and Permitted Transferees
be entitled to more than six registrations in the aggregate pursuant to Section
4.1(a), unless (a) such Requesting Common Stockholder agrees to pay all of the
costs and expenses of each such additional registration or (b) in the case of
clause (ii) above, either (x) a registration so requested is not effected for a
reason not attributable to the Requesting Common Stockholder or any of its
Affiliates or (y) the number of shares of Common Stock sought to be included by
such Requesting Common Stockholder in such registration is reduced by more than
25% pursuant to the provisions of Section 4.2(b).
4.2 INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE COMMON STOCK AND COMMON STOCK EQUIVALENTS. If
the Company at any time proposes to register any shares of Common Stock (or
Common Stock Equivalents) under the Securities Act (except registrations on such
form(s) solely for registration of Common Stock or Common Stock Equivalents in
connection with any employee benefit plan or dividend reinvestment plan or a
business combination transaction, recapitalization or exchange offer), including
registrations pursuant to Section 4.1(a), whether or not for sale for its own
account, it will each such time as soon as practicable give written notice of
its intention to do so to all the Stockholders and their Permitted Transferees.
Upon the written request (which request shall specify the total number of shares
of Common Stock or Common Stock Equivalents intended to be disposed of by such
Stockholder or Permitted Transferee) of any Stockholder or Permitted Transferee
made within 30 days after the receipt of any such notice (15 days if the Company
gives telephonic notice with written confirmation to follow promptly thereafter,
stating that (i) such registration will be on Form S-3 and (ii)
18
such shorter period of time is required because of a planned filing date), the
Company will use all reasonable efforts to effect the registration under the
Securities Act of all Common Stock held or to be acquired upon conversion,
exercise or exchange of Common Stock Equivalents (or, if Common Stock
Equivalents are proposed to be registered by the Company, Common Stock
Equivalents) by the Stockholders and their Permitted Transferees which the
Company has been so requested to register for sale in the manner initially
proposed by the Company; provided that the Company shall not be obliged to
register any Common Stock Equivalents which are not of the same class, series
and form as the Common Stock Equivalents proposed to be registered by the
Company. If the Company thereafter determines for any reason not to register or
to delay registration of the Common Stock or Common Stock Equivalents (provided,
however, that in the case of any registration pursuant to Section 4.1(a), such
determination shall not violate any of the Company's obligations under Section
4.1 or any other provision of this Agreement), the Company may, at its election,
give written notice of such determination to the Stockholders and their
Permitted Transferees and (i) in the case of a determination not to register,
shall be relieved of the obligation to register such Common Stock or Common
Stock Equivalents in connection with such registration, without prejudice,
however, to any right the requesting Stockholder may have to request that such
registration be effected as a registration under Section 4.1(a) and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Common Stock or Common Stock Equivalents of a Stockholder or
Permitted Transferee for the same period as the delay in registration of such
other securities. No registration effected under this Section 4.2(a) shall
relieve the Company of any obligation to effect a registration upon a Common
Stock Request under Section 4.1(a).
(b) PRIORITY IN INCIDENTAL REGISTRATION. In a registration pursuant
to this Section 4.2, if the managing underwriter of such underwritten offering
shall inform the Company and the relevant Stockholders and their Permitted
Transferees by letter of its belief that the number of shares of Common Stock or
Common Stock Equivalents, as the case may be, to be included in such
registration would adversely affect its ability to effect such offering, then
the Company will be required to include in such registration only that number of
shares of Common Stock or Common Stock Equivalents, as the case may be, which it
is so advised should be included in such offering. Shares of Common Stock or
Common Stock Equivalents proposed by the Company to be registered for issuance
by the Company shall have the first priority in a registration pursuant to
Section 4.2(a) and all other shares of Common Stock or Common Stock Equivalents
to be registered (whether requested to be registered pursuant to Section 4.1(a)
or 4.2(a) or otherwise) shall be given second priority without preference among
the relevant holders. If less than all of a Stockholder's or Permitted
Transferee's shares of Common Stock or Common Stock Equivalents are to be
registered, such Stockholder's or Permitted Transferee's shares of Common Stock
or Common Stock Equivalents shall be included in the registration pro rata based
on the total number of shares of Common Stock or Common Stock Equivalents sought
to be registered by each Stockholder and Permitted Transferee (as opposed to the
Company).
(c) CUSTODY AGREEMENT AND POWER OF ATTORNEY. Upon delivering a
request under this Section 4.2, a Stockholder (excluding Vestar and its
Affiliates, but including any other Permitted Transferee of any thereof) or
Permitted Transferee will, if requested by the
19
Company, execute and deliver a custody agreement and power of attorney in form
and substance reasonably satisfactory to the Company with respect to such
Stockholder's or Permitted Transferee's shares of Common Stock or Common Stock
Equivalents to be registered pursuant to this Section 4.2 (a "CUSTODY AGREEMENT
AND POWER OF ATTORNEY"). The Custody Agreement and Power of Attorney will
provide, among other things, that the Stockholder or Permitted Transferee will
deliver to and deposit in custody with the custodian and attorney-in-fact named
therein a certificate or certificates representing such shares of Common Stock
or Common Stock Equivalents (duly endorsed in blank by the registered owner or
owners thereof or accompanied by duly executed stock powers in blank) and
irrevocably appoint said custodian and attorney-in-fact as such Stockholder's or
Permitted Transferee's agent and attorney-in-fact with full power and authority
to act under the Custody Agreement and Power of Attorney on such Stockholder's
or Permitted Transferee's behalf with respect to the matters specified therein.
Such Stockholder or Permitted Transferee also agrees to execute such other
agreements as the Company may reasonably request to further evidence the
provisions of this Section 4.2.
4.3 REGISTRATION PROCEDURES. In connection with the Company's
obligations pursuant to Sections 4.1 and 4.2 hereof, the Company will use all
reasonable efforts to effect such registration and the Company will promptly:
(a) prepare and file with the SEC as soon as practicable after
request for registration hereunder the requisite registration statement to
effect such registration and use all reasonable efforts to cause such
registration statement to become effective and to remain continuously effective
until the earlier to occur of (x) 180 days following the date on which such
registration statement is declared effective or (y) the termination of the
offering being made thereunder.
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
shares of Common Stock and Common Stock Equivalents, as the case may be, covered
by such registration statement until such Common Stock and Common Stock
Equivalents, as the case may be, has been sold or such lesser period of time as
the Company, any seller of such Common Stock and Common Stock Equivalents, as
the case may be, or any underwriter is required under the Securities Act to
deliver a prospectus in accordance with the intended methods of disposition by
the sellers of such Common Stock and Common Stock Equivalents, as the case may
be, set forth in such registration statement or supplement to such prospectus;
(c) furnish to each Stockholder and Permitted Transferee which owns
shares of Common Stock or Common Stock Equivalents, as the case may be, covered
by such registration statement (the "SELLING STOCKHOLDERS") and the managing
underwriter, if any, at least one executed original of the registration
statement and such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus)
20
and any other prospectus filed under Rule 424 under the Securities Act as may
reasonably be requested by such Selling Stockholder;
(d) use all reasonable efforts (i) to register or qualify all shares
of Common Stock or Common Stock Equivalents, as the case may be, covered by such
registration statement under the securities or "blue sky" laws of such
jurisdictions where an exemption is not available as the Selling Stockholders
shall reasonably request, (ii) to keep such registration or qualification in
effect for so long as such registration statement remains in effect and (iii) to
take any other action which may be reasonably necessary or advisable to enable
the Selling Stockholders to consummate the disposition in such jurisdictions of
such Common Stock and Common Stock Equivalents, as the case may be, PROVIDED
that the Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject itself to taxation in
any such jurisdiction or take any action which would subject it to general
service of process in any such jurisdiction;
(e) notify the Selling Stockholders and the managing underwriter, if
any, promptly, and confirm such advice in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC for amendments or
supplements to a registration statement or related prospectus or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of a registration statement or the initiation of any proceedings
for that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the registered
securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) of the happening of any event or information
becoming known which requires the making of any changes in a registration
statement or related prospectus so that such documents will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and (vi) of the Company's reasonable determination that a post-effective
amendment to a registration statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the lifting
of any suspension of the qualification of any of the registered securities for
sale in any jurisdiction, at the earliest possible moment;
(g) upon the occurrence of any event contemplated by clause (e)(v)
above, prepare a supplement or post-effective amendment to the applicable
registration statement or related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the securities being sold thereunder, such
prospectus will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(h) use its best efforts to furnish to the Selling Stockholders a
signed counterpart, addressed to the Selling Stockholders and the underwriters,
if any, of (A) an
21
opinion of counsel for the Company, and (B) a "comfort" letter, signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountant's letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities (and dated the dates such opinions and comfort letters
are customarily dated) and, in the case of the accountant's letter, such other
financial matters, and in the case of the legal opinion, such other legal
matters, as the Selling Stockholders or the underwriters may reasonably request;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to the Selling Stockholders
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder no later than 90 days after
the end of any 12-month period beginning after the effective date of a
registration statement pursuant to which shares of Common Stock and Common Stock
Equivalents, as the case may be, are sold, which statement shall cover such
12-month period;
(j) cooperate with the Selling Stockholders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing shares of Common Stock and Common Stock Equivalents,
as the case may be, to be sold; and enable such shares of Common Stock and
Common Stock Equivalents, as the case may be, to be in such denominations and
registered in such names as the Selling Stockholders or the managing
underwriters, if any, may request at least two Business Days prior to any sale
of shares of Common Stock or Common Stock Equivalents, as the case may be, to
the underwriters;
(k) use its best efforts to cause the shares of Common Stock and
Common Stock Equivalents, as the case may be, covered by the applicable
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the Selling
Stockholder(s) or the underwriters, if any, to consummate the disposition of
such shares of Common Stock and Common Stock Equivalents, as the case may be;
(l) cause all shares or units of Common Stock or Common Stock
Equivalents, as the case may be, covered by the registration statement to be
listed on each securities exchange, if any, on which securities of such class,
series and form issued by the Company, if any, are then listed if requested by
the managing underwriters, if any, or the holders of a majority of the shares or
units of Common Stock or Common Stock Equivalents, as the case may be, covered
by the registration statement and entitled hereunder to be so listed;
(m) cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD") and in the
performance of any due diligence investigation by any underwriter (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
22
(n) as soon as practicable prior to the filing of any document which
is to be incorporated by reference into the registration statement or the
prospectus (after initial filing of the registration statement) provide copies
of such document to counsel to the Selling Stockholders and to the managing
underwriters, if any, and make the Company's representatives available for
discussion of such document and consider in good faith making such changes in
such document prior to the filing thereof as counsel for such Selling
Stockholders or underwriters may reasonably request.
The Company may require each Selling Stockholder to furnish to the
Company such information regarding such Selling Stockholder and the distribution
of such securities by such Selling Stockholder as the Company may from time to
time reasonably request in writing in order to comply with the Securities Act.
The Selling Stockholders severally agree that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4.3(e)(ii), (iii), (iv), (v) or (vi) hereof, they will forthwith
discontinue disposition pursuant to such registration statement of any shares of
Common Stock or Common Stock Equivalents, as the case may be, covered by such
registration statement or prospectus until their receipt of the copies of the
supplemented or amended prospectus relating to such registration statement or
prospectus or until they are advised in writing by the Company that the use of
the applicable prospectus may be resumed (and the period of such discontinuance
shall be excluded from the calculation of the period specified in clause (x) of
Section 4.3(a)) and, if so directed by the Company, will deliver to the Company
(at the Company's expense, except as otherwise provided in Section 4.1(c)) all
copies, other than permanent file copies then in their possession, of the
prospectus covering such securities in effect at the time of receipt of such
notice. The Selling Stockholders agree to furnish the Company a signed
counterpart, addressed to the Company and the underwriters, if any, of an
opinion of counsel for the Selling Stockholders covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of selling stockholder's counsel
delivered to the underwriters in underwritten public offerings of securities
(and dated the dates such opinions are customarily dated) and such other legal
matters as the Company or the underwriters may reasonably request.
4.4 UNDERWRITTEN OFFERINGS.
(a) DEMAND UNDERWRITTEN OFFERINGS. In any underwritten offering
pursuant to a registration requested under Section 4.1, the Company will use its
best efforts to enter into an underwriting agreement for such offering with the
underwriters selected by the Requesting Common Stockholder, such agreement and
underwriters to be reasonably satisfactory in form and substance to the Company,
the Requesting Common Stockholder and the underwriters and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type. The Selling Stockholders who
hold shares of Common Stock to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of them and that any or all of the
23
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to their obligations. The
Company may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Selling Stockholders
to and for the benefit of such underwriters shall also be made to and for the
benefit of the Company with due regard to the amount of Securities being sold by
such Selling Stockholder and the nature of such representations, warranties and
agreements and the underwriting.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time
proposes to register any shares of its Common Stock or Common Stock Equivalents,
as the case may be, under the Securities Act as contemplated by Section 4.2 and
such Securities are to be distributed by or through one or more underwriters,
the Company and the Selling Stockholders who hold shares of Common Stock or
Common Stock Equivalents, as the case may be, to be distributed by such
underwriters in accordance with Section 4.2 hereof shall be parties to the
underwriting agreement between the Company and such underwriters and may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of them and that any
or all of the conditions precedent to the obligations of such underwriters under
such underwriting agreement be conditions precedent to their obligations. The
Company may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Selling Stockholders
to and for the benefit of such underwriters shall also be made to and for the
benefit of the Company with due regard to the amount of Securities being sold by
such Selling Stockholder and the nature of such representations, warranties and
agreements and the underwriting.
4.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Selling Stockholders, the
underwriters and their respective counsels and accountants a reasonable
opportunity (but such Persons shall not have the obligation) to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the SEC, and, to the extent practicable, each amendment thereof or
supplement thereto, and, subject to the execution and delivery of a customary
confidentiality agreement, will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary to conduct a reasonable investigation within
the meaning of the Securities Act.
4.6 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of the Company to use its reasonable
efforts to cause shares of Common Stock and Common Stock Equivalents, as the
case may be, to be registered under the Securities Act are subject to each of
the following limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone for a reasonable period
of time the filing or effectiveness of, or suspend the rights of Selling
Stockholders to make sales
24
pursuant to, any registration statement otherwise required to be prepared, filed
and made and kept effective by it hereunder (but the duration of such
postponement or suspension may not exceed the earlier to occur of (w) 30 days
after the cessation of the circumstances described in clauses (i) and (ii) below
or (x) 180 days after the date of the determination of the Board of Directors
referred to below, and the duration of such postponement or suspension shall be
excluded from the calculation of the period specified in clause (x) of Section
4.3(a)) if the Board of Directors of the Company determines in good faith that
(i) there is a material undisclosed development in the business or affairs of
the Company (including any pending or proposed financing, recapitalization,
acquisition or disposition), the disclosure of which at such time could be
adverse to the Company's interests or (ii) the Company has filed a registration
statement with the SEC, such registration statement has not yet been declared
effective, the Company is using its reasonable best efforts to have such
registration statement declared effective, and the underwriters with respect to
such registration advise that such registration would be adversely affected. If
the Company shall so delay the filing of a registration statement, it shall, as
promptly as possible, notify the Selling Stockholders of such determination, and
the Selling Stockholders shall have the right (y) in the case of a postponement
of the filing or effectiveness of a registration statement, to withdraw the
request for registration by giving written notice to the Company within 10
Business Days after receipt of the Company's notice or (z) in the case of a
suspension of the right to make sales, to receive an extension of the
registration period equal to the number of days of the suspension.
(b) The Company shall not be required hereby to include shares of
Common Stock or Common Stock Equivalents, as the case may be, in a registration
statement if, in the written opinion of outside counsel to the Company of
recognized standing in securities law matters, the beneficial owners of such
Common Stock or Common Stock Equivalents, as the case may be, seeking
registration would be free to sell all of such shares of Common Stock or Common
Stock Equivalents, as the case may be, within the current calendar quarter
without registration under Rule 144 under the Securities Act.
(c) The Company's obligations shall be subject to the obligations of
the Selling Stockholders, which the Selling Stockholders acknowledge, to furnish
all information and materials and to take any and all actions as may be required
under applicable federal and state securities laws and regulations to permit the
Company to comply with all applicable requirements of the SEC and to obtain any
acceleration of the effective date of such registration statement.
(d) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant hereto unless such
audit is requested by the underwriters with respect to such registration.
4.7 EXPENSES. Except as otherwise provided in Section 4.1(c), the
Company will pay all reasonable out-of-pocket costs and expenses incurred in
connection with each registration of Common Stock or Common Stock Equivalents,
as the case may be, pursuant to this Agreement, including, without limitation,
the reasonable fees and disbursements of a single firm of outside counsel
retained on behalf of all Selling Stockholders by Selling Stockholders which
beneficially own a majority of the total number of shares or units of
25
Common Stock or Common Stock Equivalents, as the case may be, being registered
by Selling Stockholders (the "MAJORITY SELLING STOCKHOLDERS"), and any and all
filing fees payable to the SEC, fees with respect to filings required to be made
with stock exchanges, the NASDAQ and the NASD, fees and expenses of compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of a single firm of outside counsel for the underwriters or the
Selling Stockholders in connection with blue sky qualifications of the Common
Stock or Common Stock Equivalents, as the case may be, being registered and
determination of its eligibility for investment under the laws of such
jurisdictions as the Selling Stockholders may designate), printing expenses,
fees and disbursements of counsel and accountants of the Company, including
costs associated with comfort letters, and fees and expenses of other Persons
retained by the Company, but excluding underwriters' expenses (including
discounts, commissions or fees of underwriters and expenses included therein,
selling brokers, dealer managers or similar securities industry professionals
relating to the distribution of the securities being registered or legal
expenses of any Person other than the Company and the Selling Stockholders) but
including the fees and expenses of any qualified independent underwriter
required to participate in such registration pursuant to applicable law or the
requirements of the NASD. The Company shall, in any event in all cases, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), and the
expense of securities law liability insurance and rating agency fees, if any.
4.8 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In connection with any
registration pursuant hereto in which shares of Common Stock or Common Stock
Equivalents, as the case may be, are to be disposed of, the Company shall
indemnify and hold harmless, to the full extent permitted by law, each holder of
such Common Stock or Common Stock Equivalents, as the case may be, to be
disposed of and, when applicable, its officers, directors, agents and employees
and each Person who controls such holder (within the meaning of the Securities
Act or the Exchange Act) against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary prospectus or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
including, without limitation, any loss, claim, damage, liability or expense
resulting from the failure to keep a prospectus current, except insofar as the
same (i) are caused by or contained in any information relating to such holder
furnished in writing to the Company by such holder expressly for use therein or
(ii) are caused by such holder's failure to deliver a copy of the current
prospectus simultaneously with or prior to such sale after the Company has
furnished such holder with a sufficient number of copies of such prospectus
correcting such material misstatement or omission or (iii) arise in respect of
any offers to sell or sales made during any period when a holder is required to
discontinue sales under Section 4.3(e) (and after such holder has received the
notice contemplated by Section 4.3(e)). The Company shall also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers and directors
and each person who controls such Persons (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification of
the holders
26
of such Common Stock or Common Stock Equivalents, as the case may be, to be
disposed of, and shall enter into an indemnification agreement with such Persons
containing such terms, if requested.
(b) INDEMNIFICATION BY STOCKHOLDERS. In connection with each
registration statement effected pursuant hereto in which shares of Common Stock
or Common Stock Equivalents, as the case may be, are to be disposed of, each
Selling Stockholder shall, severally but not jointly, indemnify and hold
harmless, to the full extent permitted by law, the Company, each other Selling
Stockholder and their respective directors, officers, agents and employees and
each Person who controls the Company and each other Selling Stockholder (within
the meaning of the Securities Act or the Exchange Act) against any losses,
claims, damages, liabilities and expenses resulting from any untrue statement of
a material fact or any omission of a material fact required to be stated in such
registration statement or prospectus or preliminary prospectus or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission relates to such Selling
Stockholder and is contained in any information furnished in writing by such
Selling Stockholder or any of its Affiliates to the Company expressly for
inclusion in such registration statement or prospectus. In no event shall the
liability of any Selling Stockholder hereunder be greater in amount than the
dollar amount of the proceeds actually received by such Selling Stockholder upon
the sale of the securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder shall give prompt notice to the indemnifying party of
any claim with respect to which it shall seek indemnification and shall permit
such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; PROVIDED, HOWEVER, that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (i)
the indemnifying party shall have agreed to pay such fees or expenses, or (ii)
the indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such Person or (iii) in the opinion of
outside counsel to such Person there may be one or more legal defenses available
to such Person which are different from or in addition to those available to the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person). If such defense is not assumed by the indemnifying party, the
indemnifying party shall not be subject to any liability for any settlement made
without its consent (but such consent shall not be unreasonably withheld). No
indemnified party shall be required to consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a written
release in form and substance reasonably satisfactory to such indemnified party
from all liability in respect of such claim or litigation. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one firm of
counsel (and, if necessary, local counsel) for all parties indemnified by such
27
indemnifying party with respect to such claim, unless in the written opinion of
outside counsel to an indemnified party a conflict of interest as to the subject
matter exists between such indemnified party and another indemnified party with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of additional counsel for such indemnified party.
(d) CONTRIBUTION. If for any reason the indemnification provided for
herein is unavailable to an indemnified party or is insufficient to hold it
harmless as contemplated hereby, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations,
provided that in no event shall the liability of any Selling Stockholder for
such contribution and indemnification exceed, in the aggregate, the dollar
amount of the proceeds received by such Selling Stockholder upon the sale of
securities giving rise to such indemnification and contribution obligation.
4.9 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Stockholder or
Permitted Transferee may participate in any underwritten registration hereunder
unless such Stockholder or Permitted Transferee (a) agrees to sell its shares of
Common Stock or Common Stock Equivalents, as the case may be, on the basis
provided in and in compliance with any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and to comply with Rules
10b-6 and 10b-7 under the Exchange Act, and (b) completes and executes all
questionnaires, appropriate and limited powers of attorney, escrow agreements,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements; PROVIDED that all such
documents shall be consistent with the provisions hereof.
4.10 RULE 144. The Company hereby covenants that after it has filed
(and such registration statement has become effective) a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act in respect of
Common Stock, the Company will file in a timely manner all reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required to
file such reports, it will, upon the request of any Stockholder or Permitted
Transferee, make publicly available other information so long as necessary to
permit sales by such Stockholder or Permitted Transferee under Rule 144 under
the Securities Act) and will take such further action as any Stockholder or
Permitted Transferee may reasonably request to the extent required from time to
time to enable such Stockholder or Permitted Transferee to sell shares of Common
Stock under Rule 144 under the Securities Act.
4.11 HOLDBACK AGREEMENTS.
(a) Each Stockholder and Permitted Transferee agrees that, if any
shares of Common Stock or Common Stock Equivalents, as the case may be, are
included in a registration statement filed by the Company in connection with an
underwritten public
28
offering it shall not, without the prior written consent of the Company, effect
any public sale or distribution of shares of Common Stock or Common Stock
Equivalents, as the case may be, during the 10 days prior to or the 180 day
period beginning on the effective date of such registration statement (except as
part of such registration) if and to the extent reasonably requested in writing
(with reasonable prior notice) by the managing underwriter of the underwritten
public offering.
(b) The Company agrees not to effect any primary public sale or
distribution of any Common Stock or Common Stock Equivalents, as the case may
be, during the 10 days prior to and the 180 day period beginning on the
effective date of any registration statement in which any Stockholder or
Permitted Transferee is participating in connection with an underwritten public
offering of Common Stock or Common Stock Equivalents, as the case may be, if and
to the extent reasonably requested in writing (with reasonable prior notice) by
the managing underwriter of the underwritten public offering.
SECTION 5. MISCELLANEOUS
5.1 ADDITIONAL SECURITIES SUBJECT TO AGREEMENT. Each Stockholder
agrees that any other Securities which it shall hereafter acquire by means of a
stock split, stock dividend, distribution or otherwise (other than pursuant to a
Public Offering) shall be subject to the provisions of this Agreement to the
same extent as if held on the date hereof.
5.2 TERMINATION. This Agreement (other than the provisions of Section
4) shall terminate, and thereby become null and void, (A) in full on the
earliest date on which (i) the Initial Investors and their Affiliates do not own
in the aggregate at least 5% of the Common Stock outstanding on a fully diluted
basis or (ii) the aggregate number of shares of Common Stock outstanding on a
fully diluted basis which are not subject to Section 2 of this Agreement
constitute at least 50% of the total number of shares of Common Stock
outstanding on a fully diluted basis or (iii) the tenth anniversary of the date
hereof, and (B) as to any particular Securities, on the date on which they are
sold in a Public Offering or are sold pursuant to Rule 144 under the Securities
Act.
5.3 INJUNCTIVE RELIEF. The Stockholders, their Permitted Transferees
and the Company acknowledge and agree that a violation of any of the terms of
this Agreement will cause the Stockholders and Permitted Transferees irreparable
injury for which adequate remedy at law is not available. Accordingly, it is
agreed that each Stockholder and Permitted Transferee shall be entitled to an
injunction, restraining order or other equitable relief to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which they may be entitled
at law or equity.
5.4 OTHER STOCKHOLDERS' AGREEMENTS. None of the Stockholders shall
enter into any stockholder agreement or other arrangement of any kind with any
Person with respect to Securities which is inconsistent with the provisions of
this Agreement or which may impair its ability to comply with this Agreement;
provided that the parties hereto
29
acknowledge that certain of the Original Equity Holders may have obligations
under that certain Stockholders' Agreement dated as of March 7, 1990 entered
into among the Company and the other signatories thereto, as amended by that
certain First Amendment thereto dated as of March 21, 1991 (as so amended, and
without giving effect to any other amendment, modification or supplement thereto
whether entered into before, on or after the date hereof, other than the release
of the Company from its obligations thereunder, the "Prior Stockholders'
Agreement"), and that if performance of the obligations of such Original Equity
Holders hereunder would cause any such Original Equity Holder to be in breach of
obligations binding on, and enforceable against, it under the Prior
Stockholders' Agreement, such obligations under the Prior Stockholders'
Agreement will take priority and its obligations hereunder shall be performed
only to the extent not so in conflict with such other obligations (including by
delaying the time of performance of its obligations hereunder to the earliest
time its obligations hereunder may be performed without breach of its
obligations under the Prior Stockholders' Agreement).
5.5 AMENDMENTS. This Agreement may be amended only by a written
instrument signed (a) by Vestar, so long as it (or its Affiliates) owns
Securities, and by Xxxxxxx & Marsal, so long as it (or its Affiliates) owns
Securities, and (b) by Stockholders (other than Vestar, Xxxxxxx & Marsal and
their Affiliates) which own on a fully diluted basis Securities representing at
least a majority of the voting power represented by all Securities outstanding
on a fully diluted basis and owned by all Stockholders (other than Vestar,
Xxxxxxx & Marsal and their Affiliates); provided, however, that any amendment
which adversely affects the Company or imposes an additional obligation thereon
must be approved in writing by the Company.
5.6 SUCCESSORS, ASSIGNS AND TRANSFEREES. The provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their Permitted Transferees and their respective successors, each of
which Permitted Transferees shall agree in a writing in form and substance
reasonably satisfactory to the Company to become a party hereto and be bound to
the same extent as its transferor hereby, PROVIDED that no Stockholder may
assign to any Permitted Transferee any of its rights or obligations hereunder
other than in connection with a Transfer to such Permitted Transferee of
Securities in accordance with the provisions of this Agreement. Any purported
assignment in violation of this provision shall be null and void AB INITIO.
5.7 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or two business days after
being delivered to a recognized courier (whose stated terms of delivery are two
business days or less to the destination of such notice), or five days after
being deposited in the mail or, in the case of telecopy notice, when received,
addressed as follows to the parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:
30
if to the Company, to:
c/x Xxxxxx American Investment Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
if to Vestar, to:
Vestar Capital Partners III, L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
if to Xxxxxxx & Marsal, to:
A&M Investment Associates #7, LLC
c/o Alvarez & Marsal, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx & Xxx
One Glenhardie
Corporate Center
0000 Xxxxxxxx Xxxx
X.X. Xxx. 000
Xxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
31
and to:
Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Management Investors, to them at the addresses or telecopy
numbers set forth in the books and records of the Company, with a copy
to:
Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Original Equity Holders or the Co-Investors, to them at the
addresses or telecopy numbers set forth in the books and records of
the Company.
5.8 INTEGRATION. This Agreement and the documents referred to herein
or delivered pursuant hereto, including the Stock Subscription Agreements,
contain the entire understanding of the parties with respect to the subject
matter hereof and thereof. There are no agreements, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
and thereof other than those expressly set forth herein and therein. Subject to
the proviso of Section 5.4, this Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
5.9 SEVERABILITY. If one or more of the provisions, paragraphs,
words, clauses, phrases or sentences contained herein, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision, paragraph, word, clause, phrase or sentence in every other respect
and of the remaining provisions, paragraphs, words, clauses, phrases or
sentences hereof shall not be in any way impaired, it being intended that all
rights, powers and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
5.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and by different parties on separate counterparts each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
5.11 GOVERNING LAW, ETC.. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to contracts made and to be performed therein, except for matters
directly within the purview of the General Corporation Law of the State of
Delaware (the "DGCL"), which shall be
32
governed by the DGCL. The parties executing this Agreement hereby (i) agree to
submit to the exclusive jurisdiction of the federal and state courts located in
the Southern District of New York in any action or proceeding arising out of or
relating to this Agreement, (ii) waive any objection to the laying of venue of
any actions or proceedings brought in any such court and any claim that such
actions or proceedings have been brought in an inconvenient forum, and (iii)
agree that service of any process, summons, notice or document by U.S.
registered mail to the address for such party specified in Section 5.7 shall be
effective service of process for any action or proceeding in New York with
respect to any matter specified above.
5.12 ADDITIONAL MANAGEMENT INVESTORS. Each person who becomes party
to a Management Stock Subscription Agreement or Non-Qualified Stock Option
Subscription Agreement after the date hereof shall become a party hereto and
shall be bound hereby. The Company shall not issue any securities to an
employee or Independent Director of the Company or any of its Subsidiaries
unless he or she enters into a supplementary agreement with the Company agreeing
to be bound by the terms hereof in the same manner as the other Management
Investors. Each such supplementary agreement shall become effective upon its
execution by the Company and the additional Management Investor, and it shall
not require the signature or consent of any other party hereto. Such
supplementary agreement may modify some of the terms hereof as they affect the
additional Management Investor, provided that the modified terms shall be no
more favorable to the additional Management Investor than the terms set forth
herein.
5.13 ADDITIONAL STOCKHOLDERS. Each holder of Common Stock or Junior
Preferred Stock not already a Stockholder or a Permitted Transferee thereof may
become a party hereto with the consent of the Company and Vestar (in their sole
discretion) pursuant to a supplementary agreement with the Company and Vestar
whereby such holder agrees to be bound by the terms hereof in the same manner as
the other Initial Investors (other than Vestar) or Original Equity Holders, as
the case may be. Each such supplementary agreement shall become effective upon
its execution by the Company, Vestar and such holder, and it shall not require
the signature or consent of any other party hereto. Such supplementary
agreement may modify some of the terms hereof as they affect such additional
Stockholder, provided that the modified terms shall be no more favorable to such
additional Stockholder than the terms set forth herein.
5.14 CERTAIN INFORMATION. The Company hereby agrees that it shall
send to all Stockholders, by first class mail, postage prepaid, to their
respective addresses specified in Section 5.7 (excluding copies to counsel):
(a) within 120 days after the end of each fiscal year of the
Company, copies of the consolidated balance sheet of the Company and its
subsidiaries as at the end of such year, and consolidated statements of
income and cash flows of the Company and its subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on by independent certified public accountants of nationally
recognized standing; and
33
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, copies of the unaudited
consolidated balance sheet of the Company and its subsidiaries as at the
end of such quarter, and consolidated statements of income and cash flows
of the Company and its subsidiaries for such quarter, setting forth in each
case in comparative form the figures for the previous year, certified by an
officer of the Company as being fairly stated in all material respects
(subject to normal year-end audit adjustments).
34
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
XXXXXX AMERICAN INVESTMENT CORP.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
VESTAR CAPITAL PARTNERS III, L.P.
By: Vestar Associates III, L.P.,
its General Partner
By: Vestar Associates Corporation
III, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
A&M INVESTMENT ASSOCIATES #7, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
35
CO-INVESTORS:
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Its: Managing Member
Cerberus Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx
XXXXXXXXXX ASSOCIATES 1998, L.P.
By: /s/ Xxxxx Xxxxx-xxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx-xxx Xxxxx
Its: Managing Partner
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxx
36
GOLDEN ARROW PARTNERS
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: General Partner
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxx
GLEACHER V, L.P.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: General Partner
c/o Gleacher NatWest, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
37
CDI CAPITAL PARTNERS
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: General Partner
c/x Xxxxxx Management Consulting
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx
/s/ Xxxxx Xxxxxxxx
For Xxxx X. Xxxxxxx, Xx.
As Attorney-in-fact
---------------------------------
XXXX X. XXXXXXX, XX.
c/o Vestar Capital Partners
Seventeenth Street Plaza
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/ Xxxxx X. Xxxxx, Xx.
---------------------------------
XXXXX X. XXXXX, XX.
c/o Vestar Capital Partners
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
38
MANAGEMENT INVESTORS:
/s/ Xxxxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxxxx Xxxxxxxxx
/s/ Xxxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
/s/ Xxxx Xxxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx Xxxxx
/s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxx
/s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
/s/ Xxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxx
39
/s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
/s/ Xxxx Xxxxx, Xx.
---------------------------------
Name: Xxxx Xxxxx, Xx.
/s/ Xxxxx Xxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
ORIGINAL EQUITY HOLDERS:
SOCIETE ANONYME D'ETUDES ET DE PARTICIPATIONS
INDUSTRIELLES ET COMMERCIALES
By: /s/ Xxxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Chairman of the Board
SES
By: /s/ B. De Bourepas
------------------------------
Name: B. De Bourepas
Title: Chairman
HOLBETON LIMITED
By: /s/ X. X. Xxxxxxx /s/ X. X. Xxxxxx
------------------- -------------------
Name: X. X. Xxxxxxx X. X. Xxxxxx
Title: Director Director
CDR PARTICIPATIONS
By:
------------------------------
Name:
Title:
CONSORTIUM DE REALISATION SAS
By:
------------------------------
Name:
Title:
