1
EXHIBIT 4.3
STERIGENICS INTERNATIONAL
INVESTORS' RIGHTS AGREEMENT
2
TABLE OF CONTENTS
Page
----
I. GENERAL .................................................................................... 1
1.1 Definitions ....................................................................... 1
II. REGISTRATION; RESTRICTION ON TRANSFER ...................................................... 2
2.1 Restrictions on Transfer .......................................................... 2
2.2 Demand Registration ............................................................... 3
2.3 Piggyback Registrations ........................................................... 5
2.4 Form S-3 Registration ............................................................. 6
2.5 Expenses of Registration .......................................................... 6
2.6 Obligations of the Company ........................................................ 7
2.7 Termination of Registration Rights ................................................ 8
2.8 Delay of Registration ............................................................. 8
2.9 Indemnification ................................................................... 8
2.10 Assignment of Registration Rights ................................................. 10
2.11 Amendment of Registration Rights .................................................. 11
2.12 Limitation on Subsequent Registration Rights ...................................... 11
2.13 "Market Stand-Off" Agreement ...................................................... 11
III. COVENANTS OF THE COMPANY ................................................................... 11
3.1 Basic Financial Information and Reporting ......................................... 11
3.2 Inspection Rights ................................................................. 12
3.3 Confidentiality of Records ........................................................ 12
3.4 Reservation of Common Stock ....................................................... 13
3.5 Stock Vesting ..................................................................... 13
3.6 Key Man Insurance ................................................................. 13
3.7 Proprietary Information and Inventions Agreement .................................. 13
3.8 Real Property Holding Corporation ................................................. 13
3.9 Other Affirmative Covenants of the Company ........................................ 13
3.10 Negative Covenants of the Company ................................................. 15
3.11 Termination of Covenants .......................................................... 16
IV. RIGHTS OF FIRST REFUSAL .................................................................... 16
4.1 Subsequent Offerings .............................................................. 16
4.2 Exercise of Rights ................................................................ 16
4.3 Issuance of Equity Securities to Other Persons .................................... 17
4.4 Termination of Rights of First Refusal ............................................ 17
4.5 Transfer of Rights of First Refusal ............................................... 17
4.6 Excluded Securities ............................................................... 17
i.
3
TABLE OF CONTENTS
(continued)
Page
----
V. REPURCHASE ................................................................................ 18
5.1 Repurchase Rights ................................................................ 18
5.2 Deposit of Funds ................................................................. 20
5.3 Surrender of Certificates ........................................................ 20
5.4 Termination of Rights ............................................................ 20
VI. MISCELLANEOUS ............................................................................. 21
6.1 Governing Law .................................................................... 21
6.2 Survival ......................................................................... 21
6.3 Successors and Assigns ........................................................... 21
6.4 Entire Agreement ................................................................. 21
6.5 Separability ..................................................................... 21
6.6 Amendment and Waiver ............................................................. 21
6.7 Delays or Omissions .............................................................. 22
6.8 Notices .......................................................................... 22
6.9 Attorneys' Fees .................................................................. 22
6.10 Titles; and Subtitles ............................................................ 22
6.11 Counterparts ..................................................................... 22
ii.
4
INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT (the "Agreement") is entered into as
of the 20th day Of September, 1993, by and among STERIGENICS INTERNATIONAL, a
California corporation (the "Company"), and the purchasers of shares of the
Company's Common Stock, Series B Preferred Stock and Series; C Preferred Stock
(the "Shares") set forth on Exhibit A of that certain, Stock Purchase Agreement
of even date herewith (the "Purchase Agreement"). The purchasers of the Shares
shall be referred to hereinafter as the "Purchasers" and each individually as a
"Purchases."
RECITALS
WHEREAS, as a condition to purchasing the Shares, the Purchasers have
requested that the Company extend to them registration rights, information
rights, a right of first refusal, repurchase rights and certain other rights as
set forth below.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Purchase Agreement, the parties mutually agree as follows:
I.
GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"FORM S-3" Means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"HOLDER" means any person owning of record Registrable Securities or
any assignee of record of such Registrable Securities in accordance with Section
2.10 hereof.
"REGISTER," "REGISTERED," AND "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means (i) Common Stock of the Company issued
or issuable upon conversion of the Shares; and (ii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement such
1.
5
above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferor's rights under Article II of this Agreement
are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of a
single special counsel for the Holders, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"SHARES" shall mean the Series C Preferred Stock, the Series B
Preferred Stock and the Common Stock held by the Purchasers (as set forth on
Exhibit A to the Purchase Agreement).
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
II.
REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or
any portion of the Shares (or the Common Stock issuable upon the conversion
thereof) unless and until the transferee has agreed in writing for die benefit
of the Company to be bound by this Section 2.1, provided and to the extent such
Sections are then applicable and:
(i)There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) (A) Such Holder shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the
2.
6
circumstances surrounding the proposed disposition, and (B) if reasonably
requested by the Company, such Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the Securities
Act. It is agreed that the Company will not require opinions of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances.
(iii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such registration statement or opinion of counsel shall
be necessary for a transfer by a Holder which is (A) a partnership to its
partners in accordance with partnership interests, or (B) to the Holder's
family, member or trust for the benefit of an individual Holder, provided that
the transferee agrees to be subject to the terms of this Section 2.1 to the same
extent as if he were an original Holder hereunder.
(b) Etch certificate representing shares shall (unless
otherwise permitted by the provisions of the Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws or as provided
elsewhere in the Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR BASED ON
OTHER WRITTEN EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN; COMPLIANCE THEREWITH.
(c) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by the Company of an order of
the appropriate blue sky authority authorizing such removal.
2.2 DEMAND REGISTRATION.
2.2.1 Subject to the conditions of this Section 2.2, if the
Company shall receive at any time after September 30, 1996 a written request
from the Holders of more than thirty-five percent (35%) of the Company's
convertible Preferred Stock then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Securities Act covering the
3.
7
registration of Registrable Securities having an aggregate offering price to the
public, in excess of $10,000,000, then the Company shall, within thirty (30)
days of the receipt thereof, give written notice of such request to all Holders,
and subject to the limitations of Section 2.2.2, effect, as soon as practicable,
the registration under the Securities Act of all Registrable Securities that the
Holders request to be registered.
2.2.2 If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2.2 and the Company shall include such information in the written
notice referred to in Section 2.2.1. In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 2.2, if the underwriter
advises the Company in writing that marketing factors require a limitation of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders). Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.
2.2.3 The Company shall not be obligated. to effect more than
two (2) registrations pursuant to this Section 2.2.
2.2.4 The Company shall not be required to effect a
registration pursuant to this Section 2.2 during the period starting with the
date of filing of, and ending on the date one hundred eighty, (180) days
following the effective date of the registration statement pertaining to the
initial public offering of the Company's common stock: (the "Initial Offering"),
provided that the Company is making reasonable and good faith efforts to cause
such registration statement to become effective. In addition, the Company shall
not be required to effect a registration pursuant to this Section 2.2 if within
thirty (30) days of receipt of a written request form Initiating Holders
pursuant to Section 2.2.1, the Company gives notice to be Holders of the
Company's intention to file registration statement for its Initial Offering
within ninety (90) days.
2.2.5 Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
2.2, a certificate signed by the Chairman of the Board stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such
4.
8
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to defer
such filing for a period of not more than one hundred and twenty (120) days
after receipt of the request of the Initiating Holders; provided that such right
to delay a request shall be exercised by the Company no more than once in any
one-year period,
2.3 PIGGYBACK REGISTRATION. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans and corporate reorganizations) and will afford each such Holder an
opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder. Each Holder desiring to include in
any such registration statement all or any part of the Registrable Securities
held by it shall, within twenty (20) days after receipt of the above-described
notice from the Company, so notify the Company in writing. Such notice shall
state the intended method of disposition of the Registrable Securities by such
Holder. If a Holder decides not to include all of its Registrable Securities in
any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
2.3.1 UNDERWRITING. If the registration statement under which
the Company gives notice under this Section 2.3 is for an underwritten offering,
the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder to be included in a registration pursuant to
this Section 2.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
shareholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting, except that in no
event shall the amount of securities of the selling Holders included in the
registration be reduced below twenty-five percent (25%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such registration does not include shares of any other selling
shareholders, in which event any or all of the Registrable Securities of the
Holders may be excluded in accordance with the immediately preceding sentence.
In no event will shares of any other selling shareholder be included in such
registration which would
5.
9
reduce the number of shares which may be included by Holders without the written
consent of a majority of the Holders of the Registrable Securities proposed to
be sold in the offering.
2.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests that
the Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
2.4.1 promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders
of Registrable Securities; and
2.4.2 as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as any specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4: (i) if
Form S-3 is not available for such offering by the Holders, (ii) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any at an aggregate price to the public of less than
$500,000, (iii) if the Company shall furnish to the Holders a certificate signed
by the Chairman of the Board of Directors of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
serious, detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Holder or Holders under this Section 2.4, (iv) if the Company has, within the
twelve (12) month period preceding the date of such request, already effected
one (1) registration on Form S-3 for the Holders pursuant to this Section 2.4,
(v) if the Company has already effected two (2) registrations on Form S-3 for
the Holders pursuant to this Section 2.4. or (vi) in any particular jurisdiction
in which the Company would be required to qualify to do business or to execute a
general consent to service off process in effecting such registration,
qualification or compliance.
2.4.3 Subject to the foregoing, the Company shall file a Form
S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders.
2.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 2.2, Section 2.3 or Section 2.4 herein shall be borne by the Company.
All Selling Expenses incurred in connection with any registrations hereunder,
shall be borne by the holders of the securities so registered pro rata on the
basis of the number of shares so registered. The Company shall not, however, be
required to pay for expenses of any registration proceeding begun pursuant to
Section 2.2 or 2.4, the
6.
10
request of which has been subsequently withdrawn by the Initiating Holders
unless (a) the withdrawal is based upon material adverse information concerning
the Company of which the Initiating Holders were not aware at the time of such
request or (b) the Holders of a majority of Registrable Securities agree to
forfeit their right to one requested registration pursuant to Section 2.2 or
Section 2.4 (in which event such right shall be forfeited by all Holders). If
the Holders are required to pay the Registration Expenses, such expenses shall
be borne by the holders of securities (including Registrable Securities)
requesting such registration in proportion to the number of shares for which
registration was requested. If the Company is required to pay the Registration
Expenses of a withdrawn offering pursuant to Section 2.5(a), then the Holders
shall not forfeit their rights pursuant to Section 2.2 or Section 2.4 to a
demand registration.
2.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
2.6.1 Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days.
2.6.2 Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
2.6.3 Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
2.6.4 Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
2.6.5 In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
2.6.6 Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits
7.
11
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
2.6.7 In the event of an underwritten public offering,
furnish, at the request of a majority of the Holders participating in the
registration, on the date that such Registrable Securities are delivered to the
underwriters for sale (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters and to the Holders
requesting registration of Registrable Securities and (ii) a letter dated as of
such date, from the independent certified public accountants of the Company, in
form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering addressed to the
underwriters.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Article II shall terminate and be of no further force and effect
seven (7) years after the date following the Company's Initial Offering. In
addition, any individual Holder's registration rights shall terminate if all
Registrable Securities held by and issuable to such Holder may be sold pursuant
to Rule 144 underside Securities Act during any single 90 day period.
2.8 DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise denying any such registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Article II.
2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
2.9.1 To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers and directors of
each Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended, (the " 1934 Act"), against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the Securities Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or arise
based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law in connection with the offering covered
by such registration statement; and, subject to the provisions of Section 2.9.3
below, the Company will reimburse each such Holder, partner, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably
8.
12
incurred by them in connection with investigating or defending any such loss
claim damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 2.9.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
2.9.2 To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company with the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors or
officers or all person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder may become
subject under the Securities Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and on, to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.9.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.9 exceed the gross proceeds from the offering
received by such Holder.
2.9.3 Promptly after receipt by an indemnified party under
this Section 2.9 of notice of the commencement of any action (including any
governmental actions, such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable
9.
13
time of the commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 2.9, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 2.9.
2.9.4 If the indemnification provided for in this Section 2.9
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim,, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
2.9.5 The foregoing indemnity agreements of the Company and
Holders are subject to the condition that, insofar as they relate to any
Violation made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the SEC at the time the registration statement
in question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity agreement
shall not inure to the benefit of any person if a copy of the Final Prospectus
was furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
2.9.6 The obligations of the Company and Holders under this
Section 2.9 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
2.10 ASSIGN OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Article II may be assigned by a
Holder to a transferee or assignee of Registrable Securities; provided, however,
that no such transferee or assignee shall be entitled to registration rights
under Sections 2.2, 2.3 or 2.4 hereof unless it acquires at least one hundred
thousand (100,000) shares of Registrable Securities (as adjusted for stock
splits and combinations) and the Company shall, within twenty (20) days after
such transfer, be furnished with written notice of the name and, address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned. Notwithstanding the foregoing, rights to
cause the Company to register securities may be assigned to any subsidiary,
parent, general partner or limited partner of a Holder.
10.
14
2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Article II
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities. Any amendment or waiver effected in accordance with this Section
2.11 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Article II, Holders of Registrable Securities hereby agree
to be bound by the provisions hereunder.
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of
this Agreement, the Company shall not, without the prior written consent of the
Holders of a majority of the Registrable Securities, enter into any agreement
with any holder or prospective holder of any securities of the Company providing
for the granting to such holder of any registration rights unless such rights
are subordinate to the registration rights set forth herein.
2.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, a Purchaser
holding any of the Company's coming securities shall not sell or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company
held by such Purchaser (other than those included in the registration) for a
period specified by the underwriters not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that:
(i) such agreement shall apply only to the Company's Initial
Offering; and
(ii) all officers and directors of the Company and holders of
at least one percent (1%) of the Company's voting securities enter into similar
agreements.
The obligations described in this Section 2.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares (or securities) subject to
the foregoing restriction until the end of said one hundred eighty (180) day
period.
III.
COVENANTS OF THE COMPANY
3.1 BASIC FINANCIAL INFORMATION AND REPORTING.
3.1.1 The Company will maintain true books and records of
account in which full and correct entries will be made of all its business
transactions pursuant to a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied,
and will set aside on its books all such proper accruals and reserves as shall
be required under generally accepted accounting principles consistently applied.
11.
15
The Company will also maintain true and complete records and supporting
documentation for purposes of calculating and verifying "after-tax net proceeds"
from the "DOE Lawsuit," each as defined in Section III.B(4)(1) of the Company's
Amended and Restated Articles of Incorporation, and shall allow each Purchaser
to inspect such records and documentation pursuant to Section 3.2 below.
3.1.2 As soon as practicable after the end of each fiscal year
of the Company, and have any event within 90 days thereafter, the Company will
furnish each Purchaser a consolidated balance sheet of the Company, as at the
end of such fiscal year, and a consolidated statement of income and a
consolidated statement of cash flows of the Company, for such year, all prepared
in accordance with generally accepted accounting principles and setting forth in
each case in comparative form the figures for the previous fiscal year, all in
reasonable detail. Such financial statements shall be accompanied by a import
and opinion thereto by independent public accountants of national standing
selected by the Company's Board of Directors.
3.1.3 As long as a Purchaser holds not less than 100,000
shares of Registrable Securities, the Company will furnish such Purchaser, as
soon as practicable after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Company, and in any event within
thirty- (30) days thereafter, a consolidated balance sheet of the Company as of
the end of cut such quarterly period, and a consolidated statement of income and
a consolidated statement of cash flows of the Company for such period and for
the current fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made.
3.1.4 As long as a Purchaser holds not less than 100,000
shares of Registrable Securities, the Company will furnish such Purchaser (i)
within thirty (30) days after the beginning of eat fiscal year, an annual budget
and operating plans for such fiscal year, which budget and operating plans shall
have been approved by the Company's Board of Directors; and (ii) within thirty
(30) days after the end of each month, an unaudited balance sheet and statements
of income and cash flows, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made, but such
statement shall set forth applicable budget figures and variances from budget.
3.2 INSPECTION RIGHTS. Each Purchaser shall have the right to visit and
inspect any of the properties of the Company or any of its subsidiaries, and to
discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with its officers, all at such reasonable times and as often as may
be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 3.2 with respect to a competitor of the Company or
with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
3.3 CONFIDENTIALITY OF RECORDS. Each Purchaser agrees to use, and to
use its best efforts to insure that its authorized representatives use, the same
degree of care as such
12.
16
Purchaser uses to protect its own confidential information to keep confidential
any information furnished to it which the Company identifies as being
confidential or properitary (so long as such information is not in the public
domain), except that such Purchaser may disclose such proprietary or
confidential information to any partner, subsidiary or parent of such Purchaser
for the purpose of evaluating its investment in the Company as long as such
partner, subsidiary or parent is advised of the, confidentiality provisions of
this Section 3.3.
3.4 RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Series B and Series C Preferred Stock, all Common Stock issuable from time to
time upon such conversion.
3.5 STOCK VESTING. Unless otherwise approved by the Board of Directors,
all stock and stock equivalents issued after the date of this Agreement to
employees, directors and consultants will be subject to vesting restrictions for
at least a four-year period. The repurchase option, to which all unvested shares
of stock shall be subject, shall provide that upon termination of the employment
of the shareholder, with or without cause, the Company or its assignee (to the
extent permissible under applicable securities laws) retain the option to
repurchase at cost any unvested shares held by such shareholder.
3.6 KEY MAN INSURANCE. The Company will use its best efforts to obtain
and maintain in full force and effect term life insurance in the amount of two
million dollars ($2,000,000) on the life of Xxxxx X. Xxxxxxx naming the Company
as beneficiary.
3.7 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company shall
require all employees to execute and deliver it Proprietary Information and
Inventions Agreement substantially in the form attached to the Purchase
Agreement as Exhibit H.
3.8 REAL PROPERTY HOLDING CORPORATION. The Company covenants that it
will operate in a manner such that it will not become a "United States real
property holding corporation" as that term is defined in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder
("FIRPTA"). The Company agrees to make determinations as to its status as a
USRPHC, and will file statements concerning those determinations with the
Internal Revenue Service, in the manner and at the times required under Reg
Section 1.897-2(h), or any supplementary or successor provision thereto. Within
30 days of a request from an Purchaser or any of is partners, the Company will
inform the requesting party, in the manner set forth in Reg. Section 1.897-
2(h)(1)(iv) or any supplementary or successor provision thereto, whether that
party's interest in the Company constitutes a United States real property
interest (within the meaning of Internal Revenue Code Section 897(c)(1) and the
regulations thereunder) and whether the Company has provided to the Internal
Revenue Service all required notices as to its USRPHC status
3.9 OTHER AFFIRMATIVE COVENANTS OF THE COMPANY. Without limiting any
other covenants and provisions hereof, the Company covenants and agrees that it
will perform and observe the following covenants and provisions, and will not,
without approval of holders of the Shares in accordance with Section 6.5, amend
or revise any terms of this Section 3.9:
13.
17
3.9.1 PUNCTUAL PAYMENT. Redeem or repurchase the Shares at the
time and place and in the manner provided in the Company's Articles of
Incorporation and in Article V herein.
3.9.2 PAYMENT OF TAXES. Pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or business, or upon any properties belonging to it, prior to
the date on which penalties attach thereto, and all lawful claims, which, if
unpaid, might become a lien or charge upon any properties of the Company,
provided that the Company shall not be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by appropriate
proceedings if the Company shall have set aside on its books adequate reserves
with respect thereto as shall be determined by its Board of Directors.
3.9.3 MAINTENANCE OF INSURANCE. Maintain with responsible and
reputable insurance companies or associations insurance in such amounts and
covering such risks as is usually carried by companies of similar size engaged
in similar businesses and owning similar properties in the same general areas in
which the Company operates.
3.9.4 PRESERVATION OF CORPORATE EXISTENCE. Preserve and
maintain, its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified as a foreign
corporation in each jurisdiction in which such qualification is necessary or
desirable in view of its business and operations or the ownership of its
properties. Preserve and maintain all material licenses and other rights to use
patents, processes, licenses, trademarks, trade names, inventions, intellectual
property rights or copyrights owned or possessed by it and necessary to the
conduct of its business.
3.9.5 COMPLIANCE WITH LAWS. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority, noncompliance with which could materially adversely affect its
business or condition, financial, or otherwise, except non-compliance being
contested in good faith through appropriate proceedings so long as the Company
shall have set up sufficient reserves, if any, required under generally accepted
accounting principles with respect to such items.
3.9.6 MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve
all of its properties necessary or useful in the proper conduct of its business,
in good repair, working order and condition, ordinary wear and tear excepted.
3.9.7 NEW DEVELOPMENTS. Cause all material technological or
other proprietary developments, inventions, discoveries or improvements by the
Company's employees to be fully documented in accordance with the prevailing
industry practice and, where possible and appropriate, to file and prosecute
United States and foreign patent applications relating to and protecting such
developments on behalf of the Company.
3.9.8 FINANCING. Promptly, fully and have detail, inform the
Board of Directors in advance of any commitments or contracts relating to
financing of any nature in which the
14.
18
Company pledges corporate assets, other than under purchase money security
interests secured only by the assets purchased with such financing in the
ordinary course of business.
3.9.9 BOARD OF DIRECTORS; INDEMNIFICATION. The Board of
Directors shall not consist of more than five (5) directors, and one member of
the Board of Directors designated by the Purchasers will be appointed to the
Executive Committee of the Board of Directors, if and when such Executive
Committee is formed. The Articles of Incorporation or Bylaws of the Company
shall at all times provide for the indemnification of the Board of Directors to
the full extent provided by the law of the jurisdiction in which the Company is
organized. If requested by the Board of Directors, the Company shall use its
best efforts to obtain and maintain directors and officers insurance with
coverage and premium levels consistent with policies carried by companies of
similar size engaged in similar businesses, provided that such insurance can be
obtained for reasonable premiums, as determined by the Board of Directors. The
Company shall pay for reasonable travel and living expenses of the members of
the Board of Directors designated by the Purchasers in attending meetings of the
Board of Directors and committees thereof and in conducting other business on
behalf of the Company.
3.10 NEGATIVE COVENANTS OF THE COMPANY. Without limiting any other
covenants and provisions hereof, the Company covenants and agrees that it will
not take the actions contained in the following covenants and provisions, and
will not, without the approval of holders of the Shares hi accordance with
Section 6.5, amend or revise any terms of this Section 3.10.
3.10.1 MAINTENANCE OF OWNERSHIP OF SUBSIDIARIES. Create any
subsidiary that is not a wholly-owned subsidiary, sell or otherwise dispose of
any shares of capital stock of any subsidiary, except to the Company or another
subsidiary, or permit any subsidiary to issue, sell or otherwise dispose of any
shares of its capital stock or the capital stock of any subsidiary except to the
Company or another subsidiary; provided, however, that nothing herein contained
shall prevent (i) any merger, consolidation or other form of acquisition
transaction with Xxxxxxxx Laboratories, Inc. ("Xxxxxxxx") or any affiliate of
Xxxxxxxx. or (ii) any merger, consolidation or transfer of assets permitted
under Article III, Section B(6)(v) of the Company's Amended and Restated
Articles of Incorporation.
3.10.2 DEALINGS WITH AFFILIATES AND OTHERS. Except as set
forth on the Schedule of Exceptions to the Purchase Agreement, enter into any
transaction, including, without limitation, any loans or extensions of credit or
royalty agreements, with any officer or director of the Company or any
subsidiary or holder of any class of capital stock of the Company, or any member
of their respective immediate families or any corporation or other entity
directly or indirectly controlled by one or more of such officers, directors or
stockholders or members of their immediate families (other than any such
transactions in the ordinary course of business which are in an amount not in
excess of $10,000 unless such transaction is approved in advance by a majority
of the members of the Board of Directors who are disinterested with respect to
that transaction.
15.
19
3.10.3 CHANGE IN NATURE OF BUSINESS. Make any material change
in the nature of its business as carried on at the date hereof or as
contemplated in written materials delivered to the Purchasers prior to the date
hereof.
3.10.4 AGREEMENTS WITH EMPLOYEES FOR THE PURCHASE OF
SECURITIES. Accelerate or terminate the vesting schedules under which
restrictions on transfer of capital stock of the Company lapse over a period of
time with respect to capital stock held by employees, officers or directors of
the Company, increase beyond 1,134,730 the number of shares reserved for
issuance (pursuant to options or otherwise) pursuant to stock plans or
arrangements for the benefit of employees of or consultants to the Company, or
issue, sell or exchange, agree to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange to officers, employees and/or consultants,
shares of Common Stock, or options exercisable therefor, including options
outstanding on the date of this Agreement (all of the foregoing limitations to
be equitably adjusted in the event of any stock split, combination,
reclassification or other similar event occurring on or after the date of this
Agreement), except as issued at fair market value, or granted with an exercise
price equal to fair market value, at the time of issuance or grant, to officers,
employees or consultants of the Company and any subsidiary of the Company.
3.11 TERMINATION OF COVENANTS. All covenants of the Company contained
in Article III of this Agreement shall expire and terminate as to each Purchaser
after the time of effectiveness of the Company's first firm commitment
underwritten public offering registered under the Securities Act.
IV.
RIGHTS OF FIRST REFUSAL
4.1 SUBSEQUENT OFFERINGS. Each Purchaser shall have a right of first
refusal to purchase its pro rata share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
4.6 hereof. Each Purchaser's pro rata share is equal to the ratio of the number
of shares of the Company's Common Stock (including all shares of Common Stock
issued or issuable: upon conversion of Series B or Series C Preferred Stock) of
which such Purchaser is seemed to be a holder immediately prior to the issuance
of such Equity Securities to the total number of shares of the Company's
outstanding Common Stock (including all shares of Common Stock issuable upon
conversion of all outstanding shares of Series B and Series C Preferred Stock).
The term "Equity Securities" shall mean (i) any stock or similar security of the
Company, (ii) any security convertible, with or without consideration, into any
stock or similar security (including any option to purchase such a convertible
security), (iii) any security carrying any warrant or right to subscribe to or
purchase any stock or similar security or (iv) any such warrant or right.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Purchaser written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each
16.
20
Purchaser shall have fifteen (15) days from the giving of such notice to agree
to purchase its pro rata share of the Equity Securities for the price and upon
the terms and conditions specified in the notice by giving written notice to the
Company and stating therein the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity Securities to any Purchaser who would cause the Company to be
in violation of applicable federal securities laws by virtue of such offer or
sale.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Purchasers elect to purchase their pro rata share of the Equity Securities, then
the Company shall promptly notify in writing the Purchasers who do so elect and
shall offer such Purchasers the right to acquire such unsubscribed shares
("Subscription Notice"). The Purchasers shall have five (5) days after receipt
of the Subscription Notice to notify the Company of its election to purchase all
or a portion thereof of the unsubscribed shares. If the Purchasers fail to
exercise in full the rights of first refusal, the Company shall have sixty (60)
days thereafter to sell the Equity Securities in respect of which the
Purchasers' rights were not exercised, at a price and upon terms and conditions
no more favorable to the purchasers thereof than specified in the Company's
notice to the Purchasers pursuant to Section 4.2 hereof If the Company has not
sold such Equity Securities within such sixty (60) days, the Company shall not
thereafter issue or sell any Equity Securities, without first offering such
securities to the Purchasers in the manner provided above.
4.4 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Article IV shall terminate upon the time of effectiveness of
the Company's first firm commitment public offering registered under the
Securities Act.
4.5 TRANSFER OF RIGHTS OF HOW REFUSAL. The rights of first refusal of
each Purchaser under this Article IV may be transferred to any constituent
partner or affiliate of such Purchaser, to any successor in interest to all or
substantially all the assets of such Purchaser, or to a transferee who acquires
one hundred twenty-five thousand (125,000) shares of Registrable Securities (as
adjusted for stock splits and combinations), provided, the Company must
received, within twenty (20) days after such transfer, written notice of the
name and address of such transferee or assignee and the securities with respect
to which the rights of first refusal are being transferred,
4.6 EXCLUDED SECURITIES. The rights of first refusal established by
this Article IV shall have no application to any of the following Equity
Securities:
4.6.1. Shares of Common Stock (and/or options, warrants or
other Common Stock purchase rights issued pursuant to such options, warrants or
other rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary, pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board;
4.6.2 stock issued pursuant to any rights or agreements
outstanding as of me dam of this Agreement; options and warrants outstanding as
of the date of this Agreement and stock
17.
21
issued pursuant to any such rights or agreements granted after the date of this
Agreement, provided that the rights of first refusal established by this Article
IV applied with respect to the initial sale or grant by the Company of such
rights or agreements;
4.6.3 any Equity Securities issued in connection with a
strategic partnership, merger, consolidation, acquisition or similar business
combination, provided such transaction is approved by the Company's Board of
Directors;
4.6.4 any Equity Securities that are issued by the Company as
part of a public offering referred to in Section 4.4 hereof;
4.6.5 shares of Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;
4.6.6 shares of Common Stock issued upon conversion of the
Series B or Series C Preferred Stock; and
4.6.7 any Equity Securities issued pursuant to any equipment
leasing arrangement, or bank financing.
V.
REPURCHASE
5.1 REPURCHASE RIGHTS. The Company shall be obligated to repurchase the
Registrable Securities as follows:
5.l.l At any time after September 30, 2000, the holders of a
majority of the Registrable Securities then outstanding may require the Company
to repurchase all of the outstanding Registrable Securities for cash at a price
of $11.00 per share as to the Series B and Series C Preferred Stock plus all
accrued or declared but unpaid dividends on such shares (the "Preferred
Repurchase Price"), and $9.15 per share as to the Common Stock plus all accrued
or declared but unpaid dividends on such shares (the "Common Repurchase Price"),
by giving notice (the "Exercise Notice") to the Company, payable as provided
below. Such Exercise Notice shall specify the repurchase date (the "Repurchase
Date"), which date shall be at least 60 days from the effective date of the
Exercise Notice. The Preferred Repurchase Price and the Common Repurchase Price
shall hereinafter be referred to collectively hereinafter as the "Repurchase
Price".
5.1.2 The Company shall repurchase all of the Registrable
Securities to be repurchased hereunder on the Repurchase Date specified in the
Exercise Notice. Notwithstanding the foregoing, if, as of the end of the quarter
immediately preceding the Repurchase Date, the Company had a Current Ratio as
defined below) of less than one, then it shall repurchase such shares in three
installments of equal amount, with the first installment on the Repurchase Date
specified in die Exercise Notice, the second installment on the first
18.
22
anniversary of such date and the third installment on the second anniversary of
such date. Each such installment date shall be a "Repurchase Date" as described
herein. For purposes of this Section 5.1.2, "Current Ratio" shall mean the
Company's current assets divided by the Company's current liabilities, as
determined by reference to the Company's financial statements (prepared in
accordance with generally accepted accounting principles, to the extent
applicable for unaudited interim financial statements, consistent with the
Company's historical financial statements) for the quarter immediately preceding
the Repurchase Date.
5.1.3 At least thirty (30) but no more than sixty (60) days
prior to a Repurchase Date, the Company shall send a notice (a "Repurchase
Notice") to all holders of Registrable Securities setting forth (a) the
Repurchase Price for the shares to be repurchased; and (b) the place at which
such holders may obtain payment of the Repurchase Price upon surrender of their
share certificates. If the Company does not have sufficient funds legally
available to repurchase all shares to be repurchased at such Repurchase Date,
then it shall repurchase such shares pro rata (based on the portion of the
aggregate Repurchase Price payable to them) to the extent possible and shall
repurchase the remaining shares to be repurchased as soon as sufficient funds
are legally available.
5.1.4 If, as a result of settlement of or a final judgment
obtained in connection with the lawsuit Radiation Sterilizers, Inc. v. United
States of America, et al., , filed in the U.S. District Court, Eastern District
of Washington on April 16, 1991, or any other lawsuit arising out of the same
set of facts and circurnstances (the "DOE Lawsuit"), the Company is obligated to
pay to other parties in such lawsuit an amount in excess of $1,000,000,
notwithstanding any appeal rights the Company may have, the following provisions
shall apply:
(a) The holders of a majority of the Registrable
Securities then outstanding may require the Company to repurchase all or any
portion of the outstanding Registrable Securities for cash at a base price
(escalated in each case as provided in Section 5.1.4(b) below) of $11.00 per
share as to the Series B and Series C Preferred Stock plus all accrued or
declared but unpaid dividends on such shares, and $9.15 per share as to the
Common Stock plus all accrued or declared but unpaid dividends on such shares,
by giving notice (the "DOE Exercise Notice") to the Company, payable as provided
below. Such DOE Exercise Notice shall be delivered to the Company within 90 days
of the settlement or final judgment in the DOE Lawsuit, and shall specify the
repurchase date (the "DOE Repurchase Date"), which date shall be at least 90
days from the effective date of the DO]3 Exercise Notice. The repurchase rights
provided for in this Section 5.1.4 may be exercised only on one occasion.
(b) The base price of each of the Series B and Series
C Preferred Stock and of the Common Stock, shall escalate from the date of this
Agreement through the DOE Repurchase Date at an annual compounded rate of 6.0%,
calculated based on the number of days in such period. The escalated price for
the Series B and Series C Preferred Stock in effect as of the DOE Repurchase
Date shall be the "DOE Preferred Repurchase Price," and the escalated price for
the Common Stock in effect as of the DOE Repurchase Date shall be the "DOE
Common Repurchase Price." The DOE Preferred Repurchase Price and the DOE
19.
00
Xxxxxx Xxxxxxxxxx Price shall hereinafter be referred to collectively hereunder
as the "DOE Repurchase Price."
(c) The Company shall repurchase all of the Registrable
Securities to be repurchased pursuant to the DOE Exercise Notice on the DOE
Repurchase Date specified therein. If and to the extent the Company is unable to
repurchase all shares to be repurchased on the DOE Repurchase Date, the Company
shall within 15 days of the DOE Exercise Notice provide written notice of such
inability to the holders of Registrable Securities and to Xxxxxxx W, Xxxx, Jr.
Xx. Xxxx, personally or through trusts for which he is a trustee, shall
repurchase the Registrable Securities which the Company is unable to repurchase
within 90 days of the scheduled DOE Repurchase Date, at the prices and otherwise
on the same terms as provided for the Company herein.
5.2 DEPOSIT OF FUNDS. On or prior to any Repurchase Date or DOE
Repurchase Date, the Company shall deposit the Repurchase Price or DOE
Repurchase Price, as applicable, of all shares to be repurchased with a bank or
trust company having aggregate capital and surplus in excess of $10,000,000 as a
trust fund, with irrevocable instructions and authority to be bank or trust
company to pay, on and after such Repurchase Date or DOE Repurchase Date, the
Repurchase Price or DOE Repurchase Price of the shares to their respective
holders upon the surrender of their share certificates. The balance of any funds
deposited by the Company pursuant to this Section 5.2 remaining unclaimed at the
expiration of one year following such Repurchase Date or DOE Repurchase Date
shall be returned to the Company promptly upon its written request.
5.3 SURRENDER OF CERTIFICATES. On or after any Repurchase Date or DOE
Repurchase Date, each holder of Registrable Securities shall surrender such
holder's certificates representing such shares to the Company and thereupon the
Repurchase Price or DOE Repurchase Price of such shares shall be payable to the
order of the person whose name appears on such certificate or certificates as
the owner thereof. From and after such Repurchase Date or DOE Repurchase Date,
unless there shall have been a default in payment of the Repurchase Price or DOE
Repurchase Price or the Company is unable to pay the Repurchase Price or DOE
Repurchase Price due to not having sufficient legally available funds, all
dividends on the Registrable Securities shall cease to accrue and all rights of
the holders of such shares (except the right to receive the Repurchase Price or
DOE Repurchase Price without interest upon surrender of their certificates)
shall cease and terminate with respect to such shares, provided that in the
event that the Registrable Securities are not repurchased due to a default in
payment by the Company or because the Company does not have sufficient legally
available funds, such Registrable Securities shall remain outstanding and shall
be entitled to all of be rights and preferences provided herein.
5.4 TERMINATION OF RIGHTS. The rights of repurchase established by this
Article V shall terminate after the time of effectiveness of the Company's first
firm commitment public offering registered, under the Securities Act.
20.
24
VI
MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
6.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solelyas of die date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the sitccessors, assigns, hers, executors and of the parties hereto and
shall inure to the benefit of and be enforceable by each person who shall be a
holder of Registratble Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.
6.4 ENTIRE AGREEMENT. This Agreement constitutes the III and entire
understanding and agreement between the parties with regard to the subject
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.
6.5 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 AMENDMENT AND WAIVER.
6.6.1 Except as otherwise expressly provided, this Agreement
may be amended or modified only upon the written consent of the Company and a
majority of the Holders of Registrable Securities.
6.6.2 Except as otherwise expressly provided, the obligations
of the Company and the rights of the Holders under this Agreement may be waived
only with the written consent of a majority of the Holders of Registrable
Securities.
21.
25
6.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power or remedy, nor shall it be constructed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar bread, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit consent or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. AU remedies, either under this
Agreement, by law or otherwise afforded to Holders, shall be cumulative and not
alternative.
6.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if mum
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail
return receipt requested, postage prepaid, or (W) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the party
to be notified at the address as set forth on the signature pages hereof or at
such other address as such party may designate by ten (10) days advance written
notice to the other parties hereto.
6.9 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, cows and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including -without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
6.10 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
22.
26
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY: PURCHASERS:
STERIGENICS INTERNATIONAL. SUMMIT VENTURES III L.P.
0000 Xxxxxxx Xxxxx 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxx Xxxx, XX 00000
By: Summit Partners
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
By: /s/
------------------------- -------------------------
Xxxxx X. Xxxxxxx General Partner
SUMIMMT INVESTORS II L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
By: Stamps Xxxxxxx & Co.
Its General Partner
By: /s/
------------------------
General Partner
SEQUOIA CAPITAL GROWTH FUND
0000 Xxxx. Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Menlo Park A 94025
By: Sequoia Partners
Its General Partner
By: /s/
------------------------
General Partner
23.
27
SEQUOIA TECHNOLOGY PARTNERS III
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
By: Sequoia Partners
Its General Partner
By: /s/
-----------------------------
General Partner
The undersigned, hereby acknowledges and
agrees to the provisions of Section 5.1.4
of this Agreement:
/s/ Xxxxxxx X. Xxxx, Xx.
------------------------------------------
Xxxxxxx X. Xxxx, Xx.
24.
28
STERIGENICS INTERNATIONAL
CO-SALE AGREEMENT
This Co-Sale Agreement (the "Agreement") is made as of this 20th day of
September, 1993, by and among STERIGENICS INTERNATIONAL, a California
corporation (the "Company"), the holders of the Company's Series B Preferred
Stock, Series C Preferred Stock and Common Stock listed on Exhibit A hereto (the
"Shareholders"), and the XXXXXXX X. XXXX, XX. Trust (the "Grantor").
RECITALS
WHEREAS, the Shareholders are purchasing shares of the Company's Series
B Preferred Stock, Series C Preferred Stock and Common Stock (the "Purchased
Stock") pursuant to that certain Stock Purchase Agreement (the "Purchase
Agreement") dated as of the date hereof, among the Shareholders and the Company;
WHEREAS, such Shareholders were induced by the Company to purchase the
Purchased Stock in part by the Company's and the Grantor's agreement to enter
into this Agreement; and
WHEREAS, the parties desire to enter into this Agreement in order to
grant rights of co-sale to each Shareholder.
In consideration of the mutual covenants set fort herein, the parties
agree hereto as follows:
1. DEFINITIONS.
(a) "Co-Sale Stock" shall mean shares of the Company's Common Stock or
Preferred Stock now owned or subsequently acquired by the Grantor. The number of
shares of Stock owned by the Grantor is set forth on Exhibit B, which Exhibit
shall be amended from time to time to reflect changes in the number of shares
owned by the Grantor.
(b) "Common Stock" shall mean the Company's Common Stock and shares of
Common Stock issued or issuable upon conversion of the Company's outstanding
Preferred Stock.
2. SALES BY THE GRANTOR.
(a) If the Grantor proposes to sell or transfer any shares of Co-Sale
Stock then the Grantor shall promptly give written notice (the "Notice")
simultaneously to the Company and to each of the Shareholders at least fifteen
(15) days prior to the closing of such sale or transfer. The Notice shall
describe in reasonable detail the proposed sale or transfer including, without
limitation, the number of shares of Co-Sale Stock to be sold or transferred, the
nature of such sale or transfer, the consideration to be paid, and the name and
address of each prospective
29
purchaser or transferee. In the event that the sale or transfer is being made
pursuant to the provisions of Sections 3(a) or 30(b) hereof, the Notice shall
state under which section the sale or transfer is being made.
(b) Each Shareholder shall have the right, exercisable upon written
notice to the Grantor within ten (10) days after Notice, to participate in such
sale of Co-Sale Stock on the same terms and conditions. Such notice shall
indicate the number of shares of Common Stock such Shareholder wishes to sell
under his or her right to participate. To the extent one or more of the
Shareholders exercise such right of participation in accordance with the terms
and conditions set forth below, the number of shares of Co-Sale Stock that the
Grantor may sell in the transaction shall be correspondingly reduced.
(c) Each Shareholder may sell all or any part of that number of shares
equal to the product obtained by multiplying (i) the aggregate number of shares
of Co-Sale Stock covered by the Notice by (ii) a fraction the numerator of which
is the number of shares of Common Stock owned by the Shareholder at the time of
the sale or transfer and the denominator of which is the total number of shares
of Common Stock owned by the Grantor and the Shareholders at the time of the
sale or transfer.
(d) Each Shareholder who elects to participate in the sale pursuant to
this Section 2 (a "Participant") shall effect its participation in the sale by
promptly delivering to the Grantor for transfer to the prospective purchaser one
or more certificates, properly endorsed for transfer, which represent:
(i the type and number of shares of Common Stock
which such Participant elects to sell or
(ii) that number of shares of Series B or Series C
Preferred Stock which is at such time convertible into the number of shares of
Common Stock which such Participant elects to sell; provided, however, that if
the prospective purchaser objects to the delivery of Series B or Series C
Preferred Stock in lieu of Common Stock, such Participant shall convert such
Series B or Series C Preferred Stock into Common Stock and deliver Common Stock
as provided in Section 2(d)(i) above. The Company agrees to make any such
conversion concurrent with the actual transfer of such shares to the purchaser.
(e) The stock certificate or certificates that the Participant delivers
to the Grantor pursuant to Section 2(d) shall be transferred to the prospective
purchaser in consummation of the sale of the Common Stock pursuant to the terms
and conditions specified in the Notice, and the Grantor shall concurrently
therewith remit to such Participant that portion of the sale proceeds to which
such Participant is entitled by reason of its participation in such sale to the
extent that any prospective purchaser or purchasers prohibits such assignment or
otherwise refuses to purchase shares or other securities from a Participant
exercising its rights of co-sale hereunder, the Grantor shall not sell to such
prospective purchaser or purchasers any Co-Sale Stock unless and until,
simultaneously with such sale, the Grantor shall purchase such shares or other
securities from such Participant on the same terms and conditions specified in
the Notice.
2.
30
(f) The exercise or non-exercise of the rights of the Participants
hereunder to participate in one or more sales of Co-Sale Stock made by the
Grantor shall not adversely affect their rights to participate in subsequent
sales of Co-Sale Stock subject to Section 2(a).
(g) If none of the Shareholders elect to participate in the sale of the
CO-Sale Stock subject to the Notice, the Grantor may, not later than sixty (60)
days following delivery to the Company of the Notice, enter into an agreement
providing for the closing of the transfer of the Co-Sale Stock covered by the
Notice within thirty (30) days of such agreement on terms and conditions not
more favorable to the transferor than those described in the Notice. Any
proposed transfer on terms and conditions more favorable than those described in
the Notice, as well as any subsequent proposed transfer of any of the Co-Sale
Stock by the Grantor, shall again be subject to the co-sale rights of the
Shareholders and shall require compliance by the Grantor with the procedures
described in this Section 2.
3. EXEMPT TRANSFERS.
(a) Notwithstanding the foregoing, the co-sale rights of the
Shareholders shall not apply to (i) any transfer or transfers by the Grantor
which in the aggregate, over the term of this Agreement amount to no more than
Ten Thousand ($10,000) dollars of Co-Sale Stock held by the Grantor as of the
date hereof, (ii) any pledge of Co-Sale Stock made pursuant to a bona fide loan
transaction with a financial institution that creates a mere security interest,
(iii) any transfer to the ancestors, descendants or spouse or to trusts for the
benefit of such persons or the Grantor; or (iv) any bona fide gift; provided
that in the event of any transfer made pursuant to one of the exemptions
provided by clauses (ii), (iii) and (iv), (A) the Grantor shall inform the
Shareholders of such pledge, transfer or gift prior to effecting it and (B) the
pledgee, transferee or donee shall furnish the Shareholders with a written
agreement to be bound by and comply with all provisions of Section 2. Except
with respect to Co-Sale Stock transferred under clause (i) above (which Co-Sale
Stock shall no longer be subject to the co-sale rights of the Shareholders),
such transferred Co-Sale Stock shall remain "Co-Sale Stock" hereunder; and such
pledgee, transferee or donee shall be treated as the "Grantor" for purposes of
this Agreement.
(b) Notwithstanding the foregoing, the provisions of Section 2 shall
not apply to the sale of any Co-Sale Stock to the public pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933, amended "Securities Act").
(c) This Agreement is subject to, and Shall in no manner limit the
right of the Company to repurchase securities from the Grantor at cost pursuant
to a stock restriction agreement or other agreement between the Company and the
Grantor.
4. PROHIBITED TRANSFERS.
(a) In the event that the Grantor should sell any Co-Sale Stock in
contravention of the co-sale rights of each Shareholder under this Agreement (a
"Prohibited Transfer"), each Shareholder, in addition to such other remedies as
may be available at law, in equity or
3.
31
hereunder, shall have the put option provided below, and the Grantor shall be
bound by the applicable provisions of such option.
(b) In the event of a Prohibited Transfer, each Shareholder shall have
the right to sell to the Grantor the type and number of shares of Common Stock
equal to the number of shares each Shareholder would have been entitled to
transfer to the purchaser under Section 2(c) hereof had the Prohibited Transfer
been effected pursuant to and in compliance with the terms hereof. Such sale
shall be made on the following terms and conditions:
(i) The price per share at which the shares are to be sold to
the Grantor shall be equal to the price per share paid by the purchaser to the
Grantor in the Prohibited Transfer. The Grantor shall also reimburse each
Shareholder for any and all fees and expenses, including legal fees and
expenses, incurred pursuant to the exercise or the attempted exercise of the
Shareholder's rights under Section 2.
(ii) Within ninety (90) days after the later of the dates on
which the Shareholder (a) received notice of the Prohibited Transfer or (b)
otherwise became aware of the Prohibited Transfer, each Shareholder shall, if
exercising the option created hereby, deliver to the Grantor the certificate or
certificates represent shares to be sold, each certificate to be properly
endorsed for transfer.
(iii) The Grantor shall, upon receipt of the certificate or
certificates for the shares to be sold by a Shareholder, pursuant to this
Section 4(b), pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in Section 4(b)(i), in cash or by
other means acceptable to the Shareholder.
(iv) Notwithstanding the foregoing, any attempt by the Grantor
to transfer Co-Sale Stock in violation of Section 2 hereof shall be voidable at
the option of a majority in interest of the Shareholders if the Shareholders do
not elect to exercise the put option set forth in this Section 4, and the
Company agrees it will not effect such a transfer nor will it treat any alleged
transfee as the holder of such shares without the written consent of a majority
in interest of the Shareholders.
5. LEGEND.
(a) Each certificate representing shares of Co-Sale Stock now or
hereafter owned by the Grantor or issued to any person in connection with a
transfer pursuant to Section 3(a) hereof shall be endorsed with the following
legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN CO-SALE AGREEMENT BY AND BETWEEN THE SHAREHOLDER, THE
COMPANY AND CERTAIN HOLDERS OF STOCK OF THE COMPANY. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY."
4.
32
(b) The Grantor agrees that the Company may instruct its transfer agent
to impose transfer restrictions on the shares represented by certificates
bearing the legend referred to in Section 5(a) above to enforce the provisions
of this Agreement and the Company agrees to promptly do so. The legend shall be
removed upon termination of this Agreement.
6. MISCELLANEOUS
(a) CONDITIONS TO EXERCISE OF RIGHTS. Exercise of the Shareholders'
rights under this Agreement shall be subject to and conditioned upon, and the
Grantor and the Company shall use their best efforts to assist each Shareholder
in, compliance with applicable laws.
(b) GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
(c) AMENDMENT. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only by the written consent of (i)
as to the Company, only by the Company, (ii) as to the Shareholders, by persons
holding more than a majority in interest of the Common Stock held by the
Shareholders and their assignees, pursuant to Section 6(d) hereof, and (iii) as
to the Grantor, only by the Grantor. Any amendment or waiver effected in
accordance with clauses (i), (ii), and (iii) of this Section 6(c) shall be
binding upon each Shareholder, its successors and assigns, the Company and the
Grantor.
(d) SUCCESSORS AND ASSIGNS. Except as otherwise specifically provided
herein, the provisions hereof shall inure to the benefit of, and be binding upon
the successors, assigns, hells, executors and administrators of the parties
hereto.
(e) ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the specific
subject matter hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein.
(f) TERM. This Agreement shall terminate (i) upon the closing of a firm
commitment underwritten public offering pursuant to an effective registration
statement under the Securities Act or (ii) at such time as the Shareholders hold
less than fifty percent (50%) of the Purchased Stock.
(g) OWNERSHIP. The Grantor represents and warrants that he is the sole
legal and beneficial owner of those shares of Co-Sale Stock he currently holds
subject to the Agreement and that no other person has any interest (other than a
community property interest) in such shares.
(h) NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then
5.
33
on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the party to be notified at the address as set
forth on the signature page hereof or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.
(i) SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceabity
shall not effect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(j) ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
(k) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
6.
34
The foregoing agreement is hereby executed as of the date first above
written.
COMPANY:
STERIGENICS INTERNATIONAL
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
XXXXX X. XXXXXXX, PRESIDENT
GRANTOR:
/s/ Xxxxxxx X. Xxxx, Xx.
-----------------------------------
XXXXXXX X. XXXX, Xx.
c/o STERIGENICS INTERNATIONAL
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX, 00000
CO-SALE AGREEMENT SHAREHOLDERS:
SUMMIT VENTURES III, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
By: Summit Partners
Its General Partner
By /s/
------------------------------
General Partner
CO-SALE AGREEMENT
35
SUMMIT INVESTORS II, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
By: Stamps Xxxxxxx & Co.
Its General Partner
By /s/
---------------------------------
General Partner
SEQUOIA CAPITAL GROWTH FUND 0000
Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
By: Sequoia Partners
Its General Partner
By: /s/
---------------------------------
General Partner
SEQUOIA TECHNOLOGY PARTNERS III
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
By: Sequoia Partners
Its General Partner
By: /s/
---------------------------------
General Partner
CO-SALE AGREEMENT
36
EXHIBIT A
LIST OF SHAREHOLDERS
SUMMIT VENTURES III, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
SUMMIT INVESTORS II, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
SEQUOIA CAPITAL GROWTH FUND
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
SEQUOIA TECHNOLOGY PARTNERS III
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
CO-SALE AGREEMENT
37
EXHIBIT B
CO-SALE STOCK OWNERSHIP
GRANTOR CO-SALE STOCK
XXXXXXX X. XXXX, XX. 572,000 shares of Common Stock
CO-SALE AGREEMENT
