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EXHIBIT 10.1
EYE CARE CENTERS OF AMERICA, INC.
STOCKHOLDERS' AGREEMENT
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XXX XXXX XXXXXXX XX XXXXXXX, INC.
STOCKHOLDERS' AGREEMENT
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS ................................................................. 1
ARTICLE II
COVENANTS AND CONDITIONS ................................................... 9
2.1 RESTRICTIONS ON TRANSFERS; RIGHTS OF FIRST REFUSAL .............. 9
2.2 CALL BY THE COMPANY ............................................. 14
2.3 TAG ALONG ....................................................... 15
2.4 DRAG ALONG ...................................................... 17
2.5 PREEMPTIVE RIGHTS ............................................... 17
2.6 CORPORATE GOVERNANCE ............................................ 19
2.7 WITHHOLDING OF TAXES ............................................ 21
ARTICLE III
REGISTRATION RIGHTS ......................................................... 21
3.1 DEMAND REGISTRATIONS .............................................. 21
3.2 PIGGYBACK REGISTRATION ............................................ 22
3.3 OBLIGATIONS OF THE COMPANY ........................................ 22
3.4 FURNISH INFORMATION ............................................... 24
3.5 EXPENSES OF REGISTRATION .......................................... 24
3.6 UNDERWRITING ...................................................... 24
3.7 INDEMNIFICATION ................................................... 25
3.8 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934 ..................... 27
3.9 NO INCONSISTENT AGREEMENTS ........................................ 28
3.10 STOCK SPLIT ....................................................... 28
3.11 LOCK-UP AGREEMENTS ................................................ 28
ARTICLE IV
MISCELLANEOUS ............................................................... 28
4.1 REMEDIES .......................................................... 28
4.2 ENTIRE AGREEMENT; AMENDMENT ....................................... 29
4.3 SEVERABILITY ...................................................... 29
4.4 NOTICES ........................................................... 29
4.5 BINDING EFFECT; ASSIGNMENT ........................................ 30
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4.6 GOVERNING LAW ..................................................... 30
4.7 TERMINATION ....................................................... 30
4.8 RECAPITALIZATIONS, EXCHANGES, ETC ................................. 30
4.9 STOCKHOLDER REPRESENTATIVES ....................................... 31
4.10 ACTION NECESSARY TO EFFECTUATE THE AGREEMENT ...................... 32
4.11 PURCHASE FOR INVESTMENT; LEGEND ON CERTIFICATE .................... 32
4.12 EFFECTIVENESS OF TRANSFERS ........................................ 33
4.13 ADDITIONAL STOCKHOLDERS ........................................... 33
4.14 NO WAIVER ......................................................... 33
4.15 COUNTERPARTS ...................................................... 33
4.16 HEADINGS .......................................................... 34
4.17 CONSENT TO JURISDICTION ........................................... 34
4.18 WAIVER OF RIGHT TO JURY TRIAL ..................................... 34
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STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (the "AGREEMENT") is entered into as of
the 24th day of April, 1998, by and among Eye Care Centers of America, Inc., a
Texas corporation (the "COMPANY"), those persons listed as Management Holders on
the signature pages hereof (the "MANAGEMENT HOLDERS"), those persons listed as
Xxx Holders on the signature pages hereof (the "XXX HOLDERS"), and those persons
listed as Continuing Holders on the signature pages hereof (the "CONTINUING
HOLDERS"). The Management Holders, the Xxx Holders, and the Continuing Holders
are sometimes collectively referred to herein as the "STOCKHOLDERS."
WHEREAS, a certain Stockholders' Agreement dated October 7, 1993, was
entered into by the Company, the Continuing Holders, certain Management Holders
and other parties named therein (the "1993 STOCKHOLDERS' AGREEMENT");
WHEREAS, upon consummation of the transactions contemplated by the
Recapitalization Agreement and by those certain subscription and stock purchase
agreements of even date (the "STOCK SUBSCRIPTION AGREEMENTS"), the Stockholders
will own shares of Common Stock and Preferred Stock;
WHEREAS, the 1993 Stockholders' Agreement is terminated pursuant to its
terms upon the consummation of the transactions contemplated by the
Recapitalization Agreement as the Xxxxx Holders will then hold less than fifteen
percent (15%) of the capital stock of the Company, on a fully-diluted basis;
WHEREAS, it is a condition precedent to the obligations of the
Stockholders to purchase shares of Common Stock and Preferred Stock under the
Stock Subscription Agreements that this Agreement be executed and delivered by
the Company and each of the other Stockholders; and
WHEREAS, all of the Stockholders desire to enter into this Agreement
for the purpose of regulating certain aspects of the relationships of the
Stockholders with regard to each other and to the Company.
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties to this
Agreement, intending to be legally bound, mutually agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall be
defined as follows:
The "1933 ACT" shall mean the Securities Act of 1933, as amended, or
any successor statute.
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The "1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute.
An "AFFILIATE" of a specified person, corporation or other entity shall
mean a person, corporation or other entity which, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the person, corporation or other entity specified and, when
used with respect to the Company or any Subsidiary of the Company, shall include
any holder of capital stock or any officer or director of the Company or any
Subsidiary of the Company.
"AGREEMENT" shall mean this Stockholders' Agreement, as amended or
supplemented from time to time.
An "ASSOCIATE" shall mean, when used to indicate a relationship with
any Person, (a) any corporation or organization of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of ten
percent (10%) or more of any class of equity securities, (b) any trust or other
estate in which such Person has a substantial beneficial interest or as to which
such Person serves as a trustee or in a similar fiduciary capacity and (c) any
relative of such Person who has the same home as such Person, is a parent, aunt
or uncle, sibling, spouse, in-law, child, niece or nephew or grandchild of such
Person, or the spouse of any of them, or is a director or officer of the Company
or any Subsidiary of the Company. Neither the Company nor any of its
Subsidiaries shall be deemed an Associate of any Stockholder.
"BUSINESS DAY" shall mean any day other than Saturday, Sunday or legal
holiday on which commercial banks are authorized to be closed in Boston,
Massachusetts.
"CALL EVENT" shall have the meaning given to such term in
Section 2.2(a).
"CALL GROUP" shall have the meaning given to such term in
Section 2.2(a).
"CALL NOTICE" shall have the meaning given to such term in
Section 2.2(a).
"CALL OPTION" shall have the meaning given to such term in
Section 2.2(a).
"CALL PRICE" shall have the meaning given to such term in
Section 2.2(b).
"CALL SECURITIES" shall have the meaning given to such term in
Section 2.2(a).
"CAUSE" shall have the meaning set forth below, except with respect to
any Management Holder who is employed by the Company or one of its Subsidiaries
pursuant to an effective written employment agreement between the Company and/or
one of its Subsidiaries and such Management Holder, in which event the
definition of "Cause" set forth in such employment
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agreement shall be deemed to be the definition of "Cause" herein solely for such
Management Holder and only for so long as such employment agreement remains
effective.
In all other events, the term "Cause" shall mean that the Board of
Directors of the Company has determined, in its reasonable judgment, that any
one or more of the following has occurred:
(i) The Management Holder shall have been convicted of, or shall
have pleaded guilty or NOLO CONTENDERE to, any felony or a crime
involving dishonesty or moral turpitude;
(ii) The Management Holder shall have committed any fraud,
embezzlement, misappropriation of funds, breach of fiduciary duty or
other act of dishonesty;
(iii) The Management Holder shall have failed to perform in any
material respect (other than by reason of disability) his duties and
responsibilities to the Company and its Affiliates;
(iv) The Management Holder shall have breached in any material
respect any of the provisions of this Agreement;
(v) The Management Holder shall have engaged in conduct
reasonably likely to make the Company or any of its Affiliates subject
to civil or criminal liabilities other than those arising from the
Company's normal business activities; or
(vi) A failure by the Management Holder to take or refrain from
taking any material action as specified in written directions of the
Board of Directors of the Company within a reasonable time following
receipt by the Management Holder of such written directions.
"CHANGE OF CONTROL" shall mean a transaction, or series of related
transactions, which results in holders of ten percent (10%) or less of the
Company's Common Stock (including shares of Common Stock issuable upon exercise
of Vested Stock Options and upon conversion of all securities then convertible
into shares of Common Stock) immediately prior to such transaction or series of
related transactions, holding in excess of fifty percent (50%) of the Company's
Common Stock (including shares of Common Stock issuable upon exercise of Vested
Stock Options and upon conversion of all securities then convertible into shares
of Common Stock) immediately following such transaction, or series of related
transactions.
"COMMON STOCK" shall mean the Company's Common Stock, par value $.01,
that the Company may be authorized to issue from time to time and any stock into
which such Common Stock may hereafter be changed or for which such Common Stock
may be exchanged after giving effect to the terms of such change or exchange (by
way of reorganization, recapitalization,
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merger, consolidation or otherwise) and shall also include any common stock of
the Company hereafter authorized and any capital stock of the Company of any
other class hereafter authorized which is not preferred as to dividends or
distribution of assets in liquidation over any other class of capital stock of
the Company or which has ordinary voting power for the election of directors of
the Company.
"COMPANY" shall mean Eye Care Centers of America, Inc., a Texas
corporation, and its successors and assigns.
"COMPETITOR OF THE COMPANY" shall mean any person that is engaged in,
or who controls any person that is engaged in, any business involving the
manufacture, provision or sale through any distribution channel of eye wear
and/or contact lenses.
"CONTINUING HOLDERS" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"DEEMED OFFER DATE" shall have the meaning given to such term in
Section 2.1(d)(iii).
"XXXXX AFFILIATE" shall have the meaning given such term in
Section 2.6(f).
"XXXXX HOLDERS" shall mean those Stockholders of the Company that are
Affiliates of Xxxxx Capital Management Incorporated.
"DESIGNATED EMPLOYEE" shall have the meaning given to such term in
Section 2.2(d).
"DISABILITY" shall mean permanent disability within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, unless
otherwise defined in a separate written employment agreement between the Company
and/or one of its Subsidiaries and the person whose disability is in question.
"FAIR MARKET VALUE" shall mean the fair value of the applicable Shares
as of the applicable date on the basis of a sale of such Shares in an arms
length private sale between a willing buyer and a willing seller, neither acting
under compulsion (or, in the case of a Vested Stock Option, the fair value of
the Shares that may then be purchased by the holder of such Vested Stock Option
upon exercise thereof, determined as described below, minus the exercise price
applicable thereto). In determining such Fair Market Value, no discount shall be
taken for constituting a minority interest and no upward adjustment or discount
shall be taken relating to the fact that the Shares in question are subject to
the restrictions and entitled to the rights provided hereunder. Such Fair Market
Value shall be determined in good faith by the Board of Directors of the
Company. The parties hereto agree that the Fair Market Value per share of Common
Stock and Preferred Stock, respectively, as of the date of the consummation of
the Recapitalization and until the first anniversary of the closing date under
the Recapitalization Agreement, shall be deemed to equal the purchase price per
share of Common Stock and
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Preferred Stock, respectively, paid by the Xxx Holders in connection with the
Recapitalization (subject to appropriate adjustments for stock splits,
recapitalizations and the like).
"HOLDER" means the person who is then the record owner of Registrable
Securities which have not been sold to the public.
"INITIATING STOCKHOLDER" shall have the meaning given to such term in
Section 2.3(a).
"INVESTMENT PRICE" shall mean with respect to the purchase of Shares
held by a Management Holder under Section 2.2, an amount per Share equal to the
greater of (i) the per share price paid for such Shares by such Management
Holder at the time of the initial purchase thereof or (ii) the purchase price
per Share paid by the Xxx Holders in connection with the Recapitalization
(subject to appropriate adjustments for stock splits, recapitalizations and the
like).
"INVOLUNTARY TRANSFER" shall mean any involuntary sale, transfer,
encumbrance or other disposition by or in which any Stockholder shall be
deprived or divested of any right, title or interest in or to any Shares,
including without limitation, any levy of execution, transfer in connection with
divorce or other marital dissolution proceedings, transfer in connection with
bankruptcy, reorganization, insolvency or similar proceedings, transfer in
connection with foreclosure upon a pledge, or any transfer to a public officer
or agency pursuant to any abandoned property or escheat law.
"XXX HOLDERS" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"XXX HOLDERS DESIGNEES" shall have the meaning given such term in
Section 2.6(a).
"XXX XXXXXX REPRESENTATIVE" shall have the meaning given to such term
in Section 4.9(c).
"MANAGEMENT HOLDERS" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"NEW SECURITIES" shall mean any equity security of the Company, whether
now authorized or not, and any rights, options or warrants to purchase any
equity security of the Company, which the Company proposes to issue or sell to
any person; PROVIDED, HOWEVER, that the term "NEW SECURITIES" does not include
(i) securities issued as a stock dividend to all holders of a particular class
of equity securities of the Company PRO RATA or upon any subdivision or
combination thereof; (ii) shares of Common Stock purchased after the date hereof
by the Company from Management Holders and reissued to new or existing
Management Holders; (iii) options to purchase shares of Common Stock granted to
one or more Management Holders pursuant to a stock option plan approved by the
Company's directors and stockholders; (iv) shares of Common Stock issued upon
the exercise of Vested Stock Options pursuant to their
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terms; (v) securities of the Company issued in connection with a Public Offering
or a merger; (vi) shares of Common Stock issued to employees of, or consultants
to, the Company or any of its Subsidiaries, or any of their respective designees
who would constitute Permitted Transferees hereunder; and (vii) debt securities
or preferred stock of the Company, including such securities which are
convertible into or exchangeable for shares of Common Stock.
"NON-XXX HOLDERS" shall have the meaning given to such term in
Section 2.1(c).
"OFFERED SHARES" shall have the meaning given to such term in
Section 2.1(c)(i).
"OFFER PRICE" shall have the meaning given to such term in
Section 2.1(c)(i).
"PARTICIPATING OFFEREE" shall have the meaning given to such term in
Section 2.3(a).
"PARTICIPATION NOTICE" shall have the meaning given to such term in
Section 2.3(a).
"PARTICIPATION SECURITIES" shall have the meaning given to such term in
Section 2.3(a).
A "PERMITTED TRANSFER" shall mean:
(a) a Transfer of Shares between any Stockholder who is a natural
person and such Stockholder's spouse, children, parents or siblings or a trust
for the benefit of any of them, provided that with respect to any such Transfer,
the Stockholder retains, as trustee or by some other means, the sole authority
to vote such Shares and to direct their disposition;
(b) a Transfer of Shares by a Xxx Xxxxxx to the partners,
stockholders, officers, employees or consultants of such Xxx Xxxxxx or to an
investment partnership affiliated with the Xxx Holders;
(c) a Transfer of Shares between or among the Xxx Holders;
(d) a Transfer of Shares by a Xxx Xxxxxx following the Company's
initial Public Offering;
(e) a Transfer of Shares between any Stockholder who is a natural
person and such Stockholder's guardian or conservator; and
(f) a BONA FIDE pledge of Shares by a Stockholder to a bank or
financial institution.
A "PERMITTED TRANSFEREE" shall mean any person or entity who shall have
acquired and who shall hold Shares pursuant to a Permitted Transfer and who has
executed a counterpart of this Agreement.
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"PERSON" or "PERSON" means an individual, corporation, partnership,
trust, unincorporated association, or government (or any agency or political
subdivision thereof).
"PREFERRED STOCK" means the Company's preferred stock, par value $0.01
per share which the Company may be authorized to issue from time to time.
"PUBLIC FLOAT DATE" shall mean the date on which shares of Common Stock
shall have been sold pursuant to one or more Public Offerings in which the
aggregate gross proceeds to the Company of such shares equal or exceed $50
million.
A "PUBLIC OFFERING" shall mean the completion of a sale of Common Stock
pursuant to a registration statement which has become effective under the 1933
Act, excluding registration statements on Form X-0, X-0 or similar limited
purpose forms.
"RECAPITALIZATION" shall mean the transactions contemplated by the
Recapitalization Agreement.
"RECAPITALIZATION AGREEMENT" shall mean the Recapitalization Agreement
dated March 6, 1998, among ECCA Merger Corp., Eye Care Centers of America, Inc.
and the sellers named therein, as amended from time to time.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the 1933 Act and applicable state securities laws for the
purpose of effecting a public sale of securities.
"REGISTRATION EXPENSES" shall mean all expenses (other than Selling
Expenses) incurred by the Company in compliance with Sections 3.1 or 3.2 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
registration, the reasonable fees and disbursements of one counsel for all the
selling Holders and, if requested by the Xxx Holders, the reasonable fees and
disbursements of one counsel for the Xxx Holders as a group.
"REGISTRABLE SECURITIES" shall mean (i) all shares of Common Stock held
by any party hereto as of the date hereof, (ii) all shares of Common Stock
hereinafter acquired by any Stockholder, and (iii) any other common equity
securities of the Company issued in exchange for, upon a reclassification of, or
in a distribution with respect to, such Common Stock. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (a) a registration statement (other than a registration statement on Form
S-8) with respect to the sale of such securities shall have become effective
under the 1933 Act and such securities shall have been disposed of in accordance
with such registration statement, (b) a registration statement on Form S-8 with
respect to such securities shall have become effective under the 1933 Act, (c)
such securities shall have been sold in a Rule 144 Transaction (or any successor
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provision) under the 1933 Act, (d) such securities shall have been otherwise
transferred and new certificates for them not bearing a legend restricting
further transfer shall have been delivered by the Company or (e) such securities
shall have been issued and then ceased to be outstanding.
"RULE 144 TRANSACTION" means a Transfer of Shares (A) complying with
Rule 144 under the 1933 Act as such Rule 144 or a successor thereto is in effect
on the date of such Transfer, provided such Transfer is made pursuant to a
"broker's transaction" as defined in clauses (i) and (ii) of paragraph (g) of
Rule 144 as in effect on the date hereof, and (B) occurring at a time when
shares of any class of Common Stock are registered pursuant to Section 12 of the
1934 Act.
"SALE REQUEST" shall have the meaning given such term in
Section 2.4(a).
"SEC" means the Securities and Exchange Commission.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and transfer taxes applicable to the sale of Registrable Securities.
"SHARES" shall mean all (i) shares of Common Stock held by the
Stockholders from time to time, (ii) shares of Preferred Stock held by the
Stockholders from time to time, (iii) shares of Common Stock or Preferred Stock
subsequently held by Permitted Transferees who acquire them in one or more
Permitted Transfers, and (iv) securities of the Company or any of its
Subsidiaries issued in exchange for, upon reclassification of, or as a
distribution in respect of, any of the foregoing.
"STOCKHOLDER" shall mean any party hereto other than the Company,
including, without limitation, Permitted Transferees.
"STOCK SUBSCRIPTION AGREEMENT" shall have the meaning given such term
in the recitals to this Agreement.
"SUBSIDIARY" with respect to any entity (the "PARENT") shall mean any
corporation, firm, association or trust of which such parent, at the time in
respect of which such term is used, (i) owns directly or indirectly more than
fifty percent (50%) of the equity or beneficial interest, on a consolidated
basis, and (ii) owns directly or indirectly through one or more Subsidiaries, or
controls with power to vote, shares of capital stock or beneficial interest
having the power to cast at least a majority of the votes entitled to be cast
for the election of directors, trustees, managers or other officials having
powers analogous to those of directors of a corporation. Unless otherwise
specifically indicated, when used herein the term Subsidiary shall refer to a
direct or indirect Subsidiary of the Company.
"TAKE ALONG GROUP" shall have the meaning given such term in
Section 2.4(a).
"THIRD PARTY" means any Person other than the Company or any of the
Stockholders.
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"THL FUND IV" shall have the meaning given such term in Section 2.6(a).
"TRANSFER" shall mean to transfer, sell, assign, pledge, hypothecate,
give, create a security interest in or lien on, place in trust (voting or
otherwise), assign or in any other way encumber or dispose of, directly or
indirectly and whether or not by operation of law or for value, any Shares.
"TRANSFER NOTICE" shall have the meaning given such term in
Section 2.1(c)(i).
"VESTED STOCK OPTIONS" shall mean fully vested stock options which have
been granted to Management Holders pursuant to a stock option plan approved by
the Company's directors and stockholders.
"VOLUNTARY TERMINATION" shall include any voluntary termination of
employment with the Company by a Management Holder.
ARTICLE II
COVENANTS AND CONDITIONS
2.1 RESTRICTIONS ON TRANSFERS; RIGHTS OF FIRST REFUSAL.
Except as provided in Section 2.1(d) and 2.1(e), no Stockholder shall
Transfer all or any part of the Shares owned by him or it to any Person unless
such Stockholder first complies with the applicable terms and conditions set
forth below:
(a) TRANSFERS BY MANAGEMENT HOLDERS. Until the fifth
anniversary of the closing date under the Recapitalization Agreement, none of
the Management Holders shall Transfer any Shares except for Permitted Transfers
to Permitted Transferees. On and after the fifth anniversary of the closing date
under the Recapitalization Agreement, none of the Management Holders shall
Transfer any Shares except for (1) Transfers pursuant to Section 2.1(c) or (2)
Permitted Transfers to a Permitted Transferee. Any such Permitted Transferee
shall be required to execute and deliver to the Company a counterpart of this
Agreement, which shall evidence such Permitted Transferee's agreement that the
Shares being transferred shall continue to be subject to this Agreement and that
as to such Shares the Transferee shall be bound by the restrictions of this
Agreement (i) in the case of any Transferee other than a Stockholder, as a
Management Holder, and (ii) in the case of a Stockholder, as such Stockholder is
bound hereunder.
(b) TRANSFERS BY CONTINUING HOLDERS.
(i) Until the fifth anniversary of the closing date under
the Recapitalization Agreement, none of the Continuing Holders shall Transfer
any shares except for Permitted Transfers to Permitted Transferees. On and after
the fifth anniversary of the closing
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date under the Recapitalization Agreement, none of the Continuing Holders shall
Transfer any Shares except for (1) Transfers pursuant to Section 2.1(c), or (2)
Permitted Transfers to a Permitted Transferee, who shall be required to execute
and deliver to the Company a counterpart of this Agreement, which shall evidence
such Permitted Transferee's agreement that the Shares being transferred shall
continue to be subject to this Agreement and that as to such Shares the
Permitted Transferee shall be bound by the restrictions of this Agreement (A) in
the case of any Permitted Transferee other than a Stockholder, as a Continuing
Holder, and (B) in the case of a Stockholder, as such Stockholder is bound
hereunder. Notwithstanding clause (A) of the immediately preceding sentence, in
no event shall a Transferee of Shares (other than a Permitted Transferee and as
provided in Section 2.1(b)(ii)) from a Continuing Holder, or Permitted
Transferee thereof, be entitled to the benefit of any rights or privileges set
forth in Section 2.3, Section 2.5 or Section 2.6, including without limitation
Section 2.6(f), of this Agreement; PROVIDED, HOWEVER, that any such Transferee
shall be required to vote his or its Shares in accordance with, and take all
actions required to be taken pursuant to, the provisions of Section 2.6 of this
Agreement other than the provisions of Section 2.6(f).
(ii) In the event of a Transfer of Shares by a Xxxxx
Holder pursuant to Section 2.1(e)(iv), the Transferee shall be entitled to the
benefit of the rights and privileges set forth in Section 2.3, Section 2.5 and
Section 2.6(f) as a Xxxxx Holder, and shall be bound by all the restrictions of
this Agreement as a Xxxxx Holder. In the event of a Transfer of Shares by a
Xxxxx Holder pursuant to Section 2.1(e)(viii), the Transferee (1) shall be
entitled to the benefits of the rights and privileges set forth in Section 2.3
as a Continuing Holder, and shall be bound by all the restrictions of this
Agreement as a Continuing Holder, (2) shall not be entitled to the benefit of
any of the rights or privileges set forth in Section 2.5 or Section 2.6,
including without limitation Section 2.6(f), and (3) shall be required to vote
its Shares in accordance with, and take all actions required to be taken
pursuant to, the provisions of Section 2.6 other than the provisions of Section
2.6(f). No Transferee of Shares from a Xxxxx Holder pursuant to Section
2.1(e)(viii) shall be entitled to Transfer (other than pursuant to a Permitted
Transfer) any of the benefits of any of the rights or privileges set forth in
Section 2.3.
(c) RIGHTS OF FIRST REFUSAL.
(i) None of the Management Holders or Continuing Holders
(collectively, the "NON-XXX HOLDERS"), shall Transfer any Shares except for
Permitted Transfers to a Permitted Transferee, or pursuant to the provisions of
this Section 2.1(c). If a Non-Xxx Xxxxxx proposes to Transfer Shares to anyone
other than a Permitted Transferee, such Non-Xxx Xxxxxx shall give notice of such
proposed Transfer to the Company and the Xxx Holders. Such notice (the "TRANSFER
NOTICE") shall state that it is being delivered under this Section 2.1(c) and
that such offer is a BONA FIDE offer to purchase such Shares. The Transfer
Notice also shall set forth the terms and conditions of such offer, including
the name of the prospective purchaser, the proposed purchase price per share of
such Shares (the "OFFER PRICE"), the payment terms (including a description of
any proposed non-cash consideration), the type of disposition and the number of
such Shares to be Transferred (the "OFFERED SHARES"). The Transfer Notice shall
state
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further (A) that the Company and the Xxx Holders (collectively the "OFFEREES")
may acquire, in accordance with the provisions of this Agreement, any of the
Offered Shares for the price and upon the other terms and conditions, including
deferred payment and non-cash consideration (in each case if applicable), set
forth therein, (B) that, if all or part of the consideration to be paid by the
prospective purchaser consists of securities of another entity, the Offerees may
elect to acquire the portion of the Offered Shares to be sold for such
securities of another entity by the payment of cash with a comparable value, (C)
that the Offerees may not purchase any of such Offered Shares unless
collectively the Offerees purchase all of such Offered Shares, and (iv) that if
all such Offered Shares are not purchased by the Offerees, the Offerees may
exercise their rights provided pursuant to Section 2.4 hereof.
(ii) For a period of 30 days following the last date on
which an Offeree receives the Transfer Notice (the "OPTION PERIOD"), the Company
may, by notice in writing to the Non-Xxx Xxxxxx delivering such Transfer Notice,
elect in writing to purchase all or any portion of the Offered Shares. To the
extent that the Company elects to purchase less than all the Offered Shares,
each of the Xxx Holders may by notice in writing to the Non-Xxx Xxxxxx
delivering such Transfer Notice elect in writing to purchase at the Offer Price
their respective pro rata portions of any Offered Shares which the Company has
not elected to purchase. Such PRO RATA allocation shall be based on the number
of shares of Common Stock each of the Xxx Holders owns in relation to the total
number of shares of Common Stock owned by all of the Xxx Holders; PROVIDED that
if any Xxx Xxxxxx does not elect to purchase the Offered Shares which such Xxx
Xxxxxx may purchase pursuant to this Section 2.1(c), then the other Xxx Holders
may make an overallotment election to purchase the remaining Offered Shares. The
right to purchase any such remaining Offered Shares shall be allocated PRO RATA
to the Xxx Holders making such overallotment election based on the number of
shares of Common Stock owned by each of them compared to the total number of
shares of Common Stock owned by all Xxx Holders making such overallotment
election.
(iii) The closing of the purchase of any Offered Shares
pursuant to Section 2.1(c)(ii) hereof shall take place at the principal office
of the Company on the 60th day following the last day on which an Offeree
receives the Transfer Notice. At such closing, each purchaser of Offered Shares
shall deliver the Offer Price, on the same terms as set forth in the Transfer
Notice (including any non-cash consideration described therein), payable in
respect of the Offered Shares being purchased by such purchaser to the Non-Xxx
Xxxxxx thereof who delivered the Transfer Notice, against delivery of original
stock certificates, and stock powers duly endorsed in favor of each such
purchaser, representing the Offered Shares being acquired by such purchaser. All
of the foregoing deliveries will be deemed to be made simultaneously and none
shall be deemed completed until all have been completed.
(iv) If the Offerees do not collectively purchase all of
the Offered Shares, or if the Offerees fail to purchase all of the Offered
Shares in accordance with Section 2.1(c)(ii), then all, but not less than all of
the Offered Shares may be Transferred, but only in accordance with
Section 2.1(c)(v) and the terms of the Transfer Notice, within 240 days after
the
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last date on which an Offeree receives the Transfer Notice, after which, if the
Offered Shares have not been Transferred, all restrictions contained herein
shall again be in full force and effect.
(v) Any Shares Transferred pursuant to this
Section 2.1(c) shall remain subject to the Transfer restrictions of this
Agreement and if a Transferee is not a Stockholder prior to such Transfer then
such Transferee shall execute and deliver to the Company a counterpart of this
Agreement, which shall evidence such Transferee's agreement that the Shares
being Transferred shall continue to be subject to this Agreement and that as to
such Shares the Transferee shall be bound by the restrictions of this Agreement
as a Management Holder, if the Transferee was a Management Holder, or as a
Continuing Holder, if the Transferee was a Continuing Holder.
(d) INVOLUNTARY TRANSFERS.
(i) Any Involuntary Transfer of Shares owned by a
Stockholder shall be subject to the prior rights of the Company and Stockholders
hereunder and any such Involuntary Transfer shall be deemed to be an offer made
by the Stockholder who is the subject of such Involuntary Transfer to sell said
Shares at the Fair Market Value to the Company.
(ii) Any Stockholder whose Shares are the subject of an
Involuntary Transfer shall notify the Company in writing within ten (10) days of
such Involuntary Transfer, but the failure to give such notice shall not affect
the rights of the parties hereunder. Upon the Company's receipt of such notice
(or if no notice is received, upon the senior management of the Company becoming
aware that such Involuntary Transfer has occurred or is about to occur), the
Company forthwith will notify the Xxx Holders of such receipt. The Company shall
act upon the deemed offer under this Section within the time periods and
following the applicable procedures set forth in this Section 2.1(d).
(iii) The Company may elect to purchase any or all of the
Shares subject to an Involuntary Transfer by delivering a written notice to the
Stockholder who is the subject of such Involuntary Transfer of the Company's
intent to purchase such Shares on or before the 90th day following the later to
occur of the date of the Company's receipt of written notice setting forth the
existence of such an Involuntary Transfer and the date of such Involuntary
Transfer (the later of such dates is referred to herein as the "DEEMED OFFER
DATE"). The closing of the purchase by the Company of any Shares pursuant to
this Section 2.1(d) shall take place at the principal office of the Company on
the 180th day following the Deemed Offer Date. At such closing, the Company
shall deliver to the Stockholder who is the subject of such Involuntary Transfer
the Fair Market Value of the Shares being acquired, against delivery of original
stock certificates and stock powers duly endorsed in favor of the Company
representing the Shares being acquired by the Company. The Company, at is
option, may pay the Fair Market Value of such Shares in the form of company
check, wire transfer, or delivery of a promissory note bearing interest at the
applicable federal rate and having a maturity date not later than five years
from the date of issuance thereof. All of the foregoing deliveries will be
deemed to have been made simultaneously and none shall be deemed completed until
all have been completed. All Shares which the Company does not elect to purchase
pursuant to this Section 2.1(d) may be Transferred pursuant to an Involuntary
Transfer.
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(e) EXCLUSIONS. The restrictions on Transfer and rights of
first refusal set forth in this Section 2.1 shall not apply to any of the
following:
(i) a Permitted Transfer of Shares (provided that the
Permitted Transferee executes and delivers a counterpart of this Agreement
agreeing to be bound hereby as set forth in this Section 2.1);
(ii) a Transfer of Shares pursuant to Sections 2.2, or
2.4;
(iii) a Transfer of Shares by Participating Offerees
pursuant to Section 2.3, and a Transfer of Shares by an Initiating Stockholder
pursuant to Section 2.3 who has complied with the applicable provisions of
Section 2.1; provided that the five year prohibitions on Transfers by Management
Holders and Continuing Holders set forth in Sections 2.1(a) and 2.1(b),
respectively, shall not impair their ability to sell Participation Securities
pursuant to and in accordance with Section 2.3 as a Participating Offeree (but
not as an Initiating Stockholder);
(iv) a Transfer of Shares by a Xxxxx Holder to one or
more investment partnerships that are Affiliates of such Xxxxx Holder;
(v) a PRO RATA distribution, without consideration, by a
Xxxxx Holder to its limited partners after the expiration of six months
following the closing date under the Recapitalization Agreement;
(vi) a Transfer of Shares pursuant to a Public Offering;
(vii) a Transfer of shares of Common Stock by any
Stockholder other than a Management Holder after the expiration of 180 days
following a Public Offering pursuant to a Rule 144 Transaction;
(viii) a Transfer of Shares by a Xxxxx Holder on one
occasion, after the expiration of six months following the closing under the
Recapitalization Agreement, to no more than one financial institution which is
not a Competitor of the Company; or
(ix) a Transfer of shares of Common Stock by a Management
Holder after the expiration of 180 days following a Public Offering pursuant to
a Rule 144 Transaction, subject to the following volume limitations:
The number of shares of Common Stock and Preferred Stock
which each Management Holder is permitted, at any time, to Transfer pursuant to
clause (ix) of this Section 2.1(e) shall not exceed the difference between
(A) the product of (x) the number of shares of
Common Stock or Preferred Stock, as the case may be, then owned by such
Management Holder multiplied by (y) a fraction, the numerator of which is the
aggregate number of shares of Common Stock or Preferred Stock, as the case may
be, which have been Transferred (other than pursuant to
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Permitted Transfers) by all the Xxx Holders at any time following consummation
of the Company's initial Public Offering, and the denominator of which is the
aggregate number of shares of Common Stock or Preferred Stock, as the case may
be, which are owned by all the Xxx Holders immediately following consummation of
the Company's initial Public Offering, less
(B) the aggregate number of shares of Common Stock
or Preferred Stock, as the case may be, which such Management Holder has
Transferred (other than Permitted Transfers) at any time following consummation
of the Company's initial Public Offering.
(f) ASSIGNMENT OF PURCHASE RIGHTS. The Company, by action of
its Board of Directors, may assign its rights to purchase Shares pursuant to
Section 2.1(c) and/or Section 2.1(d) to one or more Stockholders or members of
management of the Company or any of its Subsidiaries.
2.2 CALL BY THE COMPANY.
(a) If the employment of a Management Holder by the Company
or any of its Subsidiaries shall terminate (a "CALL EVENT") for any reason prior
to the earlier to occur of (i) the initial Public Offering or (ii) a Change of
Control, then the Company shall have the right to purchase (the "CALL OPTION"),
by delivery of a written notice (the "CALL NOTICE") to such terminated
Management Holder no later than ninety (90) days after the date of such Call
Event, and such Management Holder and such Management Holder's Permitted
Transferees (the "CALL GROUP") shall be required to sell all (but not less than
all) of the Shares and Vested Stock Options which are owned by the members of
the Call Group on the date of such Call Event (collectively, the "CALL
SECURITIES") at a price per share equal to the Call Price (as defined in
Section 2.2(b) below) of such Shares as of the date the Call Notice is
delivered.
(b) For purposes of this Section 2.2, the term "CALL PRICE"
shall mean,
(i) with respect to Shares of Common Stock,
(A) in the event of a termination of a Management
Holder without Cause or by reason of death or Disability, the Fair Market Value
of such shares of Common Stock; and
(B) in the event of a termination of a Management
Holder for Cause, in the event of the Voluntary Termination by a Management
Holder, or in the event of a termination for any reason other than those
expressly provided in subparagraph (A) above, the lower of (x) the Investment
Price of such shares of Common Stock or (y) the Fair Market Value of such shares
of Common Stock; and
(ii) with respect to any Vested Stock Option, the
difference between (x) the Call Price, as determined above, payable in respect
of shares of Common Stock minus (y) the exercise price of such Vested Stock
Option.
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(c) The closing of any purchase of Call Securities by the
Company pursuant to paragraph 2.2(a) shall take place at the principal office of
the Company no later than the 180th day after the Call Event. At such closing,
the Company shall deliver to the Call Group consideration in an amount equal to
the aggregate Call Price payable in respect of such Call Securities, against
delivery of (i) original stock certificates and stock powers duly endorsed in
favor of the Company representing the Call Securities and (ii) the delivery of
an executed agreement, in form reasonably satisfactory to the Company,
evidencing the cancellation of any Vested Stock Options. The Company, at its
option, may pay the consideration for such Call Securities in the form of
company check or wire transfer, PROVIDED, HOWEVER, that if at the time of such
closing, the Company is then prohibited from redeeming with immediately
available funds all or a portion of the Call Securities pursuant to the terms of
any credit facility, indenture or similar agreement or instrument then binding
on the Company, then the Company may deliver a promissory note bearing interest
at the applicable federal rate and with a maturity date not later than five
years from the date of issuance thereof with respect to the Call Price or the
portion thereof not able to be paid in immediately available funds, and such
promissory note shall require the Company to make prepayments on the principal
amount thereof when and if permitted by the Company's credit facilities from
time to time. All of the foregoing deliveries will be deemed to be made
simultaneously and none shall be deemed completed until all have been completed.
(d) Notwithstanding anything set forth in this Section 2.2 to
the contrary, prior to the exercise by the Company of its Call Option to
purchase Call Securities pursuant to this Section 2.2, one or more new or
existing employees of the Company or any Subsidiary may be designated by the
Board of Directors of the Company (individually a "DESIGNATED EMPLOYEE" and
collectively, "DESIGNATED EMPLOYEES") who shall have the right, but not the
obligation, to exercise the Call Option and to acquire, in lieu of the Company,
some or all (as determined by the Company) of the Call Securities that the
Company is entitled to purchase from the Call Group hereunder, on the same terms
and conditions as set forth in Section 2.2(c) which apply to the repurchase of
Call Securities by the Company, except that the Designated Employees shall not
be entitled to deliver a promissory note for all or any portion of the Call
Price. Concurrently with any such purchase of Call Securities by any such
Designated Employee, such Designated Employee shall execute a counterpart of
this Agreement, whereupon such Designated Employee shall be deemed a "Management
Holder" and shall have the same rights and be bound by the same obligations as
the other Management Holders hereunder.
(e) If neither the Company nor any Designated Employee elects
to exercise the Call Option and deliver a Call Notice within 90 days of a Call
Event, then the Call Option provided in this Section 2.2 shall terminate with
respect to the Shares then owned by the Call Group, but the members of the Call
Group shall continue to hold such Call Securities pursuant to all of the other
provisions of this Agreement and other applicable agreements (including without
limitation, any restrictions on the vesting of stock options).
2.3 TAG ALONG. Except as provided in Section 2.3(d), no Stockholder
shall Transfer any Shares to a Third Party without complying with the following
terms and conditions set forth in Sections 2.3(a) and 2.3(b); PROVIDED, that
this Section 2.3 shall not in any way limit or affect the restrictions of
Section 2.1 and any Stockholder may be an Initiating Stockholder (as defined
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below) under this Section 2.3 only if such Transfer is made in accordance with
the applicable provisions of Section 2.1:
(a) After complying with the applicable provisions of
Section 2.1, the Stockholder (the "INITIATING STOCKHOLDER") desiring to Transfer
any Shares shall give not less than thirty (30) days' prior written notice of
such intended Transfer to each other Stockholder ("PARTICIPATING OFFEREE") and
to the Company. Such notice (the "PARTICIPATION NOTICE") shall set forth the
terms and conditions of such proposed Transfer, including the name of the
prospective Transferee, the number and class of Shares proposed to be
Transferred (the "PARTICIPATION SECURITIES") by the Initiating Stockholder, the
purchase price per Share proposed to be paid therefor and the payment terms and
type of Transfer to be effectuated. The Participation Notice shall state further
that the Initiating Stockholder complied with, or obtained waivers with respect
to compliance with, the applicable provisions of Section 2.1 hereof with respect
to such proposed Transfer and, if applicable, that the Offered Shares were
offered and not purchased pursuant to the right of first refusal provisions of
Sections 2.1(c). Within 20 days following the delivery of the Participation
Notice by the Initiating Stockholder to each Participating Offeree and to the
Company, each Participating Offeree shall, by notice in writing to the
Initiating Stockholder and to the Company, have the opportunity and right to
sell to the purchasers in such proposed Transfer (upon the same terms and
conditions as the Initiating Stockholder) up to that number of shares of the
same class of stock as the Participation Securities as shall equal the PRODUCT
OF (x) a fraction, the numerator of which is the number of shares of the same
class of stock as the Participation Securities which are owned by such
Participating Offeree as of the date of such Participation Notice and the
denominator of which is the sum of (A) the aggregate number of shares of the
same class of stock as the Participation Securities which are owned as of the
date of such Participation Notice by each Initiating Stockholder and by all
Participating Offerees plus (B) to the extent the Participation Securities are
comprised of shares of Common Stock, the aggregate number of shares of Common
Stock issuable pursuant to Vested Stock Options as of the date of such
Participation Notice by each Initiating Stockholder and by all Participating
Offerees, MULTIPLIED BY (y) the number of Participation Securities. The amount
of Participation Securities to be sold by any Initiating Stockholder shall be
reduced to the extent necessary to provide for such sales of Shares by
Participating Offerees. All allocations of Shares pursuant to this Section 2.3
shall be made on a class by class basis.
(b) At the closing of any proposed Transfer in respect of which
a Participation Notice has been delivered, the Initiating Stockholder, together
with all Participating Offerees electing to sell Shares, shall deliver to the
proposed Transferee certificates evidencing the Shares to be sold with stock
powers duly endorsed in favor of the proposed Transferee and shall receive in
exchange therefor the consideration to be paid or delivered by the proposed
Transferee in respect of such Shares as described in the Participation Notice.
(c) The Company agrees not to consummate any repurchase of
Shares from any Xxx Xxxxxx or Permitted Transferee thereof unless the Company
makes a concurrent pro rata repurchase of Shares from all Stockholders.
(d) The provisions of this Section 2.3 shall not apply to (i) a
Permitted Transfer of Shares, (ii) a Transfer of Shares pursuant to a Public
Offering, (iii) a Transfer of
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Shares pursuant to a Rule 144 Transaction, (iv) a Transfer of Shares pursuant to
or permitted by Sections 2.1, 2.2 or 2.4 hereof or (v) a Transfer of Shares
completed after the Public Float Date.
2.4 DRAG ALONG.
(a) Except as provided in Section 2.4(b), if fifteen (15%)
percent in interest of the Xxx Holders (referred to in this Section 2.4
collectively as the "TAKE ALONG GROUP") shall determine jointly to sell or
exchange (pursuant to a sale or transfer of Shares, merger, consolidation,
recapitalization or any similar transaction) any of their Shares in one or a
series of BONA FIDE arms-length transactions to a Third Party who is not an
Affiliate or an Associate of the Take Along Group, then, upon ten (10) days
written notice from the Take Along Group, which notice shall include reasonable
details of the proposed sale or exchange including the proposed time and place
of closing and the consideration to be received by the Stockholders (such notice
being referred to as the "SALE REQUEST"), each other Stockholder shall be
obligated to, and shall (i) sell, transfer and deliver, or cause to be sold,
transferred and delivered, to such Third Party, in the same transaction at the
closing thereof the same percentage of such Stockholder's shares of Common Stock
as is equal to the percentage of the shares of Common Stock owned by the Take
Along Group as of the date of the Sale Request that are being sold by the Take
Along Group in such transaction or transactions, (ii) deliver certificates for
all of his or its shares of Common Stock at the closing, free and clear of all
claims, liens and encumbrances, (iii) upon request, consent to the cancellation
of all Vested Stock Options for an amount per underlying share of Common Stock
equal to the difference between the consideration per share of Common Stock
referenced in the preceding clause (i) and the exercise price of such Vested
Stock Options, (iv) if stockholder approval of the transaction is required, vote
his or its Shares in favor thereof, and (v) approve, execute and deliver any and
all documents, certificates and instruments, related to the consummation of the
contemplated transaction, which documents, certificates and instruments are on
terms and conditions substantially the same as those being executed and
delivered by the Take Along Group. Each Stockholder (including the members of
the Take Along Group) shall receive the same consideration per share of Common
Stock upon any sale pursuant to this Section 2.4.
(b) In the event that any of the Stockholders fail to comply
with the provisions of Section 2.4(a), each of the other Stockholders hereby (i)
irrevocably appoints the Xxx Xxxxxx Representative as his, her or its
attorney-in-fact (with full power of substitution) to execute all agreements,
instruments and certificates and take all actions necessary or desirable to
effectuate any transaction hereunder; and (ii) grants to the Xxx Xxxxxx
Representative a proxy (which shall be deemed to be coupled with an interest and
irrevocable) to vote the Shares held by such Stockholder and exercise any
consent rights applicable thereto in favor of any transaction hereunder.
(c) The provisions of this Section 2.4 shall not apply to (i)
any Transfer pursuant to a Public Offering or pursuant to a Rule 144
Transaction, or (ii) any Transfer completed after the Public Float Date.
2.5 PREEMPTIVE RIGHTS
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(a) PREEMPTIVE RIGHTS ON ISSUANCES TO THIRD PARTIES.
(i) NOTICE FROM THE COMPANY. If the Company proposes to
issue or sell New Securities at any time prior to consummation of its initial
Public Offering, the Company shall give each Xxx Xxxxxx written notice of such
proposal, describing the type of New Securities and the price and the terms upon
which the Company proposes to issue the same. For a period of twenty (20) days
following the delivery of such notice by the Company, the Company shall be
deemed to have irrevocably offered to sell all of such New Securities to the Xxx
Holders, as a group, for the price and upon the terms specified in the notice.
Each Xxx Xxxxxx may exercise his or its right to purchase his or its PRO RATA
portion of such New Securities by giving written notice to the Company and
stating therein the quantity of New Securities to be purchased by such Xxx
Xxxxxx. A Xxx Xxxxxx'x PRO RATA portion, for purposes of this Section 2.5(a)(i),
is the ratio of the number of outstanding shares of Common Stock which such Xxx
Xxxxxx then owns to the total number of shares of Common Stock then owned by all
Xxx Holders. As used herein, "issue" (and variations thereof) includes sales or
transfers by the Company of treasury shares.
(ii) RIGHT OF OVER-ALLOTMENT. Each Xxx Xxxxxx shall have
a right of over-allotment such that if any Xxx Xxxxxx fails to exercise his or
its right hereunder to purchase his or its PRO RATA portion of New Securities,
the other Xxx Holders may purchase the non-purchasing Xxx Xxxxxx'x portion on a
PRO RATA basis (determined on the basis of the total number of shares which such
Xxx Xxxxxx then owns as compared to all shares of Common Stock owned by all Xxx
Holders who elect to purchase an over-allotment share pursuant to this Section
2.5(a)(ii)); such right of overallotment shall expire if not exercised within
five (5) days from the date such non-purchasing Xxx Xxxxxx fails to exercise his
or its right hereunder to purchase his or its PRO RATA share of New Securities.
(b) RIGHT TO PARTICIPATE IN ISSUANCES TO XXX HOLDERS.
(i) NOTICE. If any Xxx Xxxxxx elects to purchase any New
Securities pursuant to Section 2.5(a), then the Company shall give each Non-Xxx
Xxxxxx who then owns any shares of Common Stock written notice of such proposed
sale or issuance to the Xxx Holders, describing the type of New Securities, the
number of New Securities proposed to be issued to the Xxx Holders (the
"ALLOCATED NEW SECURITIES") and the price and terms upon which the Company
proposes to issue the Allocated New Securities to the Xxx Holders. For a period
of twenty (20) days following the delivery of such notice by the Company, the
Company shall be deemed irrevocably to have offered to sell to each Non-Xxx
Xxxxxx his or its PRO RATA share of the Allocated New Securities for the price
and upon the terms specified in the notice. A Non-Xxx Xxxxxx'x PRO RATA portion,
for purposes of the immediately preceding sentence shall be the ratio of the
number of outstanding shares of Common Stock which such Non-Xxx Xxxxxx then owns
of record to the total number of shares of Common Stock then outstanding. Each
Non-Xxx Xxxxxx may exercise his or its preemptive rights hereunder by giving
written notice to the Company and stating therein the quantity of Allocated New
Securities to be purchased. Each Non-Xxx Xxxxxx who has a preemptive right under
this Section 2.5(b) shall have a right of over-allotment such that if any
Non-Xxx Xxxxxx fails to exercise his or its right hereunder to purchase his or
its PRO RATA portion of Allocated New Securities, the other Non-Xxx Holders may
purchase the non- purchasing Non-Xxx Xxxxxx'x portion on a PRO RATA basis
determined on the basis of the total
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number of shares of Common Stock owned by such Non-Xxx Xxxxxx as compared to all
shares of Common Stock owned by all Non-Xxx Holders who elect to purchase an
over-allotment share pursuant to this sentence; such right of over-allotment
shall expire if not exercised within five (5) business days from the date such
non-purchasing Non-Xxx Xxxxxx fails to exercise his or its right hereunder to
purchase his or its PRO RATA share of Allocated New Securities.
(c) SALE BY THE COMPANY. If any Stockholder who has a
preemptive right under this Section 2.5 fails to exercise in full his or its
preemptive right within the allotted time day periods, the Company shall have
six (6) months thereafter to sell the New Securities with respect to which the
preemptive right was not exercised, at a price and upon terms no more favorable
to the purchasers thereof than specified in the Company's notices given pursuant
to Section 2.5(a) and (b).
(d) CLOSING. The closing of any issuance or sale pursuant to
this Section 2.5 shall take place as proposed by the Company with respect to the
New Securities to be issued, at which closing the Company shall deliver
certificates for the New Securities in the respective names of the purchasing
Stockholders against receipt of the consideration therefor.
2.6 CORPORATE GOVERNANCE. Until the tenth anniversary of the date
hereof:
(a) ELECTION OF DIRECTORS. The Company and the Stockholders
shall take all actions, including but not limited to (i) instructing their
director designees provided herein to take such actions and (ii) voting their
Shares, so that the Company's Board of Directors shall be solely comprised of
members designated as follows: (x) while any Shares are owned by Xxxxxx X. Xxx
Equity Fund IV, L. P. ("THL Fund IV"), then one (1) member shall be designated
by THL Fund IV; and (y) all other members shall be designated by the Xxx Holders
(the "Xxx Holders Designees").
(b) DESIGNATION OF XXX HOLDERS DESIGNEES. The Xxx Holders
Designees shall be designated by the vote or consent of a majority in interest
of the shares of Common Stock held by the Xxx Holders. THL Fund IV and the Xxx
Holders also shall be entitled to request that the director or directors
designated by THL Fund IV and the Xxx Holders pursuant to this Section 2.6 be
removed or replaced and the other Stockholders hereby agree to take any action,
including the voting of their Shares, to effectuate such request.
(c) RESTRICTIONS ON OTHER AGREEMENTS. No Stockholder shall
grant any proxy or enter into or agree to be bound by any voting trust with
respect to the Shares nor shall any Stockholder enter into any stockholders'
agreement or arrangement of any kind with any Person with respect to the Shares
on terms that are inconsistent with or which violate or conflict with the
provisions of this Agreement including, but not limited to, agreements or
arrangements with respect to the acquisition, disposition or voting of Shares;
PROVIDED, HOWEVER, that the provisions of Section 4.9 with respect to action by
stockholder representatives shall not be deemed inconsistent with this Section
2.6(c).
(d) STOCKHOLDER ACTION. Each Stockholder agrees that, in his or
its capacity as a stockholder of the Company, such Stockholder will vote, or
grant proxies relating to such
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Shares to vote, all of his or its Shares in favor of any merger, consolidation,
sale or transfer of Shares or any similar transaction pursuant to Section 2.4
hereof to the extent that approval of the Company's stockholders is required in
order to effect such transaction and such transaction complies with Section 2.4.
(e) CORPORATE OPERATIONS. Each of the Stockholders will, upon
request of the Xxx Holders, vote all shares of Common Stock owned by them in
favor of any one or more of the following matters approved by the Company's
board of directors:
(i) any merger, consolidation, recapitalization,
liquidation or sale of all (or substantially all) of the assets of the Company
or any Subsidiary; provided that this clause (i) shall not limit the provisions
of Section 2.4 and such transaction shall comply with Section 2.4;
(ii) any payment by the Company or any Subsidiary of
dividends or redemption of capital stock (other than as required or permitted
pursuant to this Agreement or the Company's articles of incorporation), provided
that if the Company proposes to pay dividends on or repurchase any shares of
Common Stock held by any Xxx Xxxxxx or any Permitted Transferee thereof, then
the Company shall, as the case may be, pay concurrent pro rata dividends on all
shares of Common Stock held by the Stockholders or make concurrent pro rata
repurchases of shares of Common Stock from all Stockholders that own Common
Stock;
(iii) the issuance by the Company or any Subsidiary of any
debt or equity security through public or private financing; and
(iv) any acquisition by the Company or any Subsidiary.
(f) BOARD OBSERVATION RIGHTS. The Xxxxx Holders shall be
entitled to designate one representative (the "BOARD OBSERVER") to observe the
meetings of the Company's Board of Directors. The Board Observer at any meeting
may be one of the following: (i) Xxxxx X. Xxxxx; (ii) Xxxxxxx X. Xxxxxxxx; or
(iii) Xxxxx X. Xxxxx, Xx. The Company shall provide the Board Observer with
copies of the monthly financial statements of the Company. The Xxxxx Holders are
prohibited from assigning their right to designate the Board Observer to any
Person (including without limitation any Permitted Transferee) except in
connection with a Transfer of all Shares held by the Xxxxx Holders to one or
more investment partnerships that are Affiliates of such Xxxxx Holder (a "XXXXX
AFFILIATE") Transferring Shares pursuant to such Transfer. The rights of the
Xxxxx Holders pursuant to this Section 2.6(f) shall terminate automatically when
neither the Xxxxx Holders nor any Xxxxx Affiliate owns at least ten percent
(10%) of the shares of Common Stock held by the Xxxxx Holders immediately
following the closing of the Recapitalization (after giving effect to any stock
splits, stock dividends, reverse stock splits, reclassifications or the like
with respect to the Common Stock).
(g) In the event that any of the Stockholders fail to comply
with the provisions of Section 2.6(a), (b), (d) or (e), each of the Stockholders
hereby (i) irrevocably appoints the Xxx Xxxxxx Representative as his, her or its
attorney-in-fact (with full power of substitution) to execute all agreements,
instruments and certificates and take all actions necessary or desirable to
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effectuate any action hereunder; and (ii) grant to the Xxx Xxxxxx Representative
a proxy (which shall be deemed to be coupled with an interest and irrevocable)
to vote the Shares held by such Stockholder and exercise any consent rights
applicable thereto in favor of any action hereunder.
2.7 WITHHOLDING OF TAXES. The Company shall have the right to withhold
(or cause one of the Company's subsidiaries to withhold) from any amounts
payable under this Agreement to any Management Holder or any amounts otherwise
payable by the Company to such Management Holder, or require such Management
Holder to remit to the Company, an amount sufficient to satisfy all federal,
state and local withholding tax requirements, whether arising on account of the
matters contemplated by this Agreement, any other agreement between such
Management Holder and the Company or otherwise.
ARTICLE III
REGISTRATION RIGHTS
3.1 DEMAND REGISTRATIONS.
(a) Subject to paragraph (b) hereof, if the Company shall
receive a written request (specifying that it is being made pursuant to this
Section 3.1) from a majority in interest of the Xxx Holders, or Transferees
thereof who have become parties to this Agreement, that the Company file a
registration statement under the 1933 Act, then the Company shall (i) promptly
(at least thirty (30) days prior to the filing date) give written notice to all
other Holders of such request, (ii) with reasonable promptness, and in any case
not later than ninety (90) days after receipt by the Company of such written
request for a demand registration, file a registration statement with the SEC
relating to such Registrable Securities as to which such request for a demand
registration relates and (iii) use its commercially reasonable efforts to cause
to be registered under the 1933 Act all Registrable Securities of the same class
that Holders have requested be registered.
(b) If the total amount of Registrable Securities that all
Holders request to be included in an offering exceeds the amount of securities
that the underwriters reasonably believe compatible with the success of the
offering, then the Company will include in such registration only the number of
securities which, in the good faith opinion of such underwriters, can be sold,
selected PRO RATA based on the number of Registrable Securities which each of
the Holders requesting to be included owns, or has the right to acquire pursuant
to the exercise of Vested Stock Options. Only to the extent that the
underwriters reasonably believe that the amount of securities compatible with
the success of the offering exceeds the total amount of Registrable Securities
that all Holders request to be included in the offering, may the Company
participate in such offering.
(c) The Xxx Holders, as a group, shall be entitled to request,
and the Company shall be obligated to effect, not more than five (5)
registrations of Registrable Securities pursuant to this Section 3.1. A
registration shall not be deemed effected until the registration statement
relating thereto has been declared effective, the securities covered thereby
have been sold, and the proceeds therefrom have been received by the selling
Holders.
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3.2 PIGGYBACK REGISTRATION. If, at any time, the Company determines
to register any of its equity securities (including securities convertible into
equity securities) for its own account or for the account of others under the
1933 Act in connection with the public offering of such securities (including
registrations pursuant to Section 3.1), the Company shall, at each such time,
promptly give each Holder written notice of the filing of a registration
statement with the SEC; PROVIDED, HOWEVER, that registrations relating solely to
securities to be offered by the Company (or other person for whose account the
registration is made) in connection with any acquisition, merger, employee stock
option or employee stock purchase or savings plan on Form S-4 or S-8 (or
successor forms) under the 1933 Act shall not be subject to this Section 3.2.
Upon the written request of any Holder received by the Company within ten (10)
Business Days after the giving of any such notice by the Company, the Company
shall use its commercially reasonable efforts to cause to be registered under
the 1933 Act all of the Registrable Securities of such Holder that each Holder
has requested be registered. If the total amount of Registrable Securities that
are to be included by either the Company for its own account and at the request
of Holders thereof exceeds the amount of securities that the underwriters
reasonably believe compatible with the success of the offering, then the Company
will include in such registration only the number of securities which in the
opinion of such underwriters can be sold, in the following order:
(i) first, the equity securities of the Company, unless
the registration is pursuant to Section 3.1, in which event the provisions
relating to allocation of Registrable Shares set forth in Section 3.1(b) shall
be controlling; and
(ii) then, the Registrable Securities requested to be
included by the Holders PRO RATA based on the number of Registrable Securities
which each of them owns, or has the right to acquire pursuant to the exercise of
Vested Stock Options.
3.3 OBLIGATIONS OF THE COMPANY.
(a) Whenever required under Section 3.1 hereof to use its
commercially reasonable efforts to effect the registration of any Registrable
Securities, the Company shall:
(i) prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its commercially
reasonable efforts to cause such registration statement to become and remain
effective, including, without limitation, filing of pre-effective and
post-effective amendments and supplements to any registration statement or
prospectus necessary to keep the registration statement current;
(ii) as expeditiously as reasonably possible, prepare and
file with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by such registration statement and, if
necessary for the effective disposition of the Registrable Securities covered
thereby, to keep each registration statement effective (and in compliance with
the 1933 Act) by such actions as may be necessary or appropriate for a period of
120 days after the effective date of such registration statement;
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(iii) as expeditiously as reasonably possible, furnish to
the Holders such numbers of copies of a prospectus, including any preliminary
prospectus, in conformity with the requirements of the 1933 Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them;
(iv) as expeditiously as reasonably possible, use its
commercially reasonable efforts to register and qualify the securities covered
by such registration statement under such securities or "blue sky" laws of such
jurisdictions as may be requested by the underwriters of said offering or, if
none, by the Holders; PROVIDED, HOWEVER, that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such jurisdiction, and
further provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any jurisdiction in
which the securities shall be qualified shall require that expenses incurred in
connection with the qualification of the securities in that jurisdiction be
borne by selling stockholders, then such expenses shall be payable by selling
stockholders PRO RATA, to the extent required by such jurisdiction;
(v) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the disposition
or such Registrable Securities;
(vi) notify each seller of Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the 1933 Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any such seller
promptly prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(vii) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the 1933 Act;
(viii) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement;
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(ix) use its commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on any securities
exchange or automated inter-dealer quotation system on which any class of
Registrable Securities is then listed, and if not then listed on any such
exchange or system, use its best efforts to list all Registrable Securities
covered by such registration statement on either the New York Stock Exchange or
the Nasdaq National Market;
(x) use its commercially reasonable efforts to obtain a
"cold comfort" letter from the Company's independent public accountants in
customary form, addressed to each Holder participating in the registration, and
covering such matters of the type customarily covered by "cold comfort" letters
as the Holders of a majority (by number of shares) of the Registrable Shares
being sold or the underwriters retained by such Holders reasonably request; and
(xi) use its commercially reasonable efforts to obtain an
opinion of counsel to the Company addressed to the underwriters of the sale of
Registrable Securities being registered covering such matters as are customarily
covered by such an opinion.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under this Agreement,
the Company will give the Holders of Registrable Securities on whose behalf such
Registrable Securities are to be so registered and their underwriters, if any,
and their respective counsel and accountants, the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the SEC, and each amendment thereof or supplement thereto, and
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, its
counsel and the independent public accountants who have certified its financial
statements, as shall be necessary, in the opinion of such Holders or such
underwriters or their respective counsel, in order to conduct a reasonable and
diligent investigation within the meaning of the 1933 Act. Without limiting the
foregoing, each registration statement, prospectus, amendment, supplement or any
other document filed with respect to a registration under this Agreement shall
be subject to review and reasonable approval by the Holders registering
Registrable Securities in such registration and by their counsel.
3.4 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Article III that the
Holders shall furnish to the Company such information regarding them, the
Registrable Securities held by them, and the intended method of disposition of
such securities as the Company shall reasonably request and as shall be required
in connection with the action to be taken by the Company.
3.5 EXPENSES OF REGISTRATION. All Selling Expenses shall be borne by
the Holders of securities registered under this Article III PRO RATA on the
basis of the number of their shares so registered. All Registration Expenses
incurred in connection with a registration pursuant to Sections 3.1 or 3.2
hereof shall be borne by the Company.
3.6 UNDERWRITING.
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(a) In connection with any registration of Registrable
Securities under this Agreement, the Company will, if requested by the
underwriters for any Registrable Securities included in such registration, enter
into an underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, provisions relating to indemnification and contribution. The Holders
on whose behalf Registrable Securities are to be distributed by such
underwriters shall be parties to any such underwriting agreement, and the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall be also made to and
for the benefit of such Holders of Registrable Securities. Such underwriting
agreement shall comply with Section 3.7.
(b) Such underwriters shall be selected as follows: (i) in the
case of a registration pursuant to Section 3.1, by agreement of a majority in
interest of the Xxx Holders if the Xxx Holders are selling Registrable
Securities in such registration, or (ii) in all other cases, by the Company.
3.7 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Article III:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder requesting or joining in a registration,
any underwriter (as defined in the 0000 Xxx) for it, and each person, if any,
who controls such Holder or such underwriter within the meaning of the 1933 Act,
from and against any losses, claims, damages, expenses (including reasonable
attorneys' fees and expenses and reasonable costs of investigation) or
liabilities, joint or several, to which they or any of them may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages,
expenses or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such registration
statement including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or arise out of any violation by the Company of any rule or
regulation promulgated under the 1933 Act applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration; and the Company will promptly reimburse each Holder, each person
controlled by such Holder and any underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 3.7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company(which consent shall
not be unreasonably withheld), nor shall the Company be liable to anyone for any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or omission made in connection with such
registration statement, preliminary prospectus, final prospectus or amendments
or supplements thereto in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, underwriter or control
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person. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Holder, underwriter or control person
and shall survive the transfer of such securities by such Holder.
(b) To the fullest extent permitted by law, each Holder
requesting or joining in a registration will severally and not jointly indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the 1933 Act, and each agent and any underwriter
for the Company and any person who controls any such agent or underwriter and
each other Holder and any person who controls such Holder (within the meaning of
the 0000 Xxx) against any losses, claims, damages or liabilities to which the
Company or any such director, officer, control person, agent, underwriter, or
other Holder may become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon an untrue statement of any material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or arise out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or omission was made in such registration statement, preliminary or
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Holder with respect to
such Holder expressly for use in connection with such registration; and such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, control person, agent, underwriter, or
other Holder in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED HOWEVER, the indemnity obligation of each
such Holder hereunder shall be limited to and shall not exceed the net proceeds
actually received by such Holder upon a sale of Registrable Securities pursuant
to a registration statement hereunder; and PROVIDED further that the indemnity
agreement contained in this Section 3.7(b) shall not apply to amounts paid in
settlements effected without the consent of such Holder (which consent shall not
be unreasonably withheld). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
director, officer, Holder, underwriter or control person and shall survive the
transfer of such securities by such Holder.
(c) Any person seeking indemnification under this Section 3.7
will (i) give prompt notice to the indemnifying party of any claim with respect
to which it seeks indemnification (but the failure to give such notice will not
affect the right to indemnification hereunder, unless the indemnifying party is
materially prejudiced by such failure) and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest may exist between such
indemnified and indemnifying parties with respect to such claim, permit such
indemnifying party, and other indemnifying parties similarly situated, jointly
to assume the defense of such claim with counsel reasonably satisfactory to the
parties. In the event that the indemnifying parties cannot mutually agree as to
the selection of counsel, each indemnifying party may retain separate counsel to
act on its behalf and at its expense. The indemnified party shall in all events
be entitled to participate in such defense at its expense through its own
counsel. If such defense is not assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably
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withheld). No indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release 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 will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the reasonable fees and expenses of such additional counsel.
(d) If for any reason the foregoing indemnification is
unavailable to any party or insufficient to hold it harmless as and to the
extent contemplated by the preceding paragraphs of this Section 3.7, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage, expense or liability
in such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the applicable indemnified party, as the
case may be, on the other hand, and also the relative fault of the Company and
any applicable indemnified party, as the case may be, as well as any other
relevant equitable considerations.
3.8 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holders and their Permitted Transferees the benefits of
Rule 144 and Rule 144A promulgated under the 1933 Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration, the Company agrees to use its
best efforts to take all action that may be required as a condition to the
availability of Rule 144, Rule 144A or such other rules or regulations,
including, without limitation, to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times subsequent to ninety (90)
days after the effective date of the first registration statement covering an
underwritten public offering of shares of Common Stock filed by the Company;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act
(including, without limitation, under Section 13 or Section 15 of the 1934 Act
after the effective date of the first registration statement covering an
underwritten public offering of shares of Common Stock filed by the Company);
and
(c) furnish to any Holder forthwith upon request a written
statement by the Company that it has complied with the reporting requirements of
Rule 144 (at any time after ninety (90) days after the effective date of said
first registration statement of shares of Common Stock filed by the Company),
and of the 1933 Act and the 1934 Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as may be
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reasonably requested in availing any Holder of any rule or regulation of the SEC
permitting the selling of any such securities without registration.
3.9 NO INCONSISTENT AGREEMENTS. The Company agrees that it has not
entered into, and it will not hereafter enter into, any Agreement with respect
to the registration of its securities that is inconsistent with (or superior to)
the rights granted to the Holders of Registrable Securities in this Agreement.
3.10 STOCK SPLIT. If, on or after the receipt by the Company of a
request for registration of a public offering pursuant to Section 3.1 hereof,
the proposed managing underwriter or underwriters of such offering reasonably
believes that the number of shares to be registered is less than the minimum
number necessary for the success of such offering, the Company will promptly
prepare and submit to its Board of Directors, use its best efforts to cause to
be adopted by its Board of Directors and stockholders, and, if so adopted, file
and cause to become effective, an amendment to its certificate of incorporation
so as to cause each share of its outstanding Common Stock to be converted into
such number of shares of such Common Stock so that the number of shares of
Registrable Securities to be registered is equal to the minimum number which
such managing underwriter or underwriters reasonably believes is necessary for
the success of such offering. Each Stockholder, together with his or its
Permitted Transferees, hereby agrees to vote the Shares held by him or it in
favor of adopting such amendment.
3.11 LOCK-UP AGREEMENTS. Each of the parties to this Agreement agrees
to enter into customary lock-up agreements with respect to all of their Shares
with a duration of 180 days following the closing of an initial Public Offering
and with a duration of 90 days following the closing of any subsequent Public
Offering.
ARTICLE IV
MISCELLANEOUS
4.1 REMEDIES.
(a) Each of the parties to this Agreement hereby acknowledges
that, in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party will be without an adequate remedy at law. Each
of the parties therefore agrees that, in the event of a breach of any material
provision of this Agreement, the aggrieved party will be entitled to institute
and prosecute proceedings to enforce specific performance of such provision or
to enjoin the continuing breach of such provision, as well as to obtain damages
for breach of this Agreement. By seeking or obtaining any such relief, the
aggrieved party will not be precluded from seeking or obtaining any other relief
to which it may be entitled. In addition, any transfers of Shares in violation
of this Agreement are void.
(b) In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is successfully
asserted as a defense, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
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4.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
Exhibits hereto, sets forth the entire understanding of the parties, and
supersedes all prior agreements and all other arrangements and communications,
whether oral or written, with respect to the subject matter hereof. Permitted
Transfers, Transfers permitted under Article II hereof, or issuances of capital
stock permitted under Article II hereof, including, without limitation, the
issuances of securities that do not constitute New Securities, shall become
effective when a copy of the Agreement as executed by any new Transferee or
holder of capital stock is filed with the Company. Transfers pursuant to waivers
under Article II hereof shall become effective when the waivers as executed by
all required parties, and a copy of this Agreement as executed by any new
Transferee or holder of capital stock, are filed with the Company and also filed
with the Xxx Xxxxxx Representative. Any other amendment, revision or termination
of this Agreement shall require the prior written consent of the Management
Holder Representative, the Continuing Holder Representative, and the Xxx Xxxxxx
Representative.
4.3 SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if the invalid
or unenforceable provision were omitted.
4.4 NOTICES. All notices and other communications necessary or
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given three business days after mailing by certified
mail, when delivered by hand, or when delivered by telecopier upon confirmation
of receipt, or one day after sending by an overnight delivery service that
guarantees next-day delivery, to the respective addresses of the parties set
forth below:
(a) for notices and communications to the Company:
EYE CARE CENTERS OF AMERICA, INC.
00000 Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
FAX: (000) 000-0000
ATTN: Corporate Secretary
With a copy to each of:
XXXXXX X. XXX COMPANY
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxx
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and
XXXXXXXX, XXXXXXX & XXXXXXX
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
(b) For notices and communications to the Stockholders, to the
respective addresses set forth in the Schedule of Stockholders.
By notice complying with the foregoing provisions of this Section 4.4, each
party may change the mailing address for future notices and communications to
such party.
4.5 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and to their respective
transferees, successors, assigns, heirs and administrators; PROVIDED, HOWEVER,
that the rights under this Agreement may not be assigned except as expressly
provided herein. No such assignment shall relieve an assignor of its obligations
hereunder.
4.6 GOVERNING LAW. This Agreement shall be governed by the laws of
the Commonwealth of Massachusetts (regardless of the laws that might otherwise
govern under applicable principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies.
4.7 TERMINATION. Without affecting any other provision of this
Agreement requiring termination of any rights in favor of any Stockholder,
Permitted Transferee or any other transferee of Shares, the provisions of
Articles II and III of this Agreement shall terminate as to such Stockholder,
Permitted Transferee or other transferee, when, pursuant to and in accordance
with this Agreement, such Stockholder, Permitted Transferee or other transferee,
as the case may be, no longer owns any Shares; PROVIDED, that termination
pursuant to this Section 4.7 shall only occur in respect of a Stockholder after
all Permitted Transferees in respect thereof also no longer own any Shares.
4.8 RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to
Shares, to any and all shares of capital stock of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Shares, by reason of a stock dividend, stock split, stock
issuance, reverse stock split, combination, recapitalization, reclassification,
merger, consolidation or otherwise. Upon the occurrence of any such events,
amounts hereunder shall be appropriately adjusted.
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4.9 STOCKHOLDER REPRESENTATIVES.
(a) Each Management Holder hereby designates and appoints (and
each Permitted Transferee of each such Management Holder is hereby deemed to
have so designated and appointed) Xxxxxxx X. Xxxxxxx with full power of
substitution (the "MANAGEMENT HOLDER REPRESENTATIVE"), as the representative of
each such person to perform all such acts as are required, authorized or
contemplated by this Agreement to be performed by any such person and hereby
acknowledges that the Management Holder Representative shall be the only person
authorized to take any action so required, authorized or contemplated by this
Agreement by each such person. Each such person further acknowledges that the
foregoing appointment and designation shall be deemed to be coupled with an
interest and shall survive the death or incapacity of such person. Each such
person hereby authorizes (and each such Permitted Transferee will be deemed to
have authorized) the other parties hereto to disregard any notice or other
action taken by such person pursuant to this Agreement except for the Management
Holder Representative. The other parties hereto are and will be entitled to rely
on any action so taken or any notice given by the Management Holder
Representative and are and will be entitled and authorized to give notices only
to the Management Holder Representative for any notice contemplated by this
Agreement to be given to any such person. A successor to the Management Holder
Representative may be chosen by a majority in interest of the Shares held by the
Management Holders, provided that notice thereof is given by the new Management
Holder Representative to the Company and to the other Stockholders (or their
representatives established under this Section 4.9).
(b) Each Continuing Holder hereby designates and appoints (and
each Permitted Transferee of each such Continuing Holder is hereby deemed to
have so designated and appointed) Xxxxxxx X. Xxxxxxxx and Xxxxx X. Xxxxx, Xx.,
and each of them, with full power of substitution (the "CONTINUING HOLDER
REPRESENTATIVE"), as the representative of each such person to perform all such
acts as are required, authorized or contemplated by this Agreement to be
performed by any such person and hereby acknowledges that the Continuing Holder
Representative shall be the only person authorized to take any action so
required, authorized or contemplated by this Agreement by each such person. Each
such person further acknowledges that the foregoing appointment and designation
shall be deemed to be coupled with an interest and shall survive the death or
incapacity of such person. Each such person hereby authorizes (and each such
Permitted Transferee will be deemed to have authorized) the other parties hereto
to disregard any notice or other action taken by such person pursuant to this
Agreement except for the Continuing Holder Representative. The other parties
hereto are and will be entitled to rely on any action so taken or any notice
given by the Continuing Holder Representative and are and will be entitled and
authorized to give notices only to the Continuing Holder Representative for any
notice contemplated by this Agreement to be given to any such person. A
successor to the Continuing Holder Representative may be chosen by a majority in
interest of the Shares held by the Continuing Holders, provided that notice
thereof is given by the new Continuing Holder Representative to the Company and
to the other Stockholders (or their representatives established under this
Section 4.9).
(c) Each Xxx Xxxxxx hereby designates and appoints (and each
Permitted Transferee of each such Xxx Xxxxxx is hereby deemed to have so
designated and appointed)
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Xxxxxxx X. XxXxxx and Xxxxxx X. Xxxxx, and each of them, with full power of
substitution (the "XXX XXXXXX REPRESENTATIVE"), as the representative of each
such person to perform all such acts as are required, authorized or contemplated
by this Agreement to be performed by any such person and hereby acknowledges
that the Xxx Xxxxxx Representative shall be the only person authorized to take
any action so required, authorized or contemplated by this Agreement by each
such person. Each such person further acknowledges that the foregoing
appointment and designation shall be deemed to be coupled with an interest and
shall survive the death or incapacity of such person. Each such person hereby
authorizes (and each such Permitted Transferee will be deemed to have
authorized) the other parties hereto to disregard any notice or other action
taken by such person pursuant to this Agreement except for the Xxx Xxxxxx
Representative. The other parties hereto are and will be entitled to rely on any
action so taken or any notice given by the Xxx Xxxxxx Representative and are and
will be entitled and authorized to give notices only to the Xxx Xxxxxx
Representative for any notice contemplated by this Agreement to be given to any
such person. A successor to the Xxx Xxxxxx Representative may be chosen by a
majority in interest of the Shares held by the Xxx Holders, provided that notice
thereof is given by the new Xxx Xxxxxx Representative to the Company and to the
other Stockholders (or their representatives established under this
Section 4.9).
(d) The Stockholders agree that the Management Holder
Representative, the Continuing Holder Representative and the Xxx Xxxxxx
Representative shall not have any liability arising out of or in connection with
the exercise of his powers or the discharge of his duties hereunder while acting
as a representative under this Agreement, except that such representative shall
be subject to liability for his gross negligence or willful misconduct. Such
representative shall not in any event be liable with respect to any action taken
or omitted to be taken by him in good faith or in accordance with and in
reliance upon the opinion of counsel or independent auditors or upon information
obtained by him from any governmental authority or other specialist.
4.10 ACTION NECESSARY TO EFFECTUATE THE AGREEMENT. The parties hereto
agree to take or cause to be taken all such corporate and other action as may be
necessary to effect the intent and purposes of this Agreement. This Agreement
supersedes and replaces the 1993 Stockholders' Agreement which is terminated
upon the consummation of the transactions contemplated in the Recapitalization
Agreement pursuant to Section 6.7 of the 1993 Stockholders' Agreement which
provides that the 1993 Stockholders' Agreement shall be terminated and of no
further force and effect on the first day the Xxxxx Holders hold less than 15%
of the Shares of the Company, on a fully-diluted basis.
4.11 PURCHASE FOR INVESTMENT; LEGEND ON CERTIFICATE. Each of the
parties acknowledges that all of the Shares held by such party are being (or
have been) acquired for investment and not with a view to the distribution
thereof and that no transfer, hypothecation or assignment of Shares may be made
except in compliance with applicable federal and state securities laws. All of
the certificates representing Shares of the Company which are now or hereafter
owned by the Stockholders and which are subject to the terms of this Agreement
shall have endorsed in writing, stamped or printed, thereon the following
legend:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS, INCLUDING RESTRICTIONS ON TRANSFER, OF A STOCKHOLDERS' AGREEMENT
DATED AS OF APRIL 24, 1998, AS AMENDED FROM TIME TO TIME, AND NONE OF SUCH
SECURITIES, OR ANY INTEREST THEREIN, SHALL BE TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF EXCEPT AS PROVIDED IN THAT AGREEMENT. A COPY OF THE
STOCKHOLDERS' AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY AND WILL BE
MAILED TO ANY PROPERLY INTERESTED PERSON WITHOUT CHARGE WITHIN FIVE (5) DAYS
AFTER RECEIPT OF A WRITTEN REQUEST."
4.12 EFFECTIVENESS OF TRANSFERS. All Shares Transferred by a
Stockholder (other than pursuant to an effective registration statement under
the 1933 Act or a Rule 144 Transaction) shall be held by the transferee thereof
pursuant to this Agreement. Such transferee shall, except as otherwise expressly
stated herein, have all the rights and be subject to all of the obligations of a
Stockholder under this Agreement automatically and without requiring any further
act by such transferee or by any parties to this Agreement. Without affecting
the preceding sentence, if such transferee is not a Stockholder on the date of
such Transfer, then such transferee, as a condition to such Transfer, shall
confirm such transferee's obligations hereunder in accordance with Section 4.13
hereof. No Shares shall be Transferred on the Company's books and records, and
no Transfer of Shares shall be otherwise effective, unless any such Transfer is
made in accordance with the terms and conditions of this Agreement, and the
Company is hereby authorized by all of the Stockholders to enter appropriate
stop transfer notations on its transfer records to give effect to this
Agreement. Any Transfer of Shares in violation of this Agreement shall be void.
4.13 ADDITIONAL STOCKHOLDERS. Subject to the restrictions on Transfers
of Shares contained herein, any person or entity acquiring Shares (except for
transferees acquiring shares of Common Stock (i) in an offering registered under
the 1933 Act or (ii) in a Rule 144 Transaction) shall, on or before the Transfer
or issuance to him or it of Shares, sign a counterpart signature page hereto in
form reasonably satisfactory to the Company and shall thereby become a party to
this Agreement; PROVIDED, HOWEVER, that a transferee which is a Permitted
Transferee under clause (f) of the definition of Permitted Transfer shall not be
obligated to so agree until foreclosure on its pledge, which event shall be
subject to the provisions of Section 2.1(d) of this Agreement.
4.14 NO WAIVER. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as waiver thereof or otherwise prejudice such party's
rights, powers and remedies. No single or partial exercise of any rights, powers
or remedies conferred by this Agreement shall preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
4.15 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart.
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4.16 HEADINGS. All headings and captions in this Agreement are for
purposes of references only and shall not be construed to limit or affect the
substance of this Agreement.
4.17 CONSENT TO JURISDICTION. The Company and each of the
Stockholders, by its or his execution hereof, (i) hereby irrevocably submit to
the exclusive jurisdiction of the state courts of the Commonwealth of
Massachusetts for the purposes of any claim or action arising out of or based
upon this Agreement or relating to the subject matter hereof, (ii) hereby waive,
to the extent not prohibited by applicable law, and agree not to assert by way
of motion, as a defense or otherwise, in any such claim or action, any claim
that it or he is not subject personally to the jurisdiction of the above-named
courts, that its or his property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named court is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court, and (iii) hereby agree not to commence any claim
or action arising out of or based upon this Agreement or relating to the subject
matter hereof other than before the above-named courts nor to make any motion or
take any other action seeking or intending to cause the transfer or removal of
any such claim or action to any court other than the above-named courts whether
on the grounds of inconvenient forum or otherwise. The Company and each of the
Stockholders hereby consent to service of process in any such proceeding in any
manner permitted by Massachusetts law, and agree that service of process by
registered or certified mail, return receipt requested, at its address specified
pursuant to Section 4.4 hereof is reasonably calculated to give actual notice.
4.18 WAIVER OF RIGHT TO JURY TRIAL. THE COMPANY AND EACH OF THE
STOCKHOLDERS, BY ITS OR HIS EXECUTION HEREOF, WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION AND THE RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND EACH OF
THE STOCKHOLDERS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE COMPANY AND EACH OF THE STOCKHOLDERS
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS OR
HIS, AS THE CASE MAY BE, LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS OR HIS, AS THE CASE MAY BE, JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION
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CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Remainder of Page Intentionally Left Blank]
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EYE CARE CENTERS OF AMERICA, INC.
STOCKHOLDERS' AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
EYE CARE CENTERS OF AMERICA, INC.
By: _____________________________
Name:
Title:
[Signatures continue on following pages]
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00
XXX XXXX XXXXXXX XX XXXXXXX, INC.
STOCKHOLDERS' AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
XXX HOLDERS
THL FUND IV BRIDGE CORP.
By: THL Equity Advisors IV, LLC
its General Partner
By: ___________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
S-2
00
XXX XXXX XXXXXXX XX XXXXXXX, INC.
STOCKHOLDERS' AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
MANAGEMENT HOLDERS:
Print full legal name of person or entity
purchasing Shares:
________________________________________________
Signature of person with authorization to sign
on behalf of person or entity purchasing Shares:
________________________________________________
S-3
00
XXX XXXX XXXXXXX XX XXXXXXX, INC.
STOCKHOLDERS' AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
CONTINUING HOLDERS:
EQUITY-LINKED INVESTORS-II
By: XXXXX X. XXXXX ASSOCIATES-II,
General Partner
By: ____________________________________
Name:
Title:
INDOSUEZ EYE CARE PARTNERS
By: Indosuez XX XX, Inc., its Managing
General Partner
By: ____________________________________
Name:
Title:
_________________________________________
Xxxxxx X. Xxxxxxxx, individually
AGT HOLDINGS, LLC
By: ____________________________________
Name:
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