Exhibit 4.1
STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT
THIS STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT, dated the 17th day of
September, 1998, is by and among Dover Saddlery, Inc., a Delaware corporation
(the "Holding Company"), Xxxxxxx X. Day and Citizens Ventures, Inc. Certain
terms used herein are defined in section 1.
WITNESSETH:
WHEREAS, on the date hereof, the Purchaser is purchasing certain securities
from the Holding Company pursuant to the Securities Purchase Agreements;
WHEREAS, it is a condition to such purchase that the parties hereto enter
into this Agreement; and
WHEREAS, the Restricted Securityholders agree that the purchase of such
securities by the Purchaser is of value to them.
NOW THEREFORE, for good and valuable consideration, receipt and sufficiency
of which is hereby acknowledged by the parties hereto, the parties hereby agree
as follows:
1. Certain Definitions. Capitalized terms used in this Agreement without
definition have the respective meanings ascribed thereto in the Securities
Purchase Agreements. In addition, the following terms have the following
respective meanings:
"Controlling Shareholders" shall have the meaning specified in section
3.2.
"Institutional Investor" shall mean the Purchaser and its successors
and assigns, including successor holders of the Purchased Shares and
Conversion Shares.
"Purchaser" shall mean Citizens Ventures, Inc.
"qualification" or "compliance" shall mean the qualification or
compliance of all Registrable Shares included in any registration
contemplated by section 5 under all applicable blue sky or other state
securities laws.
"Qualifying Public Offering" shall mean an underwritten public
offering pursuant to an effective registration statement under the
Securities Act covering the offer and sale of Common Stock and in which the
aggregate net proceeds to the Holding Company are not less than
$15,000,000.
"register", "registered" and "registration" as used in section 5 refer
to a registration effected by filing a registration statement in compliance
with the Securities Act to permit the sale and disposition of the
Registrable Shares and any amendment filed or required to be filed to
permit any such disposition.
"Registrable Shares" shall mean any Conversion Shares, except that, as
to any particular Registrable Shares, such securities, once issued, will
cease to be Registrable Shares when (i) a registration statement covering
such securities has been declared effective and such securities have been
disposed of pursuant to an effective registration statement or (ii) such
securities are sold to the public in accordance with Rule 144 (or any
similar provision then in force) under the Securities Act. A Person shall
be deemed a "holder" of Registrable Shares for purposes of section 5 if
such Person is the holder of any Purchased Shares and/or Conversion Shares.
"Registration Expenses" shall mean all fees, expenses and
disbursements related to any registration, qualification or compliance
pursuant to section 5, including, without limitation, all registration,
filing, rating and listing fees, blue sky fees and expenses, printing
expenses, fees and disbursements of counsel (including, without limitation,
the reasonable fees, expenses and disbursements of counsel for the holder
or holders of the Registrable Shares), and expenses of any special audits
incident to or required by any registration, qualification or compliance,
except that Registration Expenses shall not include any underwriters'
discounts or commissions attributable to any Registrable Shares registered
and sold pursuant to any such registration.
"Restricted Securityholder" shall mean Xxxxxxx X. Day and his heirs,
executors, successors and assigns, including any Person (other than an
Institutional Investor) who shall acquire any Restricted Securities from
any of them.
"Restricted Securities" shall mean all Shares of the Holding Company
and all securities convertible into or exercisable or exchangeable,
directly or indirectly, for Shares of the Holding Company, which are owned
by a Restricted Securityholder.
"Sale to the Public" shall mean a sale either (a) pursuant to an
effective registration statement under the Securities Act, or (b) in
accordance with Rule 144 (or any similar provision then in force) under the
Securities Act.
"Securities Purchase Agreements" shall mean the Securities Purchase
Agreements dated the date hereof by and among the Holding Company, Dover
Saddlery, Inc., a Massachusetts corporation, and the institutional
investors named therein, as amended, modified or supplemented from time to
time.
"transfer" shall mean any sale, pledge, gift, assignment or other
transfer.
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2. Restriction on Transfers of Restricted Securities by Restricted
Securityholders.
(a) The Holding Company shall not register the transfer of, or
otherwise permit the transfer of, any Restricted Securities by any
Restricted Securityholder (other than pursuant to a Sale to the Public)
unless (i) such transfer has been consummated in accordance with the terms
hereof and (ii) the new holder thereof shall first have become a party to
this Agreement and shall have agreed in writing to be bound by all of the
terms and conditions hereof applicable to the Restricted Securityholder
from whom such new holder shall have acquired such Restricted Securities.
Any transfer of Restricted Securities by any Restricted Securityholder
which is not consummated in accordance with this Agreement shall be void.
(b) Notwithstanding anything to the contrary set forth herein, the
Restricted Securityholder may pledge any Restricted Securities held by him
to any holder of Senior Debt (as defined in the Subordination Agreement)
and, if such holder of Senior Debt becomes the transferee of any such
pledged securities, such pledged securities shall not be subject to, and
such holder of Senior Debt and any transferee thereof shall not be bound by
or enjoy the benefits of, this Agreement.
3. Co-Sale Rights of Institutional Investors; Drag-Along Rights of Xxxxxxx
X. Day.
3.1. Co-Sale Rights of Institutional Investors. No Restricted
Securityholder shall transfer any Restricted Securities owned by such Restricted
Securityholder, directly or indirectly, to any other Person except in accordance
with this Agreement.
(a) If any Restricted Securityholder at any time proposes to transfer
any Restricted Securities, then, as a condition precedent thereto, such
Restricted Securityholder shall afford each Institutional Investor the
right to participate in such transfer in accordance with this section 3.1.
(b) Any Restricted Securityholder wishing to transfer any Restricted
Securities shall give written notice thereof to each Institutional Investor
(a "Notice of Transfer") not less than 30 nor more than 45 days prior to
any proposed transfer of any such Restricted Securities. Each such Notice
of Transfer shall:
(i) specify in reasonable detail (A) the number and kind of
Restricted Securities which such Restricted Securityholder proposes to
transfer, (B) the identity of the proposed transferee or transferees
of such Restricted Securities, (C) the time within which, the price
per share at which and all other terms and conditions upon which such
Restricted Securityholder proposes to transfer such Restricted
Securities and (D) the percentage of the Restricted
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Securities then owned by such Restricted Securityholder which such
Restricted Securityholder proposes to transfer to such proposed
transferee or transferees;
(ii) make explicit reference to this section and state that the
right of each Institutional Investor to participate in such transfer
under this section 3.1 shall expire unless exercised within 30 days
after receipt of such Notice of Transfer; and
(iii) contain an irrevocable offer by the selling Restricted
Securityholder to such Institutional Investor to participate in the
proposed transfer to the extent provided in section 3.1(c).
(c) Each Institutional Investor shall have the right to transfer to
the proposed transferee or transferees up to that number of shares of
Common Stock owned by (or issuable to) such Institutional Investor which is
equal to the Applicable Percentage (as hereinafter defined) (or, if such
Institutional Investor shall elect, any lesser percentage) of the
Restricted Securities proposed to be transferred by the selling Restricted
Securityholder, at the same price per share and on the same terms and
conditions as are applicable to the proposed transfer by such selling
Restricted Securityholder (and, if and to the extent any Institutional
Investor shall exercise such right, then the Restricted Securities to be
transferred by the selling Restricted Securityholder shall be
correspondingly reduced), provided that (i) the consideration to be paid to
any Institutional Investor so electing to participate shall be paid in cash
(unless such Institutional Investor shall elect otherwise) and (ii) no
Institutional Investor shall be required in connection with any such
transaction to make any representation, warranty or covenant other than a
representation as to such Institutional Investor's power and authority to
effect such transfer and as to such Institutional Investor's title to the
shares of Common Stock to be transferred by it, provided further that,
notwithstanding clause (ii) of the foregoing proviso, each Institutional
Investor electing to participate in such proposed transfer shall be
obligated to indemnify the proposed transferee or transferees upon the same
terms and conditions as are applicable to the indemnification given by the
selling Restricted Securityholder in connection with such proposed
transfer, so long as all indemnification obligations are shared among all
transferors in proportion to the consideration paid to each transferor, but
in no event shall the liability of any Institutional Investor under all
such indemnification provisions exceed the aggregate proceeds actually paid
to it in connection with such transfer. As used herein, the term
"Applicable Percentage" as applied to any Institutional Investor on any
date shall mean a fraction (expressed as a percentage), the numerator of
which is the number of shares of Common Stock proposed to be transferred by
such Institutional Investor on such date and the denominator of which is
the sum of (x) the aggregate number of shares of Common Stock proposed to
be transferred by such Institutional Investor and each other Institutional
Investor who shall, have timely elected to participate in such proposed
transfer and (y) the aggregate
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number of Restricted Securities proposed to be transferred by the selling
Restricted Securityholder, provided that in no event shall any
Institutional Investor be entitled to sell to the proposed transferee or
transferees a greater percentage of the shares of Common Stock then owned
by (or issuable to) such Institutional Investor than the percentage of the
shares of Common Stock then owned by the Restricted Securityholder which
are to be sold by the Restricted Securityholder to the proposed transferee
or transferees. All calculations pursuant to this section 3.1 shall be on a
fully-diluted basis (assuming the conversion, exercise and exchange of all
securities convertible into or exercisable or exchangeable for Common
Stock) and shall be carried out to a tenth of a share and then rounded to
the nearest share.
(d) Each Institutional Investor must notify such selling Restricted
Securityholder, within 30 days after receipt of the Notice of Transfer, if
such Institutional Investor desires to accept such offer and to transfer
any shares of Common Stock owned by (or issuable to) such Institutional
Investor in accordance with this section 3.1. The failure of any
Institutional Investor to provide such notice within such 30-day period
shall, for the purposes of this section 3.1, be deemed to constitute a
waiver by such Institutional Investor of its right to sell any of its
shares of Common Stock in connection with the proposed transfer described
in such Notice of Transfer. The selling Restricted Securityholder will use
commercially reasonable efforts to obtain the agreement of the prospective
transferee or transferees to the participation of the Institutional
Investors in such proposed transfer and will not consummate any such
proposed transfer unless each Institutional Investor electing to
participate therein is permitted to participate in accordance with the
provisions of this section 3.1. No Institutional Investor shall be
obligated to sell any shares of Common Stock pursuant to this section 3.1.
Any and all sales of shares of Common Stock by any Institutional Investor
pursuant to this section 3.1 shall be made either concurrently with or
prior to the sale of Restricted Securities by the selling Restricted
Securityholder.
(e) Notwithstanding anything to the contrary contained in this section
3.1, no Institutional Investor shall have any rights pursuant to this
section 3.1 to participate in any transfer by any Restricted Securityholder
(i) to (A) any member of his family (or to trusts the sole beneficiaries
and trustees of which are such Restricted Securityholder and members of his
family), (B) the estate of such Restricted Securityholder upon his death or
(C) any entity wholly-owned by such Restricted Securityholder, provided
that, in the case of this clause (i), any such transferee shall have become
a party to this Agreement, as required under section 2 or (ii) in any Sale
to the Public.
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3.2. Drag Along Rights of Controlling Shareholders.
(a) If at any time following the date hereof, the holders of a
majority of the outstanding Shares of the Holding Company (calculated on a
fully-diluted basis) but in any event including Xxxxxxx X. Day (the
"Controlling Shareholders") shall enter into an agreement to sell in an
arms-length transaction approved by the board of directors of the Holding
Company all of the Restricted Securities owned by the Controlling
Shareholders to any Person or group of Persons who are not affiliated with
the Controlling Shareholders, and each of the other shareholders of the
Holding Company (other than the Institutional Investors) sell their Shares
in the Holding Company in such transaction, then the Controlling
Shareholders may require that each Institutional Investor sell all of the
Shares (and all securities convertible into or exchangeable or exercisable
for Shares) of the Holding Company owned by such Institutional Investor to
such Person or group of Persons at the same price per share and on the same
terms and conditions as are applicable to the proposed sale by the
Controlling Shareholders, provided that (i) the consideration to be paid to
any Institutional Investor in such transaction shall be paid in cash or
cash equivalents (unless such Institutional Investor shall elect otherwise)
and (ii) no Institutional Investor shall be required in connection with any
such transaction to make any representation, warranty or covenant other
than a representation as to such Institutional Investor's power and
authority to effect such sale and as to such Institutional Investor's title
to the securities to be sold by it, provided further that, notwithstanding
clause (ii) of the foregoing proviso, each Institutional Investor shall be
obligated to indemnify the proposed transferee or transferees upon the same
terms and conditions as are applicable to the indemnification given by the
Controlling Shareholders connection with such proposed transfer, so long as
all indemnification obligations are shared among all transferors in
proportion to the consideration paid to each transferor, but in no event
shall the liability of any Institutional Investor under all such
indemnification provisions exceed the aggregate proceeds actually paid to
it in connection with such transfer.
(b) In order to exercise the rights under section 3.2(a), the
Controlling Shareholders must give notice to each Institutional Investor
not less than 30 days prior to the proposed date upon which the
contemplated sale is to be effected. In addition, the Controlling
Shareholders shall furnish to each Institutional Investor all material
agreements, documents and instruments to be executed in connection with
such transaction and shall afford each Institutional Investor a reasonable
period of time within which to review such agreements, documents and
instruments.
(c) Nothing in this section 3.2 shall modify any of the rights of any
Institutional Investor under any of the Operative Documents, including,
without limitation, any rights such Institutional Investor may have on
account of any transaction referred to in this section 3.2(a) under section
12 of the Securities Purchase Agreements.
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4. Limitation on Transactions with Affiliates. From and after the date of
this Agreement, and thereafter as long as any of the Preferred Shares or
Conversion Shares remain outstanding, the Holding Company will not, and will not
permit any of its Subsidiaries to, engage in any transaction (including, without
limitation, the purchase, sale or exchange of any properties and assets or the
rendering of any services) with an Affiliate of the Holding Company or of any of
its Subsidiaries on terms less favorable to the Holding Company or any such
Subsidiary in any material respect than would be obtainable at the time in
comparable transactions with a Person not such an Affiliate.
5. Registration, etc.
5.1. Registration on Request.
(a) In case the Holding Company shall receive from one or more holders
of any Registrable Shares a written request or requests that the Holding
Company effect any registration, qualification and/or compliance of any
Registrable Shares held by (or issuable to) such holder or holders, and
specifying the intended method of offering, sale and distribution, the
Holding Company will:
(i) promptly give written notice of the proposed registration,
qualification and/or compliance to each holder of any Registrable
Shares; and
(ii) as soon as practicable, effect such registration,
qualification and/or compliance (including, without limitation, the
execution of an undertaking for post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with exemptive regulations issued under the
Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution of such amount of Registrable Shares as is specified in a
written request or requests, made within 30 days after receipt of such
written notice from the Holding Company, by any holder or holders of
any Registrable Shares.
(b) The obligations of the Holding Company under this section 5.1 to
effect any such registration, qualification and/or compliance are subject
to the following qualifications:
(i) the Holding Company shall only be obligated to effect three
registrations pursuant to this section 5.1, provided that if, in
connection with any registration of Registrable Shares effected
pursuant to this section 5.1, the holders of Registrable Shares
requesting registration are unable for any reason to include in such
registration all of the Registrable Shares for which registration has
been requested, then the holder or holders of the Registrable
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Shares shall be entitled to an additional registration of Registrable
Shares pursuant to this section 5.1;
(ii) the Holding Company shall not be obligated to effect any
registration requested pursuant to this section 5.1 prior to the
expiration of 120 days after the consummation of the Holding Company's
initial public offering;
(iii) the Holding Company shall not be obligated to effect any
registration requested pursuant to this section 5.1 unless it shall
have been requested to do so by the holder or holders of a majority of
the Registrable Shares at the time outstanding;
(iv) the Holding Company shall not include in any registration,
qualification or compliance requested pursuant to this section 5.1 any
other securities (including, without limitation, those to be issued
and sold by the Holding Company), if as a result of including any such
other securities there is any reduction in the number of Registrable
Shares to be included therein or in the estimated price to the public
of such Registrable Shares, without the prior written consent of
holders of a majority of the Registrable Shares to be included in such
registration, qualification or compliance; and
(v) the Holding Company shall pay all Registration Expenses
related to any registration, qualification and compliance effected
pursuant to this section 5.1.
5.2. Incidental Registration.
(a) If the Holding Company at any time or from time to time shall
determine to effect the registration, qualification and/or compliance of
any of its equity securities (whether in connection with an offering by the
Holding Company or others) (otherwise than pursuant to a registration on a
form inappropriate for an underwritten public offering or relating solely
to securities to be issued in a merger, acquisition of the stock or assets
of another entity or in a similar transaction), then, in each such case
(including the Holding Company's initial public offering), the Holding
Company will:
(i) promptly give written notice of the proposed registration,
qualification and/or compliance (which shall include a list of the
jurisdictions in which the Holding Company intends to register or
qualify such securities under the applicable blue sky or other state
securities laws) to each holder of any Registrable Shares; and
(ii) include among the securities which it then registers or
qualifies all Registrable Shares specified by any holder thereof in a
written request or
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requests, made within 30 days after receipt of such written notice
from the Holding Company.
(b) The obligations of the Holding Company under this section 5.2 are
subject to the following qualifications:
(i) the Holding Company shall pay all Registration Expenses
related to any registration, qualification or compliance effected
pursuant to this section 5.2; and
(ii) if, in connection with any underwritten offering pursuant to
this section 5.2, the managing underwriter shall impose a limitation
on the number or kind of securities which may be included in any such
registration for sale by any Person other than the Holding Company
because, in its reasonable judgment, such limitation is necessary to
effect an orderly public distribution, then the Holding Company shall
be obligated to include in such registration statement only such
limited portion of the Registrable Shares (which may be none) as is
determined in good faith by such managing underwriter, provided that,
if any securities are being offered for the account of any Person
other than the Holding Company and the holders of the Registrable
Shares, the reduction in the number of Registrable Shares included in
such registration shall not represent a greater percentage of the
amount of Registrable Shares originally requested to be registered and
sold in such registration than the lowest such percentage reduction
imposed upon any other Person.
5.3. Permitted Registration. If and to the extent that any holder or
holders of any Registrable Shares shall have, at the time of delivery of the
written request referred to in section 5.2, no present intention of selling or
distributing such securities, the Holding Company shall be obligated to effect
the registration, qualification and compliance of such securities of such holder
or holders only if and to the extent, in each case, that such registration,
qualification and compliance are at the time permitted by the applicable
statutes or rules and regulations thereunder or the practices of the
governmental authority concerned.
5.4. Registration Procedures. In the case of each registration,
qualification and/or compliance contemplated by this section 5, the Holding
Company will keep the holder or holders of Registrable Shares advised in writing
as to the initiation of proceedings for such registration, qualification and
compliance and as to the completion thereof, and will advise each such holder,
upon request, of the progress of such proceedings. In addition, the Holding
Company will follow procedures customarily observed by issuers in registered
public offerings, and accord to the holder or holders of Registrable Shares all
rights (including, without limitation, the right to perform appropriate "due
diligence") customarily accorded to selling stockholders in secondary
distributions and to managing underwriters if the transaction in question is or
were an underwritten public offering. At the expense of the Holding
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Company or of the party or parties bearing the expenses of such registration,
qualification and compliance, the Holding Company will (a) keep such
registration, qualification and compliance current and effective by such action
as may be necessary or appropriate, including, without limitation, the filing of
post-effective amendments and supplements to any registration statement or
prospectus, for such period as is necessary to permit the sale and distribution
of the Registrable Shares pursuant thereto, but in no event longer than six
months, (b) take all necessary action under any applicable blue sky or other
state securities law to permit such sale and/or distribution, all as requested
by the holder or holders of Registrable Shares included therein, (c) comply with
applicable requirements of all regulatory entities, including, without
limitation, the National Association of Securities Dealers, Inc., (d) furnish
each holder of Registrable Shares included therein such number of registration
statements, prospectuses, supplements, amendments, offering circulars and other
documents incidental thereto as such holder from time to time may reasonably
request, (e) list all Registrable Shares on each securities exchange on which
securities of the same class are then listed and (f) furnish (or cause to be
furnished) to each holder of Registrable Shares, all undertakings, agreements,
certificates, opinions, financial statements and "comfort letters" of the sort
customarily provided to selling stockholders in secondary distributions and to
the managing underwriters, if the transaction in question is or were an
underwritten public offering.
5.5. Indemnification. Without limiting the generality of any other
indemnification provision contained in any of the Operative Documents, the
Holding Company will indemnify, defend and hold harmless each holder of
Registrable Shares included in any registration, qualification and/or compliance
contemplated by this section 5 and each underwriter of such securities, and each
Person, if any, who controls each such holder and underwriter within the meaning
of the Securities Act, and their respective directors, officers, employees,
agents, advisors and Affiliates (each, an "Indemnified Person"), to the fullest
extent enforceable under applicable law against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, prospectus, supplement, amendment, offering circular
or other document related to any registration, qualification or compliance or
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
any violation (or alleged violation) of the Securities Act or other securities
laws in connection with any such registration, qualification or compliance, and
will reimburse each such Indemnified Person for any legal or any other expenses
reasonably incurred in connection with investigating and/or defending (and/or
preparing for any investigation or defense of) any such claim, loss, damage,
liability, action or violation; provided that the Holding Company will not be
liable in any such case to any such Indemnified Person if, but only to the
extent that, any such claim, loss, damage, liability, action, violation or
expense is finally determined to arise out of or result from any untrue
statement in or omission from written information furnished to the Holding
Company by an instrument duly executed by such Indemnified Person and stated to
be specifically for use therein. Each holder of Registrable Shares will, if
securities held by such holder are included in a registration effected pursuant
to this section 5,
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indemnify, defend and hold harmless the Holding Company, each of its directors
and officers who signs the related registration statement, and each Person, if
any, who controls the Holding Company within the meaning of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, supplement, amendment, offering circular or other document or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Holding Company and such directors, officers or Persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending (and/or preparing for any investigation or defense
of) any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) was made in (or omitted from) such
registration statement, prospectus, supplement, amendment, offering circular or
other document in reliance upon and in conformity with written information
furnished to the Holding Company by an instrument duly executed by such holder
and stated to be specifically for use therein; provided that the liability of
any such holder under this section 5.5 shall be limited to the net sales
proceeds actually received by such holder as a result of the sale by it of
securities in such registration.
5.6. Restrictions on Other Agreements. The Holding Company will not grant
any right relating to the registration of its securities if the exercise thereof
interferes with or is inconsistent with or will delay (or could reasonably be
expected to interfere with or be inconsistent with or delay) the exercise and
enjoyment of any of the rights granted under this section 5, without the written
consent of the holder or holders of a majority of the Registrable Shares at the
time outstanding, which consent may be given or withheld in the sole discretion
of such holders. The Holding Company will not permit any of its Subsidiaries to
effect, or to grant any right relating to, the registration of its securities.
6. Board Visitation Rights. Reference is hereby made to section 13 of the
Securities Purchase Agreements for certain provisions relating to "board
visitation rights" of the holders of the Securities, to which provisions each of
the Restricted Securityholders hereby consents.
7. Voting Agreement With Respect to the Board of Directors of the Holding
Company, etc.
(a) At the request of the Required Holders of the Purchased Shares,
each Restricted Securityholder shall cause a special election of directors
of the Holding Company to be held as promptly as practicable and shall
vote, or cause to be voted, in such election and in each subsequent
election of the directors of the Holding Company (whether at a meeting or
by written consent in lieu of a meeting), all Restricted Securities
entitled to vote in such election which are held by such Restricted
Securityholder (or over which such Restricted Securityholder has voting
control) so as
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to assure that (i) the board of directors of the Holding Company, following
such election, shall have as a member thereof at least one individual
designated by the Required Holders of the Purchased Shares and (ii) the
board of directors of the Holding Company shall have not more than seven
members.
(b) The Required Holders of the Preferred Shares shall be entitled to
remove from the Holding Company's board of directors the individual so
designated by them with or without cause and to designate a replacement for
any individual so removed.
(c) Each Restricted Securityholder holding (or having voting control
over) Restricted Securities entitled to vote in any election of directors
of the Holding Company hereby grants to the Required Holders of the
Purchased Shares an irrevocable proxy, coupled with an interest, to vote
all such Restricted Securities to the extent necessary to carry out the
provisions of this section 7 in the event of any breach by such Restricted
Securityholder of such Person's obligations under this section 7 (in which
event the Required Holders of the Purchased Shares shall vote such
Restricted Securities so as to carry out the provisions of this section 7).
8. Legends. So long as any Restricted Securities held by any Restricted
Securityholder are subject to the provisions of this Agreement, all certificates
or instruments representing such securities shall bear a legend in substantially
the following form:
The securities represented hereby are subject to the terms of the
Stockholders and Registration Rights Agreement dated September 17,
1998 by and among Dover Saddlery, Inc., a Delaware corporation (the
"Holding Company"), and certain other persons. A copy of such
Stockholders and Registration Rights Agreement is on file at the
Holding Company's principal offices and, upon written request to the
Secretary of the Holding Company, a copy thereof will be mailed or
otherwise provided without charge within five days of receipt of such
request to appropriately interested persons.
9. Termination of this Certain Provisions of this Agreement. The provisions
set forth in sections 2, 3 and 7 of this Agreement shall be of no further force
or effect following (a) the consummation of a Qualifying Public Offering, (b)
the registration of such securities under the Exchange Act and (c) the listing
of such securities on a national exchange or market system for trading. The
other provisions of this Agreement shall continue in force until such time as
there are no Purchased Shares and/or Conversion Shares outstanding.
10. Notices. All communications provided for herein shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such communication by a recognized overnight delivery service (charges prepaid),
(b) by a recognized overnight
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delivery service (charges prepaid), or (c) by messenger. The respective
addresses of the parties hereto for the purposes of this Agreement are set forth
on Exhibit A attached hereto. Any party may change its address (or telecopy
number) by notice to each of the other parties in accordance with this section
10. Communications under this Agreement shall be deemed given only when actually
received.
11. Binding Effect. This Agreement shall inure to the benefit of and be
enforceable by and shall be binding upon each of the parties hereto and their
respective heirs, executors, successors, and assigns.
12. Amendments and Waivers. This Agreement may not be amended except by a
written instrument signed by the Holding Company, each Restricted Securityholder
and each Institutional Investor. No course of dealing between any parties hereto
and no delay by any party in exercising its rights hereunder shall operate as a
waiver of any rights of any party. No waiver shall be deemed to be made by any
party of its rights hereunder unless the same shall be in writing signed on
behalf of such party, and each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
or obligations of any other party in any other respect at any other time.
13. Specific Performance. The parties hereto stipulate that the remedies at
law of any party hereto in the event of any default or threatened default by any
other party hereto in the performance of or compliance with the terms hereof are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
thereof, whether by an injunction against violation thereof or otherwise.
14. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement,
including the validity hereof and the rights and obligations of the parties
hereunder, and all amendments and supplements hereof and all waivers and
consents hereunder, shall be construed in accordance with and governed by the
domestic substantive laws of The Commonwealth of Massachusetts without giving
effect to any choice of law or conflicts of law provision or rule that would
cause the application of the domestic substantive laws of any other
jurisdiction. Each of the parties hereto, to the extent that it may lawfully do
so, hereby consents to service of process, and to be sued, in The Commonwealth
of Massachusetts and consents to the jurisdiction of the courts of The
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts, as well as to the jurisdiction of all courts to which
an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the transactions contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts. Each of the parties
hereto further agrees that a summons and complaint commencing an action or
proceeding in any of such courts shall be properly served and shall confer
personal jurisdiction if served personally or by certified mail (return receipt
requested) in accordance with section 10 or as otherwise provided under the laws
of The Commonwealth
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of Massachusetts. Notwithstanding the foregoing, each of the parties hereto
agrees that nothing contained in this section 14 shall preclude the institution
of any such suit, action or other proceeding in any jurisdiction other than The
Commonwealth of Massachusetts. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY
OR AGAINST IT IN RESPECT OF ITS OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
15. Miscellaneous. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof or
thereof. This Agreement embodies the entire agreement and understanding among
the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. If any provision in this Agreement refers
to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable, whether such action
is taken directly or indirectly by such Person. In case any provision in this
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. This Agreement may be executed in any number of counterparts
and by the parties hereto, as the case may be, on separate counterparts but all
such counterparts shall together constitute but one and the same instrument.
[The remainder of this page is intentionally left blank.]
-14-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.
DOVER SADDLERY, INC., a Delaware
corporation
By /s/ Xxxxxxx X. Day
-------------------------------------
Its President (Title)
Xxxxxxx X. Day, President
/s/ Xxxxxxx X. Day
----------------------------------------
Xxxxxxx X. Day
CITIZENS VENTURES, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Managing Director (Title)
Xxxxxxx X. Xxxxxxxx,
Managing Director
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Exhibit A
Addresses for Notices
(a) If to the Holding Company or Xxxxxxx X. Day, to such Person at:
c/o Dover Saddlery, Inc.
00 Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Day, President
Telecopy No.: (000)000-0000
with a copy (which shall not constitute notice) to:
Pepe & Hazard LLP
Xxxxxxx Square
Hartford, Connecticut 06103-4302
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) If to Citizens Ventures, Inc., to it at:
00 Xxxxx Xxxxxx, 00xx xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: W. Xxxxxxxx Xxx, Esq.
Telecopy No.: (000)000-0000
-16-
