EXHIBIT 99.3
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of December 22, 1998
("STOCKHOLDERS AGREEMENT"), by and between XXXX Industries, Inc., a Delaware
corporation (the "COMPANY"), the UNR Asbestos-Disease Claims Trust (the
"TRUST"), each party listed on Exhibit A hereto (a "BAIN STOCKHOLDER" and,
collectively, the "BAIN STOCKHOLDERS") and each party listed on Exhibit B
hereto (an "OTHER PIROD STOCKHOLDER" and, together with the Bain
Stockholders, the "PIROD STOCKHOLDERS").
WHEREAS, as of the date hereof the Trust is the majority
stockholder of the Company and the PIROD Stockholders own all of the
outstanding shares of PiRod Holdings, Inc., a Delaware corporation ("PIROD");
WHEREAS, the Company and PIROD propose to enter into an
Agreement and Plan of Merger of even date herewith (the "MERGER AGREEMENT")
pursuant to which PIROD shall be merged with and into the Company (the
"MERGER"), upon the terms and conditions set forth in the Merger Agreement;
WHEREAS, upon consummation of the Merger, the Trust and the
PIROD Stockholders will each own shares of Common Stock (as hereinafter
defined);
WHEREAS, the Company, the Trust and the PIROD Stockholders
desire to establish in this Stockholders Agreement certain rights and
obligations concerning their relationship with each other from and after the
Merger;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS.
For purposes of this Stockholders Agreement, each of the
following underlined terms shall have the meaning specified with respect to
such term:
"ACTION" has the meaning specified in Section 4.7(c) hereof.
"ADDITIONAL SECURITIES" has the meaning specified in Section
4.1(a) hereof.
"AFFILIATE", with respect to any specified Person, means any
other Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, such specified Person. For purposes of this Stockholders Agreement,
the term "control" (including, with its correlative meanings, "controlled by"
and "under common
control with") shall mean possession, directly or indirectly of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise); PROVIDED, HOWEVER, that neither the Company nor any
Stockholder Party shall be deemed to be an Affiliate of the other.
"BAIN DIRECTOR" means any individual designated by the Bain
Stockholders to be nominated for election to the Board of Directors of the
Company in accordance with Section 2.2 hereof who is thereafter elected to
the Board of Directors.
"BAIN NOMINEE" has the meaning specified in Section 2.2(a)
hereof.
"BAIN STOCKHOLDER REPRESENTATIVE" means Xxxx Capital, Inc.;
PROVIDED, HOWEVER, that the Bain Stockholders may designate any Bain
Stockholder as the Bain Stockholder Representative, such designation to be
effective when (and only when) Xxxx Capital, Inc. delivers to the Company and
to the other Stockholder Parties a certificate, executed by its Chief
Executive Officer, to the effect that such new designation has been made; and
PROVIDED, FURTHER, that the Company and the other Stockholder Parties shall
be entitled to rely upon such certificate as the act of the Bain
Stockholders.
"BAIN STOCKHOLDER" and "BAIN STOCKHOLDERS" have the respective
meanings specified in the first paragraph of this Stockholders Agreement.
A Person shall be deemed to "BENEFICIALLY OWN" or be the
"BENEFICIAL OWNER" of all shares of Common Stock which such Person and any of
such Person's Affiliates beneficially own within the meaning of Rule 13d-3
under the Exchange Act (or any successor rule). Without limiting the
foregoing, (i) references in this Stockholders Agreement to the amount of
Common Stock beneficially owned by a "Stockholder Party" means, in the case
of the Bain Stockholders, the aggregate amount of Common Stock beneficially
owned by the Bain Stockholders and their respective Affiliates (including all
shares of Common Stock that can be acquired by the exercise of warrants to
acquire shares of Common Stock that are outstanding and exercisable as of the
Effective Time and (ii) in calculating the percentage of Common Stock
beneficially owned by any Stockholder Party for purposes of any provision of
this Stockholders Agreement which sets forth a specific percentage of Common
Stock, the only shares of Common Stock that shall be taken into account are
(x) shares of Common Stock which are beneficially owned by such Stockholder
Party (or, in the case of any Transferee pursuant to Section 4.11(a) hereof,
the Stockholder Party which Transferred such shares to the Transferee) as of
the Effective Time (giving effect to the conversion of shares pursuant to the
Merger Agreement and including all shares of Common Stock that can be
acquired by the exercise of warrants to acquire shares of Common Stock that
are outstanding and exercisable as of the Effective Time) and (y) any other
securities referred to clause (ii) or (iii) of the definition of Common Stock
which are thereafter issued in respect of such shares, and in each case which
continue to be beneficially owned by such Stockholder Party at the time as of
which the determination is made.
"BOARD OF DIRECTORS" means the board of directors of the
Company.
"BY-LAWS" means the by-laws of the Company, as amended from
time to time.
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"CERTIFICATE OF INCORPORATION" means the Certificate of
Incorporation of the Company, as amended from time to time.
"CHANGE OF CONTROL PROVISION" has the meaning specified in
Section 5.2 hereof.
"COMMON STOCK" means (i) the common stock, par value $.01 per
share, of the Company, (ii) any stock or other securities into which or for
which such common stock may hereafter be changed, converted or exchanged, and
(iii) any other securities issued to holders of such common stock (or such
securities into which or for which such common stock is so changed, converted
or exchanged) upon any reclassification, share combination, share
subdivision, share dividend, merger, consolidation or similar transaction(s)
or event(s).
"COMPANY" has the meaning specified in the first paragraph of
this Stockholders Agreement, and shall include its successors.
"COMPANY INDEMNIFIED PARTIES" has the meaning specified in
Section 4.7(a) hereof.
"COMPANY PIGGYBACK SECURITIES" has the meaning specified in
Section 4.1(a) hereof.
"COMPANY SECURITIES" has the meaning specified in Section
4.2(a) hereof.
"COMPANY STOCKHOLDERS MEETING" has the meaning specified in
Section 2.2(c) hereof.
"DEBT AGREEMENT" has the meaning specified in Section 5.2
hereof.
"DEMAND NOTICE" has the meaning specified in Section 4.1(a)
hereof.
"DEMAND REGISTRATION" has the meaning specified in Section
4.1(a) hereof.
"DISTRIBUTION EXPENSES" means all (i) underwriting discounts,
fees and commissions, and (ii) stock transfer taxes, if any related to or
arising from the distribution of securities pursuant to a Demand Registration
or a Piggyback Registration.
"EFFECTIVE TIME" has the meaning specified in the Merger
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the SEC promulgated thereunder, as they each may from time to time be in
effect. References in this Stockholders Agreement to a particular section of,
or rule or regulation promulgated under, the Exchange Act means such section,
rule or regulation, as the case may be, as from time to time in effect, or
any successor provision to similar effect.
"EXEMPTED TRANSACTIONS" has the meaning specified in
Section 3.2 hereof.
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"FAMILY GROUP" has the meaning specified in Section 3.2 hereof.
"INDEMNIFIED PARTY" has the meaning specified in Section 4.7(c)
hereof.
"INDEMNIFYING PARTY" has the meaning specified in Section 4.7(c)
hereof.
"INDEPENDENT DIRECTOR" means any individual independent of and
otherwise unaffiliated with any party hereto (other than the Company), and who
shall not be an officer or an employee, trustee, consultant or advisor or
(financial, legal or other) of any party hereto (other than the Company) or any
Affiliate thereof, or any individual who shall have served in any such capacity,
or who is, or has been, an officer or employee of any such consultant or
advisor.
"INITIATING PARTY" has the meaning specified in Section 4.1(a)
hereof.
"LOSS" has the meaning specified in Section 4.7(a) hereof.
"MANAGEMENT REPRESENTATIVES" has the meaning specified in
Section 2.2(a) hereof.
"MAXIMUM AMOUNT" has the meaning specified in Section 3.1(b)
hereof.
"MERGER" has the meaning specified in the recitals of this
Stockholders Agreement.
"MERGER AGREEMENT" has the meaning specified in the recitals
of this Stockholders Agreement.
"NOMINEE" has the meaning specified in Section 2.2(a) hereof.
"OTHER PARTY" has the meaning specified in Section 3.1(a)
hereof.
"OTHER PIROD STOCKHOLDER" has the meaning specified in the
first paragraph of this Stockholders Agreement.
"OTHER SECURITIES" has the meaning specified in Section 4.2(b)
hereof.
"PARTICIPATING STOCKHOLDER PARTY" means each of (i) in the
case of a Demand Registration, the Initiating Party and each other
Stockholder Party, if such other Stockholder Party delivers the request
referred to in Section 4.1(a)(i)(C) hereof and (ii) in the case of a
Piggyback Registration, each Stockholder Party that delivers the request
referred to in Section 4.2(a) or 4.12(d)(i) hereof.
"PERSON" means any individual, partnership, corporation,
limited liability company, trust, unincorporated organization or other legal
entity, and a government or agency or political subdivision thereof.
"PIGGYBACK REGISTRATION" has the meaning specified in
Section 4.2(a) hereof.
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"PIGGYBACK REGISTRATION NOTICE" has the meaning specified in
Section 4.2(a) hereof.
"PIROD" has the meaning specified in the recitals of this
Stockholders Agreement.
"PIROD STOCKHOLDERS" has the meaning specified in the first
paragraph of this Stockholders Agreement.
"PIROD TRANSFEREE" has the meaning specified in Section 6.2
hereof.
"PRINCIPAL STOCKHOLDER PARTY" means either (i) the Trust or
(ii) the Bain Stockholders (which shall be considered a single Principal
Stockholder Party for purposes of this Stockholders Agreement); and
"PRINCIPAL STOCKHOLDER PARTIES" means both the Trust and the Bain
Stockholders.
"PROSPECTUS" means the prospectus contained in a Registration
Statement (including each preliminary prospectus and any summary prospectus)
and any other prospectus filed under Rule 424 under the Securities Act in
connection with the disposition of any Registrable Securities covered by such
Registration Statement, in each case as such prospectus may be amended or
supplemented from time to time. The term "Prospectus" shall also include all
documents incorporated by reference in any such prospectus.
"REGISTRABLE SECURITIES" means, with respect to any
Stockholder Party, the shares of Common Stock beneficially owned by such
Stockholder Party as of the Effective Time (giving effect to the conversion
of shares pursuant to the Merger Agreement) and any other securities referred
to clause (ii) or (iii) of the definition of Common Stock which are
thereafter issued in respect of such shares. As to any particular
Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such Registration
Statement, (ii) such securities shall have been sold to the public pursuant
to Rule 144 under the Securities Act, or (iii) such securities shall have
ceased to be outstanding.
"REGISTRATION EXPENSES" has the meaning specified in Section
4.6(a) hereof.
"REGISTRATION RIGHTS" has the meaning specified in Section
4.12(a) hereof.
"REGISTRATION STATEMENT" means a registration statement of the
Company under the Securities Act of 1933, as it may be amended or
supplemented from time to time. The term "Registration Statement" shall also
include all exhibits, financial statements and schedules to any such
registration statement and all documents incorporated by reference in any
such registration statement.
"SEC" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act or the
Exchange Act.
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"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the SEC
promulgated thereunder, as they each may from time to time be in effect.
References herein to a particular section of, or rule or regulation
promulgated under, the Securities Act means such section, rule or regulation,
as the case may be, as from time to time in effect, or any successor
provision to similar effect.
"SELLING PARTY" has the meaning specified in Section 3.1(a)
hereof.
"SHELF REGISTRATION" has the meaning specified in Section
4.1(a) hereof.
"STOCKHOLDER INDEMNIFIED PARTIES" has the meaning specified in
Section 4.7(b) hereof.
"STOCKHOLDER PARTY" means either (i) the Trust, (ii) the Bain
Stockholders (which shall be considered a single Stockholder Party for
purposes of this Stockholders Agreement) or (iii) any Other PIROD
Stockholder; and "STOCKHOLDER PARTIES" means all of foregoing.
"STOCKHOLDER PIGGYBACK SECURITIES" has the meaning specified
in Section 4.1(a) hereof.
"STOCKHOLDER SECURITIES" has the meaning specified in Section
4.2(a) hereof.
"STOCKHOLDERS AGREEMENT" has the meaning specified in the
first paragraph of this agreement, as this agreement may from time to time be
modified, amended or supplemented in writing in accordance with the terms
hereof.
"TAG-ALONG NOTICE" has the meaning specified in Section 3.1(c)
hereof.
"TAG-ALONG RIGHTS" means the tag-along rights granted to the
Other Party pursuant to Section 3.1 hereof.
"THEN-OUTSTANDING SHARES OF COMMON STOCK" means all shares of
Common Stock outstanding at the time as of which the determination is made,
without regard to (i) any shares of Common Stock held in the treasury of the
Company or (ii) any shares of Common Stock issuable pursuant to any options,
warrants, convertible securities or other rights, agreements, commitments or
undertakings of any kind obligating the Company to issue or deliver any
shares of Common Stock (whether unissued or treasury).
"THIRD PARTY" has the meaning specified in Section 3.1(a)
hereof.
"THIRD PARTY TERMS" has the meaning specified in Section
3.1(b) hereof.
"TRANSFER" (when used as a noun or verb) means, with respect
to the Common Stock, any direct or indirect transfer, sale, assignment or
other disposition thereof. For purposes of this Stockholders Agreement, a
Transfer of Common Stock by any one or more of the Bain Stockholders shall be
deemed to be a Transfer by the Bain Stockholders as a Stockholder Party
hereunder.
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"TRANSFEREE" has the meaning specified in Section 4.11(a)
hereof.
"TRANSFERRED COMPANY SHARES" has the meaning specified in
Section 7.4(b) hereof.
"TRANSFERRED PIROD SHARES" has the meaning specified in
Section 6.2 hereof.
"TRUST" has the meaning specified in the first paragraph of
this Stockholders Agreement, and shall include its successors.
"TRUST DIRECTOR" means any individual designated by the Trust
to be nominated for election to the Board of Directors of the Company in
accordance with Section 2.2 hereof who is thereafter elected to the Board of
Directors.
"TRUST NOMINEE" has the meaning specified in Section 2.2(a)
hereof.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1. NUMBER OF DIRECTORS. Until such time, if any,
as the provisions of this Article II terminate pursuant to Section 2.6
hereof, (i) the Board of Directors shall consist of ten directors and (ii) no
action shall be taken by the Stockholder Parties or the Company to classify
the Board of Directors.
Section 2.2. STOCKHOLDER NOMINEES.
(a) MERGER. As of the Effective Time, the Board of Directors
will be reconstituted as follows: the Trust shall have the right to
designate four individuals to serve on the Board of Directors (each, a "TRUST
NOMINEE") and the Bain Stockholders shall have the right to designate two
individuals to serve on the Board of Directors (each, a "BAIN NOMINEE") (any
individual so designated by the Trust or the Bain Stockholders, a "NOMINEE").
The remaining directors shall consist of Xxxxx Xxxxxxxxx, Xxxxx Xxxxx
(together with Xx. Xxxxxxxxx, the "MANAGEMENT REPRESENTATIVES") and two
Independent Directors determined in accordance with Section 2.3 hereof;
PROVIDED, HOWEVER, that if, prior to the Effective Time Xx. Xxxxxxxxx shall
become unable to serve as a director of the Company, then the Trust shall
designate an individual to replace Xx. Xxxxxxxxx who shall be either Xx.
Xxxxxxxxx'x successor or a person designated by the Trust and reasonably
acceptable to the Bain Stockholders; and PROVIDED, FURTHER, that if, prior to
the Effective Time Xx. Xxxxx shall become unable to serve as a director of
the Company, then the Bain Stockholders shall designate an individual to
replace Xx. Xxxxx who shall be either Xx. Xxxxx'x successor or a person
designated by the Bain Stockholders and reasonably acceptable to the Trust.
Neither Management Representative (or their replacements) shall be deemed a
"Nominee", a "Trust Director" or a "Bain Director" for purposes of this
Stockholders Agreement.
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(b) COMPOSITION OF BOARD AFTER MERGER.
(i) Following the Effective Time, subject to Section 2.6
hereof, each of the Principal Stockholder Parties shall be
entitled to representation on the Board of Directors as follows:
(w) For so long as such Principal Stockholder Party
continues to beneficially own at least 20% of the then-
outstanding shares of Common Stock, four designees;
(x) For so long as such Principal Stockholder Party
continues to beneficially own less than 20%, but at least
15%, of the then-outstanding shares of Common Stock,
three designees;
(y) For so long as such Principal Stockholder Party
continues to beneficially own less than 15%, but at least
10%, of the then-outstanding shares of Common Stock, two
designees; and
(z) For so long as such Principal Stockholder Party
continues to beneficially own less than 10%, but at least
5%, of the then-outstanding shares of Common Stock, one
designee;
PROVIDED, THAT (i) only Shares of Common Stock owned beneficially
at the Effective Time shall be included in making the
calculations in paragraphs (w) - (z) above and (ii) the Trust
shall in no event be entitled to more than four designees, and
Bain shall in no event be entitled to more than two designees,
on the Board of Directors pursuant to this Section 2.2.
(ii) Following the Effective Time, subject to Section 2.6
hereof, each Management Representative shall be nominated for
election to the Board of Directors pursuant to Section 2.3(c)
hereof and the Stockholder Parties shall have the obligation to
vote for such individuals as directors pursuant to Section 2.4
hereof; PROVIDED, HOWEVER, that with respect to each Management
Representative, this Section 2.2(b)(ii) shall apply only for so
long as such Management Representative continues to hold the
executive position with the Company held by such Management
Representative immediately after the Effective Time.
(iii) Following the Effective Time, subject to Section 2.6
hereof, the balance of the directors (including any vacancies
arising as a result of a decrease in the number of designees to
which a Principal Stockholder Party is entitled pursuant to this
Section 2.2(b)) shall be Independent Directors determined in
accordance with Section 2.3 hereof.
(c) NOMINATION AND ELECTION. The Company shall cause the
Nominees, the Management Representatives (subject to the proviso set forth in
Section 2.2(b)(ii) hereof) and any Independent Directors determined in
accordance with Section 2.3 hereof, to be nominated for
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election to the Board of Directors (i) in the case of the reconstitution of
the Board of Directors contemplated by Section 2.2(a) hereof, at the meeting
of stockholders of the Company held to vote upon the Merger (the "COMPANY
STOCKHOLDERS MEETING") and (ii) thereafter, (x) at each annual meeting of
stockholders of the Company (or any special meeting of stockholders convened
for the purpose (which need not be the sole purpose) of electing directors)
or (y) in connection with any solicitation of written consents by the Company
undertaken for the purpose (which need not be the sole purpose) of electing
directors. The Company shall solicit proxies (or, if applicable, written
consents) for, and otherwise use its commercially reasonable best efforts to
secure, the election of such individuals to the Board of Directors.
(d) INFORMATION REGARDING NOMINEES. Within 20 days of the
receipt by it of written notice of any stockholders meeting or solicitation
of written consents relating to the election of directors (or, in the case of
the Company Stockholders Meeting, within 10 days after the date of this
Stockholders Agreement), each Principal Stockholder Party shall deliver to
the Company and to the other Principal Stockholder Party a written notice
setting forth (i) the names of its Nominee(s), (ii) such other information
regarding its Nominee(s) as would be required to be included in the Company's
proxy statement under the Exchange Act, and (iii) the consents of its
Nominee(s) to serve as director(s) of the Company if so elected.
(e) REPLACEMENT NOMINEES. If, prior to his or her election
to the Board of Directors, any Nominee shall become unable to serve as a
director of the Company, the Principal Stockholder Party who so designated
such Nominee shall be entitled to designate a replacement, who shall then be
a Nominee for purposes of Section 2.2(a) or 2.2(b), as the case may be.
(f) VACANCIES. Subject to Section 2.2(h) hereof, the Company
shall use its commercially reasonable best efforts to ensure that the
applicable Principal Stockholder Party shall have the exclusive right to
designate a Nominee to fill any vacancy created by the removal, death or
resignation of a Bain Director or Trust Director, as the case may be
(including, without limitation, nominating such individual for election to
the Board of Directors at a meeting of stockholders of the Company (or
written consent in lieu of such meeting) called for purpose of filling such
vacancy and, if the first sentence of Section 2.2(g) hereof is applicable,
removing the applicable director).
(g) REMOVAL. Each Principal Stockholder Party may at any
time notify the Company and the other Stockholder Parties in writing of its
desire to remove any of its designees from the Board of Directors, in which
case the Company shall take the actions specified in Sections 2.2(c) and
2.2(f) hereof and the other Stockholder Parties shall take the actions
specified in Section 2.4 hereof. No Stockholder Party shall seek to remove
any of another Stockholder Party's designees from the Board of Directors for
any reason.
(h) RECONSTITUTION OF BOARD. If at any time the amount of
Common Stock beneficially owned by any Principal Stockholder Party changes so
as to decrease the number of designees to which such Principal Stockholder
Party is entitled pursuant to Section 2.2(b) hereof, the Stockholder Parties
and the Company will promptly take all necessary action to reconstitute the
Board of Directors in accordance with Section 2.2(b) hereof.
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Section 2.3. INDEPENDENT DIRECTORS. The Principal
Stockholder Parties shall use their commercially reasonable best efforts to
agree on the nominees for election to the Board of Directors as Independent
Directors with respect to the Company Stockholders Meeting and, thereafter,
with respect to each annual meeting of stockholders of the Company or any
special meeting of stockholders of the Company (or written consent in lieu of
such meeting) called for the purpose of electing directors. If and to the
extent that the Principal Stockholder Parties are unable to so agree, the
Board of Directors shall determine the identity of the Independent Directors
whom the Company shall nominate for election to the Board of Directors. The
foregoing procedures shall also apply in the event of any vacancy on the
Board of Directors created by the removal, death or resignation of an
Independent Director. Any individual selected by the Principal Stockholder
Parties or by the Board of Directors as an Independent Director pursuant to
this Section 2.3 shall not be deemed a "Nominee", a "Trust Director" or a
"Bain Director" for purposes of this Stockholders Agreement.
Section 2.4. COVENANT TO VOTE. The Trust and each of the
PIROD Stockholders agrees that, at any annual meeting of stockholders of the
Company or any special meeting of stockholders of the Company (or written
consent in lieu of such meeting) called for the purpose of electing (or, if
applicable, removing) directors, all of the Common Stock (and all other
voting securities of the Company, if any) beneficially owned by it shall be
voted (i) for the election of the individuals nominated in accordance with
Sections 2.2 and 2.3 hereof (including, without limitation, any nomination
for the purpose of filling any vacancy) and (ii) if any Principal Stockholder
Party has given the notice referred to in the first sentence of Section
2.2(g) hereof, for the removal of the director or directors specified in such
notice.
Section 2.5. ACTION BY THE BOARD; QUORUM. A majority of the
entire Board of Directors shall constitute a quorum. All actions by the
Board of Directors shall be taken by a majority vote of such quorum.
Section 2.6. TERMINATION OF ARTICLE II. This Article II
shall terminate at such time, if any, as either Principal Stockholder Party
is the beneficial owner of less than 5% of the then-outstanding shares of
Common Stock.
ARTICLE III
TAG-ALONG RIGHTS
Section 3.1 TAG-ALONG RIGHTS.
(a) GENERAL. Each Stockholder Party (a "SELLING PARTY")
agrees that it shall not Transfer for value any shares of Common Stock
beneficially owned by it (other than in Exempted Transactions (as defined
below), to which the provisions of this Section 3.1 do not apply) if such
Transfer, together with all such Transfers of Common Stock by the Selling
Party and/or its Affiliates as part of the same transaction or series of
related transactions (excluding in each case Exempted Transactions), would
result in a Transfer of Common Stock in excess of an aggregate of 5% of the
then-outstanding shares of Common Stock, unless the terms and
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conditions of such Transfer shall include an offer to each of the other
Stockholder Parties (each of the foregoing, an "OTHER PARTY") to include in
the Transfer to the proposed transferee or transferees (the "THIRD PARTY"),
at such Other Party's option and on the same price and on the same terms and
conditions as apply to the Selling Party, an amount of Common Stock equaling
the least of (i) the number derived by multiplying (x) the number of shares
of Common Stock beneficially owned by such Other Party by (y) a fraction, the
numerator of which is the number of shares of Common Stock proposed to be
Transferred by the Selling Party, and the denominator of which is the total
number of shares of Common Stock beneficially owned by the Selling Party on
the date of the notice referred to in Section 3.1(b) hereof, (ii) if there is
a Maximum Amount (as defined in Section 3.1(b) hereof), the number derived by
multiplying (x) the Maximum Amount by (y) a fraction, the numerator of which
is the number of shares of Common Stock owned by such Other Party and the
denominator of which is the total number of shares of Common Stock
beneficially owned by the Selling Party and all Other Parties exercising
their Tag-Along Rights pursuant to Section 3.1(c) hereof or (iii) such lesser
number of shares as such Other Party shall designate in its Tag-Along Notice.
(b) NOTICE BY SELLING PARTY. The Selling Party shall notify
the Company and the Other Parties in writing of any proposed Transfer to
which the provisions of this Section 3.1 apply. Each such notice shall set
forth: (i) the name and address of the Third Party, (ii) the number of shares
of Common Stock proposed to be Transferred to the Third Party, (iii) the
number of shares of Common Stock beneficially owned by the Selling Party,
(iv) the proposed amount and form of consideration and terms and conditions
of payment offered by the Third Party, and any other material terms
pertaining to the Transfer (the "THIRD PARTY TERMS"), including without
limitation, whether the Third Party has limited the number of shares it
proposes to purchase from the Selling Party and the Other Parties pursuant to
this Section 3.1 to the number of shares set forth in clause (ii) above (the
"MAXIMUM AMOUNT"), and (v) that the Third Party has been informed of the
Tag-Along Rights of the Other Parties and has agreed to purchase shares of
Common Stock in accordance with the terms hereof.
(c) EXERCISE OF TAG-ALONG RIGHTS BY OTHER PARTIES.
(i) Each Other Party may exercise its Tag-Along Rights by
delivery of a written notice to the Company and the Selling Party (the
"TAG-ALONG NOTICE") within twenty (20) days following receipt of the
notice specified in Section 3.1(b) hereof. The Tag-Along Notice shall
state (x) the number of shares of Common Stock beneficially owned by
such Other Party and (y) the number of shares of Common Stock that
such Other Party wishes to include in such Transfer to the Third Party
(giving effect to the formula set forth in clauses (i) and (iii) of
Section 3.1(a) hereof, but subject to reduction, if applicable,
pursuant to clause (ii) of Section 3.1(a) hereof).
(ii) Each Other Party which delivers a Tag-Along Notice
shall, upon the giving of such notice, be entitled and obligated to
sell the number of shares of Common Stock set forth in such
Tag-Along Notice to the Third Party on the Third Party Terms.
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(iii) After expiration of the twenty-day period referred to in
subparagraph (i) above, if no Other Party has given a Tag-Along Notice
and the provisions of this Section 3.1 have been complied with in all
respects, the Selling Party shall have the right for a 120-day period
to Transfer the shares of Common Stock covered by the notice set forth
in Section 3.1(b) hereof to the Third Party on the Third Party Terms
(or on other terms no more favorable to the Selling Party) without
further notice to the Other Parties, but after such 120-day period no
such Transfer may be made without again giving notice to the Other
Parties of the proposed Transfer and complying with the requirements
of this Section 3.1.
(d) CLOSING. At the closing of the Transfer by the Selling Party
to any Third Party (of which the Selling Party shall give each Other Party
who has elected to exercise its Tag-Along Right at least five business days'
prior written notice), the Third Party shall remit to each Other Party as
applicable the consideration for the total sales price of the Common Stock
beneficially owned by such Other Party sold pursuant thereto, against
delivery by such Other Party of certificates for such Common Stock, duly
endorsed or with duly executed stock powers and the compliance by such Other
Party with any other conditions to closing included in the Third Party Terms.
(e) THIRD PARTY TERMS. Notwithstanding anything in this
Stockholders Agreement to the contrary, for purposes of determining the
consideration payable to each Other Party as applicable at the closing
referred to in Section 3.2(d) hereof, (x) if the Third Party Terms provide
that the Third Party shall assume any debt of the Selling Party, such
assumption shall be treated as a cash payment equal to the amount of debt so
assumed and (y) a Transfer (by merger or otherwise) of any equity or
beneficial interest in any Person which is the beneficial owner of Common
Stock (or any direct or indirect parent of such Person) shall be treated as
follows:
(i) such Transfer shall be deemed to be a Transfer of a
percentage of the total number of shares of Common Stock beneficially
owned by such Person equal to the percentage of the equity or
beneficial interest in such Person (or such Person's parent)
Transferred in such transaction; and
(ii) the consideration allocable to the Common Stock shall be
determined by an investment banking firm of national reputation
selected by the Selling Party and reasonably satisfactory to other
Principal Stockholder Party.
Section 3.2 EXEMPTED TRANSACTIONS. The following Transfers
shall constitute "EXEMPTED TRANSACTIONS" for purposes of Section 3.1 hereof:
(i) a Transfer of Common Stock by any Stockholder Party to an Affiliate of
such Stockholder Party, (ii) a Transfer of Common Stock by any Stockholder
Party to the public pursuant to an effective registration statement under the
Securities Act, provided such offering is an underwritten or anonymous
offering, (iii) a Transfer of Common Stock by any Stockholder Party pursuant
to Rule 144 promulgated under the Securities Act, (iv) a Transfer of Common
Stock by any Xxxx Stockholder to its limited partners, (v) a Transfer of
Common Stock by any PIROD Stockholder pursuant to applicable laws of descent
and distribution, (vi) a Transfer of Common Stock by PH, Inc. to its
stockholders or (vii)
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a Transfer of Common Stock by a PIROD Stockholder to a member of his Family
Group (as defined below), provided that the provisions contained in this
Agreement will continue to be applicable to such shares of Common Stock after
any such Transfer pursuant to clauses (i), (vi) and (vii) hereof and the
transferees of such shares of Common Stock shall agree in writing to be bound
by the provisions of this Agreement (in which case Exhibit A or B hereto, as
applicable, will be deemed amended to add each such transferee as a Xxxx
Stockholder or an Other PIROD Stockholder, as the case may be. "FAMILY
GROUP" means the spouse and descendants (whether natural or adopted) and any
trust solely for the benefit of a PIROD Stockholder and/or his spouse and/or
descendants.
ARTICLE IV
REGISTRATION RIGHTS
Section 4.1. DEMAND REGISTRATION, INCLUDING SHELF REGISTRATION.
(a) REQUEST FOR REGISTRATION.
(i) At any time and from time to time after the first
anniversary of the Effective Time (subject to Section 4.1(a)(ii)
hereof), upon the written request of any Principal Stockholder Party
(the "INITIATING PARTY") that the Company effect the registration
under the Securities Act of a number of Registrable Securities that is
not less than the lesser of (x) Registrable Securities having an
aggregate market value (based on the closing share price on the
business day immediately preceding the date of such request) of at
least $5 million or (y) at least 3% of the then-outstanding shares of
Common Stock (a "DEMAND NOTICE"), which request shall specify the
intended method or methods of disposition of such Registrable
Securities (it being understood that the method specified or intended
by the Initiating Party with respect to any registration may be an
offering on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act or otherwise (a "SHELF REGISTRATION")), the Company
will promptly give written notice of such requested registration to
the other Stockholder Parties, and thereupon the Company shall use its
commercially reasonable best efforts to effect as promptly as
practicable the registration under the Securities Act of:
(A) all of the Registrable Securities which the Company has been so
requested to register by the Initiating Party,
(B) all shares of Common Stock which the Company desires to include in such
registration for its own account, as specified in a written notice given to
the Initiating Party and the other Stockholder Parties within 10 days after
receipt by the Company of the Demand Notice, and
(C) all Registrable Securities which the Company has been requested to
include in such registration by each other Stockholder Party, as specified in
a written request given by such Stockholder Party to the Company and the
Initiating Party within 10 days after receipt of the
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aforesaid written notice from the Company (together with the securities
referred to in clause (B) above, the "ADDITIONAL SECURITIES"),
all to the extent requisite to permit the disposition of such
Registrable Securities in accordance with the intended method or
methods of disposition specified in the Demand Notice. A registration
pursuant to this Section 4.1(a)(i) is referred to herein as a "DEMAND
REGISTRATION."
(ii) Notwithstanding the foregoing subparagraph (i), if any
Principal Stockholder Party shall desire to request a Demand
Registration pursuant to Section 4.1(a)(i) hereof prior to the first
anniversary of the Effective Time, (x) it shall so notify the other
Principal Stockholder Party in writing, seeking the other Principal
Stockholder Party's consent to such Demand Registration and (y) the
Initiating Party may deliver its Demand Notice to the Company pursuant
to Section 4.1(a)(i) hereof only if the other Principal Stockholder
Party consents to such Demand Registration (which consent may be given
or withheld in its sole discretion).
(iii) Notwithstanding the foregoing subparagraph (i), (x) the
right of each Principal Stockholder Party to request a Demand
Registration as provided therein shall terminate at such time, if any,
as the Registrable Securities beneficially owned by such Principal
Stockholder Party constitute less than 3% of the then-outstanding
shares of Common Stock and (y) the right of any Stockholder Party to
participate in any Demand Registration pursuant to Section
4.1(a)(i)(C) hereof shall terminate at such time, if any, as the
Registrable Securities beneficially owned by such Stockholder Party
constitute less than 1% of the then-outstanding shares of Common
Stock.
(iv) Notwithstanding the foregoing subparagraph (i), if a
registration pursuant to this Section 4.1 involves an underwritten
offering, and the lead underwriter shall advise the Initiating Party
in writing (with a copy to the Company and each other Participating
Stockholder Party) that, in its opinion, the number of Additional
Securities proposed to be included in such Demand Registration exceeds
the number that can be reasonably sold in such offering without
materially and adversely affecting the offering price or otherwise
materially and adversely affecting such offering, the Company shall
include in such Demand Registration (but only to the extent of the
number of securities that the lead underwriter advises can reasonably
be sold in such offering), (x) first, the Registrable Securities to be
offered by the Initiating Party and each other Participating
Stockholder Party, according to the relative number of Registrable
Securities beneficially owned by the Initiating Party and the other
Participating Stockholder Parties at such time and (y) second, the
securities which the Company desires to include in such registration.
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(v) The Company and the other Participating Stockholder Parties
shall have withdrawal rights with respect to the Additional Securities
comparable to those set forth in Section 4.2(d) hereof.
(vi) Except as aforesaid, no other Person shall have any right
to include any securities in any registration initiated by a Principal
Stockholder Party as a Demand Registration.
(b) LIMITATIONS ON DEMAND REGISTRATIONS. Notwithstanding the
foregoing and subject to Section 4.3(a) hereof, the Company shall not be
required, within any six-month period, to effect more than one Demand
Registration for the account of any Principal Stockholder Party (including
for purposes of this calculation any Demand Registration in which a Principal
Stockholder Party participates pursuant to Section 4.1(a)(i)(C) hereof) .
For purposes of this Stockholders Agreement, a registration shall not be
deemed to have been effected (i) unless a Registration Statement with respect
thereto has become effective and maintained effective in accordance with
Section 4.5(a)(ii) hereof, (ii) if after it has become effective and during
the period in which such Registration Statement is required to be maintained
effective in accordance with Section 4.5(a)(ii) hereof, 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 for any reason
not attributable to any Participating Stockholder Party (and/or any of its
Affiliates) and has not thereafter become effective, (iii) if the conditions
to closing specified in the purchase agreement or underwriting agreement, if
any, entered into in connection with such registration are not satisfied or
waived, other than by reason of a failure on the part of any Participating
Stockholder Party (and/or any of its Affiliates) or (iv) the Principal
Stockholder Party referred to in the preceding sentence has been unable to
sell at least 75% of the Registrable Securities included by it in the
offering.
(c) COMPANY'S RIGHT TO POSTPONE REGISTRATION. Notwithstanding the
foregoing, the Company shall be entitled to postpone for a reasonable period
of time (but not exceeding 60 continuous days) the filing (but not the
preparation) of a Registration Statement for a Demand Registration if the
Company submits to the Initiating Party and each other Participating
Stockholder Party a certificate signed by the Chief Executive Officer of the
Company stating that, in the good faith judgment of the Board of Directors,
such Demand Registration and offering (including, without limitation, any
disclosures required to be made in connection with such Demand Registration)
would materially interfere with any material financing, acquisition,
corporate reorganization or other material transaction involving the Company;
PROVIDED, HOWEVER, that (i) at all times during such period the Company is in
good faith using its commercially reasonable best efforts to cause such
Registration Statement to be filed as promptly as practicable and (ii) the
Company may not exercise the right to postpone registration pursuant to this
Section 4.1(c) more than once in any twelve month period.
(d) SELECTION OF UNDERWRITERS. If the Demand Registration involves
an underwritten offering, the Initiating Party (with the consent, not to be
unreasonably withheld, of the other Principal Stockholder Party, if the other
Principal Stockholder Party participates in the
15
offering pursuant to Section 4.1(a)(i)(C) hereof) shall have the right to
select one or more underwriters to act as lead underwriters of such
underwritten offering.
(e) COMPANY REGISTRATION. Notwithstanding anything in this
Stockholders Agreement to the contrary, after receipt of a Demand Notice, the
Company shall not initiate a registration of any of its securities for its
own account (other than a registration on Form S-4 or Form S-8 or any like
successor forms), for the account of any other Stockholder Party (except a
Demand Registration in which such other Stockholder Party participates
pursuant to Section 4.1(a)(i)(C) hereof) and/or for the account of any other
Person pursuant to registration rights granted to such Person in compliance
with Section 4.9(a) hereof until 90 days after the effective date of the
Registration Statement for such Demand Registration.
(f) WITHDRAWAL OF REGISTRATION. At any time after the Company
files with the SEC the Registration Statement for a Demand Registration and
prior to such Registration Statement being declared effective by the SEC, the
Company, if requested in writing by the Initiating Party (with the consent,
not to be unreasonably withheld, of the other Principal Stockholder Party, if
the other Principal Stockholder Party participates in the offering pursuant
to Section 4.1(a)(i)(C) hereof), shall promptly withdraw such registration.
Section 4.2. PIGGYBACK REGISTRATION.
(a) REQUEST FOR REGISTRATION.
(i) If the Company at any time proposes to file a Registration
Statement under the Securities Act relating to an offering of shares
of Common Stock or other equity securities of the Company, or
securities convertible into or exchangeable or exercisable for shares
of Common Stock or such other securities (other than a Registration
Statement on Form S-4 or Form S-8 or any like successor forms), to be
offered for its own account (the "COMPANY SECURITIES") or for the
account of any other Person (other than a Demand Registration for the
account of one or more Stockholder Parties pursuant to Section 4.1
hereof), the Company shall (x) provide prompt written notice of the
proposed offering to each Stockholder Party, setting forth the number
and type of securities proposed to be offered and a description of the
intended method or methods of distribution (the "PIGGYBACK
REGISTRATION NOTICE"), and (y) use its commercially reasonable best
efforts to effect the registration under the Securities Act (a
"PIGGYBACK REGISTRATION") of such number of Registrable Securities as
shall be specified in a written request by such Stockholder Party
(collectively with any securities so specified by all other
Stockholder Parties, the "STOCKHOLDER SECURITIES") made within 15 days
after receipt of such Piggyback Registration Notice from the Company,
subject to Sections 4.2(a)(ii) and 4.2(b) hereof.
(ii) Notwithstanding the foregoing subparagraph (i), the right
of any Stockholder Party to request a Piggyback Registration as
provided therein shall terminate at such time, if any, as the
Registrable Securities beneficially owned by
16
such Stockholder Party constitute less than 1% of the then-outstanding
shares of Common Stock.
(b) PRIORITY. If a registration pursuant to this Section 4.2
involves an underwritten offering, and the lead underwriter shall advise the
Company in writing (with a copy to each Participating Stockholder Party)
that, in its opinion, the number of Stockholder Securities proposed to be
included in such registration exceeds the number that can reasonably be sold
in such offering without materially and adversely affecting the offering
price or otherwise materially and adversely affecting such offering, the
Company shall include in such registration (but only to the extent of the
number of securities that the Company is so advised can reasonably be sold in
such offering), (i) first, the Company Securities, (ii) second, the
Stockholder Securities, determined on a pro rata basis according to the
relative number of Registrable Securities beneficially owned by the
Participating Stockholder Parties at that time, and (iii) third, if all
Company Securities and Stockholder Securities are included in such
registration, any shares of Common Stock or other equity securities of the
Company, or securities convertible into or exchangeable or exercisable for
shares of Common Stock or such other securities to be offered for the account
of any other Person pursuant to registration rights granted to such Person in
compliance with Section 4.9(a) hereof (the "OTHER SECURITIES").
(c) COMPANY DETERMINATION NOT TO REGISTER. Notwithstanding the
foregoing, if, at any time after giving a Piggyback Registration Notice to
the Stockholder Parties pursuant to Section 4.2(a) hereof and prior to the
effective date of the Registration Statement in respect of such Piggyback
Registration, the Company shall determine for any reason not to register the
securities proposed to be covered thereby, the Company may, at its election,
give written notice of such determination to each Participating Stockholder
Party and thereupon shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from any
obligation of the Company to pay the Registration Expenses in connection
therewith, pursuant to Section 4.6(b) hereof), without prejudice, however, to
the rights of any Principal Stockholder Party to request that such
registration be effected as a Demand Registration (subject to Section 4.1(a)
hereof). No registration effected under this Section 4.2 shall relieve the
Company of its obligations pursuant to Section 4.1 hereof.
(d) WITHDRAWAL OF REGISTRABLE SECURITIES. Any Participating
Stockholder Party may withdraw all or any part of its Registrable Securities
from any Piggyback Registration upon written notice to the Company at any
time prior to the later of (i) the Registration Statement in respect of such
Piggyback Registration being declared effective by the SEC and (ii) the
execution of any underwriting agreement with respect to such Piggyback
Registration.
Section 4.3 UNDERWRITTEN OFFERINGS.
(a) DEMAND REGISTRATION. If requested by the underwriters for any
underwritten Demand Registration, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in form and substance to the Company,
the Initiating Party, each other Participating Stockholder Party and the
underwriters and to contain such representation and warranties by the Company
and such
17
other terms as are customarily contained in agreements of that type,
including, without limitation, covenants to keep the Registration Statement
current until all Registrable Securities to be sold in such offering have
been sold or disposed of, indemnities and contribution to the effect and to
the extent provided in Section 4.7 hereof and the provision of opinions of
counsel and accountants' letters to the effect and to the extent provided in
Section 4.5(a)(x) hereof. The Initiating Party and each other Participating
Stockholder Party shall cooperate with the Company in the negotiation of the
underwriting agreement and shall be a party to such underwriting agreement.
(b) PIGGYBACK REGISTRATION. In connection with each Piggyback
Registration, if the Company proposes to distribute any of its securities
through one or more underwriters, the Company shall, subject to Section
4.2(b) hereof, arrange for such underwriters to include all the Registrable
Securities proposed to be offered and sold by each Participating Stockholder
Party with the other securities of the Company to be distributed by such
underwriters. Each Participating Stockholder Party shall be a party to the
underwriting agreement between the Company and such underwriters.
(c) UNDERWRITING AGREEMENT. In each underwriting agreement
referred to in Section 4.3(a) or 4.3(b) hereof, each Participating
Stockholder Party, at its option, may require that any or all of the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to
and for the benefit of such Participating Stockholder Party, and that any or
all of the conditions precedent to the obligations of such underwriters under
such underwriting agreement shall be conditions precedent to the obligations
of such Participating Stockholder Party. The Participating Stockholder
Parties shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding the Participating Stockholder Parties and
information provided by the Participating Stockholder Parties to be included
in the applicable Registration Statement, the Registrable Securities and the
intended method or methods or distribution and any other representation
required by law, or to furnish any indemnity or contribution to any Person
which is broader than the indemnity and contribution furnished by the
Participating Stockholder Parties in Section 4.7 hereof.
Section 4.4. PREPARATION OF REGISTRATION STATEMENT.
(a) DEMAND REGISTRATION. Each Registration Statement in respect
of a Demand Registration shall be on any form selected by the Company for
which the Company then qualifies; PROVIDED, HOWEVER, that the Company shall
use commercially reasonable best efforts to continue to be qualified to
register secondary offerings of its securities under the Securities Act on
Form S-3 (or any like successor form).
(b) PIGGYBACK REGISTRATION. Each Registration Statement in
respect of a Piggyback Registration shall provide for the offering and sale
of Registrable Securities in a manner consistent with the offering and sale
of the other securities of the Company to which such Registration Statement
relates.
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(c) OPPORTUNITY TO PARTICIPATE. In connection with the
preparation of each Registration Statement in respect of a Demand
Registration or a Piggyback Registration, the Company shall give each
Participating Stockholder Party and its underwriters, if any, and their
respective counsel and accountants the opportunity to participate in the
preparation of such Registration Statement and the related Prospectus,
including each amendment thereof or supplement thereto, and any
correspondence to the SEC (including its staff) responding to comments on the
Registration Statement or Prospectus, and shall give each of them such access
to the financial and other records, corporate documents and properties of the
Company and its subsidiaries and such opportunities to discuss the business
of the Company with its officers and the independent public accountants who
have certified its financial statements as shall be necessary, in the opinion
of such Participating Stockholder Party, such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning
of the Securities Act. In the case of a Demand Registration, the Company
shall not file any such Registration Statement or Prospectus, including any
amendment thereof or supplement thereto, or response letter to which any
Participating Stockholder Party or any such counsel reasonably objects.
(d) PARTICIPATING STOCKHOLDER PARTY'S INFORMATION. In connection
with the preparation of each Registration Statement in respect of a Demand
Registration or a Piggyback Registration, the Company may require each
Participating Stockholder Party to furnish the Company such information
regarding such Participating Stockholder Party and the distribution of the
Registrable Securities to which such Registration Statement relates as the
Company may from time to time reasonably request in writing.
Section 4.5 REGISTRATION PROCEDURES.
(a) COMPANY OBLIGATIONS. If and whenever the Company is obligated
by the provisions of this Stockholders Agreement to use its commercially
reasonable best efforts to effect the registration of any Registrable
Securities under the Securities Act, the Company shall as promptly as
practicable:
(i) prepare, and as promptly as practicable, but in any event
within 60 days after the receipt of the Demand Notice (subject to
Section 4.2(d) hereof), file with the SEC a Registration Statement
with respect to the Registrable Securities and thereafter use
commercially reasonable best efforts to cause such Registration
Statement to become effective;
(ii) use commercially reasonable best efforts to cause the
Registration Statement to remain effective and to prepare and file
with the SEC any amendments and supplements to the Registration
Statement and to the related Prospectus as may be necessary to keep
the Prospectus current until the earlier of (x) such time at which all
Registrable Securities offered thereby have been sold or disposed of
in accordance with the intended method or methods of disposition by
the Participating Stockholder Parties (or are no longer Registrable
Securities) and in compliance with the provisions of the Securities
Act and (y) 60 days after the Registration Statement is first declared
effective;
19
(iii) notify each Participating Stockholder Party (v) when a
Registration Statement becomes effective, (w) when the filing of a
post-effective amendment to a Registration Statement or supplement to
or amendment of the related Prospectus is required, when the same is
filed, and in the case of a post-effective amendment, when the same
becomes effective, (x) of any request by the SEC for any amendment of
or supplement to a Registration Statement or the related Prospectus or
for additional information, (y) of the entry of any stop order
suspending the effectiveness of such Registration Statement or of the
initiation of any proceedings for that purpose and (z) of the
suspension of the qualification of any Registrable Securities for
offering or sale in any jurisdiction or of the initiation of any
proceedings for that purpose;
(iv) make every reasonable effort (x) to prevent the entry of
any stop order affecting the Registration Statement and (y) to remove
any such stop order, if entered at the earliest possible moment;
(v) furnish to each Participating Stockholder Party and any
underwriters such number of conformed copies of the Registration
Statement as initially filed with the SEC and of each pre-effective
and post-effective amendment or supplement thereto (in each case
including at least one copy of all exhibits thereto and all documents
incorporated by reference therein), such number of copies of each
Prospectus, and such other documents, as such Participating
Stockholder Party or any underwriter reasonably may request to
facilitate the distribution of the Registrable Securities to which
such Registration Statement relates;
(vi) use commercially reasonable best efforts (x) to register or
qualify the Registrable Securities covered by a Registration Statement
under the securities or blue sky laws of such jurisdictions in the
United States as any Participating Stockholder Party reasonably
requests, (y) to keep each such registration or qualification in
effect until the earlier of (A) the time at which all Registrable
Securities covered by such Registration Statement have been sold or
disposed of in accordance with the intended method or methods of
disposition by the Participating Stockholder Parties (or are no longer
Registrable Securities) and in compliance with the provisions of such
securities or blue sky laws and (B) 60 days after the Registration
Statement is first declared effective, and (z) to do any and all other
acts and things which may be reasonably necessary or advisable to
enable each Participating Stockholder Party to consummate the sale or
disposal in such jurisdictions of such Registrable Securities in
accordance with the intended method or methods of disposition by such
Participating Stockholder Party; PROVIDED, HOWEVER, that the Company
shall not for any such purpose be required to qualify generally to do
business as a foreign corporation wherein it would not but for the
requirements of this Section 4.5(a)(vi) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction;
20
(vii) use commercially reasonable best efforts to cause the
Registrable Securities covered by a Registration Statement to be
listed on each national securities exchange on which the Company's
equity securities are then listed at the time of the sale of such
Registrable Securities pursuant to such Registration Statement (or if
no such equity securities are then listed, to qualify as a "national
market system security" with the NASDAQ National Market);
(viii) use its commercially reasonable best efforts to cause
its senior management to attend and make presentations regarding the
prospects of the Company at all meetings with prospective purchasers
of shares of Common Stock that are arranged by any underwriter (after
conferring with senior management regarding possible schedule
conflicts) in connection with any widely distributed, underwritten
offering of such shares of Common Stock;
(ix) notify each Participating Stockholder Party, at any time
when a Prospectus is required to be delivered under the Securities
Act, upon discovery that, or upon the happening of any event as a
result of which, the Prospectus (as then in effect) contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and as
promptly as practicable prepare and furnish to each Participating
Stockholder Party such number of copies of a supplement to or an
amendment of such Prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(x) furnish to each Participating Stockholder Party a signed
counterpart, addressed to such Participating Stockholder Party of
(x) an opinion of counsel for the Company experienced
in securities law matters, dated the effective date of the
Registration Statement (and, if such registration includes an
underwritten offering, dated the date of the closing under the
underwriting agreement), and
(y) one or more "comfort" letters, (1) dated the
effective date of the Registration Statement and, if different,
dated the date of the closing of any sale of Registrable
Securities thereunder, or (2) if such registration includes an
underwritten offering, dated the date of the underwriting
agreement and dated the date of the closing under the
underwriting agreement, in each such case signed by each of the
independent public accountants who have issued an audit report on
the financial statements included or incorporated by reference in
the Registration Statement,
21
covering such matters as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities and
such other matters as such Participating Stockholder Party may
reasonably request;
(xi) otherwise use commercially reasonable best efforts to
comply with all applicable rules and regulations of the SEC, and make
available generally to its stockholders a consolidated earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act covering a period of twelve (12) months beginning within six
months after the effective date of each Registration Statement, which
statements shall cover said twelve (12)-month period; PROVIDED,
HOWEVER, that the Company shall be deemed to have complied with this
clause (xi) if it has complied with Rule 158 under the Securities Act;
(xii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities registered pursuant to such
Registration Statement and a CUSIP number for all such Registrable
Securities, in each case from and after a date not later than the
effective date of such Registration Statement, and to instruct such
transfer agent (x) to release any stop transfer orders with respect to
the Registrable Securities being sold and (y) to furnish certificates
without restrictive transfer legends representing ownership of the
Registrable Securities being sold, in such denominations requested by
any Participating Stockholder Party or the lead underwriter; and
(xiii) enter into such agreements and take such other actions
as each Participating Stockholder Party or the lead underwriter
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities, including, without limitation,
preparing for and participating in such number of "road shows" and all
such other customary selling efforts as the lead underwriter may
reasonably request in order to expedite or facilitate such
disposition.
(b) PARTICIPATING STOCKHOLDER PARTY'S OBLIGATIONS. Each
Participating Stockholder Party, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4.5(a)(ix) hereof,
shall forthwith discontinue disposition of the Registrable Securities until such
Participating Stockholder Party's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4.5(a)(x) hereof or until it is
advised in writing by the Company that the use of the Prospectus may be resumed
and has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus. If so directed by the Company,
each Participating Stockholder Party shall deliver to the Company or destroy all
copies, other than permanent file copies then in such Participating Stockholder
Party's possession, of the Prospectus required to be supplemented or amended.
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Section 4.6. EXPENSES OF REGISTRATION.
(a) DEMAND REGISTRATION. With respect to each Demand Registration
undertaken for the account of any Principal Stockholder Party up to (and
including) the second Demand Registration that becomes effective as set forth
in Section 4.1(b) hereof, and the distribution of the Registrable Securities
pursuant thereto, the Company shall bear all reasonable out-of-pocket fees,
costs and expenses incurred by the Company and each Participating Stockholder
Party, including, without limitation, (i) all SEC and stock exchange
registration and filing fees, (ii) stock exchange listing fees, (iii) 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 Registrable Securities), (iv) printing expenses
(including the expense of printing Prospectuses), (v) messenger and delivery
expenses, (vi) marketing expenses (including, without limitation, expenses in
connection with road shows), (vii) reasonable fees and disbursements of
counsel for the Company and each Principal Stockholder Party and their
independent public accountants, and (viii) all Distribution Expenses (all
such expenses being herein referred to herein as the "REGISTRATION
EXPENSES"). In the case of any Demand Registration undertaken thereafter,
the Participating Stockholder Parties shall bear all Registration Expenses
incurred by the Company and the Participating Stockholder Parties in
connection with such Demand Registration on a pro rata basis according to the
relative number of shares proposed to be included in such registration by the
Participating Stockholder Parties; PROVIDED, HOWEVER, that any Registration
Expenses attributable to any securities included in the Demand Registration
by the Company in accordance with Section 4.1(a)(i)(B) hereof shall be borne
by the Company on a pro rata basis according to the relative number of such
Registrable Securities proposed to be included by it in the registration; and
PROVIDED, FURTHER, that (x) the Company shall bear up to a maximum of $25,000
for each Participating Stockholder Party of the fees and disbursements of
counsel for such Participating Stockholder Party and (y) except to the extent
set forth in the foregoing clause (x), each Participating Stockholder Party
shall bear the fees and disbursements of its counsel, independent public
accountants and other advisors. Notwithstanding the foregoing, in the event
that the Xxxx Stockholders are issued shares of Common Stock in the Merger
that have not been registered under the Securities Act, the Xxxx Stockholders
shall be entitled to exercise an additional Demand Registration in which all
of the Registration Expenses shall be borne by the Company.
(b) PIGGYBACK REGISTRATION. Except as set forth in the following
sentence, the Company shall bear all Registration Expenses of the Company and
each Participating Stockholder Party in connection with any Piggyback
Registration and the distribution of the Registrable Securities pursuant
thereto. Notwithstanding the foregoing, (i) the Company shall bear the fees
and disbursements of counsel for each Participating Stockholder Party up to a
maximum of $25,000 for such Participating Stockholder Party and (ii) the
Company shall not be responsible for (x) except as set forth in the foregoing
clause (i), the fees and disbursements of any counsel, accountant or other
advisor retained by any Participating Stockholder Party in connection with
such Piggyback Registration, and (y) Distribution Expenses related to or
arising from the sale by such Participating Stockholder Party of any
Registrable Securities pursuant to such Piggyback Registration.
23
Section 4.7. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any Registrable Securities pursuant to this Stockholders
Agreement, the Company shall indemnify and hold harmless (i) each
Participating Stockholder Party, (ii) the Affiliates of each Participating
Stockholder Party, (iii) the trustees, partners, directors, officers, agents
and advisors of each Participating Stockholder Party, (iv) each Person who
participates as an underwriter in the offering or sale of such Registrable
Securities and (v) each Person (if any) who controls a Participating
Stockholder Party or any such underwriter within the meaning of either the
Securities Act or the Exchange Act (collectively, the "COMPANY INDEMNIFIED
PARTIES") from and against any and all losses, claims, damages or liabilities
(collectively "LOSSES"), joint or several, to which the Company Indemnified
Parties or any of them may become subject, under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
(x) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus in respect of such
registration, including any amendment thereof or supplement thereto, or (y)
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and, subject to
Section 4.7(c) hereof, the Company shall reimburse the Company Indemnified
Parties for any legal or other out-of-pocket expenses reasonably incurred by
them in connection with investigating or defending any such Loss, action or
proceeding; PROVIDED, HOWEVER, that the foregoing indemnity shall not apply
to the extent that such Loss (or action or proceeding in respect thereof) or
expense arises out of or is based on an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement
or Prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Participating Stockholder
Party expressly for use in the preparation of such Registration Statement or
Prospectus. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of any Company Indemnified Party.
(b) INDEMNIFICATION BY THE PARTICIPATING STOCKHOLDER PARTIES. In
the event of any registration of any Registrable Securities pursuant to this
Stockholders Agreement, each Participating Stockholder Party shall indemnify
and hold harmless (i) the Company, (ii) the Company's directors, officers,
agents and advisors, (iii) each Person who participates as an underwriter in
the offering or sale of Registrable Securities, (iv) each Person (if any)
other than such Participating Stockholder Party who controls the Company
within the meaning of either the Securities Act or the Exchange Act, and (v)
if any one or more other Stockholder Parties are Participating Stockholder
Parties, (w) each such other Stockholder Party, (x) the Affiliates of each
such other Stockholder Party, (y) the trustees, partners, directors,
officers, agents and advisors of each such other Stockholder Party, and (z)
each Person (if any) who controls each such other Stockholder Party within
the meaning of either the Securities Act or the Exchange Act (the
"STOCKHOLDER INDEMNIFIED PARTIES"), from and against any and all Losses,
joint or several, to which the Stockholder Indemnified Parties or any of them
may become subject, under the Securities Act or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based on (x) any untrue
24
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus in respect of such registration,
including any amendment thereof or supplement thereto, or (y) any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if in any such case
such statement or alleged statement or omission or alleged omission was made
in reliance on and in conformity with written information furnished to the
Company by or on behalf of such Participating Stockholder Party expressly for
use in the preparation of such Registration Statement or Prospectus; and,
subject to Section 4.7(c) hereof, such Participating Stockholder Party shall
reimburse the Stockholder Indemnified Parties for any legal or other
out-of-pocket expenses reasonably incurred by them in connection with
investigating or defending any such Loss, action or proceeding. In no event
shall the liability of any Participating Stockholder Party hereunder be
greater in amount than the dollar amount of the gross proceeds (net of
underwriting discounts and commissions) received by such Participating
Stockholder Party and/or any of its Affiliates upon the sale of the
Registrable Securities giving rise to such indemnification obligation. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Stockholder Indemnified Party.
(c) INDEMNIFICATION PROCEDURES. The party seeking indemnification
pursuant to this Section 4.7 is referred to as the "INDEMNIFIED PARTY" and
the party from whom indemnification is sought under this Section 4.7 is
referred to as the "INDEMNIFYING PARTY." The Indemnified Party shall give
prompt written notice to the Indemnifying Party of the commencement of any
action or proceeding involving a matter referred to in Section 4.7(a) or
4.7(b) hereof (an "ACTION"), if an indemnification claim in respect thereof
is to be made against the Indemnifying Party; PROVIDED, HOWEVER, that the
failure to give such prompt notice shall not relieve the Indemnifying Party
of its indemnity obligations hereunder with respect to such Action, except to
the extent that the Indemnifying Party is materially prejudiced by such
failure. The Indemnifying Party shall be entitled to participate in and to
assume the defense of such Action, with counsel selected by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party; PROVIDED,
HOWEVER, that (i) the Indemnifying Party, within a reasonable period of time
after the giving of notice of such indemnification claim by the Indemnified
Party, (x) notifies the Indemnified Party of its intention to assume such
defense and (y) appoints such counsel, and (ii) the Indemnifying Party may
not, without the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such Action.
If the Indemnifying Party so assumes the defense of any such Action, (A) the
Indemnifying Party shall pay all costs associated with, any damages awarded
in, and all expenses arising from the defense or settlement of such Action,
and (B) the Indemnified Party shall have the right to employ separate counsel
and to participate in (but not control) the defense, compromise or settlement
of such Action, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (x) the Indemnifying Party has agreed
to pay such fees and expenses, (y) the Indemnified Party has been advised by
its counsel that there are likely to be one or more defenses available to it
which are different from or additional to those available to the Indemnifying
Party, and in any such case that portion of the reasonable fees and expenses
of such separate counsel that are reasonably related to matters
25
covered by the indemnity provided in this Section 4.7 shall be paid by the
Indemnifying Party or (z) such counsel has been selected by the Indemnified
Party solely due to a conflict of interest which exists between counsel
selected by the Indemnifying Party and the Indemnified Party. If the
Indemnifying Party does not so assume the defense of such Action, the
Indemnified Party shall be entitled to exercise control of the defense,
compromise or settlement of such Action. No Indemnified Party shall settle
or compromise any Action for which itis entitled to indemnification under
this Stockholders Agreement without the prior written consent of the
Indemnifying Party (which consent may not be unreasonably withheld or
delayed). The other party shall cooperate with the party assuming the
defense, compromise or settlement of any Action in accordance with this
Stockholders Agreement in any manner that such party reasonably may request
and the party assuming the defense, compromise or settlement of any Action
shall keep the other party fully informed in the defense of such Action.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 4.7 is unavailable or is insufficient to hold the Indemnified Party
harmless under Section 4.7(a) or 4.7(b) hereof with respect to any Losses
referred to therein for any reason other than as specified therein, then the
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and the Indemnified Party on the other hand with respect to the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, the untrue or alleged untrue statement or omission or alleged
omission relates to information supplied (or omitted to be supplied) by the
Indemnifying Party on the one hand or the Indemnified Party on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or payable by an Indemnified Party as a result of the Losses referred to
above in this Section 4.7(d) shall be deemed to include any legal or other
out-of-pocket expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such Loss, action or
proceeding.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 4.7(d) were determined by pro rata
allocation, by reference to a Participating Stockholder Party's (and/or any
of its Affiliate's) stock ownership in the Company, or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 4.7(d), a Participating Stockholder Party shall
not be required to contribute any amount in excess of the amount by which the
net proceeds received by such Participating Stockholder Party (and/or any of
its Affiliates) from the Registrable Securities that were offered to the
public exceed the amount of any damages which such Participating Stockholder
Party (and/or any of its Affiliates) has otherwise been required to pay by
reason of such untrue statement or 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.
26
If indemnification is available under this Section 4.7, the
Indemnifying Party shall indemnify the Indemnified Party to the full extent
provided in Section 4.7(a) or 4.7(b) hereof, as applicable, without regard to
the relative fault of the Indemnifying Party or Indemnified Party or any
other equitable consideration provided for in this Section 4.7(d).
(e) OTHER RIGHTS. The provisions of this Section 4.7 shall be in
addition to any other rights to indemnification or contribution which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.
(f) PERIODIC PAYMENT. The indemnification and contribution
required by this Section 4.7 shall be made by periodic payment of the amount
thereof during the course of the investigation or defense, as and when bills
are received or Loss or expense is incurred.
Section 4.8. LOCK-UP AGREEMENTS.
(a) STOCKHOLDER PARTIES' LOCK-UP. If and whenever the Company
proposes to register any shares of Common Stock or other equity securities of
the Company, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock or such other securities, under the
Securities Act for sale for its own account (other than on Form S-4 or S-8 or
any like successor forms) or is required to effect the registration of any
Registrable Securities under the Securities Act pursuant to Section 4 hereof,
and, in the case of an underwritten offering, if requested by the lead
underwriter, each Stockholder Party agrees, and will cause its executive
officers, directors, partners and trustees to agree, not to offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, or
announce the offering of, or register, cause to be registered or announce the
intended registration of, any Registrable Securities, including any sale
pursuant to a brokerage transaction under Rule 144 under the Securities Act,
within seven days prior to and 90 days (or such shorter period as may be
requested by the lead underwriter in the case of an underwritten offering)
after the effective date of the Registration Statement (or, in the case of an
underwritten offering, the date of the applicable underwriting agreement)
relating to such registration, except (i) if applicable, as part of such
registration or (ii) in the case of an underwritten offering, with the
consent of the lead underwriter; PROVIDED, HOWEVER, that (x) each Stockholder
Party, or its executive officers, directors, partners and trustees, may offer
and sell Registrable Securities during such period in one or more privately
negotiated transactions, provided that the buyer(s) of such Registrable
Securities agree to be bound by this Section 4.8(a), on the same terms as
such Stockholder Party, until the expiration of such period; (y) this Section
4.8(a) shall in no way limit or delay any Principal Stockholder Party's right
to submit a Demand Notice in accordance with Section 4.1 hereof, or the
Company's obligations with respect thereto prior to the filing with the SEC
of the Registration Statement in respect of such Demand Registration
(including, without limitation, the preparation of such Registration
Statement in accordance with Section 4.4 hereof); and (z) each Stockholder
Party, or its executive officers, directors, partners and trustees, may offer
and sell Registrable Securities during such period to the Company.
(b) COMPANY LOCK-UP. The Company agrees, and will cause its
executive officers and directors to agree, not to offer, sell, contract to sell,
pledge or otherwise dispose of,
27
directly or indirectly, or announce the offering of, or register, cause to be
registered or announce the intended registration of any shares of Common
Stock or other equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for shares of Common Stock or
such other securities, within seven days prior to and 90 days (or such
shorter period as may be requested by the lead underwriter of an underwritten
offering) after the effective date of any Registration Statement with respect
to its Registrable Securities, except (i) as part of such registration or
pursuant to a registration on Form S-4 or Form S-8 (or any like successor
forms) or (ii) with the consent of such lead underwriter.
Section 4.9. CERTAIN LIMITATIONS.
(a) NO INCONSISTENT AGREEMENTS. The Company represents and
warrants to the Stockholder Parties that the Company has not entered, and the
Company agrees that on and after the date hereof the Company shall not enter,
into any agreement with respect to its securities that would in any way
interfere, or which is inconsistent, with the rights granted to the
Stockholder Parties in this Stockholders Agreement. Without limiting the
generality of the foregoing, (i) the Company has not granted to any Person(s)
other than the Stockholder Parties the right to have registered under the
Securities Act (including, without limitation, in a "piggyback" registration)
any shares of Common Stock or other equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for shares of
Common Stock or such other securities, and (ii) on and after the date hereof
the Company shall not grant to any Person(s) other than the Stockholder
Parties any such registration rights, if such registration rights, in the
reasonable judgment of any Stockholder Party, would interfere with, or have
priority over, any of the rights granted to such Stockholder Party in this
Stockholders Agreement.
(b) CHANGES IN COMMON STOCK. The Company shall not effect or
permit to occur any merger, combination, reclassification, recapitalization,
reorganization, restructuring or subdivision of its Common Stock which would
materially adversely affect the ability of the Stockholder Parties to include
Registrable Securities in any registration contemplated by this Stockholders
Agreement or the marketability of such Registrable Securities under any such
registration.
Section 4.10. RULE 144. The Company shall take all actions
reasonably necessary to enable the Stockholder Parties to sell Registrable
Securities without registration under the Securities Act within the
limitations of the exemptions provided by (i) Rule 144 and Rule 144A under
the Securities Act or (ii) any similar rule or regulation hereafter adopted
by the SEC, including, without limiting the generality of the foregoing,
filing on a timely basis all reports required to be filed by the Exchange
Act. Upon request of any Stockholder Party, the Company shall deliver to
such Stockholder Party a written statement as to whether it has complied with
such requirements.
Section 4.11. ASSIGNMENT OF REGISTRATION RIGHTS.
(a) GENERAL. Each Principal Stockholder Party may assign its
registration rights under this Article IV, in whole or in part, to any Person
to which such Stockholder Party Transfers any Registrable Securities (a
"TRANSFEREE"); PROVIDED, HOWEVER, that (i) the Registrable
28
Securities so Transferred constitute at least 5% of the then-outstanding
shares of Common Stock, and (ii) such Transferee enters into a written
assumption agreement with respect to all such obligations so assumed.
(b) RETENTION OF RIGHTS BY STOCKHOLDER PARTY. If a Stockholder
Party beneficially owns any Registrable Securities following any assignment
hereunder to a Transferee that is not an Affiliate of such Stockholder Party,
such assignment shall not limit or otherwise affect such Stockholder Party's
rights, and the Company's obligations, under this Article IV with respect to
such remaining Registrable Securities, except to the extent rights hereunder
were assigned to the Transferee.
(c) RIGHTS OF TRANSFEREE. Except as otherwise provided in this
Section 4.11, the provisions of this Article IV which are for the benefit of
each Stockholder Party shall be for the benefit of and enforceable by any
Transferee(s) (and references in this Article IV to a Stockholder Party shall
be deemed also to refer to such Transferee(s) as appropriate). Without
limiting the generality of the foregoing, if, at the time the Company is
required to deliver a notice to the Stockholder Parties pursuant to Section
4.1(a) or 4.2(a) hereof, one or more Transferees that are not Affiliates of a
Stockholder Party also have rights with respect to such registration pursuant
to an assignment effected in accordance with Section 4.11(a) hereof, the
Company shall deliver a copy of such notice to each such Transferee, and
afford each such Transferee the opportunity to participate in such
registration, on the basis set forth in Section 4.1(a) hereof (subject to
Sections 4.1(a)(iii) and 4.1(a)(iv) hereof) or Section 4.2(a) hereof (subject
to Sections 4.2(a)(ii) and 4.2(b) hereof), as the case may be.
ARTICLE V
ADDITIONAL COVENANTS OF THE COMPANY
Section 5.1. DIMINUTION OF RIGHTS. So long any Principal
Stockholder Party is the beneficial owner of 10% or more of the
then-outstanding shares of Common Stock, the Company shall not, without the
prior written approval of such Principal Stockholder Party:
(a) amend the By-Laws in any manner which diminishes the rights of
any holder or holders of Common Stock, including, without limitation, any
amendment that would (i) limit or regulate the right of holders of Common
Stock to nominate directors or propose new business at a meeting of
stockholders, to call special meetings of stockholders, to act by written
consent (including any provision permitting the Board of Directors to fix a
record date for any actions by written consent initiated by a stockholder) or
to remove directors, (ii) increase the vote or quorum required for any
stockholder action, or (iii) restrict or adversely affect in any material way
the ability to buy, sell, transfer or hold shares of Common Stock; or
(b) adopt a Shareholder Rights Plan (or any plan or agreement of
similar effect).
29
Section 5.2. CHANGE OF CONTROL PROVISIONS. So long any Principal
Stockholder Party is the beneficial owner of 10% or more of the
then-outstanding shares of Common Stock, without the prior written approval
of such Principal Stockholder Party, neither the Company nor any subsidiary
of the Company shall enter into or otherwise permit itself or any of its
properties to become bound by or subject to any material agreement,
instrument or other commitment (including, but not limited to joint venture
or partnership agreements, contracts with customers, suppliers or labor
unions, loan, indemnity or guaranty agreements, indentures, notes, leases or
licenses, mortgages and security agreements) (i) containing a Change of
Control Provision (as defined below) other than (x) an employment or employee
severance agreement or plan or (y) an indenture, loan guaranty, lease or note
agreement or other agreement relating to the incurrence or assumption of
indebtedness (a "DEBT AGREEMENT") that contains a Change of Control Provision
that is consistent in all material respects with the form of Change of
Control Provision that then prevailing market practice would require be
included in a Debt Agreement for a substantially comparable borrower covering
indebtedness substantially similar to that being incurred by the Company
pursuant to such Debt Agreement or (ii) granting to any party thereto or
holder thereof any right to vote for the election of directors of the
Company. The Company agrees that all material agreements, instruments or
other commitments that would contain a Change of Control Provision (whether
or not approved by or requiring the approval of any Stockholder Party and
without regard to the exception in the definition of Change of Control
Provision) shall be submitted to the Board of Directors for approval and
shall have been approved by the Board of Directors prior to the Company
entering into any such agreement. As used herein, a "CHANGE OF CONTROL
PROVISION" shall mean any provision which would give rise to any actual or
potential (A) event of default under a Debt Agreement or (B) restriction on,
requirement of (including, without limitation, any requirement relating to
any put right of securityholders), or other adverse effect on the Company or
any of its subsidiaries as the result of the happening of a "change of
control" of the Company however defined, but including without limitation any
provision relating to (i) beneficial ownership by any Person of more or less
than a specified percentage of outstanding Common Stock, (ii) a change in the
Board of Directors not approved by the previously incumbent directors or
(iii) a merger, sale of all or substantially all the Company's assets or
other business combinations involving the Company or any of its subsidiaries,
except that, in the case of any Stockholder Party referred to in the first
sentence of this Section 5.2, "Change of Control Provision" shall not include
a provision as to which such Stockholder Party notifies the Company in
writing before the Company enters into any agreement, instrument or other
commitment containing such provision that, in the reasonable judgment of such
Stockholder Party, such provision would not have a material adverse effect on
such Stockholder Party's ability to sell the shares of Common Stock then
beneficially owned by such Stockholder Party.
Section 5.3. NO CONFLICT. The Company shall use commercially
reasonable best efforts to ensure that the Certificate of Incorporation and
By-Laws do not and will not at any time conflict with the provisions of this
Stockholders Agreement as then in effect. In the event any such conflict
should nevertheless exist, the provisions of this Stockholders Agreement
shall control to the extent permitted by applicable law.
Section 5.4. ACCESS TO INFORMATION. The Company shall from time
to time furnish to each Stockholder Party information known or reasonably
available to the Company
30
which is requested by such Stockholder Party for purposes of exercising its
rights under this Stockholders Agreement.
Section 5.5. STOCKHOLDER PARTY'S DISCRETION. The Company agrees
and acknowledges that any consent of any Stockholder Party contemplated by
any provision of this Stockholders Agreement (including, without limitation,
Sections 5.1 and 5.2 hereof) would be sought solely in such Stockholder
Party's capacity as a stockholder of the Company and that such Stockholder
Party has the right to give or withhold such consent for any reason in its
sole discretion, including, without limitation, its desire to retain the
level of its ownership percentage of the then-outstanding shares of Common
Stock and/or to preserve the marketability of the shares of Common Stock
beneficially owned by it.
ARTICLE VI
ADDITIONAL COVENANTS OF THE PIROD STOCKHOLDERS
Section 6.1. ACTION BY BAIN STOCKHOLDERS. The Bain Stockholders
agree and acknowledge that the Bain Stockholder Representative has the
exclusive authority to act on behalf of the Bain Stockholders, and that the
Bain Stockholders shall act through the Bain Stockholder Representative, for
purposes of exercising the rights of the Bain Stockholders as a Stockholder
Party under this Stockholders Agreement, including without limitation, the
giving of any notice pursuant to Article IV hereof and the giving of any
consent pursuant to Section 5.1 or 5.2 hereof. The other parties hereto
shall be entitled to rely upon any such action by the Bain Stockholder
Representative as the act of the Bain Stockholders.
Section 6.2. ADDITIONAL PIROD STOCKHOLDERS. Prior to the
Effective Time, no PIROD Stockholder may Transfer any or all of the shares of
capital stock of PIROD beneficially owned by such PIROD Stockholder, or any
options or warrants with respect to the capital stock of PIROD (the
"TRANSFERRED PIROD SHARES") to any other Person (the "PIROD TRANSFEREE")
unless such PIROD Stockholder shall cause the PIROD Transferee, concurrently
with such Transfer, to become a party to this Stockholders Agreement by
executing a counterpart hereof and shall promptly deliver the same to the
Company and to the Trust. Exhibit A or B hereto, as applicable, will
thereupon be deemed amended to include the name of the PIROD Transferee as a
Bain Stockholder or an Other PIROD Stockholder, as the case may be.
Section 6.3 RESTRICTIONS ON TRANSFER IN FIRST YEAR.
Notwithstanding any other provision contained herein, prior to the first
anniversary of the Effective Time, neither the Trust, any Bain Stockholder,
any Other PIROD Stockholder nor any Permitted Successor (as defined below)
shall Transfer any shares of Common Stock unless the Trust and the Bain
Stockholders have previously consented in writing to such Transfer; PROVIDED,
HOWEVER, that this Section 6.3 shall not apply to (i) a Transfer of Common
Stock by any Stockholder Party to an Affiliate of such Stockholder Party,
(ii) a Transfer of Common Stock by any Bain Stockholder to its limited
partners, (iii) a Transfer of Common Stock by PH, Inc. to its stockholders or
(iv) a Transfer of Common Stock by a PIROD Stockholder to a member of his
Family Group (the transferees of shares referred to in clauses (i) - (iv)
being deemed to be "PERMITTED SUCCESSORS"), if prior to such
31
Transfer each transferee of such shares of Common Stock has agreed in writing
to be bound by the provisions of this Agreement, including this Section 6.3
(in which case Exhibit A or B hereto, as applicable, shall be deemed amended
to include each such transferee as a Bain Stockholder or an Other PIROD
Stockholder, as the case may be).
ARTICLE VII
MISCELLANEOUS
Section 7.1. EFFECTIVENESS. Except for Article II (but only
insofar as it relates to actions of the parties to be taken prior to the
Effective Time), Section 4.9, Article VI and this Article VII, which shall be
effective from and after the date hereof, this Stockholders Agreement shall
be effective from and after the Effective Time. In the event that prior to
the Effective Time the Merger Agreement terminates in accordance with the
terms thereof, this Stockholders Agreement shall also terminate and be of no
further force or effect.
Section 7.2. NOTICES. All notices, requests, consents, demands,
waivers, instructions and other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally or by
overnight mail, or sent by telecopier, as follows;
(a) if to the Trust:
Xxxx X. Xxxxx, Xx.
Xxxxxxxxxxx Associates
0 Xxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xx Xxxxxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Bain Stockholders:
Xxxx Xxxxxxx
Xxxx Capital, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
32
with a copy to:
Xxxxx X. Learner, Esq.
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) if to any Other PIROD Stockholder:
as set forth on Exhibit B hereto
(d) if to the Company:
XXXX Industries, Inc.
0000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxx, Xxxx & Xxxxx
Three First National Plaza
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other Person or address as any party may specify by notice in
writing to the other parties. All notices and other communications given to
a party in accordance with the provisions of this Stockholders Agreement
shall be deemed to have been given on the date of actual receipt.
Notwithstanding the preceding sentence, notice of change of address shall be
effective only upon actual receipt thereof.
Section 7.3. AMENDMENTS. Any provision of this Stockholders
Agreement may be amended or modified in whole or in part at any time by an
agreement in writing between the Company and the Stockholder Parties,
executed in the same manner as this Stockholders Agreement. No consent,
waiver or similar act shall be effective unless in writing.
33
Section 7.4. ASSIGNMENT; TRANSFERS TO AFFILIATES.
(a) ASSIGNMENT. This Stockholders Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns. Except as provided
herein, none of the parties hereto may assign this Stockholders Agreement or
any of its rights or obligations hereunder.
(b) ARTICLES II AND V. The rights of any Principal Stockholder
Party specified in Articles II and V hereof may be assigned, in whole or in
part, to any Person to which such Principal Stockholder Party Transfers any
shares of Common Stock (the "TRANSFERRED COMPANY SHARES"), but if and only if
(i) in the event that such Person is an Affiliate of such Principal
Stockholder Party, the requirements set forth in Section 7.4(c) are complied
with and (ii) in the event that such Person is not an Affiliate of such
Principal Stockholder Party, (x) the Transferred Company Shares constitute at
least 5% of the then-outstanding shares of Common Stock and (y) the other
Principal Stockholder Party consents in writing to such assignment (which
consent may be given or withheld in its sole discretion). If such consent is
given, then concurrently with such assignment, the Company, the Stockholder
Parties and the Person to which such shares of Common Stock are Transferred
shall execute an amendment to this Stockholders Agreement with respect to
such assignment.
(c) TRANSFERS TO AFFILIATES. No party hereto (other than the
Company) may Transfer any shares of Common Stock (any/or any rights of such
party hereunder) to any of its Affiliates unless such party shall cause such
Affiliate, concurrently with such Transfer, to become a party to this
Stockholders Agreement by executing a counterpart hereof and shall promptly
deliver the same to the Company and to the other Stockholder Parties.
Exhibit A or B hereto, as applicable, will thereupon be deemed amended to
include the name of such Affiliate as a Bain Stockholder or an Other PIROD
Stockholder, as the case may be.
Section 7.5. GOVERNING LAW. This Stockholders Agreement shall be
construed in accordance with and governed by the internal laws of the State
of Delaware, without giving effect to principles of conflicts of laws of the
State of Delaware or any other jurisdiction that, in either case, would call
for the application of the substantive laws of any jurisdiction other than
Delaware.
Section 7.6. COUNTERPARTS. This Stockholders Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument.
Section 7.7. SPECIFIC PERFORMANCE. The Company and each
Stockholder Party acknowledges and agrees that the parties' respective
remedies at law for a breach or threatened breach of any of the provisions of
this Stockholders Agreement would be inadequate and, in recognition of that
fact, agrees that, in the event of a breach or threatened breach by the
Company or a Stockholder Party of the provisions of this Stockholders
Agreement, in addition to any remedies at law, each of the Stockholder
Parties and the Company, without posting any bond, shall be entitled to
obtain equitable relief in the form of specific performance by the other
party,
34
a temporary restraining order, a temporary or permanent in injunction or any
other equitable remedy which may then be available.
Section 7.8. SEVERABILITY. If any term, provision, covenant or
restriction of this Stockholders Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Stockholders Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, PROVIDED that the parties hereto shall negotiate in
good faith to attempt to place the parties in the same position as they would
have been in had such provision not been held to be invalid, void or
unenforceable.
Section 7.9. ENTIRE AGREEMENT. This Stockholders Agreement
contains the entire agreement between the Stockholder Parties and the
Company with respect to the transactions contemplated hereby, and supersede
all prior agreements among the parties with respect to these matters.
35
IN WITNESS WHEREOF, the parties have caused this Stockholders
Agreement to be executed as of the date first referred to above.
XXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
UNR ASBESTOS-DISEASE CLAIMS TRUST
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: Trustee
XXXX CAPITAL FUND V, L.P.
By: XXXX CAPITAL PARTNERS V, L.P.,
its general partner
By: XXXX CAPITAL INVESTORS V, L.P.,
its general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
36
XXXX CAPITAL FUND V-B, L.P.
By: XXXX CAPITAL PARTNERS V, L.P.,
its general partner
By: XXXX CAPITAL INVESTORS V, L.P.,
its general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
BCIP TRUST ASSOCIATES, L.P.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: a general partner
XXXX CAPITAL V MEZZANINE FUND, L.P.
By: XXXX CAPITAL V MEZZANINE PARTNERS, L.P.,
its general partner
By: XXXX CAPITAL INVESTORS V, INC.,
its general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
37
BCM CAPITAL PARTNERS, L.P.
By: XXXX CAPITAL V MEZZANINE PARTNERS, L.P.,
its general partner
By: XXXX CAPITAL INVESTORS V, INC.,
its general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
PH, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: President
BCIP ASSOCIATES
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: a general partner
38
EXHIBIT A
BAIN STOCKHOLDERS
Xxxx Capital Fund V, X.X.
Xxxx Capital Fund V-B, L.P.
BCIP Trust Associates, X.X.
Xxxx Capital V Mezzanine Fund, L.P.
BCM Capital Partners, L.P.
BCIP Associates
39
EXHIBIT B
OTHER PIROD STOCKHOLDERS
Name Notice Information
---- ------------------
PH, Inc.
40
