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EXHIBIT 4.3
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of December 1, 1999, by and
among Protocol Holdings, Inc., a Delaware corporation (the "Company"), the
several persons named in Schedule I hereto (collectively, the "New Investors"),
and the several persons named in Schedule II hereto (collectively, the "Original
Stockholders"). The New Investors and the Original Stockholders are herein
sometimes referred to collectively as the "Stockholders".
WHEREAS, the Company, the New Investors and the Original
Stockholders have entered into a Recapitalization Agreement dated as of
September 29, 1999 (as amended, the "Recapitalization Agreement");
WHEREAS, pursuant to the Recapitalization Agreement, on the
Initial Closing Date (as defined therein), (i) the New Investors will purchase
from the Company on the Initial Closing Date (as defined in the Recapitalization
Agreement) an aggregate 10,693,634 shares of Series B Preferred Stock, $.001 par
value (the "Series B Preferred Stock"), of the Company, and (ii) the Company
will purchase from the Original Stockholders up to an aggregate 7,682,685 shares
of capital stock of the Company, all on the terms and subject to the conditions
set forth in the Recapitalization Agreement (capitalized terms used herein and
not otherwise defined have the meanings given to them in the Recapitalization
Agreement);
WHEREAS, the Recapitalization Agreement provides that the
Company may issue and deliver to the New Investors up to an additional 3,960,606
shares of Series B Preferred Stock on the terms and conditions set forth
therein;
WHEREAS, the Company and each of the Stockholders desire to
make certain arrangements among themselves with respect to the matters set forth
herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties hereto hereby
agree as follows:
SECTION 1. Voting Agreement. (a) From and after the Initial
Closing Date, at each annual or special shareholders meeting called for the
election of directors, and whenever the shareholders of the Company act by
written consent with respect to the election of directors, each Stockholder
agrees to vote or otherwise give such Stockholder's consent in respect of all
shares of capital stock of the Company (whether now or hereafter acquired) owned
by such Stockholder, and the Company shall take all necessary and desirable
actions within its control, in order to cause:
(i) the authorized number of directors on the Board of
Directors of the Company (the "Board") to be established at seven; and
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(ii) the election to the Board of two directors (each, a "BCI
Designee") designated by BCI Growth V, L.P. ("BCI"), which directors
will initially include Xxxx Xxxxxxx and Xxxxx Xxxxx; and
(iii) the election to the Board of two directors (each a
"Xxxxxx Xxxxx Designee") designated by Xxxxxx Xxxxx & Partners II, L.P.
("Xxxxxx Xxxxx"), which directors will initially include Avy Xxxxx and
Xxx Xxxxxxxxxx; and
(iv) the election of one director who shall be the chief
executive officer of the Company, which director shall initially be
Xxxxxxx X. XxXxxx; and
(v) the election of two directors, each of whom shall be
either (x) independent with relevant industry experience or (y) an
executive of the Company, and in each case shall be acceptable to the
New Investors, one of which directors will initially be Xxxxxx Xxxxxxx;
all of which designees shall hold office, subject to their earlier
registration or removal in accordance with clause (vi) below, the
Bylaws of the Company and applicable corporate law, until their
respective successors shall have been elected and shall have qualified,
provided, however, that Xx. Xxxxxxx will hold office until such time as
Xx. Xxxxxxx resigns, is removed for cause by a majority of the
remaining Directors or is removed with the approval of the chief
executive officer of the Company;
(vi) the removal from the Board (with or without cause) of any
director upon the written request of the Stockholder that designated
such director, but only upon such written request; and
(vii) upon any vacancy in the Board as a result of any
individual designated as provided in clause (ii) or (iii) above ceasing
to be a member of the Board, whether by resignation or otherwise, the
election to the Board of an individual designated by the Stockholder
that designated such individual.
(b) Each Stockholder agrees to use its reasonable best efforts
to cause its designees to the Board to vote or otherwise give such Director's
consent to the creation and maintenance of:
(i) a Compensation Committee of the Board consisting of three
directors, at least one of whom shall be a BCI Designee and one of whom
shall be a Xxxxxx Xxxxx Designee (which directors will originally be
Avy Xxxxx (who shall be the Chairman of the Compensation Committee),
Xxxxx Xxxxx and Xxxxxx Xxxxxxx), which Compensation Committee shall
approve all grants of stock options to employees of the Company, all
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increases in compensation of officers of the Company, all annual
bonuses granted to officers of the Company and all other employee
benefits (including, without limitation, vacation policy, benefit
plans, company automobiles and insurance) granted to officers of the
Company; and
(ii) an Audit Committee of the Board of Directors, consisting
of three directors, at least one of whom shall be a BCI Designee and
one of whom shall be a Xxxxxx Xxxxx Designee (which directors will
originally be Xxxx Xxxxxxx (who shall be Chairman of the Audit
COMMITTEE), Xxxxxx Xxxxxxxxxx and Xxxxxxx XxXxxx), which Audit
Committee shall review and approve the financial statements of the
Company as audited by the Company's independent certified public
accountants.
(c) Each Stockholder covenants and agrees to vote or otherwise
give such Stockholder's consent in respect of all shares of capital stock of the
Company (whether now owned or hereafter acquired) owned by such Stockholder, to
approve the Stock Option Plan of the Company substantially in the form of
Exhibit A hereto (the "Stock Option Plan").
(d) The Company will pay all direct out-of-pocket expenses
reasonably incurred by any non-employee director in attending each meeting of
the Board of Directors, or any committee thereof.
SECTION 2. Restrictions on Transfer. Until the date a
registration statement covering Common Stock of the Company becomes effective
under the Securities Act of 1933, as amended (the "Securities Act"), each
Original Stockholder hereby agrees that such Original Stockholder shall not
without the express written consent of New Investors holding a majority of the
Common Stock (for the purposes of such calculation treating the Series A
Preferred Stock, $.001 par value (the "Series A Preferred Stock") of the
Company, and the Series B Preferred Stock as the number of shares of Common
Stock into which such Series A Preferred Stock and Series B Preferred Stock, as
the case may be, is convertible) then held by the New Investors at any time sell
or in any other way, directly or indirectly, transfer, assign, distribute or
otherwise dispose of (collectively "Transfer") any shares of capital stock then
owned by such Original Stockholder except by sale in accordance with Section 3,
4 or Section 5 hereof or, in the case of an Original Stockholder who is an
employee or director of the Company, to the Company pursuant to written
agreements between the Company and such employee or director and approved by the
Board of Directors of the Company.
Notwithstanding the foregoing, if such Original Stockholder is
a natural person, such Original Stockholder may Transfer shares of Series A
Preferred Stock and Common Stock by will, by the laws of descent and
distribution, and inter vivos, by gift to members of such Original Stockholder's
immediate family or to a trust, the beneficiaries of which are such
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Original Stockholder and/or members of his immediate family and his or their
descendants or, with or without consideration to any pension or retirement plan
established for his or their benefit or to any other Original Stockholder;
provided that in any such event each such transferee shall be bound by all of
the provisions of this Agreement to the same extent as if such transferee were
the Original Stockholder. Any such transferee may transfer shares received
pursuant to this paragraph to the Original Stockholder that was the transferor
of such shares.
SECTION 3. Tag-Along Rights. (a) If any New Investor or group
of New Investors (for purposes of this Section 3, a "Selling New Investor")
proposes to sell, exchange, transfer or in any other manner dispose of shares of
Common Stock, Series A Preferred Stock or Series B Preferred Stock held by such
Selling New Investor (including any transfer of shares by the New Investors that
is being effected by a merger or consolidation of the Company with another
entity), then such Selling New Investor shall give written notice (a "Notice of
Intention to Sell") to the Company setting forth in reasonable detail the terms
and conditions of such proposed transaction. In the event that the terms and/or
conditions set forth in the Notice of Intention are thereafter amended in any
respect, the Selling New Investor shall also give written notice (an "Amended
Notice") of the amended terms and conditions of the proposed transaction to the
Company. Upon its receipt of any Notice of Intention to Sell or any Amended
Notice, the Company shall promptly, but in all events within three (3) business
days of its receipt thereof, forward copies thereof to each of the Original
Stockholders and the New Investors other than the Selling New Investor (the
"Other New Investors"). The Selling New Investor shall provide additional
information with respect to the proposed sale, exchange or transfer as
reasonably requested by the Company, the Other New Investors or the Original
Stockholders.
(b) Each Original Stockholder and each Other New Investor
shall have the right, exercisable upon written notice to the Company within 15
days after such Original Stockholder's or Other New Investor's receipt of any
Notice of Intention to Sell, or, if later, within 7 days of such Original
Stockholder's or other New Investor's receipt of the most recent Amended Notice,
to participate in the proposed disposition of shares by the Selling New Investor
to the proposed purchaser on the terms and conditions set forth in such Notice
of Intention to Sell or the most recent Amended Notice, as the case may be (such
participation rights being hereinafter referred to as "tag-along" rights). Each
Original Stockholder and each Other New Investor may participate with respect to
all or any part of that number of shares of Common Stock which is equal to the
product obtained by multiplying (i) the aggregate number of shares of Common
Stock to be sold or transferred in the proposed disposition by (ii) a fraction,
the numerator of which is the number of shares of Common Stock at the time owned
by such Original Stockholder or such Other New Investor, as the case may be, and
the denominator of which is the sum of the total number of shares of Common
Stock then owned by the New Investors and the Original Stockholders (for the
purposes of such calculation treating the Series A Preferred Stock and Series B
Preferred Stock as the number of shares of Common Stock into
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which such Series A Preferred Stock and Series B Preferred Stock, as the case
may be, is convertible as of the date of the Notice of Intention to Sell). Any
Original Stockholders or Other New Investors that have not notified the Company
of their intent to exercise tag-along rights within 7 days of receipt of an
Amended Notice shall be deemed to have elected not to exercise such tag-along
rights with respect to the transaction contemplated by such Amended Notice
(regardless of their election pursuant to the Notice of Intention to Sell
relating to such transaction).
(c) Each Original Stockholder and each Other New Investor
participating in the proposed disposition shall deliver to the Company, as agent
for such Original Stockholder and such Other New Investor, for transfer to the
proposed acquiror one or more certificates, properly endorsed for transfer or
accompanied by stock transfer powers duly endorsed for transfer, with all stock
transfer taxes paid and stamps affixed, which represent the number of shares of
Common Stock, Series A Preferred Stock or Series B Preferred Stock that such
Original Stockholder or such Other New Investor elects to dispose of pursuant to
Section 3(b). The consummation of such proposed disposition shall be subject to
the sole discretion of the Selling New Investor, who shall have no liability or
obligation whatsoever to any Original Stockholder or other New Investor
participating therein other than to obtain for such Original Stockholder the
same terms and conditions as those to be obtained by the New Investor in the
proposed disposition. Anything herein to the contrary notwithstanding, it is
understood that a Selling New Investor shall not have any authority to, and
shall not, act as agent or attorney-in-fact (or in any similar capacity) for any
party exercising tag-along rights hereunder.
(d) A stock certificate or certificates representing the
number of shares of Common Stock, Series A Preferred Stock or Series B Preferred
Stock to be disposed of by any Original Stockholder or such Other New Investors
pursuant to Section 3(b) hereof shall be delivered by the Company, on behalf of
the selling stockholders, to the purchaser upon the consummation of the
disposition of the Common Stock, Series A Preferred Stock or Series B Preferred
Stock pursuant to the terms and conditions specified in the Notice of Intention
to Sell and the Company shall promptly thereafter remit to such Original
Stockholder or such Other New Investor (i) that portion of the proceeds of the
disposition to which such Original Stockholder or such Other New Investor is
entitled by reason of such participation and (ii) a stock certificate
representing any balance of shares of Common Stock, Series A Preferred Stock or
Series B Preferred Stock, as the case may be, that were not so disposed of (or
all shares of Common Stock, Series A Preferred Stock and Series B Preferred
Stock, in the event the proposed disposition is not consummated).
(e) Anything herein to the contrary notwithstanding, no
tag-along rights of any Original Stockholder or such Other New Investor shall
apply hereunder with respect to (i) a transfer by a New Investor to an affiliate
(as defined in Rule 405 under the Securities Act) of
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such New Investor, (ii) any distributions or transfers by a New Investor which
is a partnership to its partners (including any of its limited partners) or
(iii) in the case of a New Investor who is an individual, transfer by such New
Investor to the spouse or lineal descendants of such New Investor, including,
without limitation, transfer by bequest or devise, or to a trust or trusts for
the benefit of such New Investor or any of the foregoing; provided that in each
case such transferee agrees to become a party to this Agreement.
SECTION 4. Drag-Along Rights. (a) If the New Investors jointly
elect to transfer all or substantially all of their shares to a third party
(including any transfer of shares by the New Investors that is being effected by
a merger or consolidation of the Company with another entity), the New Investors
shall have the right (the "Drag-Along Right") (but not the obligation) to cause
the Original Stockholders to transfer all their respective shares of Common
Stock or Series A Preferred Stock to such third party (or to exchange such
shares pursuant to the terms of such merger or consolidation) at the same price
and on the same terms and conditions as the New Investors transfer their shares.
Each Original Stockholder will participate with respect to all or any part of
that number of shares of Common Stock which is equal to the product obtained by
multiplying (i) the number of shares of Common Stock at the time owned by such
Original Stockholder by (ii) a fraction, the numerator of which is the aggregate
number of shares of Common Stock to be sold or transferred by the New Investors
in the proposed disposition, and the denominator of which is the sum of the
total number of shares of Common Stock then owned by the New Investors (for the
purposes of such calculation treating the Series A Preferred Stock and Series B
Preferred Stock as the number of shares of Common Stock into which such Series A
Preferred Stock and Series B Preferred Stock, as the case may be, is
convertible). No such termination shall affect any rights of any party with
respect to a breach hereof by any other party prior to such termination.
(b) The New Investors may elect to exercise the Drag-Along
Right by delivering written notice to the Original Stockholders not later than
thirty (30) days prior to the consummation of the transfer described in Section
4(a) above. The notice delivered pursuant to this Section 4(b) will contain a
copy of the definitive documentation pursuant to which (i) the New Investors
have a bona fide intention to effect the transfer described in Section 4(a)
above, (ii) the name and address of the third party, and (iii) the expected
closing date of such transfer.
(c) Each Original Stockholder participating in the transfer
pursuant to the Drag-Along Right shall deliver to the third party at a closing
to be held at the offices of the Company (or such other place as the parties
agree), one or more certificates, properly endorsed for transfer, which
represent all the shares of Common Stock or Series A Preferred Stock owned by
such Original Stockholder, and each such Original Stockholder shall make such
representations and warranties as are made by the New Investors, and shall enter
into such agreements, in each case which are customary and reasonable in the
context of the proposed sale,
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including without limitation representations and warranties (and indemnities
with respect thereto) that the transferee of the shares (or interests therein)
is receiving good and marketable title to such shares (or interests therein),
free and clear of all pledges, liens, encumbrances, mortgages or any other
security interests of any kind whatsoever. In addition, the Stockholders shall
reasonably cooperate and consult with each other in order to effect the transfer
described in this Section 4, and the Company and the Original Stockholders shall
provide reasonable assistance to the New Investors in connection with the
preparation of disclosure schedules relating to representations and warranties
to be made to the third party involved in such transfer and in the determination
of the appropriate scope of, or limitations or exceptions to, such
representations and warranties.
SECTION 5. Right of First Refusal. If an Original Stockholder
(for purposes of this Section 5, a "Selling Stockholder") wishes to sell, pledge
or transfer all or any portion of the Common Stock or Series A Preferred Stock
held by him at any time, in a transaction not otherwise prohibited by Section 2
hereof (or otherwise by the terms of this Agreement), then, and in any such
event, the following provisions shall be applicable; provided, however, that the
provisions of this Section 5 shall not apply to any transfer permitted by the
second paragraph of Section 2 or pursuant to Section 3 hereof or, in the case of
an Original Stockholder who is an employee or director of the Company, to the
Company pursuant to written agreements between the Company and such employee or
director and approved by the Board of Directors of the Company.
(a) Such Selling Stockholder shall promptly deliver a notice
of intention to sell (an "Offering Notice") to each other Stockholder (each, an
"Initial Offeree") and the Company in writing of the proposed sale, specifying
the number of such shares of Common Stock or Series A Preferred Stock to be sold
by such Selling Stockholder (such specified shares, the "Offered Shares"), the
name of the proposed purchaser or purchasers and the proposed cash purchase
price per share (the "Purchase Price").
(b) Thereupon, each Initial Offeree or his or its nominee
shall have the right and option, for a period of 10 business days after receipt
of the Offering Notice (the "Option Period"), to purchase, at the Purchase Price
per share, all or part of that number of shares of the Offered Shares which is
equal to the product obtained by multiplying (i) the aggregate number of shares
of the Offered Shares by (ii) a fraction, the numerator of which is the number
of shares of Common Stock at the time owned by such Initial Offeree and the
denominator of which is the number of shares of Common Stock at the time owned
by all Initial Offerees (for the purposes of such calculation treating the
Series A Preferred Stock and Series B Preferred Stock as the number of shares of
Common Stock into which such Series A Preferred Stock and Series B Preferred
Stock, as the case may be, is convertible as of the date of the Offering
Notice). Any Initial Offeree shall exercise such right and option to purchase
such Offered Shares by mailing a written
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notice (a "Notice of Election") to the Selling Stockholder and the Company
within the Option Period. Any Notice of Election from an Initial Offeree who
wishes to exercise his or its right of purchase as to more than the number of
shares of Offered Shares set forth above shall state in his Notice of Election
the maximum number of Offered Shares he or it wishes to purchase. Any available
excess Offered Shares (that is, Offered Shares as to which the other Initial
Offerees shall not have exercised their rights of purchase) shall be allocated
to the Initial Offerees so indicating their desire to purchase such excess
Offered Shares, up to the quantity of Offered Shares requested on a pro rata
basis.
(c) If Notices of Election with respect to all (but not less
than all) of the Offered Shares shall have been received as aforesaid by the
Selling Stockholder, such Selling Stockholder shall sell the Offered Shares to
the Initial Offerees or their nominees at the price and on the terms stated in
the Offering Notice. The closing of such sale of Offered Shares shall take place
at the office of counsel for the Selling Stockholder no later than 30 days
following the expiration of the Option Period, or such other place and earlier
date as may be agreed by all parties to the transaction. At such closing the
Selling Stockholder shall deliver a certificate or certificates for the Common
Stock or Series A Preferred Stock to be sold, duly endorsed for transfer or
accompanied by stock powers duly endorsed for transfer and all stock transfer
taxes paid and stamps affixed, against receipt of the purchase price therefor by
certified or official bank check.
(d) If a Selling Stockholder is not required to sell Offered
Shares to Initial Offerees pursuant to paragraph (c) above, such Offered Shares
may be sold to the proposed purchaser identified in the related Offering Notice
for a period of 60 days following the expiration of the Option Period to any
person or persons at a price not lower than the price specified in the Offering
Notice and on other terms not more favorable to the purchaser than those
specified in the Offering Notice. Any such Offered Shares not sold by such 60th
day shall again be subject to the restrictions contained in this Agreement and
shall not thereafter be sold, pledged or transferred, except in compliance with
the applicable provisions of this Agreement.
SECTION 6. Preemptive Rights. (a) The Company hereby grants to
each Stockholder the right to purchase such Stockholder's Proportionate
Percentage (as hereinafter defined) of any future Eligible Offering (as
hereinafter defined). For the purposes of this Section 6, the following terms
shall have the meanings set forth below:
"Proportionate Percentage" means, with respect to any
Stockholder as of any date, the result (expressed as a percentage)
obtained by dividing (i) the number of shares of Common Stock, Series A
Preferred Stock or Series B Preferred Stock owned by such Stockholder
as of such date, by (ii) the total number of shares of Common Stock
outstanding as of such date (for the purposes of such calculation
treating the Series A
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Preferred Stock and Series B Preferred Stock as the number of shares of
Common Stock into which such Series A Preferred Stock and Series B
Preferred Stock, as the case may be, is convertible).
"Eligible Offering" means an offer by the Company to sell to
investors (including any of the Stockholders) for cash shares of Common
Stock or other capital stock having voting rights or other rights
similar to Common Stock, or any security convertible into or
exchangeable for, participating with, or carrying rights or options to
purchase, Common Stock or other capital stock, other than an offering
of securities by the Company:
(i) of shares of Common Stock or options to purchase
shares of Common Stock in connection with or pursuant to any
stock option or stock purchase plan approved by the Board of
Directors of the Company (including the Stock Option Plan) to
full-time employees, officers, directors, consultants and/or
advisors to the Company or its subsidiaries;
(ii) in connection with any acquisition of a related
businesses by the Company or any of its subsidiaries; or
(iii) in a public offering of shares of Common Stock
registered under the Securities Act (a "Qualified Public
Offering").
(b) The Company shall, before issuing any securities pursuant
to an Eligible Offering, give written notice thereof to each Stockholder. Such
notice shall specify the security or securities the Company proposes to issue
and the cash consideration that the Company intends to receive therefor. For a
period of fifteen (15) days following the date of such notice, each Stockholder
shall be entitled, by written notice to the Company, to elect to purchase all or
any part of such Stockholder's Proportionate Percentage of the securities being
sold in the Eligible Offering; provided, however, that if two or more securities
shall be proposed to be sold as a "unit" in an Eligible Offering, any such
election must relate to such unit of securities. In the event that elections
pursuant to this Section 6(b) shall not be made with respect to any securities
included in an Eligible Offering within such fifteen (15) day period, then the
Company may issue such securities to investors, but only for a consideration
payable in cash not less than, and otherwise on no more favorable terms to the
investors than, those set forth in the Company's notice and only within sixty
(60) days after the end of such fifteen (15) day period. In the event that any
such offer is accepted by a Stockholder or Stockholders, the Company shall sell
to such Stockholder or Stockholders, and such Stockholder or Stockholders shall
purchase from the Company, for the consideration and on the terms set forth in
the notice as aforesaid, the securities that such Stockholder or Stockholders
shall have elected to purchase.
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SECTION 7. Transactions with Affiliates. The New Investors shall not,
directly or indirectly, sell, lease, transfer or otherwise dispose of any of
their properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or otherwise enter into any transaction with, the
Company or any Subsidiary of the Company, except on terms that are no less
favorable to the Company or such Subsidiary than those (including, without
limitation, prices) ordinarily entered into in comparable transactions by the
Company or such subsidiary on an arms' length basis with an unrelated party.
SECTION 8. Legend on Stock Certificates. Each certificate representing
shares of Common Stock, Series A Preferred Stock or Series B Preferred Stock, as
the case may be, owned by any Stockholder shall conspicuously bear the following
legend until such time as the shares represented thereby are no longer subject
to the provisions hereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS AGREEMENT, DATED AS OF DECEMBER
1, 1999, AMONG THE COMPANY AND THE OTHER PARTIES THERETO. COPIES MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE COMPANY."
The Company covenants that it shall keep a copy of this Agreement on
file at the address listed in Section 14 for the purpose of furnishing copies to
the holders of record of shares of Common Stock, Series A Preferred Stock or
Series B Preferred Stock.
SECTION 9. Duration of Agreement. This Agreement shall terminate upon
the earliest to occur of (i) the tenth anniversary of the date hereof, (ii) the
consummation of a Qualified Public Offering, (iii) the acquisition of
"beneficial ownership" by any "person" or "group" other than the New Investors
or their affiliates, of voting stock of the Company representing more than 50%
of the voting power of all outstanding shares of such voting stock, whether by
way of merger or consolidation or otherwise, other than by way of a Qualified
Public Offering or (iv) with respect to any Stockholder, the date on which such
Stockholder no longer owns any shares of Common Stock (in each case, treating
the Series A Preferred Stock and Series B Preferred Stock as the number of
shares of Common Stock into which such Series A Preferred Stock and Series B
Preferred Stock, as the case may be, is convertible). No such termination shall
affect any rights of any party with respect to a breach hereof by any other
party prior to such termination.
For purposes of this Section 8: (i) the terms "person" and "group"
shall have the meaning set forth in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the
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"Exchange Act"), whether or not applicable, (ii) the term "beneficial owner"
shall have the meaning set forth in Rules 13d-3 and 13d-5 under the Exchange
Act, whether or not applicable, except that a person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time or upon the occurrence of certain events, (iii) any "person" or "group"
will be deemed to beneficially own any voting stock of the Company so long as
such person or group beneficially owns, directly or indirectly, in the aggregate
a majority of the voting stock of a registered holder of the voting stock of the
Company and (iv) the term "affiliate" shall have the meaning set forth in
Section 405 of the Securities Act, and in the case of a New Investor that is a
partnership shall include its partners (including limited partners), and in the
case of a New Investor that is an individual shall include the spouse and lineal
descendants of such New Investor, and any trust or trusts for the benefit of
such New Investor, spouse or lineal descendants.
SECTION 10. Representations and Warranties. Each Stockholder, severally
and not jointly, represents and warrants to the Company and the other
Stockholders as follows:
(a) The execution, delivery and performance of this Agreement by
such Stockholder will not violate any provision of applicable law, any order of
any court or other agency of government, or any provision of any indenture,
agreement or other instrument to which such Stockholder or any of its or his
properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument.
(b) This Agreement has been duly executed and delivered by such
Stockholder, and when executed by the other parties hereto will constitute the
legal, valid and binding obligation of such Stockholder, enforceable in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent conveyance and similar laws and to
limitations on the availability of equitable remedies.
(c) The shares of Common Stock, Series A Preferred Stock and
Series B Preferred Stock listed in Schedule I and Schedule II opposite the name
of such Stockholder constitute all the shares of Common Stock, Series A
Preferred Stock or Series B Preferred Stock, as the case may be, of the Company
owned by such Stockholder as of the date hereof or that may be acquired by such
Stockholder pursuant to the Recapitalization Agreement.
SECTION 11. Headings. Headings of articles, sections and paragraphs of
this Agreement are inserted for convenience of reference only and shall not
affect the interpretation or be deemed to constitute a part hereof.
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SECTION 12. Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable,
such illegality, invalidity or unenforceability shall not affect any other
provisions of this Agreement.
SECTION 13. Benefits of Agreement. Nothing expressed by or mentioned in
this Agreement is intended or shall be construed to give any person other than
the parties hereto and their respective successors and permitted assigns any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and permitted
assigns. Notwithstanding anything in this Section 13 to the contrary, subject to
compliance with the terms of this Agreement, each Stockholder shall have the
right to assign its interests hereunder to any transferee of the Common Stock,
Series A Preferred Stock or Series B Preferred Stock held by such Stockholder in
compliance with this Agreement; provided, however, that such transferee shall
agree in writing with the parties hereto to be bound by, and to comply with, all
applicable provisions of this Agreement and to be deemed to be a Stockholder for
purposes of this Agreement (it being understood that for purposes of this
Agreement any successor to or assigns of any (i) New Investor shall be deemed to
be a New Investor, and (ii) Original Stockholder shall be deemed to be an
Original Stockholder, excluding the transfer by a New Investor to an Original
Stockholder, or a transfer by an Original Stockholder to a New Investor, as the
case may be).
SECTION 14. Notices. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient and received if contained
in a written instrument delivered in person or by courier or duly sent by first
class certified mail, postage prepaid, or by facsimile addressed to such party
at the address or facsimile number set forth below:
(1) if to the Company, to it at:
Protocol Holdings, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy: 000-000-0000
(2) if to any Stockholder, to the address of such Stockholder appearing
in Schedule I or Schedule II hereto;
12
13
or, in any case, at such other address or facsimile number as shall have been
furnished in writing by such party to all of the other parties hereto. All such
notices, requests, consents and other communications shall be deemed to have
been received (a) in the case of personal or courier delivery, on the date of
such delivery, (b) in the case of mailing, on the fifth business day following
the date of such mailing and (c) in the case of facsimile, when received.
SECTION 15. Modification. Neither this Agreement nor any provision
hereof may be modified, changed, discharged or terminated except by an
instrument in writing signed by the Company, the New Investors and the holders
of the majority of the aggregate voting power of shares of Common Stock
(treating the Series A Preferred Stock as the number of shares of Common Stock
into which such Series A Preferred Stock is convertible) of the Original
Stockholders who have executed this Agreement.
SECTION 16. Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
SECTION 17. GOVERNING LAW. THIS AGREEMENT AND ALL MATTERS RELATING TO
THIS AGREEMENT, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS CONFLICT OF LAW RULES.
13
14
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as a sealed instrument, all as of the day and year first above
written.
PROTOCOL HOLDINGS, INC.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXXX XXXXX & PARTNERS II, L.P.
By /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
XXXXXX XXXXX & PARTNERS DUTCH, L.P.
By /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
BCI GROWTH IV, L.P.
By Glenpointe Associates, LLP,
General Partner
By Glenpointe Associates, LLC
General Partner
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
15
page intenionally left blank
16
BCI GROWTH V, L.P.
By Glenpointe Associates V, LLC
General Partner
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
BCI INVESTORS, L.L.C.
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
17
ING (U.S.) CAPITAL LLC
By /s/ Xxxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
18
XXXXXXXXX XXXXXXXX & COMPANY, INC.
By /s/ Xxxxxxx Xxxxx *
----------------------------------------
Name:
Title:
/s/ Xxxxx X. Xxxxxx *
----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxx *
----------------------------------------
Xxxxxx Xxxxx
/s/ Xxxxxx X. Xxxxxxx *
----------------------------------------
Xxxxxx X. Xxxxxxx
XXXXXXX XXXXX CANADA CORPORATION
By *
----------------------------------------
Name:
Title:
/s/ Xxxxxx X. Xxxx *
----------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxxx Xxxxx *
----------------------------------------
Xxxxx Xxxxx
* Executed pursuant to the Election to Redemption Form
19
Xxxxx Xxxxx
*Executed pursuant to the Election to Redemption Form
20
/s/ Xxxxxx X. Knee *
----------------------------------------
Xxxxxx X. Knee
/s/ Xxxxxxx Kommitt *
----------------------------------------
Xxxxxxx Xxxxxx
LA FIDUCIE FAMILLIALE XXXXX
By *
----------------------------------------
Name:
Title:
LA FIDUCIE FAMILLIALE XXXXX
By *
----------------------------------------
Name:
Title:
/s/ Xxxxx X. Xxxxx *
----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxx X. XxXxxx *
----------------------------------------
Xxxxxxx X. XxXxxx
/s/ Xxxxx Xxx Xxxxxxx *
----------------------------------------
Xxxxx Xxx Xxxxxxx
* Executed pursuant to the Election to Redemption Form
21
*Executed pursuant to the Election to Redemption Form
22
/s/ Xxxxxxx X. Xxxxxx *
----------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxxxx *
----------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx El-Xxxxxx *
----------------------------------------
Xxxxxxx El-Xxxxxx
/s/ Xxxxxxx Xxxxx *
----------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx X. Xxxxx *
----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxx Xxxxxxxxx *
----------------------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxx *
----------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxx Xxxxxxxx *
----------------------------------------
Xxxx Xxxxxxxx
* Executed pursuant to the Election to Redemption Form
23
/s/ Xxxxxx X. Xxxxxx *
----------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxxx *
----------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxx Xxxxxxxx *
----------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx *
----------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Fidele Toghoua *
----------------------------------------
Fidele Toghoua
/s/ Xxxxxxx Xxxxxxxxx *
----------------------------------------
Xxxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXX, AS TRUSTEE OF THE AMENDED AND
RESTATED XXXXXX X. XXXXXXX FAMILY TRUST U/A/D
10/15/87
* Executed pursuant to the Election to Redemption Form
24
By *
----------------------------------------
Name:
Title:
* Executed pursuant to the Election to Redemption Form
25
XXXXXX X. XXXXXXX, AS TRUSTEE OF THE AMENDED AND
RESTATED XXXXXX X. XXXXXXX FAMILY TRUST U/A/D
10/15/87
By *
----------------------------------------
Name:
Title:
/s/ D. Xxxxx Xxxxxxx *
----------------------------------------
D. Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxx *
----------------------------------------
Xxxxxx Xxxx
/s/ X. Xxxxxxx Read *
----------------------------------------
X. Xxxxxxx Read
/s/ Xxxxxxx X. Read *
----------------------------------------
Xxxxxxx X. Read
/s/ Xxxxxx Xxxxx *
----------------------------------------
Xxxxxx Xxxxx
/s/ Xxxxxxxxx Xxxxx *
----------------------------------------
Xxxxxxxxx Xxxxx
* Executed pursuant to the Election to Redemption Form
26
/s/ Xxxx X. and Xxxxx X. Xxxxxx *
----------------------------------------
Xxxx X. and Xxxxx X. Xxxxxx
* Executed pursuant to the Election to Redemption Form
