INVESTORS' AGREEMENT
DATED AS OF
NOVEMBER 23, 1999
BY AND AMONG
VIKING MERGER SUB, INC.,
DLJ MERCHANT BANKING PARTNERS II, L.P.,
DLJ MERCHANT BANKING PARTNERS XX-X, X.X.,
XXX XXXXXXXX XXXXXXXX XX, X.X.,
XXX DIVERSIFIED PARTNERS, L.P.
DLJ DIVERSIFIED PARTNERS -A, L.P.,
DLJ MILLENNIUM PARTNERS, L.P.
DLJ MILLENNIUM PARTNERS-A, L.P.
DLJMB FUNDING II, INC.,
DLJ EAB PARTNERS, L.P.,
DLJ FIRST ESC, L.P.,
DLJ ESC II L.P.,
DLJ INVESTMENT FUNDING II, INC.,
DLJ INVESTMENT PARTNERS, L.P.,
DLJ INVESTMENT PARTNERS II, L.P.,
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION,
BNY CAPITAL CORPORATION,
CARLYLE HIGH YIELD PARTNERS, L.P.,
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
LIFE INSURANCE COMPANY OF NORTH AMERICA,
XXXX X. XXXXXX
AND
XXXX X. XXXXXXXXX
TABLE OF CONTENTS
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PAGE
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ARTICLE
DEFINITIONS
Section 1.01. DEFINITIONS..............................................2
ARTICLE 2
CORPORATE GOVERNANCE
Section 2.01. COMPOSITION OF THE BOARD.................................8
Section 2.02. REMOVAL..................................................8
Section 2.03. VACANCIES................................................8
Section 2.04. MEETINGS.................................................8
Section 2.05. ACTION BY THE BOARD......................................9
Section 2.06. CONFLICTING CHARTER OR BYLAW PROVISIONS..................9
ARTICLE 3
RESTRICTIONS ON TRANSFER
Section 3.01. GENERAL..................................................9
Section 3.02. LEGENDS.................................................10
Section 3.03. PERMITTED TRANSFEREES...................................10
Section 3.04. RESTRICTIONS ON TRANSFERS BY MANAGEMENT STOCKHOLDERS....10
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PRE-EMPTIVE RIGHTS
Section 4.01. RIGHTS TO PARTICIPATE IN TRANSFER.......................11
Section 4.02. RIGHT TO COMPEL PARTICIPATION IN CERTAIN TRANSFERS......13
Section 4.03. CERTAIN RIGHTS..........................................15
Section 4.04. PRE-EMPTIVE RIGHTS......................................15
Section 4.05. TREATMENT OF DLJIP ENTITIES.............................16
ARTICLE 5
REGISTRATION RIGHTS
Section 5.01. DEMAND REGISTRATION.....................................16
Section 5.02. PIGGYBACK REGISTRATION..................................19
Section 5.03. HOLDBACK AGREEMENTS.....................................20
Section 5.04. REGISTRATION PROCEDURE..................................20
Section 5.05. INDEMNIFICATION BY THE COMPANY..........................23
Section 5.06. INDEMNIFICATION BY PARTICIPATING STOCKHOLDERS...........24
Section 5.07. CONDUCT OF INDEMNIFICATION PROCEEDINGS..................24
Section 5.08. CONTRIBUTION............................................25
Section 5.09. PARTICIPATION IN PUBLIC OFFERING........................26
Section 5.10. OTHER INDEMNIFICATION...................................26
Section 5.11. COOPERATION BY THE COMPANY..............................26
ARTICLE 6
MISCELLANEOUS
Section 6.01. ENTIRE AGREEMENT........................................27
Section 6.02. BINDING EFFECT; BENEFIT.................................27
Section 6.03. EXCLUSIVE FINANCIAL AND INVESTMENT BANKING ADVISOR......27
Section 6.04. ASSIGNABILITY...........................................27
Section 6.05. PRINTING BUSINESS.......................................27
Section 6.06. AMENDMENT; WAIVER; TERMINATION..........................27
Section 6.07. NOTICES.................................................28
Section 6.08. HEADINGS................................................29
Section 6.09. COUNTERPARTS............................................29
Section 6.10. APPLICABLE LAW..........................................29
Section 6.11. SPECIFIC ENFORCEMENT....................................29
Section 6.12. CONSENT TO JURISDICTION.................................30
INVESTORS' AGREEMENT
AGREEMENT dated as of November 23, 1999 among (i) Viking Merger Sub,
Inc. ("VIKING") which, immediately upon consummation of the Merger will become
Merrill Corporation, a Minnesota corporation (the surviving corporation being
the "COMPANY"), (ii) 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, DLJ First ESC,
L.P., a Delaware limited partnership DLJ ESC II, L.P., a Delaware limited
partnership, DLJ Investment Partners II, L.P., a Delaware limited partnership,
DLJ Investment Partners, L.P., a Delaware limited partnership, DLJ Investment
Funding II, Inc., a Delaware corporation (each of the foregoing, a "DLJ ENTITY",
and collectively, the "DLJ ENTITIES"), (iii) Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, BNY Capital Corporation, Carlyle High Yield Partners,
L.P., Connecticut General Life Insurance Company, Life Insurance Company of
North America and (iv) Xxxx X. Xxxxxx and Xxxx X. Xxxxxxxxx (each a "MANAGEMENT
STOCKHOLDER" and collectively, the "MANAGEMENT STOCKHOLDERS") (each of the
persons in (ii), (iii) and (iv) a "STOCKHOLDER" and collectively, the
"STOCKHOLDERS").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Merger dated July 14,
1999 between Viking and the Company, as amended, (the "MERGER AGREEMENT"),
Viking has agreed to merge with and into the Company, with the Company as the
surviving corporation (the "MERGER");
WHEREAS, prior to the Merger, the DLJ Entities and the entities
described in (iii) above will acquire securities in Viking and will, at the time
the Merger becomes effective pursuant to the terms of the Merger Agreement (the
"EFFECTIVE TIME") hold securities in the Company;
WHEREAS, immediately prior to the Merger, the Management Stockholders
will own class B common shares in the Company which will remain outstanding at
the Effective Time;
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations as holders of securities
in the Company after consummation of the transactions contemplated by the Merger
Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and in the Merger Agreement, and with effect from the Effective
Time, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"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.
"AGGREGATE OWNERSHIP" means, with respect to any Stockholder or group
of Stockholders, and with respect to any class of Company Securities, the total
amount of such securities "beneficially owned" (as such term is defined in Rule
13d-3 under the Exchange Act without regard to the timing limitation in Rule
13d-3(d)(1)(i)) (without duplication) by such Stockholder or group of
Stockholders as of the date of such calculation (but adjusted in accordance with
the proviso below), calculated on a Fully Diluted basis and taking into account
any stock dividend, stock split or reverse stock split; PROVIDED that such
amount of securities shall be increased (without duplication) with respect to
any Stockholder, by any stock appreciation rights, options, warrants or other
rights to purchase or subscribe for Company Securities of such Stockholder only
as and when such stock appreciation rights, options, warrants or other rights
have vested.
"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 Articles of Incorporation of the Company, as
amended from time to time.
"CLOSING DATE" means November 23, 1999.
"CO-INVEST MANAGEMENT STOCKHOLDER" means any individual who (a) may, in
accordance with Section 6.04, become a Management Stockholder after the Closing
Date and (b)
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participates in any leveraged co-investment plan, stock option plan or other
stock based incentive plan of the Company after the Closing Date.
"COMMON SHARES" means the voting common shares, par value $0.01 per
share, of Viking and immediately upon consummation of the Merger will mean,
without duplication, the voting class B common shares, par value $0.01 per
share, of the Company and any shares into which such Common Shares may
thereafter be converted or exchanged.
"COMPANY SECURITIES" means the Common Shares (and securities
convertible into or exchangeable for Common Shares), the Preferred Shares and
any options, warrants (including the Warrants) or other rights to acquire Common
Shares, Preferred Shares or any other equity security issued by the Company.
"DLJIP ENTITIES" means collectively, DLJ ESC II L.P., DLJ Investment
Funding II, Inc., DLJ Investment Partners, L.P. and DLJ Investment Partners II,
L.P.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FULLY DILUTED" means, with respect to Common Shares and without
duplication, all outstanding Common Shares and all Common Shares issuable in
respect of securities convertible into or exchangeable for Common Shares, stock
appreciation rights, options, warrants (including the Warrants) and other rights
to purchase or subscribe for Common Shares or securities convertible into or
exchangeable for Common Shares; PROVIDED that, to the extent any of the
foregoing stock appreciation rights, options, warrants or other rights to
purchase or subscribe for Common Shares are subject to vesting, the Common
Shares subject to vesting shall be included in the definition of "Fully Diluted"
only upon and to the extent of such vesting.
"FIRST PUBLIC OFFERING" means the first sale after the date hereof of
Common Shares pursuant to an effective registration statement under the
Securities Act (other than a registration statement on Form S-8 or any successor
form and other than the registration statement filed in connection with Senior
Notes Warrants and in connection with any Common Shares for which warrants may
be exercised).
"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.
"OTHER STOCKHOLDERS" means all Stockholders other than the DLJ
Entities, and their respective Permitted Transferees.
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"PERMITTED TRANSFEREE" means:
(i) in the case of any DLJ Entity (A) any other DLJ
Entity, (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 under the
terms of a voting trust;
(ii) in the case of any Other Stockholder that is an
individual, (A) a spouse, child, parent, or sibling (or child
thereof) of the Other Stockholder or the heirs, executors,
administrators, testamentary trustees, legatees or
beneficiaries of any of the foregoing persons referred to in
this clause (A), (B) a trust for the benefit of any of the
foregoing or the Other Stockholder, (C) a charitable remainder
trust, or (D) a private foundation or similar not-for-profit
entity controlled solely by such Other Stockholder or the
spouse or a child of such Other Stockholder, PROVIDED that if
any such Other Stockholder shall transfer, individually or in
the aggregate, more than 10% of his or her Initial Ownership
of Common Shares, the Permitted Transferee to whom such Common
Shares have been transferred shall grant such Other
Stockholder an irrevocable proxy with respect to the voting of
any matter relating to such shares; and
(iii) in the case of any Other Stockholder that is
not an individual, any Affiliate of such Other Stockholder.
"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.
"PREFERRED SHARES" means the 14.5% Senior Preferred Shares due 2011,
$0.01 par value, of the Company.
"PRO RATA PORTION" means the number of Common Shares a Stockholder
holds on a Fully Diluted basis multiplied by a fraction, the numerator of which
is the number of Common Shares to be sold by the DLJ Entities and their
Permitted Transferees in a given transaction (including, if Warrants are to be
sold, the number of Common Shares into which such Warrants may be converted upon
exercise) and the denominator of which is the total number of Common
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Shares, on a Fully Diluted basis, held in the aggregate by the DLJ Entities and
their Permitted Transferees prior to such transaction.
"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 until (i) a registration
statement covering such Shares has been declared effective by the SEC and such
shares have been disposed of pursuant to such effective registration statement,
(ii) such Shares are sold under circumstances in which all of the applicable
conditions of Rule 144 are met or under which they may be sold pursuant to Rule
144(k) or (iii) such Shares are otherwise transferred, the Company has delivered
a new certificate or other evidence of ownership for such Shares not bearing the
legend required pursuant to this Agreement and such Shares may be resold without
subsequent registration under the Securities Act.
"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), (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) 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 DLJ Entities, in
the case of any offering in which such entities participate, 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, which shall
not include any underwriting fees, discounts or commissions attributable to the
sale of Registrable Securities, or any out-of-pocket expenses of the
Stockholders (or the agents who manage their accounts), except as set forth in
(vii) above, but which shall include any fees and expenses of underwriter's
counsel.
"RESTRICTION TERMINATION DATE" means the earlier to occur of (a) the
fourth anniversary of the Closing Date and (b) the date upon which the Aggregate
Ownership of Common Shares of the DLJ Entities and any of their Permitted
Transferees falls below 10 percent of the Initial Ownership of Common Shares of
the DLJ Entities.
"RULE 144" means Rule 144 and Rule 144A (or any successor provisions)
under the Securities Act.
"SEC" means the Securities and Exchange Commission.
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"SECTION 4.04 PORTION" means the pro rata portion of any Company equity
securities proposed to be issued by the Company with respect to which
Stockholders shall be entitled to exercise their rights under Section 4.04 based
upon such Stockholder's Aggregate Ownership of Common Shares as a percentage of
the Aggregate Ownership of Common Shares of all Stockholders.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR NOTES WARRANTS" means the warrants attached to the Senior
Discount Notes due 2009 of Merrill Corporation issued on or about November 23,
1999.
"SHARES" means Common Shares, Preferred Shares and Warrant Shares.
"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 6.04, or
otherwise, so long as such Person shall (i) beneficially own any Company
Securities, or (ii) have any stock appreciation rights, options, warrants or
other rights to purchase or subscribe for Company Securities.
"TAG-ALONG PORTION" means the number of Common Shares held (or, without
duplication, Common Shares acquirable upon exercise of the 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 Common Shares (or, without
duplication, Common Shares acquirable upon the exercise of Warrants) proposed to
be sold in the Tag-Along Sale pursuant to Section 4.01, and the denominator of
which is the aggregate number of Common Shares (assuming the exercise of all
Warrants) outstanding and owned by all Stockholders;
"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 Stockholders
pursuant to the Subscription Agreement for the purchase of an aggregate of
344,263 Common Shares (subject to adjustment as provided for therein).
"WARRANT SHARES" means shares of Common Stock issuable by the Company
upon exercise of the Warrants.
(b) The term "DLJ ENTITIES", to the extent such entities shall have
transferred any of their Shares to Permitted Transferees, shall mean the DLJ
Entities and the Permitted Transferees of the DLJ Entities, 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 DLJ Entities and such Permitted Transferees.
(c) The term "MANAGEMENT STOCKHOLDERS", to the extent such stockholders
shall have transferred any of their Shares to Permitted Transferees, shall mean
the Management Stockholders and the Permitted Transferees of the Management
Stockholders, taken together,
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and any right or action that may be taken at the election of the Management
Stockholders may be taken at the election of the Management Stockholders and
such Permitted Transferees.
(d) 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.
(e) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Demand Registration 5.01(e)
DLJSC 6.03
Drag-Along Rights 4.02(a)
Holdback Period 5.03
Holders 5.01(e)
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)
Participating Stockholder 4.04(b)
Public float 4.01(f)
Public Offering Limitations 3.04(a)
Records 5.04(g)
Registration Request 5.01
Relevant Portion 4.04(b)
Relevant Stockholder 4.04(b)
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)
Subscription Agreement 6.01
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)
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TCW Entity 3.01
Transfer 3.01
ARTICLE 2
CORPORATE GOVERNANCE
Section 2.01. COMPOSITION OF THE BOARD. (a) The Board shall consist
initially of seven directors, three of which (including the Chairman) will be
nominated by DLJ Merchant Banking Partners II, L.P., three of which will be
nominated by the Management Stockholders and one of which shall be nominated by
DLJ Investment Partners II, L.P. so long as its Aggregate Ownership of Common
Shares exceeds 10% of its Initial Ownership of Common Shares, failing which,
such director will be nominated by DLJ Merchant Banking Partners II, L.P. Any
directors appointed pursuant to paragraph 7(b) of the Certificate of Designation
of the Preferred Shares shall be in addition to these seven directors and shall
not affect the rights of appointment hereunder.
(b) Each Stockholder 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 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 the
DLJ Entities will be required to vote their shares in favor of the nominees of
the Management Stockholders only until the time that the Aggregate Ownership of
Common Shares of the Management Stockholders falls below 10 percent of the
Initial Ownership of Common Shares of the Management Stockholders.
Section 2.02. REMOVAL. Each Stockholder 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 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.
8
Section 2.05. ACTION BY THE BOARD. (a) A quorum of the Board shall
consist of four directors; PROVIDED that the DLJ Entities shall have the right
at any time to increase 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.
(b) The Board may create executive, compensation and audit committees,
as well as such other committees as it may determine, to the extent authorized
by applicable law. To the extent not prohibited by applicable law, the DLJ
Entities shall be entitled to majority representation on any committee created
by the Board and the Management Stockholders shall be entitled to at least one
representative on any such committee.
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.
Except as set forth below, no transferee other than a Permitted
Transferee or a party hereto shall be required to become a party to this
Agreement. Except as set forth (i) in the second sentence of this Section 3.01
and (ii) with respect to the DLJ Entities, Section 4.01, transfers by the
Stockholders (other than Management Stockholders) are not subject to any
restrictions on transfer of Company Securities. It is acknowledged that DLJSC
shall be permitted to sell any or all of its Company Securities to TCW/Crescent
Mezzanine Partners II, L.P. and/or one or more of its Affiliates (each a "TCW
ENTITY"), and in such event, each such TCW Entity shall execute and deliver an
agreement to be bound by the terms of and become a party to this Agreement upon
the same terms (other than any rights or obligations of DLJSC under Section 6.03
hereof) as DLJSC is so bound at the time of such transfer.
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.
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Section 3.02. LEGENDS. In addition to any other legend that may be
required, each certificate for Common Shares or Preferred Shares 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, VOTING AND OTHER MATTERS AS SET FORTH IN THE
INVESTORS' AGREEMENT DATED AS OF NOVEMBER 23, 1999, COPIES OF WHICH ARE ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY".
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 and 4.01 so long as (a) such Permitted
Transferee shall have agreed in writing to be bound by the terms of and become a
party to 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 permitted by
Section 3.03, or as follows:
(i) in a transfer made in compliance with Section 4.01 or 4.02
or as required by any employment contract between the Company or any
Subsidiary and such management Stockholder;
(ii) subject to the Public Offering Limitations, in a Public
Offering in connection with the exercise of its rights under Article 5
hereof; or
(iii) after the first anniversary of the First Public
Offering, subject to Section 5.03, in a transfer made in compliance
with Rule 144 promulgated under the Securities Act; PROVIDED, however,
that such sales cannot reduce a Management Stockholder's ownership to
(or occur at a time when such Management Stockholder's ownership is
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otherwise) below the greater of (a) 50% of such Management
Stockholder's Initial Ownership of Common Shares and (b) the percentage
of such Management Stockholder's Initial Ownership of Common Shares
that is equal to the Aggregate Ownership of Common Shares of the DLJ
Entities as a percentage of the DLJ Entities' Initial Ownership of
Common Shares.
For purposes of this Agreement, "PUBLIC OFFERING LIMITATIONS" means (A)
no Management Stockholder shall be permitted to sell any Common Shares in the
First Public Offering provided that any Management Stockholder that is not a
Co-invest Management Stockholder may sell in the First Public Offering the
lesser of (i) such Management Stockholder's Pro Rata Portion in respect of the
First Public Offering, and (ii) 20 percent of the Initial Ownership of Common
Shares of such Management Stockholder; (B) other than pursuant to the proviso in
(A) above, no Management Stockholder may sell any Common Shares until such time
as the Aggregate Ownership of Common Shares of the DLJ Entities is less than 75
percent of the Initial Ownership of Common Shares of the DLJ Entities and (C) in
each Public Offering following the First Public Offering, each Management
Stockholder may sell no more than such Management Stockholder's Pro Rata Portion
in respect of such Public Offering.
(b) The provisions of Section 3.04(a) shall terminate on the
Restriction Termination Date. Notwithstanding the foregoing sentence, the
provisions of Section 3.04(a) shall not terminate with respect to any Management
Stockholder's Common 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.
(c) In addition to any other restriction contained in this Agreement
and notwithstanding any other provision of this Section 3.04, neither a
Management Stockholder nor any Permitted Transferee thereof may transfer any
Common Shares prior to the date such Common Shares have vested in accordance
with the terms of any relevant investment plan or other related agreement to
which such Common Shares are subject.
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PRE-EMPTIVE RIGHTS
Section 4.01. RIGHTS TO PARTICIPATE IN TRANSFER. (a) If any DLJ Entity
(the "SELLING PERSON") proposes a transfer (other than a transfer (i) in a
Public Offering or pursuant to Rule 144, (ii) to any Permitted Transferee or
(iii) to the Company or any of its employees or independent contractors in
connection with any plan or proposal for the incentivisation of any such
employees or independent contractors under which such employee or independent
contractor becomes bound by the terms hereof), of a number of Common Shares
equal to or exceeding 20% of the then outstanding Common Shares in a single
transaction or in a series of related transactions (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"). In the event of
such a proposed transfer, the Selling Person shall provide each Other
Stockholder written notice 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 of
11
Common Shares 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.
Any Other Stockholder that owns Warrants shall be permitted to participate in
such a Tag-Along Offer, subject to the other provisions of this Section 4.01, by
transferring in lieu of Common Shares representing such Person's Tag Along
Portion a number of Warrants which, if exercised, would confer the right to
acquire such number of Common Shares ("UNDERLYING SHARES") and the calculation
below in this Section 4.01 shall be made as though the Warrants in question had
been exercised for Common Shares. The price per Warrant to be received by such a
Tagging Person shall be the price per Common Share multiplied by the number of
Underlying Shares minus the applicable Warrant exercise price in respect
thereof.
From the receipt of the Tag-Along Notice, each Tagging Person shall,
subject to Section 4.01(f), 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 Common Shares (or
Warrants in lieu thereof) held by such Tagging Person as is specified in such
notice; PROVIDED that if the aggregate number of Common Shares (or Warrants in
lieu thereof) proposed to be sold by the Selling Person and all Tagging Persons
in such transaction exceeds the number of Common Shares which can be sold on the
terms and conditions set forth in the Tag-Along Notice, then the Tag-Along
Portion of each Tagging Person shall be sold pursuant to the Tag-Along Offer and
the Selling Person shall sell its Tag-Along Portion and such additional Common
Shares (or Warrants in lieu thereof) 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 Common Shares (or
Warrants in lieu thereof) of such Tagging Person to be included in the transfer,
together with a limited power-of-attorney authorizing the Selling Person to
transfer such Common Shares (or Warrants in lieu thereof) on the terms set forth
in the Tag-Along Notice. Delivery of such certificate or certificates
representing the Common Shares (or Warrants in lieu thereof) to be transferred
and the limited power-of-attorney authorizing the Selling Person to transfer
such Common Shares (or Warrants in lieu thereof) 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 Common Shares (or Warrants in lieu thereof) on
substantially the same terms and conditions set forth in the Tag-Along Notice,
the Selling Person shall return to each Tagging Person the limited
power-of-attorney (and all copies thereof) together with all certificates
representing the Common Shares (or Warrants in lieu thereof) 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
Common Shares (or Warrants in lieu thereof) 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
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such transfer and the terms thereof (plus such copies of related documents) 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.
(d) If any Tagging Person 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 DLJ Entities shall be entitled to transfer,
pursuant to the Tag-Along Offer, a number of Common Shares (or Warrants in lieu
thereof) held by the DLJ Entities equal to the number of Common Shares (or
Warrants in lieu thereof) constituting the portion of such Tagging Person's
Tag-Along Portion with respect to which Tag-Along Rights were not exercised.
(e) The DLJ Entities and any Tagging Person who exercises the Tag-Along
Rights pursuant to this Section 4.01 may sell the Common Shares (or Warrants in
lieu thereof) subject to 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) The Tag-Along Rights will terminate upon consummation of any Public
Offering creating a Public float (as defined) of at least $50,000,000. "PUBLIC
FLOAT" means the fair market value of all outstanding Common Shares (other than
those held by any Affiliate of the Company) which have been subject to a Public
Offering.
Section 4.02. RIGHT TO COMPEL PARTICIPATION IN CERTAIN TRANSFERS. (a)
If (i) (A) the DLJ Entities and their Permitted Transferees propose to transfer
not less than 75% of their Aggregate Ownership of Common Shares to a Third Party
in a bona fide sale at a price per share in excess of $22 per share (taking into
account the effect of any stock split, stock dividend or reverse stock split) or
(B) the DLJ Entities propose a transfer at a price per share in excess of $22
per share (taking into account the effect of any stock split, stock dividend or
reverse stock split) in which the Common Shares to be transferred by the DLJ
Entities and their Permitted Transferees together with the Subject Shares
(defined below) constitute more than 75% of the outstanding Common Shares and
(ii) the shares to be sold by the DLJ Entities and their Permitted Transferees
constitute at least 50 percent of the total number of Common Shares to be so
sold pursuant to (A) or (B) above (such Common Shares proposed to be transferred
being referred to collectively, as the "SOLD SHARES"; and any such proposed
sale, a "SECTION 4.02 SALE"), the DLJ Entities may at their option require all
Other Stockholders to sell their Subject Shares ("DRAG-ALONG RIGHTS"), (which
for the avoidance of doubt shall require any Other Stockholder (subject to and
effective at the closing of the Section 4.02 Sale) to exercise options and/or
warrants (excluding the Warrants) and to sell to such Third Party the Common
Shares received as a result of such exercise to the extent necessary (or in the
case of the Warrants, to sell such Warrants to such Third Party without
exercise)) for the same consideration per Common Share (or in the case of the
Warrants
13
such consideration per Common Share less the applicable exercise price in
respect thereof) and otherwise on the same terms and conditions as the sale by
the DLJ Entities; provided that any Other Stockholder that holds options or
warrants the exercise price per share of which is greater than the per share
price at which the Common Shares are to be sold to the Third Party may, if
required by the DLJ Entities 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; and provided further that no
Other Stockholder shall be required (x) to make any representation or warranty
other than in respect of its title to its Subject Shares and its authority to
sell its Subject Shares or (y) to agree to indemnify other parties in an
aggregate amount exceeding the amount of net proceeds it receives in respect of
the exercise of its options or Warrants and/or the sale of its Subject Shares.
In the event the Section 4.02 Sale is not consummated with respect to any shares
acquired upon exercise of such options or warrants, or the Section 4.02 Sale is
not consummated, such options or warrants shall be deemed not to have been
exercised or canceled, as applicable. DLJMB 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 Common Shares and
Warrants of such Other Stockholder proposed to be sold (the "SUBJECT SHARES"),
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 Subject Shares shall, for each Other Stockholder, be its Pro Rata
Portion in respect of such Section 4.02 Sale. Subject to Sections 4.02 and 4.03,
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 Shares as set forth below. The price payable in such transfer
shall be the Section 4.02 Sale Price. Not later than the 15th Business Day
following receipt of the Section 4.02 Notice (the "SECTION 4.02 NOTICE PERIOD"),
each of the Other Stockholders shall deliver to a representative of the DLJ
Entities designated in the Section 4.02 Notice certificates representing all
Subject Shares 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 such
representative, the Company shall cause the books and records of the Company to
show that such Subject Shares are bound by the provisions of this Section 4.02
and Section 4.03 and that such Subject Shares shall be transferred to the
purchaser of the Subject Shares immediately upon surrender for transfer by the
holder thereof.
(b) The DLJ Entities shall have a period of 45 Business 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 Notice. If the
Section 4.02 Sale shall not have been consummated during such period, the DLJ
Entities shall return to each of the Other Stockholders all certificates
representing Subject Shares that such Other Stockholder delivered for transfer
pursuant hereto, together with any documents in the possession of the DLJ
Entities 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 Shares owned by the
Other Stockholders shall again be in effect.
14
(c) Concurrently with the consummation of the transfer of Common Shares
pursuant to this Section 4.02 and Section 4.03, the DLJ Entities 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 Shares transferred pursuant hereto and shall
furnish such other evidence of the completion and time of completion of such
transfer and the terms thereof (plus such copies of related documents) as may
reasonably requested by such Stockholders.
Section 4.03. CERTAIN RIGHTS. It is understood and agreed that the
employment agreements or associated restricted stock purchase agreements between
one or more Management Stockholders and the Company or any Subsidiary may
contain provisions permitting or requiring, under certain circumstances, such
Management Stockholders to sell to the Company or a Subsidiary, and permitting
or requiring, under certain circumstances, the Company or such Subsidiary to
purchase from such Management Stockholder, Company Securities. Such provisions
may, by the terms of such agreements, remain effective notwithstanding that the
employment relationship created by such employment agreements has been
terminated, in which event such provisions are deemed to be incorporated herein
and made a part hereof, to the extent appropriate.
Section 4.04. PRE-EMPTIVE RIGHTS. (a) The Company shall provide each
Stockholder with a written notice (a "SECTION 4.04 NOTICE") of any proposed
issuance by the Company of equity securities (other than as provided in Section
4.04 (d)) at least 10 Business Days prior to the proposed issuance date. Such
notice shall specify the price at which the equity securities are to be issued
and the other material terms of the issuance. Each Stockholder shall be entitled
to purchase such Stockholder's Section 4.04 Portion of the equity securities
proposed to be issued. A Stockholder may exercise its rights under this Section
4.04 by delivering written notice of its election to purchase equity securities
to the Company and each other Stockholder within 5 Business Days of receipt of
the Section 4.04 Notice. A delivery of such a written notice (which notice shall
specify the number of shares (or amount) of equity securities to be purchased by
the Stockholder submitting such notice) by such Stockholder shall constitute a
binding agreement of such Stockholder to purchase at the price and on the terms
specified in the Section 4.04 Notice, the number of shares (or amount) of equity
securities specified in such Stockholder's written notice. In the event the
equity securities proposed to be issued by the Company are not Common Shares, it
shall be a condition to the consummation of the purchase of such equity
securities pursuant to this Section 4.04 by any Stockholder that such
Stockholder shall execute an amendment of this Agreement on the terms consistent
with this Agreement reasonably satisfactory to the Company and the other
Stockholders.
(b) In the event any Stockholder (a "RELEVANT STOCKHOLDER") declines to
exercise its preemptive rights under this Section 4.04 or elects to exercise
such rights with respect to less than such Relevant Stockholder's Section 4.04
Portion, each other Stockholder who is not a Relevant Stockholder (a
"PARTICIPATING STOCKHOLDER") shall be entitled to purchase from the Company its
Relevant Portion of the amount of such Relevant Stockholder's Section 4.04
Portion with respect to which such Relevant Stockholder shall not have exercised
its preemptive rights. For these purposes "RELEVANT PORTION" means the pro rata
portion of a Participating
15
Stockholder based upon such Participating Stockholder's Aggregate Ownership of
Common Shares as a percentage of the Aggregate Ownership of Common Shares of all
Participating Stockholders.
(c) In the case of any issuance of equity securities, the Company shall
have 90 days from the date of the Section 4.04 Notice to consummate the proposed
issuance of any or all of such securities which the Stockholders have not
elected to purchase at the price and upon terms that are not materially less
favorable to the Company than those specified in the Section 4.04 Notice. At the
consummation of such issuance, the Company shall issue certificates representing
the securities to be purchased by each Stockholder exercising preemptive rights
pursuant to this Section 4.04 registered in the name of such Stockholder,
against payment by such Stockholder of the purchase price for such securities.
If the Company proposes to issue securities after such 90-day period, it shall
again comply with the procedures set forth in this Section.
(d) Notwithstanding the foregoing, no Stockholder shall be entitled to
purchase equity securities as contemplated by this Section 4.04 in connection
with issuances of equity securities (i) to employees, former employees or
independent contractors of the Company or any Subsidiary pursuant to employee
benefit plans or arrangements approved by the Board (including upon the exercise
of stock options), (ii) in connection with any bona fide, arm's length
restructuring of outstanding debt of the Company or any Subsidiary, (iii) in
exchange for securities pursuant to any bona fide, arm's-length merger,
acquisition or similar transaction, (iv) pursuant to a Public Offering, (v) to
holders of Warrants upon exercise thereof in accordance with their terms and
(vi) to holders of Senior Notes Warrants upon exercise thereof in accordance
with their terms. The Company shall not be under any obligation to consummate
any proposed issuance of any equity securities, regardless of whether it shall
have delivered a Section 4.04 Notice in respect of such proposed issuance.
Section 4.05. TREATMENT OF DLJIP ENTITIES. For purposes of Section 4.01
and 4.02 hereof, the DLJIP Entities shall be treated as, and have the rights of,
Other Stockholders and not DLJ Entities. For the avoidance of doubt, for the
purposes of this Agreement, DLJSC shall (without prejudice to any of its rights
or obligations under Section 6.03 hereof) be treated as, and have the rights of,
an Other Stockholder and not a DLJ Entity.
ARTICLE 5
REGISTRATION RIGHTS
Section 5.01. DEMAND REGISTRATION. (a) If the Company shall receive
a Registration Request (as defined below) from a Person entitled to make such
request pursuant to this Section 5.01 (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 15 days prior to the anticipated filing date of the
registration statement relating to such Demand Registration to all the other
Stockholders holding Registrable Securities of the same type, or, in the
event such Registrable Securities are Common Shares to all other Stockholders
holding
16
Warrants exercisable for such Common Shares, 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 Person or Persons making such Registration
Request, then held by such Person or Persons, PROVIDED that if the
Registration Request is received from the holders of 35% or greater of
the Warrants, the obligation of the Company under this Section 5.01(a)
(i) shall be to effect the registration of the Common Shares to which
the relevant selling Stockholders are entitled upon the exercise of
such Warrants and not the Warrants themselves; and
(ii) subject to the restrictions set forth in Section 3.04 and
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 that is entitled in respect of such Registrable
Securities to request the Company to effect a Piggyback 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 10 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 more than (A) four Demand Registrations where the
Registration Request is made by the DLJ Entities or their Permitted Transferees
in respect of Common Shares, (B) two Demand Registrations in respect of
Preferred Shares, where any such Registration Request may be made by the holders
of 35% or greater of Preferred Shares or (C) one Demand Registration in respect
of a registration of Warrant Shares or Common Shares issued upon the exercise of
Warrants, without duplication, where the Registration Request may be made by the
holders of 35% or greater of the Warrant Shares or Common Shares issued upon the
exercise of Warrants, without duplication, PROVIDED that no such Registration
Request in respect of Warrant Shares or Common Shares issued upon the exercise
of Warrants, without duplication, may be made before the date which is six
months after the First 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 Shares to be
included in such Demand Registration, in the reasonable opinion of the DLJ
Entities exercised in good faith, equals or exceeds (x) $25,000,000 if such
Demand Registration would constitute the First Public Offering, (y) no minimum
restriction in the case of a Registration Request by the holders of 35% or
greater of the Warrant Shares or Common Shares issued upon the exercise of
Warrants, without duplication, or (z) $20,000,000 in all other cases. In no
event will the Company be required to effect more than one Demand Registration
within any six-month period.
For purposes hereof, "REGISTRATION REQUEST" means a written request (a)
in the case of a request in respect of a registration of Common Shares, by (i)
the DLJ Entities or their Permitted Transferees or (ii) by the holders of 35% or
greater of the Warrant Shares or Common Shares
17
issued upon the exercise of Warrants, without duplication, which constitute
Registrable Securities, or (b) in the case of a request in respect of a
registration of Preferred Shares, by the holders of 35% or greater of the
Preferred Shares, which constitute Registrable Securities.
(b) Promptly after the expiration of the 10-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) 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 (taken together with 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 or would cause the Shares
offered to exceed 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:
(A) First, all Registrable Securities requested to be
included in such registration by the Person or Persons making
such Registration Request;
(B) second, all Registrable Securities requested to
be included in such registration by any Stockholders pursuant
to Section 5.02 below; and
18
(C) third, any securities proposed to be registered
by the Company.
Section 5.02. PIGGYBACK 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 Shares 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 the issuance of securities in exchange for existing securities
in connection with an 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(c), give prompt written notice at least 20 days prior
to the anticipated filing date of the registration statement relating to such
registration to each DLJ Entity 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 (a "PIGGYBACK REGISTRATION").
Subject to Section 3.04, 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 any Stockholder
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. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 5.02.
(b) For the avoidance of doubt, holders of Warrants shall be deemed for
purposes of this Section 5.02 to own the Common Shares for which their Warrants
are exercisable and any holders of Warrants wishing to participate in a
Piggyback Registration may make any exercise of its Warrants conditional upon
consummation of the sale of the Common Shares to which such exercise relates in
the Public Offering in question.
(c) If a registration pursuant to this Section 5.02 involves a Public
Offering (other than in the case of a Public Offering requested by any DLJ
Entity or any of their Permitted Transferees or the Other Stockholders, in each
case, in a Demand Registration pursuant to Section 5.01, 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,
19
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; and
(ii) second, all Registrable Securities requested to be
included in such registration by any DLJ Entity and its Permitted
Transferees or any Other Stockholder (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 Registrable
Securities so requested to be included in such registration).
(d) Notwithstanding the foregoing, nothing herein will prevent the
Company from, at any time, abandoning or delaying any such registration
initiated by it. If any registration pursuant to this Section 5.02 will be
underwritten in whole or in part, the Company may require that the Registrable
Securities requested for inclusion pursuant to this Section 5.02 be included in
the underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters.
Section 5.03. HOLDBACK AGREEMENTS. If any registration of Common Shares
shall be in connection with a Public Offering, each DLJ Entity 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 Common Shares or any Warrants, 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 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 each
participating Stockholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement
20
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 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 the Company shall promptly prepare and
make available to each such Stockholder any such supplement or amendment.
(f) (i) The DLJ Entities will have the right, in their sole discretion,
to select an underwriter or underwriters in connection with any Public Offering
in connection with a Demand Registration in which any DLJ Entity or any
Permitted Transferee of any DLJ Entity is selling Shares, which underwriter or
underwriters may include any Affiliate of any DLJ Entity and (ii) the Company
will select an underwriter or underwriters in connection with any other Public
Offering. In connection with any Public Offering, the Company will enter into
customary agreements (including an underwriting agreement in customary form
which provides for, among other things, customary "lock-up" provisions
restricting the issuance of securities by the Company) 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
21
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 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.
(j) In a registration involving an underwritten offering, the Company
shall cause senior management of the Company to participate in "road shows"
relating to any offering of Registrable Securities, as reasonably requested by
the managing underwriter or underwriters of such offering; provided, no such
road show shall last more than 10 consecutive Business Days.
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
22
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).
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.
23
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 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 incurred. In the case of any such
24
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 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
25
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 (as a seller) 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
required under the terms of such underwriting arrangements and the provisions of
this Agreement in respect of registration rights.
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 (in their capacity as such) 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 Warrants or Registrable Securities pursuant to Rule 144A
under the Securities Act, the Company shall cooperate with such Stockholder
(which shall include, without limitation, in the case of Registrable Securities,
making registration rights (substantially equivalent to those of such
Stockholder set out in this Section 5) with respect to the Registrable
Securities to be sold (or securities issuable or to be issued in exchange
therefor) promptly 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 to this Section 5.11 shall not be on terms substantially more favorable
to the possessors thereof than the registration rights granted pursuant to this
Agreement to the DLJ Entities).
26
ARTICLE 6
MISCELLANEOUS
Section 6.01. ENTIRE AGREEMENT. This Agreement, the Subscription
Agreement dated the date hereof between Viking and certain of the parties hereto
(the "SUBSCRIPTION AGREEMENT") (and the Transaction Documents defined therein)
constitute 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. 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, and their respective heirs, successors, legal representatives
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
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 DLJ Entities may choose
in their sole discretion shall be engaged as the exclusive financial and
investment banking advisor of the Company on terms customary in the investment
banking industry. DLJSC or such Affiliate shall be entitled to reimbursement
from the Company for all customary and reasonable out-of-pocket expenses
incurred by DLJSC or such Affiliate (including, without limitation, reasonable
fees and expenses of counsel) as financial and investment banking advisor of the
Company.
Section 6.04. ASSIGNABILITY. Except as contemplated by the final
sentence of the second paragraph of Section 3.01, 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" and, if such agreement shall so specify, an
"OTHER STOCKHOLDER", a "MANAGEMENT STOCKHOLDER" or a "CO-INVEST MANAGEMENT
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 offering of Registrable Securities completed before the date such
Stockholder ceased to own any Shares).
Section 6.05. PRINTING BUSINESS. The DLJ Entities will use commercially
reasonable efforts to introduce the Company to its portfolio companies and
encourage such companies to utilize the services of the Company.
Section 6.06. 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
27
by an instrument in writing executed by the Company with the approval of the
Board and Stockholders holding at least 75% of the outstanding Shares; 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 6.07. 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 Corporation
Xxx Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
(000) 000-0000
Attention: Xxxxx Xxxxxx
General Counsel
Fax: (000) 000-0000
with copies to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx XXX
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
(000) 000-0000
Fax: (000) 000-0000
and
Faegre & Xxxxxx LLP
2200 Norwest Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
(000) 000-0000
Fax: (000) 000-0000
and a copy to the DLJ Entities at their addresses
listed below.
28
if to the DLJ Entities, to:
DLJ Merchant Banking Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
if to any other party hereto to the address(es) listed for such a party
on the applicable signature page of the Subscription Agreement:
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 6.08. HEADINGS. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
Section 6.09. 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 6.10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW RULES OF SUCH STATE.
Section 6.11. 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
29
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 6.12. CONSENT TO JURISDICTION. The parties agree that 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 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 6.07
shall be deemed effective service of process on such party.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VIKING MERGER SUB, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
DLJ MERCHANT BANKING PARTNERS II, L.P.
BY DLJ MERCHANT BANKING II, INC.
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ MERCHANT BANKING
PARTNERS II-A, L.P.
BY DLJ MERCHANT BANKING II,
INC., Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ OFFSHORE PARTNERS II, C.V.
BY DLJ MERCHANT BANKING II,
INC., Advisory General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ DIVERSIFIED PARTNERS, L.P.
BY DLJ DIVERSIFIED PARTNERS,
INC., Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ DIVERSIFIED PARTNERS-A, L.P.
BY DLJ DIVERSIFIED PARTNERS, INC.,
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJMB FUNDING II, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ EAB PARTNERS, L.P.
BY DLJ LBO PLANS MANAGEMENT
CORPORATION, General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ MILLENNIUM PARTNERS, L.P.
BY DLJ MERCHANT BANKING II,
INC., Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ FIRST ESC, L.P.
BY DLJ LBO PLANS MANAGEMENT
CORPORATION, as General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ ESC II L.P.
BY DLJ LBO PLANS MANAGEMENT
CORPORATION, as General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ MILLENNIUM PARTNERS-A, L.P.
BY DLJ MERCHANT BANKING II, INC.,
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ INVESTMENT FUNDING II, INC.
By: /s/ Xxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Title: Managing Director
DLJ INVESTMENT PARTNERS, L.P.
By: DLJ INVESTMENT PARTNERS, INC.,
Managing General Partner
By: /s/ Xxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Title: Managing Director
DLJ INVESTMENT PARTNERS II, L.P.
By: DLJ INVESTMENT PARTNERS II, INC.,
Managing General Partner
By: /s/ Xxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Title: Managing Director
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
BNY CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
CARLYLE HIGH YIELD PARTNERS, L.P.
By: /s/ Xxxx Xxxx
-----------------------------------
Name: Xxxx Xxxx
Title: Managing Director
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA Investments, Inc.
(authorized agent)
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By: CIGNA Investments, Inc.
(authorized agent)
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
/s/ Xxxx X. Xxxxxx
-----------------------------------
XXXX X. XXXXXX
/s/ Xxxx X. Xxxxxxxxx
-----------------------------------
XXXX X. XXXXXXXXX
TCW CRESCENT MEZZANINE PARTNERS
II, L.P., 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: /s/ Xxxx Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxx Xxxxxx
Title: President
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW ADVISORS (BERMUDA), LIMITED,
As General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: TCW INVESTMENT MANAGEMENT COMPANY,
As Investment Advisor
By: /s/ Xxxx Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxx Xxxxxx
Title: Managing Director
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (XXXX XX), L.P., as General Partner
By: TCW ADVISORS (BERMUDA), LIMITED,
As General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: TCW INVESTMENT MANAGEMENT COMPANY,
As Investment Advisor
By: /s/ Xxxx Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxx Xxxxxx
Title: Managing Director
