EXHIBIT 4.1
INVESTORS' AGREEMENT
dated as of
September 29, 1999
among
XXXXXXX RIVER LABORATORIES HOLDINGS, INC.
and the
several Stockholders from time to time parties hereto
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................1
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board.......................................8
SECTION 2.02. Removal........................................................9
SECTION 2.03. Vacancies......................................................9
SECTION 2.04. Meetings.......................................................9
SECTION 2.05. Action by the Board............................................9
SECTION 2.06. Conflicting Charter or Bylaw Provisions.......................10
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General.......................................................10
SECTION 3.02. Legends.......................................................11
SECTION 3.03. Permitted Transferees.........................................11
SECTION 3.04. Restrictions on Transfers by Management Stockholders..........11
SECTION 3.05. Restrictions on Transfers by CRL..............................12
SECTION 3.06. Restrictions on Transfers by New Minority Shareholders;
Right of First Refusal........................................13
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
SECTION 4.01. Rights to Participate in Transfer.............................15
SECTION 4.02. Right to Compel Participation in Certain Transfers............17
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration...........................................19
SECTION 5.02. Incidental Registration.......................................22
SECTION 5.03. Holdback Agreements...........................................23
SECTION 5.04. Registration Procedures.......................................24
PAGE
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SECTION 5.05. Indemnification by the Company................................27
SECTION 5.06. Indemnification by Participating Stockholders.................27
SECTION 5.07. Conduct of Indemnification Proceedings........................28
SECTION 5.08. Contribution..................................................29
SECTION 5.09. Participation in Public Offering..............................30
SECTION 5.10. Other Indemnification.........................................31
SECTION 5.11. Cooperation by the Company....................................31
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Entire Agreement..............................................31
SECTION 6.02. Binding Effect; Benefit; Treatment of TCW Entities............31
SECTION 6.03. Exclusive Financial and Investment Banking Advisor............32
SECTION 6.04. Put Right.....................................................32
SECTION 6.05. Pre-emptive Rights............................................33
SECTION 6.06. Assignability.................................................33
SECTION 6.07. Amendment; Waiver; Termination................................34
SECTION 6.08. Notices.......................................................34
SECTION 6.09. Headings......................................................37
SECTION 6.10. Counterparts..................................................37
SECTION 6.11. Applicable Law................................................37
SECTION 6.12. Specific Enforcement..........................................37
SECTION 6.13. Consent to Jurisdiction.......................................37
ii
INVESTORS' AGREEMENT
AGREEMENT dated as of September 29, 1999 among Xxxxxxx River
Laboratories Holdings, Inc., a Delaware corporation (the "Company"), CRL
Acquisition LLC, a Delaware limited liability company (the "LLC"), DLJ
Investment Partners, L.P., DLJ Investment Funding, Inc., DLJ ESC II L.P.
(collectively with DLJ Investment Partners, L.P., and DLJ Investment Funding,
Inc., "DLJIP"), The 1818 Mezzanine Fund, L.P. ("BB"), Carlyle High Yield
Partners, L.P. ("Carlyle"), B&L CRL, Inc., a Delaware corporation ("CRL"), the
TCW Entities (as defined herein) (if and when the TCW Entities execute a
counterpart of this Agreement), and certain other Persons listed on the
signature pages hereof (each, a "Management Stockholder", and collectively,
the "Management Stockholders").
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Adverse Person" means any Person whom the Board of Directors of the
Company reasonably determines is a competitor or a potential competitor of the
Company or its subsidiaries in a business that is material to the Company and
its subsidiaries, taken as a whole.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person; provided that no stockholder of the Company shall be deemed
an Affiliate of any other stockholder of the Company solely by reason of any
investment in the Company. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), when used with respect to
any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Affiliated Employee Benefit Trust" means any trust that is a
successor to the assets held by a trust established under an employee benefit
plan subject to
ERISA or any other trust established directly or indirectly under such plan or
any other such plan having the same sponsor.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City are authorized by law to close.
"Bylaws" means the Bylaws of the Company, as amended from time to
time.
"Charter" means the Certificate of Incorporation of the Company, as
amended from time to time.
"Closing Date" means September 29, 1999.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company and any stock into which such Common Stock may thereafter be
converted or changed, and "Common Shares" means shares of Common Stock.
"Company Securities" means the Common Stock and securities
convertible into or exchangeable for Common Stock and options, warrants
(including the Warrants) or other rights to acquire Common Stock or any other
equity security issued by the Company, provided that notwithstanding the
foregoing, the term "Company Securities" shall not include the High Yield
Warrants.
"Drag-Along Portion" means, with respect to any Other Stockholder and
any class of Company Securities, the number of such class of Company
Securities beneficially owned by such Other Stockholder on a Fully Diluted
basis (but without duplication) multiplied by a fraction, the numerator of
which is the number of such class of Company Securities proposed to be sold by
the LLC on behalf of the LLC and the Other Stockholders and the denominator of
which is the total number of such class of Company Securities on a Fully
Diluted basis beneficially owned by the Stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fully Diluted" means, with respect to Common Stock and without
duplication, all outstanding Shares and all Shares issuable in respect of
securities convertible into or exchangeable for Shares, options, warrants
(including the Warrants) and other rights to purchase or subscribe for Shares
or securities convertible into or exchangeable for Common Stock; provided
that, to the extent
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any of the foregoing options, warrants or other rights to purchase or
subscribe for Shares are subject to vesting, the Shares subject to vesting
shall be included in the definition of "Fully Diluted" only upon and to the
extent of such vesting; and provided further that any Shares that vest upon
and as a result of a certain transaction shall be included in the definition
of "Fully Diluted" for purposes of such transaction.
"High Yield Warrants" means the warrants that are issued to
purchasers of the Senior Subordinated Notes of Xxxxxxx River Laboratories,
Inc. on or around the Closing Date for the purchase of shares of Common Stock
constituting not more than 6% of the fully diluted equity of the Company.
"Initial Ownership" means, with respect to any Stockholder and any
class of Company Securities, the number of shares of such class of Company
Securities beneficially owned (and without duplication) which such Persons
have the right to acquire as of the date hereof, or in the case of any Person
that shall become a party to this Agreement on a later date, as of such date,
taking into account any stock split, stock dividend, reverse stock split or
similar event.
"Initial Public Offering" means the first sale after the date hereof
of Common Stock pursuant to an effective registration statement under the
Securities Act (other than (1) a registration statement on Form S-8 or any
successor form and (2) a shelf registration statement filed with respect to
the High Yield Warrants and / or Warrants).
"Other Stockholders" means all Stockholders other than the LLC and
its Permitted Transferees; provided that DLJIP, BB, Carlyle, and the TCW
Entities shall be considered for purposes of this Agreement to be Other
Stockholders.
"Permitted Transferee" means:
(i) in the case of the LLC: (A) any of: DLJ
Merchant Banking Partners II, L.P., a Delaware limited
partnership, DLJ Offshore Partners II, C.V. a Netherlands
Antilles limited partnership, DLJ Merchant Banking Partners
II-A, L.P., a Delaware limited partnership, DLJ Diversified
Partners, L.P., a Delaware limited partnership, DLJ
Diversified Partners-A, L.P., a Delaware limited
partnership, DLJ EAB Partners, L.P., a Delaware limited
partnership, DLJ Millennium Partners, L.P., a Delaware
limited partnership, DLJ Millennium Partners-A, L.P., a
Delaware limited partnership, DLJMB Funding II, Inc., a
Delaware corporation, UK Investment Plan 1997 Partners, a
Delaware partnership, DLJ First ESC, L.P., a Delaware
limited partnership
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and DLJ ESC II, L.P., a Delaware limited partnership, (each
of the foregoing, a "DLJ Entity", and collectively, the "DLJ
Entities"), (B) any general or limited partner of any DLJ
Entity (a "DLJ Partner"), and any corporation, partnership,
Affiliated Employee Benefit Trust or other entity that is an
Affiliate of any DLJ Partner (collectively, the "DLJ
Affiliates"), (C) any managing director, general partner,
director, limited partner, officer or employee of any DLJ
Entity or of any DLJ Affiliate, or the heirs, executors,
administrators, testamentary trustees, legatees or
beneficiaries of any of the foregoing persons referred to in
this clause (C) (collectively, "DLJ Associates"), (D) a
trust, the beneficiaries of which, or a corporation, limited
liability company or partnership, the stockholders, members
or general or limited partners of which, include only XXX
Xxxxxxxx, XXX Xxxxxxxxxx, XXX Associates, their spouses or
their lineal descendants, or (E) a voting trustee for one or
more DLJ Entities, DLJ Affiliates or DLJ Associates;
provided that notwithstanding the foregoing, no Other
Stockholder shall be a Permitted Transferee of the LLC;
(ii) in the case of CRL, Bausch & Lomb Incorporated
("B&L"), or any wholly-owned subsidiary of B&L; and
(iii) in the case of any Management Stockholder:
(A) a Person to whom Shares are transferred from such Other
Stockholder (1) by will or the laws of descent and
distribution or (2) by gift without consideration of any
kind; provided that, in the case of clause (2), such
transferee is the issue or spouse of such Management
Stockholder, (B) a trust that is for the exclusive benefit
of such Management Stockholder or its Permitted Transferees
under (A) above, or a custodian or guardian for the
exclusive benefit of the same, or (C) the Company, in a
transfer approved by the Board; and
(iv) in the case of DLJIP, BB, Carlyle, and the TCW
Entities: any Affiliate of such Person.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Pro Rata Portion" means the number of Shares a Stockholder holds
multiplied by a fraction, the numerator of which is the number of Shares to be
sold by the LLC and its Permitted Transferees in a Public Offering and the
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denominator of which is the total number of Shares, on a Fully Diluted basis,
held in the aggregate by the LLC and its Permitted Transferees prior to such
Public Offering (excluding any Shares acquired or acquirable upon the exercise
of High Yield Warrants).
"Public Offering" means an underwritten public offering of
Registrable Securities of the Company pursuant to an effective registration
statement under the Securities Act.
"Registrable Securities" means any Shares or Warrants until (i) a
registration statement covering such Shares or Warrants has been declared
effective by the SEC and such Shares or Warrants have been disposed of
pursuant to such effective registration statement, (ii) such Shares or
Warrants are sold under circumstances in which all of the applicable
conditions of Rule 144 are met, or (iii) such Shares or Warrants are otherwise
transferred, the Company has delivered a new certificate or other evidence of
ownership for such Shares or Warrants not bearing the legend required pursuant
to this Agreement and such Shares or Warrants may be resold without subsequent
registration under the Securities Act, provided that the term "Registrable
Securities" shall not apply to any Shares received upon exercise of any High
Yield Warrants.
"Registration Expenses" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Shares or Warrants), (iii) printing expenses,
(iv) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (v) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters requested pursuant to
Section 5.04(h)), (vi) the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, (vii) reasonable
fees and expenses of one counsel for the Stockholders participating in the
offering selected (A) by the LLC, in the case of any offering in which the LLC
or any Permitted Transferee of the LLC participates, or (B) in any other case,
by the Other Stockholders holding the majority of Shares to be sold for the
account of all Other Stockholders in the offering, (viii) fees and expenses in
connection with any review of underwriting arrangements by the National
Association of Securities Dealers, Inc. (the "NASD") including fees and
expenses of any "qualified independent underwriter" and (ix) fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities; but shall not include any underwriting fees, discounts or
commissions attributable to the sale of
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Registrable Securities, or any out-of-pocket expenses (except as set forth in
clause (vii) above) of the Stockholders (or the agents who manage their
accounts) or any fees and expenses of underwriter's counsel.
"Restriction Termination Date" means the earlier to occur of (a) the
second anniversary of the Initial Public Offering and (b) the fifth
anniversary of the Closing Date.
"Rule 144" means Rule 144 and Rule 144A (or any successor provisions)
under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of Common Stock.
"Stockholder" means each Person (other than the Company) who shall be
a party to or bound by this Agreement, whether in connection with the
execution and delivery hereof as of the date hereof, pursuant to Section 6.06,
or otherwise, so long as such Person shall (i) beneficially own (directly or
indirectly) any Company Securities, or (ii) have any stock appreciation
rights, options, warrants (other than High Yield Warrants) or other rights to
purchase or subscribe for Company Securities.
"Subject Securities" means any Company Securities beneficially owned
by the Other Stockholders.
"Tag-Along Portion" means the number of shares of Common Stock held
(or, without duplication, acquirable under the Warrants) (excluding any shares
of Common Stock acquired or acquirable under the High Yield Warrants) by the
Tagging Person or the Selling Person, as the case may be, multiplied by a
fraction, the numerator of which is the number of shares of Common Stock
proposed to be sold in the Tag-Along Sale pursuant to Section 4.01, and the
denominator of which is the aggregate number of shares of Common Stock on a
Fully Diluted basis owned by all Stockholders (excluding any shares of Common
Stock acquired or acquirable under the High Yield Warrants).
"TCW Entities" means TCW/Crescent Mezzanine Partners II, L.P.,
TCW/Crescent Mezzanine Trust II, Crescent/MACH I Partners, L.P., TCW Leveraged
Income Trust, L.P. and TCW Leveraged Income Trust II, L.P.
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"Third Party" means a prospective purchaser of Shares in an arm's-
length transaction from a Stockholder where such purchaser is not a Permitted
Transferee of such Stockholder.
"Warrants" means the warrants issued by the Company to the DLJ
Entities for the purchase of shares of Common Stock constituting not more than
10% (the "Agreed Percentage") of the fully diluted equity of the Company,
provided that the Agreed Percentage shall be subject to adjustment in the
event of any disruption or adverse change in current financial or capital
markets generally or in the market for new issuances of high yield securities.
"Warrant Shares" means shares of Common Stock issuable by the Company
upon exercise of the Warrants.
(b) The term "LLC", to the extent the LLC shall have transferred any
of its Shares to "Permitted Transferees", shall mean the LLC and the Permitted
Transferees of the LLC, taken together, and any right or action that may be
taken at the election of the LLC may be taken at the election of the holders
of a majority of the Shares then held by the LLC and such Permitted
Transferees. In the event of a distribution of Shares by the LLC to the
holders of limited liability company interests in the LLC, the term "LLC"
shall be deemed to mean the DLJ Entities and their Permitted Transferees,
taken together, and any right or action that may be taken at the election of
the DLJ Entities may be taken at the election of the holders of a majority of
the Shares then held by the DLJ Entities and such Permitted Transferees.
(c) The term "Other Stockholders", to the extent such stockholders
shall have transferred any of their Shares to "Permitted Transferees", shall
mean the Other Stockholders and the Permitted Transferees of the Other
Stockholders, taken together, and any right or action that may be taken at the
election of the Other Stockholders may be taken at the election of the Other
Stockholders and such Permitted Transferees.
(d) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Applicable Holdback Period 5.03
beneficially own 1.01(a)
Demand Registration 5.01(e)
DLJSC 6.03
7
Drag-Along Rights 4.02(a)
Exercise Period 6.04
Holders 5.01(a)
Incidental Registration 5.01(e)
Indemnified Party 5.07
Indemnifying Party 5.07
Inspectors 5.04(g)
Maximum Offering Size 5.01(e)
Nominee 2.03(a)
Put 6.04
Records 5.04(g)
Section 4.01 Response Notice 4.01(a)
Section 4.02 Notice 4.02(a)
Section 4.02 Notice Period 4.02(a)
Section 4.02 Sale 4.02(a)
Section 4.02 Sale Price 4.02(a)
Selling Person 4.01(a)
Selling Stockholder 5.01(e)
Tag-Along Notice 4.01(a)
Tag-Along Notice Period 4.01(a)
Tag-Along Offer 4.01(a)
Tag-Along Right 4.01(a)
Tag-Along Sale 4.01(a)
Tagging Person 4.01(a)
transfer 3.01
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board. (a) The Board shall consist
initially of nine directors, (i) seven of whom (including the Chairman) will
be designated by DLJ Merchant Banking Partners II, L.P., (ii) one of whom will
be designated by CRL, and (iii) one of whom will be the Chief Executive
Officer appointed by the Board. DLJIP shall be entitled to designate one
observer to the Board, who shall be entitled to receive a copy of any
materials distributed to all members of the Board, until the date on which
DLJIP owns (directly or indirectly) less than 50% of the equity interest in
the Company which it owned (indirectly) as of the Closing Date.
(b) Each Stockholder (other than CRL) entitled to vote for the
election of directors to the Board agrees that it will vote its Shares or
execute written consents, as the case may be, and take all other necessary
action (including
8
causing the Company to call a special meeting of stockholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01;
provided that no Other Stockholder shall be required to vote for the
board-designees of DLJ Merchant Banking Partners II, L.P. if the aggregate
number of Common Shares held by the LLC is less than 10% of its Initial
Ownership of Common Shares, and provided further that no party hereto shall be
required to vote for the board- designee of CRL if the aggregate number of
Common Shares held by CRL is less than 40% of the Initial Ownership of CRL.
SECTION 2.02. Removal. Each Stockholder (other than CRL) agrees that
if, at any time, it is then entitled to vote for the removal of directors of
the Company, it will not vote any of its Shares in favor of the removal of any
director who shall have been designated or nominated pursuant to Section 2.01
unless such removal shall be for cause or the Persons entitled to designate or
nominate such director shall have consented to such removal in writing.
SECTION 2.03. Vacancies. If, as a result of death, disability,
retirement, resignation, removal (with or without cause) or otherwise, there
shall exist or occur any vacancy of the Board:
(a) the Person or Persons entitled under Section 2.01 to designate
or nominate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy may designate another individual (the
"Nominee") to fill such capacity and serve as a director of the Company; and
(b) each Stockholder (other than CRL) then entitled to vote for the
election of the Nominee as a director of the Company agrees that it will vote
its Shares, or execute a written consent, as the case may be, in order to
ensure that the Nominee is elected to the Board.
SECTION 2.04. Meetings. The Board shall hold a regularly scheduled
meeting at least once every calendar quarter, and notice of each meeting shall
be given to all directors at least five Business Days prior to such meeting.
SECTION 2.05. Action by the Board. (a) A quorum of the Board shall
consist of four directors, of whom at least three must be designees of DLJ
Merchant Banking Partners II, L.P.; provided that the LLC shall have the right
at any time to change the number of directors necessary to constitute a quorum
of the Board. All actions of the Board shall require the affirmative vote of
at least a majority of the directors present at a duly convened meeting of the
Board at which a quorum is present or the unanimous written consent of the
Board; provided that, in the event there is a vacancy on the Board and an
individual has been nominated to fill such vacancy, the first order of
business shall be to fill such vacancy.
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(b) CRL shall have the right to send an observer who is an employee
of B&L or an Affiliate of B&L to any meeting of the Board that the director
who is designated by CRL is unable to attend. The observer shall have the
privilege of voice but no vote with respect to any matter and shall be given a
copy of any materials distributed to the Board members for such meeting.
(c) The Board may create executive, compensation and audit
committees, as well as such other committees as it may determine. DLJ Merchant
Banking Partners II, L.P. shall be entitled to designate a majority of the
directors on any committee created by the Board.
SECTION 2.06. Conflicting Charter or Bylaw Provisions. Each
Stockholder shall vote its Shares or execute written consents, as the case may
be, and take all other actions necessary, to ensure that the Company's Charter
and Bylaws facilitate and do not at any time conflict with any provision of
this Agreement.
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General. Each Stockholder understands and agrees that
the Company Securities purchased pursuant to the applicable subscription
agreement have not been registered under the Securities Act and are restricted
securities. Each Stockholder agrees that it will not, directly or indirectly,
sell, assign, transfer, grant a participation in, pledge or otherwise dispose
of ("transfer") any Company Securities (or solicit any offers to buy or
otherwise acquire, or take a pledge of any Company Securities) except in
compliance with the Securities Act and the terms and conditions of this
Agreement.
Any attempt to transfer any Company Securities not in compliance with
this Agreement shall be null and void and the Company shall not, and shall
cause any transfer agent not to, give any effect in the Company's stock
records to such attempted transfer.
No transferee other than a Permitted Transferee or a party hereto shall
be required or permitted to become a party to this Agreement or have the benefit
of any rights hereunder or the burden of any obligations hereunder.
Except as set forth in the first sentence of this Section 3.01,
transfers by the LLC are not subject to any restrictions.
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SECTION 3.02. Legends. In addition to any other legend that may be
required, each certificate for shares of Common Stock and each Warrant that is
issued to any Stockholder shall bear a legend in substantially the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE INVESTORS' AGREEMENT DATED AS OF
SEPTEMBER 29, 1999, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM XXXXXXX
RIVER LABORATORIES HOLDINGS, INC. OR ANY SUCCESSOR THERETO."
If any Company Securities shall cease to be Registrable
Securities under clause (i) or clause (ii) of the definition thereof, the
Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such securities without the first sentence
of the legend required by this Section endorsed thereon. If any Company
Securities cease to be subject to any and all restrictions on transfer set
forth in this Agreement, the Company shall, upon the written request of the
holder thereof, issue to such holder a new certificate evidencing such Company
Securities without the second sentence of the legend required by this Section
endorsed thereon.
SECTION 3.03. Permitted Transferees. Notwithstanding anything in this
Agreement to the contrary, any Stockholder may at any time transfer any or all
of its Company Securities to one or more of its Permitted Transferees without
the consent of the Board or any other Stockholder or group of Stockholders and
without compliance with Sections 3.04, 3.05, 3.06 and 4.01 so long as (a) such
Permitted Transferee shall have agreed in writing to be bound by the terms of
this Agreement and (b) the transfer to such Permitted Transferee is not in
violation of applicable federal or state securities laws.
SECTION 3.04. Restrictions on Transfers by Management Stockholders.
(a) Each Management Stockholder and each Permitted Transferee of
such Management Stockholder may transfer its Company Securities only as
follows:
(i) in a transfer made in compliance with Section 4.01 or 4.02;
(ii) subject to the Public Offering Limitations, in a Public
Offering in connection with the exercise of its rights under Article
5 hereof;
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(iii) after the Initial Public Offering, pursuant to the exemption
from registration provided under Rule 144, provided that until the
later of (A) the third anniversary of the IPO and (B) the Restriction
Termination Date, such sales cannot reduce the Stockholder's
ownership to (or occur at a time when such Stockholder's ownership is
otherwise) below the greater of (X) 50% of his or her Initial
Ownership and (Y) that percentage of his or her Initial Ownership as
equals the percentage of the LLC's Initial Ownership remaining after
previous dispositions by the LLC; or
(iv) following the Restriction Termination Date, to (A) any Third
Party other than an Adverse Person or any person deemed inappropriate
by the Board or (B) any Third Party through a national securities
exchange, in each case for consideration consisting solely of cash,
provided, however, that the amount sold in any 12-month period may
not exceed 20% of the Management Stockholder's Initial Ownership.
For purposes of this Agreement, "Public Offering Limitations" means
(A) no Management Stockholder shall be permitted to sell any Shares in the
Initial Public Offering, (B) in the first public offering following the
Initial Public Offering, no Management Stockholder may sell more than the
lesser of (x) 50% of his or her Pro Rata Portion and (y) 20% of his or her
holdings prior to the offering and (C) in each public offering thereafter,
each Management Stockholder may sell no more than the lesser of (x) his or her
Pro Rata Portion and (y) 50% of his or her holdings prior to the offering.
(b) The provisions of Section 3.04(a) shall terminate upon the
earliest to occur of (i) the tenth anniversary of the Closing Date and (ii)
the date upon which the shareholdings of the LLC fall below 10% of its Initial
Ownership. Notwithstanding the foregoing sentence, the provisions of Section
3.04(a) shall not terminate with respect to any Management Stockholder's
Shares which shall have been pledged to the Company as security in connection
with any indebtedness for borrowed money owed by such Management Stockholder
to the Company unless the proceeds from the sale of such Shares are applied to
repay such indebtedness in full.
SECTION 3.05. Restrictions on Transfers by CRL.
(a) CRL may transfer its Company Securities only as follows:
(i) in a transfer made in compliance with Section 4.01 or 4.02;
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(ii) in a Public Offering in connection with the exercise of its
rights under Article 5 hereof;
(iii) after the Initial Public Offering, pursuant to the exemption
from registration provided under Rule 144, provided, however, that
the amount sold in any 12-month period pursuant to this clause (iii)
may not exceed 25% of CRL's Initial Ownership.
(iv) following the Restriction Termination Date, to (A) any Third
Party other than an Adverse Person or any person deemed inappropriate
by the Board or (B) any Third Party through a national securities
exchange, in each case for consideration consisting solely of cash.
(b) The provisions of Section 3.05(a) shall terminate upon the
earliest to occur of (i) the tenth anniversary of the Closing Date and (ii)
the date upon which the shareholdings of the LLC fall below 10% of its Initial
Ownership.
SECTION 3.06. Restrictions on Transfers by New Minority Shareholders;
Right of First Refusal.
(a) Each of DLJIP, BB, Carlyle, and the TCW Entities (a "New
Minority Shareholder") may transfer its Company Securities only as follows:
(i) in a transfer made in compliance with Section 4.01 or 4.02;
(ii) in a Public Offering in connection with the exercise of its
rights under Article 5 hereof;
(iii) after the Initial Public Offering, pursuant to the exemption
from registration provided under Rule 144;
(iv) after the earlier of (A) 3 years from the Closing Date or (B)
the Initial Public Offering, to any Third Party other than an Adverse
Person or any person deemed inappropriate by the Board, provided in
the case of any transfer prior to the Initial Public Offering that
the transferor shall first have complied with Section 3.06(b) and
that the consideration shall consist solely of cash; or
(v) to the limited partners of such New Minority
Shareholder, as part of a general distribution of all assets held by
such New Minority Shareholder to its limited partners; provided that
any transferees pursuant to this clause (v) shall be deemed not to be
Permitted Transferees.
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(b) Right of First Refusal.
(i) If, prior to an Initial Public Offering, a New Minority
Shareholder proposes to transfer Company Securities owned by such New
Minority Shareholder in a transaction pursuant to and permitted by
Section 3.06(a)(iv), such New Minority Shareholder shall provide DLJ
Merchant Banking II, Inc. and the Company written notice of such
proposed transfer. The notice shall identify the number of Company
Securities proposed to be transferred, the cash price at which a
transfer is proposed to be made and all other material terms and
conditions of the offer.
(ii) The receipt of a such notice by DLJ Merchant Banking II, Inc.
and the Company from a New Minority Shareholder shall constitute an
offer by such New Minority Shareholder to sell first, to the DLJ
Entities and, if not accepted or only accepted in part by the DLJ
Entities, second to the Company, for cash, the Company Securities at
the price and on the other terms and conditions set forth in such
notice. Such offer shall be irrevocable for 10 Business Days after
receipt of such notice by the DLJ Entities and the Company. During
such period, any of the DLJ Entities and the Company shall have the
right to accept such offer as to all or a portion of the Company
Securities (provided that first priority of the right to accept is
given to the DLJ Entities; and provided further that the aggregate
number of Company Securities accepted by the DLJ Entities and the
Company together equals the total number of Company Securities
subject to the offer) by giving a written notice of acceptance to
such Ne Minority Shareholder prior to the expiration of the offer
period.
(iii) Any Person who has accepted the offer shall purchase and pay
for all Company Securities accepted within 30 days after such
acceptance.
(iv) Upon the failure to accept the offer in full prior to the
expiration of the offer period or the failure to consummate the
purchase within 30 days after the acceptance of the offer, there
shall commence a 60-day period during which the New Minority
Shareholder that gave the notice shall have the right to transfer to
a third party any or all of the Company Securities subject to such
offer at a price in cash not less than 90% of the price indicated in
the applicable notice to DLJ Merchant Banking II, Inc. and the
Company, and on the other terms and conditions set forth therein,
provided that the transfer to such third party is not in violation of
applicable federal or state or foreign securities laws. If such New
Minority Shareholder does not consummate the sale in accordance with
the foregoing time limitations, such New Minority Shareholder may
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not thereafter transfer any Company Securities in a transaction
pursuant to Section 3.06(a)(iv) without repeating the foregoing
procedures.
(c) The provisions of Section 3.06(a) shall terminate upon the
earliest to occur of (i) the tenth anniversary of the Closing Date and (ii)
the date upon which the shareholdings of the LLC fall below 10% of its Initial
Ownership.
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
SECTION 4.01. Rights to Participate in Transfer. (a) If the LLC (the
"Selling Person") proposes to transfer a number of Shares equal to or
exceeding 25% of the outstanding Shares in a single transaction or in a series
of related transactions on the date of the proposed sale (a "Tag-Along Sale"),
the Other Stockholders may, at their option, elect to exercise their rights
under this Section 4.01 (each such Stockholder, a "Tagging Person"), provided
that no such rights shall apply to transfers of Shares (i) in a Public
Offering or pursuant to Rule 144 (defined for these purposes to exclude Rule
144A under the Securities Act), (ii) to any Permitted Transferee of the LLC
(defined for these purposes to exclude, except in the case of a general
distribution to DLJ Partners, any Permitted Transferee who is a Permitted
Transferee solely by reason of being an Affiliate of a DLJ Partner), or (iii)
to holders of limited liability company units in the LLC ("Units"). In the
event of such a proposed transfer, the Selling Person shall provide each Other
Stockholder written notice of the terms and conditions of such proposed
transfer ("Tag-Along Notice") and offer each Tagging Person the opportunity to
participate in such sale. The Tag-Along Notice shall identify the number and
type of Company Securities subject to the offer ("Tag-Along Offer"), the cash
price at which the transfer is proposed to be made, and all other material
terms and conditions of the Tag-Along Offer, including the form of the
proposed agreement, if any. From the date of the Tag-Along Notice, each
Tagging Person shall have the right (a "Tag-Along Right"), exercisable by
written notice ("Section 4.01 Response Notice") given to the Selling Person
within 15 Business Days (the "Tag-Along Notice Period"), to request that the
Selling Person include in the proposed transfer the number of Company
Securities held by such Tagging Person as is specified in such notice;
provided that if the aggregate number of Company Securities proposed to be
sold by the Selling Person and all Tagging Persons in such transaction exceeds
the number of Company Securities which can be sold on the terms and conditions
set forth in the Tag-Along Notice, then only the Tag-Along Portion of Company
Securities of each Tagging Person shall be sold pursuant to the Tag-Along
Offer and the Selling Person shall sell its Tag-Along Portion of Company
Securities and such
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additional Company Securities as permitted by Section 4.01(d). If the Tagging
Persons exercise their Tag-Along Rights hereunder, each Tagging Person shall
deliver, together with its Section 4.01 Response Notice, to the Selling Person
the certificate or certificates representing the Company Securities of such
Tagging Person to be included in the transfer, together with a limited
power-of-attorney authorizing the Selling Person to transfer such Securities
on the terms set forth in the Tag-Along Notice. Delivery of such certificate
or certificates representing the Company Securities to be transferred and the
limited power-of-attorney authorizing the Selling Person to transfer such
Company Securities shall constitute an irrevocable acceptance of the Tag-Along
Offer by such Tagging Persons. If, at the end of a 120 day period after such
delivery, the Selling Person has not completed the transfer of all such
Company Securities on substantially the same terms and conditions set forth in
the Tag-Along Notice (provided, however, that the cash price payable in any
such sale may exceed the cash price specified in the Tag-Along Notice by up to
10%), the Selling Person shall return to each Tagging Person the limited
power-of-attorney (and all copies thereof) together with all certificates
representing the Company Securities which such Tagging Person delivered for
transfer pursuant to this Section 4.01.
(b) Concurrently with the consummation of the Tag-Along Sale, the
Selling Person shall notify the Tagging Persons thereof, shall remit to the
Tagging Persons the total consideration (by bank or certified check) for the
Company Securities of the Tagging Persons transferred pursuant thereto, and
shall, promptly after the consummation of such Tag-Along Sale, furnish such
other evidence of the completion and time of completion of such transfer and
the terms thereof as may be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any Tagging
Person shall not have elected to participate in the Tag-Along Sale, such
Tagging Person will be deemed to have waived its rights under Section 4.01(a)
with respect to the transfer of its securities pursuant to such Tag-Along
Sale, but not with respect to any future sales.
(d) If any Stockholder declines to exercise its Tag-Along Rights or
elects to exercise its Tag-Along Rights with respect to less than such Tagging
Person's Tag-Along Portion, the Tagging Persons who do respond and the LLC
shall be entitled to transfer, pursuant to the Tag-Along Offer, an additional
number of Company Securities equal to the number of Company Securities
constituting their pro rata portion of such Tagging Person's Tag-Along Portion
with respect to which Tag-Along Rights were not exercised.
(e) The LLC and any Tagging Person who exercises the Tag-Along
Rights pursuant to this Section 4.01 may sell the Company Securities subject
to
16
the Tag-Along Offer on the terms and conditions set forth in the Tag-Along
Notice (provided, however, that the cash price payable in any such sale may
exceed the cash price specified in the Tag-Along Notice by up to 10%) within
120 days of the date on which Tag-Along Rights shall have been waived,
exercised or expire.
(f) In the event that the DLJ Entities propose to transfer a number
of Units equal to or exceeding 40% of the outstanding Units in a single
transaction or in a series of related transactions on the date of the proposed
sale, other than transfers of Units (i) in a Public Offering or pursuant to
Rule 144 (defined for these purposes to exclude Rule 144A under the Securities
Act) or (ii) to any Permitted Transferee of the LLC (defined for these
purposes to exclude, except in the case of a general distribution to DLJ
Partners, any Permitted Transferee who is a Permitted Transferee solely by
reason of being an Affiliate of a DLJ Partner), the Board of Directors shall
in good faith determine an appropriate procedure which shall mutatis mutandis
reflect the procedures of this Section 4.01 to allow Company Securities to be
sold proportionally by Other Stockholders as part of such sale, and shall in
good faith determine an appropriate valuation for such Company Securities
reflecting the price per Unit at which the DLJ Entities propose to sell the
Units.
(g) This Section 4.01 shall terminate upon the Initial Public
Offering.
SECTION 4.02. Right to Compel Participation in Certain Transfers. (a)
If (i) the LLC proposes to transfer not less than 50% of its Initial Ownership
of Common Stock to a Third Party in a bona fide sale or (ii) the LLC proposes
an arms-length transfer in which the shares of Common Stock to be transferred
by the LLC and its Permitted Transferees constitute more than 50% of the
outstanding shares of Common Stock (a "Section 4.02 Sale"), the LLC may at its
option require all Other Stockholders to sell the Drag-Along Portion of the
Subject Securities ("Drag-Along Rights") then held by every Other Stockholder,
and (subject to and at the closing of the Section 4.02 Sale) to exercise all,
but not less than all, of the options held by every Other Stockholder and to
sell all of the shares of Common Stock received upon such exercise to such
Third Party, for the same consideration per share of Common Stock and
otherwise on the same terms and conditions as the LLC; provided that any Other
Stockholder who holds options the exercise price per share of which is greater
than the per share price at which the Shares are to be sold to the Third Party
may, if required by the LLC to exercise such options, in place of such
exercise, submit to irrevocable cancellation thereof without any liability for
payment of any exercise price with respect thereto. In the event the Section
4.02 Sale is not consummated with respect to any shares acquired upon exercise
of such options, or the Section 4.02 Sale is not consummated, such options
shall be deemed not to have been exercised or
17
canceled, as applicable. The LLC shall provide written notice of such Section
4.02 Sale to the Other Stockholders (a "Section 4.02 Notice") not later than
the 15th Business Day prior to the proposed Section 4.02 Sale. The Section
4.02 Notice shall identify the transferee, the number of Subject Securities,
the consideration for which a transfer is proposed to be made (the "Section
4.02 Sale Price") and all other material terms and conditions of the Section
4.02 Sale. The number of shares of Common Stock to be sold by each Other
Stockholder will be the Drag-Along Portion of the shares of Common Stock that
such Other Stockholder owns. Each Other Stockholder shall be required to
participate in the Section 4.02 Sale on the terms and conditions set forth in
the Section 4.02 Notice and to tender all its Subject Securities as set forth
below. The price payable in such transfer shall be the Section 4.02 Sale
Price. Not later than the 10th Business Day following the date of the Section
4.02 Notice (the "Section 4.02 Notice Period"), each of the Other Stockholders
shall deliver to a representative of the LLC designated in the Section 4.02
Notice certificates representing all Subject Securities representing the Drag
Along Portion held by such Other Stockholder, duly endorsed, together with all
other documents required to be executed in connection with such Section 4.02
Sale. If an Other Stockholder should fail to deliver such certificates to the
representative of the LLC, the Company shall cause the books and records of
the Company to show that such Subject Securities are bound by the provisions
of this Section 4.02 and that such Subject Securities shall be transferred to
the purchaser of the Subject Securities immediately upon surrender for
transfer by the holder thereof.
(b) The LLC shall have a period of 45 days from the date of receipt
of the Section 4.02 Notice to consummate the Section 4.02 Sale on the terms
and conditions set forth in such Section 4.02 Sale Notice. If the Section 4.02
Sale shall not have been consummated during such period, the LLC shall return
to each of the Other Stockholders all certificates representing Subject
Securities that such Other Stockholder delivered for transfer pursuant hereto,
together with any documents in the possession of the LLC executed by the Other
Stockholder in connection with such proposed transfer, and all the
restrictions on transfer contained in this Agreement or otherwise applicable
at such time with respect to Common Stock owned by the Other Stockholders
shall again be in effect.
(c) Concurrently with the consummation of the transfer of Company
Securities pursuant to this Section 4.02, the LLC shall give notice thereof to
all Stockholders, shall remit to each of the Stockholders who have surrendered
their certificates the total consideration (by bank or certified check) for
the Subject Securities transferred pursuant hereto and shall furnish such
other evidence of the completion and time of completion of such transfer and
the terms thereof as may be reasonably requested by such Stockholders.
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ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration. (a) If the Company shall receive a
written request by the LLC or its Permitted Transferees or DLJIP (any such
requesting Person, a "Selling Stockholder") that the Company effect the
registration under the Securities Act of all or a portion of such Selling
Stockholder's Registrable Securities, and specifying the intended method of
disposition thereof, then the Company shall promptly give written notice of
such requested registration (a "Demand Registration") at least 30 days prior
to the anticipated filing date of the registration statement relating to such
Demand Registration to the Other Stockholders and thereupon will use its best
efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the Selling Stockholders, then held by the
Selling Stockholders; and
(ii) subject to the restrictions set forth in Section 5.01(e), all
other Registrable Securities of the same type as that to which the
request by the Selling Stockholders relates which any Other
Stockholder entitled to request the Company to effect an Incidental
Registration (as such term is defined in Section 5.02) pursuant to
Section 5.02 (all such Stockholders, together with the Selling
Stockholders, the "Holders") has requested the Company to register by
written request received by the Company within 15 days after the
receipt by such Holders of such written notice given by the Company,
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided that, subject to Section 5.01(d) hereof, the Company
shall not be obligated to effect (A) more than six Demand Registrations for
the LLC and its Permitted Transferees or (B) one Demand Registration for DLJIP
(which Demand Registration right may not be exercised prior to the earlier of
(1) five years from the Closing Date and (2) the date that is 180 days after
an Initial Public Offering); and provided further that the Company shall not
be obligated to effect a Demand Registration unless the aggregate proceeds
expected to be received from the sale of the Common Stock to be included in
such Demand Registration, in the reasonable opinion of DLJ Merchant Banking
II, Inc. exercised in good faith, equals or exceeds (Y) $30,000,000 if such
Demand Registration would constitute the Initial Public Offering, or (Z)
$10,000,000 in all other cases. In no event will the Company be required to
effect more than one Demand Registration within any four-month period.
19
(b) Promptly after the expiration of the 15-day period referred to
in Section 5.01(a)(ii) hereof, the Company will notify all the Holders to be
included in the Demand Registration of the other Holders and the number of
Registrable Securities requested to be included therein. The Selling
Stockholders requesting a registration under this Section may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Company revoking such request,
in which case such request, so revoked, shall be considered a Demand
Registration unless the participating Stockholders reimburse the Company for
all costs incurred by the Company in connection with such registration, or
unless such revocation arose out of the fault of the Company, in which case
such request shall not be considered a Demand Registration.
(c) The Company will pay all Registration Expenses in connection
with any Demand Registration.
(d) A registration requested pursuant to this Section shall not be
deemed to have been effected (i) unless the registration statement relating
thereto (A) has become effective under the Securities Act and (B) has remained
effective for a period of at least 180 days (or such shorter period in which
all Registrable Securities of the Holders included in such registration have
actually been sold thereunder); provided that if after any registration
statement requested pursuant to this Section becomes effective (x) such
registration statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or court
and (y) less than 75% of the Registrable Securities included in such
registration statement has been sold thereunder, such registration statement
shall not be considered a Demand Registration or (ii) if the Maximum Offering
Size (as defined below) is reduced in accordance with Section 5.01(e) or
5.01(f) such that less than 66 2/3% of the Registrable Securities of the
Selling Stockholders sought to be included in such registration are included.
(e) If a Demand Registration involves an Underwritten Public
Offering and the managing underwriter shall advise the Company and the Selling
Stockholders that, in its view, (i) the number of Registrable Securities
requested to be included in such registration (including any securities which
the Company proposes to be included which are not Registrable Securities) or
(ii) the inclusion of some or all of the Registrable Securities owned by the
Holders, in any such case, exceeds the largest number of securities which can
be sold without having an adverse effect on such offering, including the price
at which such securities can be sold (the "Maximum Offering Size"), the
Company will include in such registration, in the priority listed below, up to
the Maximum Offering Size:
20
(A) first: (1) in the case of a Demand by the LLC and
its Permitted Transferees, all Securities requested to be
registered by the Selling Stockholder and by all of its
Permitted Transferees and CRL, DLJIP, BB, Carlyle, and the
TCW Entities (allocated, if necessary for the offering not
to exceed the Maximum Offering Size, pro rata among such
Persons on the basis of the relative number of shares of
Registrable Securities requested to be registered), or (2)
in the case of a Demand by DLJIP, all Securities requested
to be registered by the Selling Stockholder and by all of
its Permitted Transferees and BB, Carlyle, and the TCW
Entities (allocated, if necessary for the offering not to
exceed the Maximum Offering Size, pro rata among such
Persons on the basis of the relative number of shares of
Registrable Securities requested to be registered);
(B) second: (1) in the case of a Demand by the LLC and
its Permitted Transferees, all Registrable Securities
requested to be included in such registration by any other
Holder (allocated, if necessary for the offering not to
exceed the Maximum Offering Size, pro rata among such other
Holders on the basis of the relative number of shares of
Registrable Securities requested to be included in such
registration), or (2) in the case of a Demand by DLJIP, all
Registrable Securities requested to be included in such
registration by the LLC and its Permitted Transferees and by
CRL (allocated, if necessary for the offering not to exceed
the Maximum Offering Size, pro rata among such other Holders
on the basis of the relative number of shares of Registrable
Securities requested to be included in such registration);
(C) third: (1) in the case of a Demand by the LLC and
its Permitted Transferees, any securities proposed to be
registered by the Company, or (2) in the case of a Demand by
DLJIP, all Registrable Securities requested to be included
in such registration by any other Holder (allocated, if
necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such other Holders on the
basis of the relative number of shares of Registrable
Securities requested to be included in such registration);
and
(D) fourth: in the case of a Demand by DLJIP, any
securities proposed to be registered by the Company.
(f) If the Company files a shelf registration statement with respect
to the High Yield Warrants, the Company shall notify the holders of the
Warrants at
21
least 20 days prior to such filing. The holders of the Warrants shall have the
right (which shall not be deemed to be a use of a Demand Registration right),
by notice to the Company, to include the Warrants in such shelf registration
statement. Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not be construed to confer on any Stockholder (other than
holders of Warrants in their capacity as such, together with any Persons
entitled to indemnification hereunder in connection therewith) any rights in
connection with such shelf registration statement.
SECTION 5.02. Incidental Registration. (a) If the Company proposes to
register any Company Securities under the Securities Act (other than a
registration (A) on Form S-8 or S-4 or any successor or similar forms, (B)
relating to Common Stock issuable upon exercise of employee stock options or
in connection with any employee benefit or similar plan of the Company or (C)
in connection with a direct or indirect acquisition by the Company of another
company), whether or not for sale for its own account, it will each such time,
subject to the provisions of Section 5.02(b), give prompt written notice at
least 30 days prior to the anticipated filing date of the registration
statement relating to such registration to the LLC and each Other Stockholder,
which notice shall set forth such Stockholder's rights under this Section 5.02
and shall offer such Stockholders the opportunity to include in such
registration statement such number of Registrable Securities of the same type
as are proposed to be registered as each such Stockholder may request (an
"Incidental Registration"). Upon the written request of any such Stockholder
made within 15 days after the receipt of notice from the Company (which
request shall specify the number of Registrable Securities intended to be
disposed of by such Stockholder), the Company will use its best efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by such Stockholders, to
the extent requisite to permit the disposition of the Registrable Securities
so to be registered; provided that (I) if such registration involves a Public
Offering, all such Stockholders requesting to be included in the Company's
registration must sell their Registrable Securities to the underwriters
selected as provided in Section 5.04(f) on the same terms and conditions as
apply to the Company and (II) if, at any time after giving written notice of
its intention to register any stock pursuant to this Section 5.02(a) and prior
to the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to register
such securities, the Company shall give written notice to all such
Stockholders and, thereupon, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (without
prejudice, however, to rights of the LLC under Section 5.01). No registration
effected under this Section 5.02 shall relieve the Company of its obligations
to effect a Demand Registration to the extent required by Section 5.01.
22
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section
5.02.
(b) If a registration pursuant to this Section 5.02 involves a
Public Offering (other than in the case of a Public Offering requested by the
LLC or any of its Permitted Transferees or the Other Stockholders in a Demand
Registration, in which case the provisions with respect to priority of
inclusion in such offering set forth in Section 5.01(e) shall apply) and the
managing underwriter advises the Company that, in its view, the number of
Shares that the Company and such Stockholders intend to include in such
registration exceeds the Maximum Offering Size, the Company will include in
such registration, in the following priority, up to the Maximum Offering Size:
(i) first, so much of the securities proposed to be registered by
the Company as would not cause the offering to exceed the Maximum
Offering Size;
(ii) second, all Registrable Securities requested to be included in
such registration by the LLC and its Permitted Transferees or any
Other Stockholder pursuant to this Section 5.02 (allocated, if
necessary for the offering not to exceed the Maximum Offering Size,
pro rata among such Stockholders on the basis of the relative number
of shares of Registrable Securities so requested to be included in
such registration).
SECTION 5.03. Holdback Agreements. If any registration of Registrable
Securities shall be in connection with a Public Offering, the LLC and its
Permitted Transferees and each Other Stockholder agrees not to effect any
public sale or distribution, including any sale pursuant to Rule 144, or any
successor provision, under the Securities Act, of any Registrable Securities,
and not to effect any such public sale or distribution of any other Common
Stock of the Company or of any stock convertible into or exchangeable or
exercisable for any Common Stock of the Company (in each case, other than as
part of such Public Offering) during the 14 days prior to the effective date
of such registration statement (except as part of such registration) or during
the period after such effective date equal to the lesser of (i) such period of
time as agreed between such managing underwriter and the Company and (ii) 180
days (such lesser period, the "Applicable Holdback Period").
SECTION 5.04. Registration Procedures. Whenever Stockholders request
that any Registrable Securities be registered pursuant to Section 5.01 or
5.02, the Company will, subject to the provisions of such Sections, use its
best efforts to effect the registration and the sale of such Registrable
Securities in accordance
23
with the intended method of disposition thereof as quickly as practicable, and
in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof, and use its best efforts to cause such filed registration statement
to become and remain effective for a period of not less than 180 days.
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
participating Stockholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such registration
statement as proposed to be filed, and thereafter the Company will furnish to
such Stockholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such Stockholder or
underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Stockholder.
(c) After the filing of the registration statement, the Company will
promptly notify each Stockholder holding Registrable Securities covered by
such registration statement of any stop order issued or threatened by the SEC
and take all reasonable actions required to prevent the entry of such stop
order or to remove it if entered.
(d) The Company will use its best efforts to (i) register or qualify
the Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions in the United States
as any Stockholder holding such Registrable Securities reasonably (in light of
such Stockholder's intended plan of distribution) requests and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and
things that may be reasonably necessary or advisable to enable such
Stockholder to consummate the disposition of the Registrable Securities owned
by such Stockholder; provided that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (B) subject
itself to taxation in any
24
such jurisdiction or (C) consent to general service of process in any such
jurisdiction.
(e) The Company will immediately notify each Stockholder holding
such Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an
event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
promptly prepare and make available to each such Stockholder any such
supplement or amendment.
(f) The LLC will have the right, in its sole discretion, to select
an underwriter or underwriters in connection with any Public Offering, which
underwriter or underwriters may include any Affiliate of any DLJ Entity. In
connection with any Public Offering, the Company will enter into customary
agreements (including an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or
facilitate the disposition of Registrable Securities in any such Public
Offering, including the engagement of a "qualified independent underwriter" in
connection with the qualification of the underwriting arrangements with the
NASD.
(g) Upon the execution of confidentiality agreements in form and
substance satisfactory to the Company, the Company will make available for
inspection by any Stockholder and any underwriter participating in any
disposition pursuant to a registration statement being filed by the Company
pursuant to this Section 5.04 and any attorney, accountant or other
professional retained by any such Stockholder or underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection
with such registration statement. Records that the Company determines, in good
faith, to be confidential and that it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction. Each
Stockholder agrees that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the Company Securities or its Affiliates
unless and until such is made generally available to the public. Each
25
Stockholder further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to each such Stockholder and to each
such underwriter, if any, a signed counterpart, addressed to such underwriter,
of (i) an opinion or opinions of counsel to the Company and (ii) a comfort
letter or comfort letters from the Company's independent public accountants,
each in customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as a majority of
such Stockholders or the managing underwriter therefor reasonably requests.
(i) The Company will otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
stockholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
The Company may require each such Stockholder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration.
Each such Stockholder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
5.04(e), such Stockholder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Stockholder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5.04(e), and, if so
directed by the Company, such Stockholder will deliver to the Company all
copies, other than any permanent file copies then in such Stockholder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event that the Company shall
give such notice, the Company shall extend the period during which such
registration statement shall be maintained effective (including the period
referred to in Section 5.04(a)) by the number of days during the period from
and including the date of the giving of notice pursuant to Section 5.04(e) to
the date when the Company shall make available to such Stockholder a
prospectus supplemented or amended to conform with the requirements of Section
5.04(e).
26
SECTION 5.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Stockholder holding Registrable Securities
covered by a registration statement, its officers, directors and agents, and
each person, if any, who controls such Stockholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the Registrable
Securities (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
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,
except insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information furnished in writing to the Company by such Stockholder
or on such Stockholder's behalf expressly for use therein; provided that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such loss, claim, damage, liability or expense results
from the fact that a current copy of the prospectus (or, in the case of a
prospectus, the prospectus as amended or supplemented) was not sent or given
to the person asserting any such loss, claim, damage, liability or expense at
or prior to the written confirmation of the sale of the Registrable Securities
concerned to such person if it is determined that the Company has provided
such prospectus and it was the responsibility of such Stockholder to provide
such person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Company also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Stockholders provided in this Section 5.05.
SECTION 5.06. Indemnification by Participating Stockholders. Each
Stockholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless
the Company, its officers, directors and agents and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Stockholder, but only (i) with respect to
information furnished in writing by such Stockholder or on such Stockholder's
behalf expressly for use in any registration statement or prospectus relating
to the Registrable Securities, or any
27
amendment or supplement thereto, or any preliminary prospectus or (ii) to the
extent that any loss, claim, damage, liability or expense described in Section
5.05 results from the fact that a current copy of the prospectus (or, in the
case of a prospectus, the prospectus as amended or supplemented) was not sent
or given to the person asserting any such loss, claim, damage, liability or
expense at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such person if it is determined that it was the
responsibility of such Stockholder to provide such person with a current copy
of the prospectus (or such amended or supplemented prospectus, as the case may
be) and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to
such loss, claim, damage, liability or expense. Each such Stockholder also
agrees to indemnify and hold harmless underwriters of the Registrable
Securities, their officers and directors and each person who controls such
underwriters on substantially the same basis as that of the indemnification of
the Company provided in this Section 5.06. As a condition to including
Registrable Securities in any registration statement filed in accordance with
Article 5 hereof, the Company may require that it shall have received an
undertaking reasonably satisfactory to it from any underwriter to indemnify
and hold it harmless to the extent customarily provided by underwriters with
respect to similar securities.
SECTION 5.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
this Article 5, such person (an "Indemnified Party") shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party,
and shall assume the payment of all fees and expenses; provided that the
failure of any Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party of its obligations hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such failure to
notify. In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) in the reasonable judgment of such Indemnified Party
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
the Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are
28
incurred. In the case of any such separate firm for the Indemnified Parties,
such firm shall be designated in writing by the Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
SECTION 5.08. Contribution. If the indemnification provided for in
this Article 5 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
the Stockholders holding Registrable Securities covered by a registration
statement on the one hand and the underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and such Stockholders on the one hand and the underwriters on the
other, from the offering of the Registrable Securities, or if such allocation
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits but also the relative fault of the
Company and such Stockholders on the one hand and of such underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations and (ii) as between the Company on the one hand and
each such Stockholder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of each such Stockholder in
connection with such statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
such Stockholders on the one hand and such underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and such Stockholders bear to the total underwriting
discounts and commissions received by such underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
the Company and such Stockholders on the one hand and of such underwriters on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact
29
relates to information supplied by the Company and such Stockholders or by
such underwriters. The relative fault of the Company on the one hand and of
each such Stockholder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Stockholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.08 were determined by pro
rata allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5.08, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages which such underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no Stockholder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities of such Stockholder were offered to the public exceeds the amount
of any damages which such Stockholder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Each such
Stockholder's obligation to contribute pursuant to this Section 5.08 is
several in the proportion that the proceeds of the offering received by such
Stockholder bears to the total proceeds of the offering received by all such
Stockholders and not joint.
SECTION 5.09. Participation in Public Offering. No Person may
participate in any Public Offering hereunder unless such Person (a) agrees to
sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
and customarily required under the terms of such underwriting arrangements and
the provisions of this Agreement in respect of registration rights.
30
SECTION 5.10. Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the
Company and each Stockholder participating therein with respect to any
required registration or other qualification of securities under any federal
or state law or regulation or governmental authority other than the Securities
Act.
SECTION 5.11. Cooperation by the Company. In the event any
Stockholder shall transfer any Registrable Securities pursuant to Rule 144A
under the Securities Act, the Company shall cooperate with such Stockholder
(which shall include, without limitation, making registration rights with
respect to the Registrable Securities to be sold (or securities issuable or to
be issued in exchange therefor) available to the ultimate purchasers thereof)
and shall provide to such Stockholder such information as such Stockholder
shall reasonably request, provided that any registration rights made available
pursuant hereto shall not be on terms substantially more favorable to the
possessors thereof than the registration rights granted herein to the LLC.
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersede all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.
SECTION 6.02. Binding Effect; Benefit; Treatment of TCW Entities. (a)
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, legal representatives and
permitted assigns. Nothing in this Agreement, expressed or implied, shall
confer on any Person other than the parties hereto, their respective heirs,
successors, legal representatives and permitted assigns, the DLJ Entities, and
DLJ Merchant Banking II, Inc., any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(b) It is acknowledged and understood by all parties hereto that this
agreement shall be binding in the absence of executed counterparts from the
TCW Entities. It is further understood that if the TCW Entities do not deliver
executed counterparts to the Company within 30 days from the Closing Date, all
references herein to the TCW Entities shall be deemed to be removed without
any further action on the part of any party hereto.
31
SECTION 6.03. Exclusive Financial and Investment Banking Advisor.
During the period from and including the date hereof through and including the
fifth anniversary of the date hereof, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation ("DLJSC"), or any Affiliate of DLJSC that the LLC may choose in
its sole discretion, shall be engaged as the exclusive financial and
investment banking advisor of the Company.
SECTION 6.04. Put Right. (a) During the period, if any, beginning on
(i) the earlier of (A) the date that all of the Indebtedness (as defined in,
and for the purposes hereof such term shall include, the Subordinated Discount
Note Due 2010 issued by the Company to CRL Holdings, Inc.) of the Company and
its subsidiaries incurred on or prior to the Closing Date has been repaid in
full (including any refinancings or replacements of such Indebtedness) or (B)
the date that (1) all of the Indebtedness of the Company and its subsidiaries
incurred on or prior to the Closing Date has been repaid in full, refinanced
or replaced and (2) the documentation relating to all of the refinanced or
replacement Indebtedness referred to in the preceding clause (A) permits the
Put (as defined below) to be exercised, provided that in connection with any
refinancing or replacement referred to in the preceding clause (A) the Company
shall make a good faith effort to obtain such permission in the documentation
thereof, and ending on (ii) the earliest of (X) the date of the Initial Public
Offering, (Y) the date on which the LLC shall own less than 50% of the
outstanding Common Stock, and (Z) twelve years from the Closing Date, CRL
shall have the right to sell (the "Put") all, but not less than all, of the
Common Stock owned by it (excluding any Common Stock acquired by it after the
Closing Date) to the Company. The price per share for the Common Stock
purchased pursuant to the Put shall be the fair market value thereof as
determined by an investment bank of nationally recognized standing selected by
the Board, which shall not be an affiliate of the LLC or the DLJ Entities.
(b) In the event that CRL proposes to exercise its rights under this
section, it shall provide the Company with written notice thereof (the
"Section 6.04 Notice"). The Company shall then have 75 days from the date of
its receipt of the Section 6.04 Notice in which to obtain the determination of
the price per share set forth in clause (a) above, and to provide written
notice to CRL of such price per share (the "Value Notice"). CRL shall then
have 10 Business Days from the date of its receipt of the Value Notice in
which it may provide written notice to the Company of its intention to
exercise the Put (the "Put Notice"). If CRL does not provide the Put Notice to
the Company within such 10 day period, it shall forfeit all its rights under
this Section 6.04. If CRL does provide the Put Notice to the Company within
such 10 day period: (i) the Company shall deliver to CRL the price per share
set forth in the Value Notice for the Common Stock to be sold by CRL, and (ii)
CRL shall simultaneously deliver to the Company
32
certificates representing such Common Stock, together with duly executed stock
powers, on a date to be determined by mutual agreement (but not less than 10
days after the date of the Company's receipt of the Put Notice).
SECTION 6.05. Pre-emptive Rights. (a) If the Company proposes to
issue any Company Securities (other than (i) to employees of the Company or
any subsidiary pursuant to employee benefit plans or arrangements approved by
the Board (including upon the exercise of employee stock options), (ii) in
connection with any bona fide, arm's length direct or indirect merger,
acquisition or similar transaction, (iii) pursuant to a Public Offering, (iv)
upon the exercise of Warrants or High Yield Warrants, or (v) on or prior to
the Closing Date), each Other Stockholder shall have the pre-emptive right to
acquire its pre-emptive portion of such Company Securities, at the same price
per Company Security at which such Company Securities are sold in such
issuance. For these purposes, "pre-emptive portion" shall mean a fraction, the
numerator of which is the Initial Ownership of such Stockholder and the
denominator of which is the Initial Ownership of all Stockholders.
(b) The Company shall provide written notice to each Other
Stockholder at least twenty days prior to any issuance of Company Securities
with respect to which such Other Stockholder would have pre-emptive rights
pursuant to clause (a) above. Each Other Stockholder shall then have ten days
from its receipt of such notice in which to provide written notice to the
Company of its exercise of its rights pursuant to this Section 6.05.
(c) The rights of any Other Stockholder under this Section 6.05
shall expire at such time as such Other Stockholder owns less than 40% of its
Initial Ownership of Common Stock.
(d) The Company shall not be under any obligation to consummate any
proposed issuance of Company Securities, regardless of whether it shall have
delivered a written notice in respect of such issuance.
SECTION 6.06. Assignability. This Agreement shall not be assignable
by any party hereto, except that any Person acquiring Shares who is required
by the terms of this Agreement or any employment agreement or stock purchase,
option, stock option or other compensation plan of the Company or any
Subsidiary to become a party hereto shall (unless already bound hereby)
execute and deliver to the Company an agreement to be bound by this Agreement
and shall thenceforth be a "Stockholder". Any Stockholder who ceases to own
beneficially any Shares shall cease to be bound by the terms hereof (other
than the provisions of Sections 5.05, 5.06, 5.07, 5.08, and 5.10 applicable to
such Stockholder with respect to any
33
offering of Registrable Securities completed before the date such Stockholder
ceased to own any Shares).
SECTION 6.07. Amendment; Waiver; Termination. No provision of this
Agreement may be waived except by an instrument in writing executed by the
party against whom the waiver is to be effective. No provision of this
Agreement may be amended or otherwise modified except by an instrument in
writing executed by (i) the Company with the approval of the Board, (ii) DLJ
Merchant Banking II, Inc., and (iii) CRL, until such time as CRL is no longer
entitled to nominate a director to the Board; provided that if any such
amendment or modification has an adverse effect on any Stockholder that is
materially disproportionate to the effect of such amendment or modification on
Stockholders generally, the approval of such Stockholder shall also be
required.
SECTION 6.08. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmissions
and shall be given,
if to the Company or the Management Stockholders, to
Xxxxxxx River Laboratories Holdings, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
Fax: (000) 000-0000
and a copy to the LLC at its address listed below;
if to the LLC, to:
CRL Acquisition LLC
x/x XXX Xxxxxxxx Xxxxxxx Xxxxxxxx XX, X.X.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxx
Fax: (000) 000-0000
with a copy to:
00
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
if to CRL, to:
B&L CRL, Inc.
c/o Bausch & Lomb Incorporated
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx Peabody LLP
Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx XxXxxx Xxxxx
Fax: (000) 000-0000
if to DLJ Investment Partners, L.P., to:
DLJ Investment Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxx
Fax: 000-000-0000
if to DLJ Investment Funding, Inc., to:
DLJ Investment Funding, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax: 000-000-0000
if to DLJ ESC II, L.P., to:
35
DLJ ESC II L.P.
c/o DLJ LBO Plans
Management Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax: 000-000-0000
if to BB, to:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Fax: 000-000-0000
with a copy to:
Xxxx Xxxxx Rifkind Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx
Fax: 000-000-0000
if to Carlyle, to:
Carlyle Group L.P.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Fax: 000-000-0000
if to the TCW Entities, to:
Trust Company of the West
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
36
Attention: Xx. Xxx Xxxxxxx
Fax: 000-000-0000
All notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5 p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding business day in the place
of receipt. Any notice, request or other written communication sent by
facsimile transmission shall be confirmed by certified mail, return receipt
requested, posted within one Business Day, or by personal delivery, whether
courier or otherwise, made within two Business Days after the date of such
facsimile transmission.
Any Person who becomes a Stockholder shall provide its address and
fax number to the Company, which shall promptly provide such information to
each other Stockholder.
SECTION 6.09. Headings. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
SECTION 6.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
SECTION 6.11. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE.
SECTION 6.12. Specific Enforcement. Each party hereto acknowledges
that the remedies at law of the other parties for a breach or threatened
breach of this Agreement would be inadequate and, in recognition of this fact,
any party to this Agreement, without posting any bond, and in addition to all
other remedies which may be available, shall be entitled to obtain equitable
relief in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable remedy which may then
be available.
SECTION 6.13. Consent to Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
37
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of
the parties hereby consents to the non-exclusive jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit, action
or proceeding and irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 6.08 shall
be deemed effective service of process on such party.
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXXXX RIVER LABORATORIES
HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
CRL ACQUISITION LLC
By:
---------------------------------
Name:
Title:
B&L CRL, INC.
By:
---------------------------------
Name:
Title:
DLJ INVESTMENT PARTNERS, L.P.
By: DLJ INVESTMENT PARTNERS, INC.,
Managing General Partner
By:
---------------------------------
Name:
Title:
39
DLJ ESC II L.P.
By: DLJ LBO PLANS MANAGEMENT
CORPORATION,
General Partner
By:
---------------------------------
Name:
Title:
DLJ INVESTMENT FUNDING, INC.
By:
---------------------------------
Name:
Title:
THE 1818 MEZZANINE FUND, L.P.
By: XXXXX BROTHERS XXXXXXXX & CO.
General Partner
By:
---------------------------------
Name:
Title:
CARLYLE HIGH YIELD PARTNERS, L.P.
By: TCG High Yield, L.L.C.
General Partner
By:
---------------------------------
Name: Xxxx Xxxx
Title: Executive Managing Director
40
MANAGEMENT STOCKHOLDERS
-----------------------------------------
Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxxxxx
-----------------------------------------
Xxxxx X. Palm
-----------------------------------------
Real X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxx
-----------------------------------------
Xx. Xxxxx Sun Xxx
-----------------------------------------
Xx. Xxxx X. Xxxxxx
41
-----------------------------------------
Xx. Xxxxxxxxxx Xxxxxxxx
-----------------------------------------
Xx. Xxx Xxxxxx
-----------------------------------------
Xxxxxxxxx Xxxxxxxxx
42
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
By: TCW/Crescent Mezzanine II, L.P.
its general partner or managing owner
By: TCW/Crescent Mezzanine, L.L.C.
its general partner
By:
--------------------------------------
Name:
Title:
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/Crescent Mezzanine II, L.P.
its general partner or managing owner
By: TCW/Crescent Mezzanine, L.L.C.
its general partner
By:
--------------------------------------
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company,
as Portfolio Manager and as
Attorney-in-Fact for the Partnership
By:
--------------------------------------
Name:
Title:
43
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Investment Management Company,
as Investment Advisor
By:
--------------------------------------
Name:
Title:
By: TCW Advisors (Bermuda), Ltd.,
as general partner
By:
--------------------------------------
Name:
Title:
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW Investment Management Company,
as Investment Advisor
By:
--------------------------------------
Name:
Title:
By: TCW (XXXX XX), L.P., as general
partner
By: TCW Advisors (Bermuda), Ltd.,
as its general partner
By:
--------------------------------------
Name:
Title:
44
