Exhibit 10.15
XXXXX, INC.
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
Amended and Restated Stockholders Agreement, dated as of this 4th day
of November 1999 (this "Agreement"), by and among Warburg, Xxxxxx Ventures,
L.P., a Delaware limited partnership ("Warburg"); the individuals whose names
and addresses appear from time to time on Schedule I hereto (the "Management
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Investors," and, together with Warburg, the "Investors"); and Xxxxx, Inc., a
Delaware corporation (the "Company"). Certain terms used in this Agreement
are defined in Section 8 hereof.
R E C I T A L S
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WHEREAS, the Investors and the Company desire to promote their mutual
interests by agreeing to certain matters relating to the disposition and voting
of the shares of Common Stock, par value $.01 per share, of the Company (the
"Common Stock") owned by the Investors on the date hereof, together with any
other shares of Common Stock acquired by them (other than shares of Common
Stock issued from time to time under the T.K.G. Acquisition Corp. 1996 Stock
Incentive Plan, the Knoll 1997 Stock Incentive Plan or the Knoll 1999 Stock
Incentive Plan (together, as they may be amended from time to time, the
"Stock Plan")) (collectively, the "Shares"), as further set forth herein; and
WHEREAS, the Investors and the Company have previously entered into a
Stockholders Agreement (Common Stock and Preferred Stock), dated as of
February 29, 1996 (the "Old Stockholders Agreement"), in connection with their
ownership of shares of Common Stock and desire to amend and restate the Old
Stockholders Agreement in its entirety as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. COVENANTS OF THE PARTIES
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(a) Legends. The certificates evidencing the Shares owned or
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acquired by the Investors or their permitted transferees will bear the
following legends reflecting the restrictions on the transfer of such
securities under the Securities Act and those contained in this Agreement:
"The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended (the "Act"), and may not be
transferred except pursuant to an effective registration under the Act
or in a transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt transaction under
the Act and the rules and regulations promulgated thereunder.
The securities evidenced hereby are subject to the terms of that
certain Stockholders Agreement (Common Stock and Preferred Stock),
dated as of February 29, 1996, as amended by that certain Amended and
Restated Stockholders Agreement, dated as of November 4, 1999,
and as may be further amended from time to time, by and among the
Company and certain holders of the Common Stock, including certain
restrictions on transfer and rights of first refusal. A copy of such
Stockholders Agreement has been filed with the Secretary of the
Company and is available upon request."
(b) Election of Directors.
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(i) As of the date hereof, the Board of Directors of the Company
(the "Board") will consist of Xxxxxx X. Xxxxxxx ("Staniar"), Xxxx X. Xxxxx
("Xxxxx"), Xxxxxx X. Xxxxx ("Xxxxx"), Xxxxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxx
Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx Xxx, Xxxxx X. Xxxxxxx and Xxxxx Xxxx. From
and after the date hereof, the Investors and the Company shall take all action
within their respective power, including but not limited to, the voting of all
shares of capital stock of the Company owned by them, required to cause the
Board to consist of nine members or such other number as the Board may from
time to time establish, and at all times throughout the term of this Agreement
to include (A) that number of Warburg Directors as shall constitute a majority
of the Board, or, at Warburg's written election, which election shall be
irrevocable, as shall constitute one director less than a majority of the
Board, (B) Staniar, who shall be entitled to be a member of the Board until
termination of his employment with the Company in accordance with the terms of
the Staniar Employment Agreement, (C) Xxxxx, who shall be entitled to be a
member of the Board until termination of his employment with the Company in
accordance with the terms of the Xxxxx Employment Agreement, (D) Xxxxx, who
shall be entitled to be a member of the Board until termination of his
employment with the Company in accordance with the terms of the Xxxxx
Employment Agreement, and (E) Xxxxxxx, who shall be entitled to be a member of
the Board until termination of her employment with the Company.
(ii) From and after the date on which the Company completes an
Initial Public Offering, for as long as Warburg owns beneficially (within the
meaning of Rule 13d-3 of the Exchange Act) at least (i) 50% of the outstanding
shares of Common Stock, the Company and each Investor will nominate and use its
best efforts to have that number of Warburg Directors as shall constitute a
majority of the Board (or, at Warburg's written election, which election shall
be irrevocable, as shall constitute one director less than a majority of the
Board) elected to the Board, (ii) 25% of the outstanding shares of Common
Stock, the Company and each Investor will nominate and use its best efforts to
have four Warburg Directors elected to the Board, (iii) 15% of the outstanding
shares of Common Stock, the Company and each Investor will nominate and use its
best efforts to have three Warburg Directors elected to the Board and (iv) at
least 5% of the outstanding shares of Common Stock, the Company and each
Investor will nominate and use its best efforts to have two Warburg Directors
elected to the Board.
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(c) Replacement Directors. In the event that any Warburg Director
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is unable to serve, or once having commenced to serve, is removed or withdraws
from the Board (a "Withdrawing Director"), such Withdrawing Director's
replacement (the "Substitute Director") will be designated by Warburg. A
Warburg Director may be removed, with or without cause, by Warburg, and Warburg
shall thereafter have the right to nominate a replacement for such director.
The Investors and the Company agree to take all action within their respective
power, including but not limited to, the voting of all shares of capital stock
of the Company owned by them, to cause the election of such Substitute Director
promptly following his or her nomination pursuant to this Section 1(c).
(d) Subscription Right. If at any time after the date hereof, except
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for (i) grants or issuances of equity securities pursuant to the Stock Plan or
any other incentive plan for the Company's or any of its Subsidiaries'
directors, employees or consultants (collectively, "Plan Stock") or as part of
an Initial Public Offering and (ii) securities issuable upon exercise of
previously issued warrants, options or other rights to acquire equity
securities or upon conversion of previously issued securities convertible into
equity securities, the Company proposes to sell equity securities of any kind
(the term "equity securities" shall include for these purposes any warrants,
options or other rights to acquire equity securities and debt securities
convertible into equity securities) of the Company, then, as to each Investor
who holds shares of capital stock of the Company, the Company shall:
(i) give written notice setting forth in reasonable detail
(1) the designation and all of the terms and provisions of the securities
proposed to be issued (the "Proposed Securities"), including, where
applicable, the voting powers, preferences and relative participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof and interest rate and maturity; (2) the price and
other terms of the proposed sale of such securities; (3) the amount of such
securities proposed to be issued; and (4) such other information as may be
reasonably required in order to evaluate the proposed issuance; and
(ii) offer to sell to each such Investor a portion of the
Proposed Securities equal to a percentage determined by dividing (x) the
number of shares of Common Stock then held by such Investor (other than
Plan Stock) by (y) the total number of shares of Common Stock then
outstanding (other than Plan Stock).
Each such Investor must exercise its purchase rights hereunder within ten (10)
days after receipt of such notice from the Company. If all of the Proposed
Securities offered to such Investors are not fully subscribed by such
Investors, the remaining Proposed Securities will be reoffered to those
Investors purchasing their full allotment upon the terms set forth in this
Section 1(d) (with an allocation based on the respective percentages of the
aggregate number of shares of Common Stock held by such Investors (other than
Plan Stock)), until all such Proposed Securities are fully subscribed for or
until all such Investors have subscribed for all such Proposed Securities which
they desire to purchase, except that such Investors must exercise their
purchase rights within five days after receipt of all such reoffers. To the
extent that the Company offers two or more securities in units, Investors must
purchase such units as
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a whole and will not be given the opportunity to purchase only one of the
securities making up such unit.
Upon the expiration of the offering periods described above, the
Company will be free to sell such Proposed Securities that the Investors have
not elected to purchase during the ninety (90) days following such expiration
on terms and conditions no more favorable to the purchasers thereof than those
offered to such holders. Any Proposed Securities offered or sold by the
Company after such 90-day period must be reoffered to the Investors pursuant
to this Section 1(d). The election by an Investor not to exercise its
subscription rights under this Section 1(d) in any one instance shall not
affect its right (other than in respect of a reduction in its percentage
holdings) as to any subsequent proposed issuance. Any sale of such securities
by the Company without first giving the Investors the rights described in this
Section 1(d) shall be void and of no force and effect.
(e) Additional Investors. The parties hereto acknowledge that,
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subject to the terms hereof, certain employees of the Company or its
Subsidiaries may become stockholders of the Company after the date hereof and
that each such employee will be required, as a condition to the issuance of
shares of Common Stock to them, to execute a Joinder Agreement in the form
attached hereto as Exhibit A (the "Joinder Agreement"). Upon execution of a
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Joinder Agreement, each such employee shall be deemed to be a Management
Investor under this Agreement and shall be entitled to all of the rights and
benefits afforded to, and shall be subject to all the obligations of, a
Management Investor hereunder.
2. TRANSFER OF STOCK
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(a) Resale of Securities. Without the approval of the Board, no
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Management Investor shall Transfer any Shares, or any beneficial interest
therein, other than (i) in accordance with the provisions of this Section 2,
(ii) sales pursuant to a Transfer Notice in accordance with Section 3 and
(iii) sales pursuant to a Drag-Along Notice in accordance with Section 4. Any
Transfer or purported Transfer made in violation of this Section 2 shall be
null and void and of no effect.
(b) Securities Act Transfer Restrictions. No Management Investor
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shall Transfer any Shares (including any shares received as a result of
dividends, splits or any other forms of recapitalization in respect of such
Shares), either voluntarily or involuntarily, directly or indirectly, except
pursuant to an effective registration under the Securities Act, or in a
transaction which, in the opinion of counsel reasonably satisfactory to the
Company, qualifies as an exempt transaction under the Securities Act and the
rules and regulations promulgated thereunder.
(c) Rights of First Refusal. No Management Investor shall Transfer
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any Shares, or any beneficial interest therein (except (i) (x) to members of
such Management Investor's immediate family or trusts for their benefit, and
(y) upon the death of any Management Investor, to his or her respective
executors, administrators, or testamentary trustees; to a corporation or
partnership, the sole stockholders or limited or general partners of
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which include only such Management Investor and members of such Management
Investor's immediate family; a transfer from a Management Investor's trust or
other transferee back to such Management Investor; a transfer to the legal
guardian of a disabled Management Investor or of a Management Investor's
disabled immediate family member, provided in each instance in this clause (i)
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that such transferee executes and delivers to the Company and Warburg a Joinder
Agreement, or (ii) to Warburg or an Affiliate thereof), unless the Management
Investor desiring to make the Transfer (hereinafter referred to as the
"Transferor") shall have first made the offers to sell to the Company and then
to Warburg as contemplated by Section 2(d) through 2(j), and such offers shall
not have been accepted.
(d) Offer by Transferor. Copies of the Transferor's offer shall be
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given to the Company and Warburg and shall consist of an offer to sell to the
Company or, failing its election to purchase, then to Warburg, all of the
shares then proposed to be transferred by the Transferor (the "Subject Shares")
pursuant to a bona fide offer of a third party, to which copies shall be
attached a statement of intention to Transfer to such third party, the name and
address of the prospective third party transferee, the number of shares of
Common Stock involved in the proposed Transfer and terms of such Transfer.
(e) Acceptance of Offer. (i) Within 10 days after the receipt of the
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offer described in Section 2(d), the Company may, at its option, elect to
purchase all, but not less than all, of the Subject Shares. The Company shall
exercise such option by giving notice thereof to the Transferor and to Warburg
within such 10 day period.
(ii) In the event that the Company does not exercise its option to
purchase the Subject Shares within such 10 day period, Warburg may exercise
its election to purchase all, but not less than all, of the Subject Shares by
giving notice thereof to the Transferor and to the Company within 10 days after
receipt of notice from the Transferor in accordance with Section 2(d) to the
effect that the Company did not exercise its option to purchase.
(iii) In either event, the notice required to be given by the
purchasing party (the "Purchaser") shall specify a date for the closing of the
purchase which shall not be more than 30 days after the date of the giving of
such notice.
(f) Purchase Price. The purchase price per share for the Subject
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Shares shall be the price per share offered to be paid by the prospective
transferee described in the offer, which price shall be paid in cash or, if so
provided in the offer of the prospective transferee, cash plus deferred
payments of cash in the same proportions, and with the same terms of deferred
payment as therein set forth.
(g) Consideration Other Than Cash. If the offer of Subject Shares
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under this Section 2 is for consideration other than cash or cash plus deferred
payments of cash, the Purchaser shall pay the cash equivalent of such other
consideration. If the Transferor and the Purchaser cannot agree on the amount
of such cash equivalent within 10 days after the beginning of the 10-day period
under Section 2(e)(i), any of such parties may, by three days'
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written notice to the other, initiate appraisal proceedings under Section 2(h)
for determination of the cash equivalent.
(h) Appraisal Procedure. If any party shall initiate an appraisal
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procedure to determine the amount of the cash equivalent of any consideration
for Subject Shares under Section 2(g), then the Transferor, on the one hand,
and the Purchaser, on the other hand, shall each promptly appoint as an
appraiser an individual who shall be a member of a reputable valuation firm.
Each appraiser shall, within 30 days of appointment, separately investigate the
value of the consideration for the Subject Shares as of the proposed transfer
date and shall submit a notice of an appraisal of that value to each party.
Each appraiser shall be instructed to determine such value without regard to
income tax consequences to the Transferor as a result of receiving cash rather
than other consideration. If, upon the completion of the initial appraisals
(the "Earlier Appraisals"), the higher appraised value of such consideration
is not more than 110% of the lower appraised value of such consideration, the
average of the two appraisals on a per share basis shall be controlling as the
amount of the cash equivalent. If the higher appraised value is more than 110%
of the lower appraised value, the appraisers, within 10 days of the submission
of the last appraisal, shall appoint a third appraiser who shall be member of
a reputable valuation firm. The third appraiser shall, within 30 days of his
appointment, appraise the value of the consideration for the Subject Shares
(without regard to the income tax consequences to the Transferor as a result
of receiving cash rather than other consideration) as of the proposed transfer
date and submit notice of his appraisal to each party. The value determined by
the third appraiser shall be controlling as the amount of the cash equivalent
unless the value is greater than the two Earlier Appraisals, in which case the
higher of the two Earlier Appraisals will control, and unless that value is
lower than the two Earlier Appraisals, in which case the lower of the two
Earlier Appraisals will control. If any party fails to appoint an appraiser
or if one of the two initial appraisers fails after appointment to submit his
appraisal within the required period, the appraisal submitted by the remaining
appraiser shall be controlling. The cost of the foregoing appraisals shall be
shared one-half by the Transferor and one-half by the Purchaser.
(i) Closing of Purchase. The closing of the purchase shall take
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place at the office of the Company or such other location as shall be mutually
agreeable and the purchase price, to the extent comprised of cash, shall be
paid at the closing, and cash equivalents and documents evidencing any deferred
payments of cash permitted pursuant to Section 2(f) above shall be delivered at
the closing. At the closing, the Transferor shall deliver to the Purchaser the
certificates evidencing the Subject Shares to be conveyed, duly endorsed and in
negotiable form with all the requisite documentary stamps affixed thereto.
(j) Release from Restriction; Termination of Rights. If the offer
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to sell is neither accepted by the Company nor by Warburg, the Transferor may
make a bona fide Transfer to the prospective transferee named in the statement
attached to the offer in accordance with the agreed upon terms of such
Transfer, provided, that (A) such Transfer shall be made only in strict
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accordance with the terms therein stated and (B) the transferee executes and
delivers to the Company and Warburg a copy of the Joinder Agreement. If the
Transferor shall fail to make such Transfer within sixty (60) days following
the expiration of
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the time hereinabove provided for the election by Warburg or, in the event
the Purchaser revokes an election to purchase the Subject Shares pursuant to
Section 2(g), within sixty (60) days of the date of such notice of revocation,
such Shares shall again become subject to all the restrictions of this
Section 2.
3. RIGHT OF CO-SALE.
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(a) In the event that Warburg intends to Transfer shares of Common
Stock which, together with any previous sales of shares of Common Stock by
Warburg from and after the date of this Agreement, represent more than fifteen
percent (15%) of the issued and outstanding shares of Common Stock on a
cumulative basis (other than to an Affiliate of Warburg, to the Company or
pursuant to a distribution of such shares to its partners), Warburg shall
notify each other Investor holding shares of such class of stock, in writing,
of such Transfer and its terms and conditions (the "Proposed Sale"). Within
10 days of the date of such notice, each Investor that wishes to participate
in the Proposed Sale shall so notify Warburg in writing (a "Transfer Notice").
In the event Warburg fails to receive a Transfer Notice from any Investor
within such 10-day period, such Investor shall be deemed to have declined to
participate in the Proposed Sale. Each Investor delivering a Transfer Notice
shall have the right to sell, at the same price and on the same terms as
Warburg, that number of shares of Common Stock equal to the number of shares
of Common Stock the third party proposes to purchase multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock (other
than Plan Stock) issued and owned by such Investor and the denominator of which
shall be the aggregate number of shares of Common Stock (other than Plan Stock)
issued and owned by Warburg and each other Investor (including such Investor
exercising its rights under this Section 3). Nothing contained herein shall
obligate Warburg to consummate the Proposed Sale or limit Warburg's right to
amend or modify the terms of the Proposed Sale in any respect; provided that
the Investors are offered the opportunity to participate in the Proposed Sale
on such amended or modified terms.
(b) Notwithstanding anything contained in this Section 3, in the
event that all or a portion of the consideration to be paid in the Proposed
Sale consists of securities and the sale of such securities to Investors would
require either a registration under the Securities Act or the preparation of a
disclosure document pursuant to Regulation D under the Securities Act (or any
successor regulation) or a similar provision of any applicable state securities
law, then, at the option of Warburg, the Management Investors may receive, in
lieu of such securities, the fair market value of such securities in cash, as
determined in good faith by the Board unless Management Investors holding a
majority of the shares of Common Stock held by Management Investors shall
request an appraisal, in which case the appraisal procedure set forth in
Section 2(h) shall be followed as closely as practicable, with such Management
Investors holding a majority of such shares held by the Management Investors,
on the one hand, and Warburg, on the other hand, each appointing an appraiser
meeting the qualifications set forth in said Section 2(h).
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4. DRAG-ALONG RIGHT
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(a) If at any time and from time to time after the date of this
Agreement, the holder or holders of a majority of the outstanding shares of
voting capital stock of the Company (the "Proposed Transferors") wish to
Transfer in a bona fide arms' length sale all shares of Common Stock then
owned by them to any Person or Persons who are not Affiliates of the Proposed
Transferors (for purposes of this Section 4(a), the "Proposed Transferee"), the
Proposed Transferors shall have the right (the "Drag-Along Right") to require
each Investor to sell to the Proposed Transferee all shares of Common Stock
(for the same per share consideration received by the Proposed Transferor for
each such class of capital stock) then held by the Investors, subject to
purchase by the Proposed Transferee. Each Investor agrees to take all steps
necessary to enable him or it to comply with the provisions of this Section
4(a), including, if necessary, voting any shares of Common Stock in favor of
the transaction with the Proposed Transferee (whether effected as a merger or
otherwise) to facilitate the Proposed Transferors' exercise of a Drag-Along
Right.
(b) To exercise a Drag-Along Right, the Proposed Transferors shall
give each Investor a written notice (for purposes of this Section 4, a "Drag-
Along Notice") containing (i) the number of shares of Common Stock that the
Proposed Transferee proposes to acquire from the Proposed Transferors, (ii) the
name and address of the Proposed Transferee, and (iii) the proposed purchase
price, terms of payment and other material terms and conditions of the Proposed
Transferee's offer. Each Investor shall thereafter be obligated to sell the
shares of Common Stock subject to such Drag-Along Notice, provided that the
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sale to the Proposed Transferee is consummated within 120 days of delivery of
the Drag-Along Notice. If the sale is not consummated within such 120-day
period, then each Investor shall no longer be obligated to sell such
stockholder's shares pursuant to that specific Drag-Along Right but shall
remain subject to the provisions of this Section 4.
(c) Notwithstanding anything contained in this Section 4, in the
event that all or a portion of the purchase price consists of securities and
the sale of such securities to the Investors would require either a
registration under the Securities Act or the preparation of a disclosure
document pursuant to Regulation D under the Securities Act (or any successor
regulation) or a similar provision of any applicable state securities law,
then, at the option of the Proposed Transferors, the Management Investors may
receive, in lieu of such securities, the fair market value of such securities
in cash, as determined in good faith by the Board unless the Management
Investors holding a majority of the shares of Common Stock held by Management
Investors shall request an appraisal, in which case the appraisal procedure set
forth in Section 2(h) shall be followed as closely as practicable, with such
Management Investors holding a majority of such shares held by the Management
Investors), on the one hand, and Warburg, on the other hand, each appointing
an appraiser meeting the qualifications set forth in Section 2(h).
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5. INFORMATION AS TO COMPANY AND RELATED COVENANTS
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(a) Investor Financial Information. From and after the date hereof,
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the Company shall deliver to each Investor owning more than 5% of the issued
and outstanding shares of Common Stock (except for the annual reports referred
to in (a)(ii) below, which shall be delivered to each Investor as long as such
Investor owns any shares of Common Stock):
(i) Quarterly Statements. As soon as practicable, and in any event
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within 45 days after the close of each of the first three fiscal quarters of
each fiscal year of the Company, a consolidated balance sheet, statement of
income and statement of changes in cash flow of the Company and its
Subsidiaries (as hereinafter defined) as of the close of such quarter and the
portion of the Company's fiscal year ending on the last day of such quarter,
all in reasonable detail and prepared in accordance with U.S. generally
accepted accounting principles, consistently applied, subject to audit and year
end adjustments, setting forth in each case in comparative form the figures for
the comparable period of the previous year;
(ii) Annual Statements. As soon as practicable after the end of
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each fiscal year of the Company, and in any event within 120 days thereafter, a
copy of the consolidated balance sheet, and consolidated statements of income,
stockholders' equity and changes in cash flow of the Company and its
Subsidiaries for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and accompanied
by an opinion thereon of independent certified public accountants of recognized
national standing selected by the Company, which opinion shall state that such
financial statements fairly present the financial position and results of
operations of the Company and its Subsidiaries on a consolidated basis and
have been prepared in accordance with U.S. generally accepted accounting
principles consistently applied (except for changes in application in which
such accountants concur) and that the examination of such accountants has been
made in accordance with generally accepted auditing standards, and accordingly
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances.
(b) Director Materials. The Company shall prepare and deliver to
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each director of the Company:
(i) Monthly Financial Statements. As soon as practicable, and in
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any event within 30 days after the close of each of month of each fiscal year
of the Company, a consolidated balance sheet, statement of income and statement
of changes in cash flow of the Company and its Subsidiaries as of the close of
each month and the portion of the Company's fiscal year ending on the last day
of such month, all in reasonable detail and prepared in accordance with U.S.
generally accepted accounting principles, consistently applied, subject to
audit and year end adjustments, setting forth in each case in comparative form
the figures for the comparable period of the previous year;
(ii) Business Plan; Projections. Prior to the commencement of each
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fiscal year of the Company, an annual business plan of the Company and
projections of operating
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results, prepared on a monthly basis, and a three-year business plan of the
Company and projections of operating results. Within 45 days of the close of
each fiscal quarter of the Company, the Company shall provide its directors
with a comparison of actual year-to-date results with the corresponding
budgeted figures;
(iii) Audit Reports. Promptly upon receipt thereof, one copy of each
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other financial report and internal control letter submitted to the Company by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Company and its Subsidiaries; and
(iv) Requested Information. With reasonable promptness, the Company
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shall furnish each director with such other data and information as from time
to time may be reasonably requested.
The Company acknowledges that its obligations under this Section 5(b)
shall not limit the rights of its directors under applicable law to obtain
information and other materials from the Company.
(c) Inspection. From and after the date hereof, the Company will
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permit each Investor owning more than 5% of the issued and outstanding shares
of Common Stock, its nominee, assignee or its representative to visit and
inspect any of the properties of the Company, to examine all its books of
account, records, reports and other papers not contractually required of the
Company to be confidential or secret, to make copies and extracts therefrom,
and to discuss its affairs, finances and accounts with its officers, directors,
key employees and independent public accountants or any of them (and by this
provision the Company authorizes said accountants to discuss with said
Investor, its nominee, assign and representatives the finances and affairs of
the Company and its Subsidiaries), all at such reasonable times and as often
as may be reasonably requested.
(d) Confidentiality. As to so much of the information and other
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material furnished under or in connection with this Agreement (whether
furnished before, on or after the date hereof) as constitutes or contains
confidential business, financial or other information of the Company or its
Subsidiaries, each Investor covenants for itself and its directors, officers,
partners and stockholders that it will use due care to prevent its respective
officers, directors, employees, counsel, accountants and other representatives
from disclosing such information to persons other than their respective
authorized employees, counsel, accountants, stockholders, partners, limited
partners and other authorized representatives; provided, however, that the
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Investor may disclose or deliver any information or other material disclosed
to or received by the Investor should such disclosure or delivery be required
by law.
6. REGISTRATION RIGHTS
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(a) Definitions. As used in this Section 6:
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(i) "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act;
(ii) the term "Holder" shall mean any holder of Registrable
Securities;
(iii) the term "Initiating Holder" shall mean Warburg;
(iv) the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
(v) the term "Registrable Securities" means (A) the shares of Common
Stock owned by the Investors on the date hereof, (B) any additional shares of
Common Stock acquired by the Investors (other than pursuant to the Stock Plan
or any other incentive plan) and (C) any capital stock of the Company issued as
a dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Common Stock referred to in clause (A) or (B)
above;
(vi) "Registration Expenses" shall mean (x) all expenses incurred by
the Company in compliance with Sections 6(b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which
shall be paid in any event by the Company) and (y) all reasonable fees and
disbursements of counsel for each of the Holders; and
(vii) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.
(b) Requested Registration.
----------------------
(i) Request for Registration. If the Company shall receive from the
------------------------
Initiating Holder, at any time, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:
(A) promptly give written notice of the proposed registration
to all other Holders of Registrable Securities of the same class as the
Registrable Securities specified in such request; and
(B) as soon as practicable, use all reasonable efforts to
effect such registration (including, without limitation, the execution of
an undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the
11
sale and distribution of all or such portion of such Registrable Securities
as are specified in such request, together with all or such portion of the
Registrable Securities of the same class as the Registrable Securities
specified in such request of any Holder or Holders joining in such request
as are specified in a written request received by the Company within 10
business days after written notice from the Company is given under Section
6(b)(i)(A) above; provided that the Company shall not be obligated to
--------
effect, or take any action to effect, any such registration pursuant to
this Section 6(b):
(x) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance,
unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable rules
or regulations thereunder;
(y) After the Company has effected two (2) such
registrations pursuant to this Section 6(b) requested by the
Initiating Holder, and such registrations have been declared or
ordered effective and the sales of such Registrable Securities shall
have closed; or
(z) If the Registrable Securities requested by all
Holders to be registered pursuant to such request do not have an
anticipated aggregate public offering price (before any underwriting
discounts and commissions) of at least $25,000,000.
The registration statement filed pursuant to the request of the
Initiating Holder may, subject to the provisions of Section 6(b)(ii) below,
include other securities of the Company which are held by officers or directors
of the Company, or which are held by Persons who, by virtue of agreements with
the Company, are entitled to include their securities in any such registration,
but the Company's right to include any of its securities in any such
registration shall be subject to the limitations set forth in Section 6(b)(ii)
below.
The registration rights set forth in this Section 6 shall be
assignable, in whole or in part, to any permitted transferee of the Shares,
provided such transferee executes and delivers to the Company and Warburg a
Joinder Agreement.
(ii) Underwriting. If the Initiating Holder intends to distribute the
------------
Registrable Securities covered by its request by means of an underwriting, it
shall so advise the Company as a part of its request made pursuant to Section
6(b).
If officers or directors of the Company holding shares of
Common Stock (other than Registrable Securities) shall request inclusion in any
registration pursuant to Section 6(b), or if holders of securities of the
Company other than Registrable Securities who are entitled, by contract with
the Company or otherwise, to have securities included in such a registration
(the "Other Stockholders") request such inclusion, the Holders shall offer to
include the securities of such officers, directors and Other Stockholders in
the underwriting
12
and may condition such offer on their acceptance of the further applicable
provisions of this Section 6. The Holders whose shares are to be included in
such registration and the Company shall (together with all officers, directors
and Other Stockholders proposing to distribute their securities (in each case,
other than Registrable Securities) through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Initiating
Holder and reasonably acceptable to the Company. Notwithstanding any other
provision of this Section 6(b), (i) if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares
to be underwritten, then the securities of the Company held by officers or
directors (other than Registrable Securities) of the Company and the securities
held by Other Stockholders shall be excluded from such registration to the
extent so required by such limitations and (ii) if the representative advises
the Holders in writing that marketing factors require a limitation on the
number of shares to be sold by officers and directors of the Company, the
securities of the Company held by such officers or directors (including
Registrable Securities) shall be excluded from such registration to the extent
so required by such limitations. If, after the exclusion of such shares,
further reductions are still required, the number of shares included in the
registration by each Holder shall be reduced on a pro rata basis (based on the
number of shares held by the respective Holders) by such minimum number of
shares as is necessary to comply with such request. No Registrable Securities
or any other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any officer, director or Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holder. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities or other securities to be underwritten, the
Company may include its securities for its own account in such registration if
the representative so agrees and if the number of Registrable Securities and
other securities which would otherwise have been included in such registration
and underwriting will not thereby be limited.
(iii) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting the filing of a registration statement pursuant to this
Section 6(b), a certificate signed by the President or Chief Executive Officer
of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its stockholders for such registration statement to be filed and it is
therefore essential to defer the filing of such registration statement, then
the Company shall have the right to defer such filing for a period of not more
than 120 days after receipt of the request of the Initiating Holder; provided,
--------
however, that the Company may not utilize this right more than once in any
-------
twelve (12) month period.
(c) Company Registration.
--------------------
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of a security holder
or holders, other than a registration relating solely to employee benefit
plans, or a registration relating solely to a
13
Commission Rule 145 transaction, or a registration on any registration form
which does not permit secondary sales or does not include substantially the
same information as would be required to be included in a registration
statement covering the sale of Registrable Securities, the Company will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable
blue sky or other state securities laws); and
(B) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities (of the same class of equity
securities being registered under such registration statement) specified in
a written request or requests, made by the Holders within ten business days
after receipt of the written notice from the Company described in clause
(i) above, except as set forth in Section 6(c)(ii) below. Such written
request may specify all or a part of the Holders' Registrable Securities
of the same class of equity securities being registered under such
registration statement.
(ii) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 6(c)(i)(A). In such event, the right of each of the
Holders to registration pursuant to this Section 6(c) shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities (of the same class of equity securities being
registered under such registration statement) in the underwriting to the
extent provided herein. The Holders whose shares are to be included in such
registration shall (together with the Company and the Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 6(c), if the representative
determines that marketing factors require a limitation on the number of shares
to be underwritten, the Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner: The securities of the Company held by officers,
directors and Other Stockholders of the Company (in each case, other than
Registrable Securities) and, if required by the representative of the
underwriters, the securities of the Company held by officers and directors of
the Company (including Registrable Securities), shall be excluded from such
registration and underwriting to the extent required by such limitation, and,
if a limitation on the number of shares is still required, the number of
shares that may be included in the registration and underwriting by each of the
Holders shall be reduced, on a pro rata basis (based on the number of shares
held by such Holder), by such minimum number of shares as is necessary to
comply with such limitation. If any of the Holders or any officer, director
or Other Stockholder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
14
(iii) Number and Transferability. Each of the Holders shall be
--------------------------
entitled to have its shares included in an unlimited number of registrations
pursuant to this Section 6(c). The registration rights granted pursuant to
this Section 6(c) shall be assignable, in whole or in part, to any permitted
transferee of the Shares, provided such transferee executes and delivers to
the Company and to Warburg a Joinder Agreement.
(d) Form S-3. Following the Initial Public Offering, the Company
--------
shall use its best efforts to qualify for registration on Form S-3 for
secondary sales. After the Company has qualified for the use of Form S-3,
Holders of Registrable Securities shall have the right to request unlimited
registrations on Form S-3 (such requests shall be in writing and shall state
the number of shares of Registrable Securities to be disposed of and the
intended method of disposition of shares by such holders), subject only to the
following:
(i) The Company shall not be required to effect a registration
pursuant to this Section 6(d) unless the Holder or Holders of Registrable
Securities requesting registration propose to dispose of shares of Registrable
Securities having an aggregate price to the public (before deduction of
underwriting discounts and expenses of sale) of more than $5,000,000.
(ii) The Company shall not be required to effect a registration
pursuant to this Section 6(d) within 180 days of the effective date of the most
recent registration pursuant to this Section 6(d) in which securities held by
the requesting Holder could have been included for sale or distribution.
(iii) The Company shall not be required to effect a registration
pursuant to this Section 6(d) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement. In such event, the Company
shall have the right to defer the filing of the registration statement no more
than once during any twelve (12) month period for a period of not more than one
hundred twenty (120) days after receipt of the request of the Holder or Holders
under this Section 6(d).
(iv) The Company shall not be obligated to effect any registration
pursuant to this Section 6(d) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless the Company
is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder.
The Company shall give written notice thereof to all Holders of
Registrable Securities within five (5) days of the receipt of a request for
registration pursuant to this Section 6(d) and shall provide a reasonable
opportunity for other Holders of Registrable Securities to participate in the
registration, provided that if the registration is for an underwritten
offering, the terms of Section 6(b)(ii) shall apply to all participants in such
15
offering. Subject to the foregoing, the Company will use its best efforts to
effect promptly the registration of all shares of Registrable Securities on
Form S-3 to the extent requested by the Holder or Holders thereof for purposes
of disposition.
(e) Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Section 6 (whether or not such registration, qualification or compliance is
effectuated) shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered (or proposed to be
registered) pro rata on the basis of the number of their shares so registered
(or proposed to be registered).
(f) Registration Procedures. In the case of each registration
-----------------------
effected by the Company pursuant to Section 6, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
will:
(i) keep such registration effective for a period of one hundred
twenty (120) days or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto,
whichever first occurs; provided, however, that (A) such 120-day period shall
be extended for a period of time equal to the period during which the Holders,
as applicable, refrain from selling any securities included in such
registration in accordance with provisions in Section 6(j) hereof; and (B) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended until all such Registrable Securities are sold, provided that
Rule 415, or any successor rule under the Securities Act, permits an offering
on a continuous or delayed basis, and provided further that applicable rules
under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment which (y)
includes any prospectus required by Section 10(a)(3) of the Securities Act or
(z) reflects facts or events representing a material or fundamental change in
the information set forth in the registration statement, the incorporation by
reference of information required to be included in (y) and (z) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement; and
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time may
reasonably request.
(g) Indemnification.
---------------
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors and partners, and each person controlling each
of the Holders, with respect to each registration which has been effected
pursuant to this Section 6, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or
16
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of
its officers, directors and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by any Holder with respect to
such Holder or underwriter with respect to such underwriter and stated to be
specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each Other Stockholder and each of their officers,
directors, and partners, and each person controlling such Other Stockholder
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact with respect to such Holder contained in any
such registration statement, prospectus, offering circular or other document
made by such Holder, or any omission (or alleged omission) to state therein a
material fact with respect to such Holder required to be stated therein or
necessary to make the statements by such Holder therein not misleading, and
will reimburse the Company and such Other Stockholders, directors, officers,
partners, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
with respect to such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each of the Holders hereunder shall
be limited to an amount equal to the proceeds to such Holder of securities
sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section 6(g)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting
17
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at its own expense (unless the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in such action, in which case the fees and
expenses of counsel shall be at the expense of the Indemnifying Party), and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 6 unless, and only to the extent, the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, 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
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 6(g) is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated
by this Agreement are in conflict with the foregoing provisions, the provisions
in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders
is subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter if a copy of the Final Prospectus was furnished to the underwriter
and was not
18
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
(vii) Any indemnification payments required to be made to an
Indemnified Party under this Section 6(g) shall be made as the related claims,
losses, damages, liabilities or expenses are incurred.
(h) Information by the Holders. Each of the Holders and each Other
--------------------------
Stockholder holding securities included in any registration, shall furnish to
the Company such information regarding such Holder or Other Stockholder and the
distribution proposed by such Holder or Other Stockholder as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this Section
6. Warburg shall not be required, in connection with any underwriting
arrangements entered into in connection with any registration, to provide any
information, representations or warranties, or covenants with respect to the
Company, its business or its operations, and such Investors shall not be
required to provide any indemnification with respect to any registration
statement except as specifically provided for in Section 6(g)(ii) hereof.
(i) Rule 144 Reporting.
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of the restricted
securities to the public without registration, the Company agrees to:
(A) make and keep public information available as those terms
are understood and defined in Rule 144, at all times from and after ninety
(90) days following the effective date of the first registration under the
Securities Act filed by the Company after the date of this Agreement for an
offering of its securities to the general public;
(B) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act at any time after the date
of this Agreement the Company has become subject to such reporting
requirements; and
(C) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time
from and after ninety (90) days following the effective date of the first
registration statement filed by the Company after the date of this
Agreement for an offering of its securities to the general public), and of
the Securities Act and the Exchange Act (at any time after the date of this
Agreement the Company 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 as the Holder may reasonably request
19
in availing itself of any rule or regulation of the Commission allowing
the Holder to sell any such securities without registration.
(j) "Market Stand-off" Agreement. Each of the Holders agrees, if
----------------------------
requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, not to sell or otherwise transfer or dispose of
any shares of Common Stock (or other securities) of the Company held by such
Holder during the 90-day period (or such longer period if requested by such
underwriter, up to 180 days) following the effective date of a registration
statement of the Company filed under the Securities Act, provided that:
(i) such agreement only applies to the first such registration
statement of the Company after the date of this Agreement which includes
securities to be sold on the Company's behalf to the public in an
underwritten offering; and
(ii) all officers and directors of the Company enter into
similar agreements.
If requested by the underwriters, the Holders shall execute a separate
agreement to the foregoing effect. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of said 90-day period (or such longer
period if requested by the underwriter, up to 180 days). The provisions of
this Section 6(j) shall be binding upon any transferee who acquires Registrable
Securities, whether or not such transferee is entitled to the registration
rights provided hereunder.
(k) Termination. The registration rights set forth in this Section 6
-----------
shall not be available to any Holder if, in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any 90-day period pursuant to Rule 144 under the Securities Act
(without giving effect to the provisions of Rule 144(k)). The Company will
arrange for a provision to the transfer agent for such shares of an opinion of
counsel in connection with any such sale under Rule 144.
7. TERMINATION. The Agreement shall terminate:
-----------
(a) upon the closing of the Initial Public Offering, except for the
provisions of Sections 1(b)(ii), 1(c), 5(d) and 6, any election made by Warburg
pursuant to Section 1(b)(i), 1(b)(ii) or 9(d), which shall remain in full force
and effect following the closing of the Initial Public Offering; or
(b) on the date on which (i) Warburg, and (ii) the Management Investors
holding a majority of shares of Common Stock (other than Plan Stock and other
than those shares held by Warburg or its Affiliates) shall have agreed in
writing to terminate this Agreement.
Notwithstanding anything in this Agreement to the contrary, if a
Management Investor's employment with the Company and its Subsidiaries is
terminated, whether by such
20
Management Investor or by the Company, whether with or without cause or whether
due to the death or disability, all rights (other than his rights under
Section 6) of such Management Investor under this Agreement (but not the
obligations) shall be terminated.
8. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Terms Defined. As used in this Agreement, the following terms
-------------
have the respective meaning set forth below:
Affiliate: any person or entity, directly or indirectly, controlling,
---------
controlled by or under common control with such person or entity.
Xxxxx Employment Agreement: the Employment Agreement, dated as of
--------------------------
February 29, 1996, between Xxxxx and the Company, as amended as of April 30,
1997, and as further amended as of August 1, 1998.
Exchange Act: the Securities Exchange Act of 1934, as amended.
------------
Initial Public Offering: the completion of an underwritten initial
-----------------------
public offering after the date of this Agreement for shares of Common Stock
pursuant to a registration statement under the Securities Act resulting in net
proceeds to the Company and/or any selling stockholders of not less than
$25,000,000.
Xxxxx Employment Agreement: the Employment Agreement, dated as of
--------------------------
February 29, 1996, between Xxxxx and the Company.
Person: an individual, partnership, joint-stock company, corporation,
------
limited liability company, trust or unincorporated organization, and a
government or agency or political subdivision thereof.
Security, Securities: as defined in Section 2(1) of the Securities
--------------------
Act.
Securities Act: the Securities Act of 1933, as amended.
--------------
Staniar Employment Agreement: the Employment Agreement, dated as of
----------------------------
February 29, 1996, between Staniar and the Company.
Subsidiary: a corporation of which the Company owns, directly or
----------
indirectly, more than fifty percent 50% of the Voting Stock.
Transfer: any sale, assignment, pledge, hypothecation, or other
--------
disposition or encumbrance, whether or not for consideration.
21
Voting Stock: securities of any class or classes of a corporation the
------------
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
Warburg Directors: any director of the Company, including a
-----------------
Substitute Director, designated by Warburg pursuant to a provision of this
Agreement.
(b) Accounting Principles. Where the character or amount of any
---------------------
asset or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, this shall be done
in accordance with U.S. generally accepted accounting principles at the time
in effect, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
(c) Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(d) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
(e) Section Headings. The headings of the sections and subsections
----------------
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
9. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered or
certified mail, postage prepaid:
(A) if to any of the Management Investors, at the address of
such Management Investor shown on Schedule I, or at such other address as the
Management Investor may have furnished the Company in writing;
(B) if to Warburg, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx X. Xxxxxx, or at such other address as Warburg may
have furnished the Company in writing; and
(C) if to the Company, to Xxxxx, Inc., 0000 Xxxxx Xxxxxx,
Xxxx Xxxxxxxxxx, XX 00000, Attention: Chief Executive Officer, or at such
other address as it may
22
have furnished in writing to each of the Investors, with a copy to Warburg
pursuant to the previous clause (B).
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed, (ii) documents received by each
Investors pursuant hereto and (iii) financial statements, certificates and
other information previously or hereafter furnished to each Investor, may be
reproduced by each Investor by an photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and each Investor
may destroy any original document so reproduced. All parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made by
each Investor in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
constitutes the entire understanding of the parties hereto relating to the
subject matter hereof and supersedes all prior understandings among such
parties (including the Old Stockholders Agreement). This Agreement may be
amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of (i) Warburg, and (ii) the holder or
holders of a majority of the shares of Common Stock (other than Plan Stock and
other than those shares held by Warburg or its Affiliates), which shall include
Management Investors holding a majority of such shares held by Management
Investors. Without limiting the foregoing, at any time, by written notice to
the Company, Warburg may elect, which election shall be irrevocable, (A) to
limit its rights to vote the shares of Common Stock and other capital stock of
the Company held by it to the lesser of (i) 50.0% of the voting rights of the
Common Stock and other capital stock of the Company outstanding and (ii) the
voting rights of the Common Stock and other capital stock of the Company held
by it, or (B) to waive any or all rights it may have under this Agreement;
provided, that, unless such election shall expressly state to the contrary,
such election shall not apply to any shares that are Transferred by Warburg.
(e) Severability. In the event that any part or parts of this
------------
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
23
(f) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
24
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first above written.
XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
WARBURG, XXXXXX VENTURES, L.P.
By: Warburg, Xxxxxx & Co.,
General Partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Partner
MANAGEMENT INVESTORS:
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxx X. XxXxxx
---------------------------
Xxxxx X. XxXxxx
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
SCHEDULE I
(Intentionally Omitted)
Exhibit A
---------
JOINDER AGREEMENT
-----------------
Joinder Agreement, dated as of this __ day of ___________ _____, by
and among Xxxxx, Inc., a Delaware corporation (the "Company"), and the
undersigned (the "Investor").
Reference is made to that certain Amended and Restated Stockholders
Agreement (the "Stockholders Agreement"), dated as of November __, 1999, by
and among Xxxxx, Inc., Warburg, Xxxxxx Ventures, L.P. and the other holders of
Common Stock from time to time party thereto, as the same may from time to time
be amended.
By executing this Joinder Agreement, the Investor hereby agrees to be
bound by the terms of the Stockholders Agreement as if he were an original
signatory to such Agreement and shall be deemed to be a Management Investor
thereunder.
[insert for corporations only: The Investor hereby represents and warrants
that (i) it is a corporation duly organized, validly existing and in good
standing under the laws of and has the power and authority to
=============
execute and deliver this Agreement and perform its obligations hereunder,
(ii) the execution, delivery and performance of this Agreement has been
authorized by the board of directors of the Investor and no other approval or
authorization is necessary and (iii) the execution, delivery and performance of
this Agreement does not conflict with or violate the terms of its Certificate
of Incorporation or By-laws or any agreement to which it is a party or may be
bound.]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder
Agreement as of the date first above written.
------------------------
Name:
Agreed to and Accepted by:
XXXXX, INC.
_____________________________
Name:
Title:
