EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
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TABLE OF CONTENTS
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Page
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ARTICLE I Definitions......................................... 1
ARTICLE II Covenants and Conditions............................ 11
2.1 Restrictions on Transfers; Rights of First Refusal.. 11
2.2 Call by the Company................................. 15
2.3 Tag Along........................................... 16
2.4 Drag Along.......................................... 17
2.5 Preemptive Rights................................... 18
2.6 Corporate Governance................................ 22
2.7 Withholding of Taxes................................ 26
ARTICLE III Registration Rights................................. 26
3.1 Certain Definitions................................. 26
3.2 Demand Registrations................................ 27
3.3 Piggyback Registration.............................. 28
3.4 Obligations of the Company.......................... 29
3.5 Furnish Information................................. 31
3.6 Expenses of Registration............................ 31
3.7 Underwriting........................................ 31
3.8 Indemnification..................................... 32
3.9 Reports Under Securities Exchange Act of 1934....... 34
3.10 No Inconsistent Agreements.......................... 35
3.11 Stock Split......................................... 35
3.12 Lock Up Agreements.................................. 35
ARTICLE IV Miscellaneous....................................... 35
4.1 Remedies............................................ 35
4.2 Entire Agreement; Amendment......................... 36
4.3 Severability........................................ 36
4.4 Notices............................................. 36
4.5 Binding Effect; Assignment.......................... 38
4.6 Governing Law....................................... 38
4.7 Termination......................................... 38
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4.8 Recapitalizations, Exchanges, Etc................... 38
4.9 Stockholder Representative.......................... 38
4.10. Action Necessary to Effectuate the Agreement........ 39
4.11. Purchase for Investment; Legend on Certificate...... 39
4.12. Effectiveness of Transfers.......................... 39
4.13. Additional Stockholders............................. 40
4.14. No Waiver........................................... 40
4.15. Counterparts........................................ 40
4.16. Headings............................................ 40
4.17 Consent to Jurisdiction............................. 40
4.18 Waiver of Right to Jury Trial....................... 41
Exhibit A Schedule of Stockholders
Exhibit B Certificate of Designation, Preferences and Rights of the Series A
and Series B Preferred Stock
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STOCKHOLDERS' AGREEMENT
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This Stockholders' Agreement (the "Agreement") is entered into as of the
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19th day of September, 1996, by and among Experian Corporation, a Delaware
corporation (the "Company"), those persons listed as Management Investors on the
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signature pages hereof (the "Management Investors"), those persons listed as Xxx
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Investors on the signature pages hereof (the "Xxx Investors"), these persons
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listed as Xxxx Investors on the signature pages hereof (the "Xxxx Investors"),
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that person listed as the TRW Investor on the signature pages hereof (the "TRW
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Investor"), and those persons listed as Additional Equity Investors on the
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signature pages hereof (the "Additional Equity Investors"). The Management
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Investors, the Xxx Investors, the Xxxx Investors, the TRW Investor and the
Additional Equity Investors are sometimes collectively referred to herein as the
"Stockholders."
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WHEREAS, upon consummation of the transactions contemplated by the
Recapitalization Agreement and by those certain stock subscription or stock
purchase agreements of even date (the "Stock Subscription Agreements"), the
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Stockholders will own the number of shares of Common Stock and Senior Preferred
Stock set forth next to their respective names on the Schedule of Stockholders
attached hereto as Exhibit A (the "Schedule of Stockholders");
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WHEREAS, it is a condition precedent to the obligations of the
Stockholders to purchase shares of Common Stock under the Stock Subscription
Agreements that this Agreement be executed and delivered by the Company and each
of the other Stockholders; and
WHEREAS, all of the Stockholders desire to enter into this Agreement for
the purpose of regulating certain aspects of the relationships of the
Stockholders with regard to each other and to the Company;
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties to this
Agreement, intending to be legally bound, mutually agree as follows:
ARTICLE I
Definitions
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For the purposes of this Agreement, the following terms shall be defined
as follows:
The "1933 Act" shall mean the Securities Act of 1933, as amended, or any
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successor statute.
The "1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
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or any successor statute.
"Additional Equity Investors" shall have the meaning given to such term in
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the introductory paragraph of this Agreement.
"Additional Lead Investors Management Designees" shall have the meaning
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given to such term in Section 2.6(b).
An "Affiliate" of a specified person, corporation or other entity shall
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mean a person, corporation or other entity which, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the person, corporation or other entity specified and, when
used with respect to the Company or any Subsidiary of the Company, shall include
any holder of capital stock or any officer or director of the Company or any
Subsidiary of the Company.
"Agreement" shall mean this Stockholders' Agreement, as amended or
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supplemented from time to time.
An "Associate" shall mean, when used to indicate a relationship with any
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Person, (a) any corporation or organization of which such Person is an officer
or partner or is, directly or indirectly, the beneficial owner of ten percent
(10%) or more of any class of equity securities, (b) any trust or other estate
in which such Person has a substantial beneficial interest or as to which such
Person serves as a trustee or in a similar fiduciary capacity and (c) any
relative of such Person who has the same home as such Person, is a parent, aunt
or uncle, sibling, spouse, in-law, child, niece or nephew or grandchild of such
Person, or the spouse of any of them, or is a director or officer of the Company
or any Subsidiary of the Company. Neither the Company nor any of its
Subsidiaries shall be deemed an Associate of any Stockholder.
"Xxxx Designees" shall have the meaning given to such term in
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Section 2.6(a).
"Xxxx Investors" shall have the meaning given to such term in the
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introductory paragraph of this Agreement.
"Xxxx Fund V Designee" shall have the meaning given to such term in
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Section 2.6(a).
"Xxxx Fund V-B Designee" shall have the meaning given to such term in
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Section 2.6(a).
"Xxxx Outside Director Designee" shall have the meaning given to such term
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in Section 2.6(b).
"BCIP" shall mean BCIP Associates, an investment partnership, the partners
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of which are employees of Xxxx Capital, Inc. and their retirement plans.
"BCIP Designee" shall have the meaning given to such term in
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Section 2.6(a).
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"Call Event" shall have the meaning given to such term in Section 2.2(a).
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"Call Group" shall have the meaning given to such term in Section 2.2(a).
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"Call Notice" shall have the meaning given to such term in Section 2.2(a).
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"Call Option" shall have the meaning given to such term in Section 2.2(a).
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"Call Price" shall have the meaning given to such term in Section 2.2(b).
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"Call Securities" shall have the meaning given to such term in
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Section 2.2(a).
"Cause" shall have the meaning set forth below, except with respect to any
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Management Investor who is employed by the Company or one of its Subsidiaries
pursuant to an effective written employment agreement between the Company and/
or one of its Subsidiaries and such Management Investor, in which event the
definition of "Cause" set forth in such employment agreement shall be deemed to
be the definition of "Cause" herein solely for such Management Investor and only
for so long as such employment agreement remains effective.
In all other events, the term "Cause" shall mean that the Board of
Directors of the Company has determined, in its reasonable judgment, that any
one or more of the following has occurred;
(i) The Management Investor shall have been convicted of, or
shall have pleaded guilty or nolo contendere to, any felony or a crime
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involving dishonesty or moral turpitude;
(ii) The Management Investor shall have committed any fraud,
embezzlement, misappropriation of funds, breach of fiduciary duty or other
act of dishonesty;
(iii) The Management Investor shall have failed to perform in any
material respect (other than by reason of disability) his duties and
responsibilities to the Company and its Affiliates;
(iv) The Management Investor shall have breached in any material
respect any of the provisions of this Agreement;
(v) The Management Investor shall have engaged in conduct
reasonably likely to make the Company or any of its Affiliates subject to
civil or criminal liabilities other than those arising from the Company's
normal business activities; or
(vi) A failure by the Management Investor to take or refrain from
taking any material action as specified in written directions of the Board
of Directors of the Company
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within a reasonable time following receipt by the Management Investor of
such written directions.
"Certificate of Designation" shall mean the Certificate of Designation,
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Preferences and Rights of the Series A and Series B Preferred Stock attached
hereto as Exhibit B.
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"Change of Control" shall mean a transaction, or series of related
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transactions, which results in holders of ten percent (10%) or less of the
Company's Common Stock (including shares of Common Stock issuable upon exercise
of Vested Stock Options and upon conversion of all securities then convertible
into shares of Common Stock) immediately prior to such transaction or series of
related transactions, holding in excess of fifty percent (50%) of the Company's
Common Stock (including shares of Common Stock issuable upon exercise of Vested
Stock Options and upon conversion of all securities then convertible into shares
of Common Stock) immediately following such transaction, or series of related
transactions.
"Common Stock" shall mean the Company's Class A Common Stock, par value
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$.001, Class B Common Stock, par value $.001, Class L-1 Common Stock, par value
$.001, and Class L-2 Common Stock, par value $.001, that the Company may be
authorized to issue from time to time and any stock into which such Common Stock
may hereafter be changed or for which such Common Stock may be exchanged after
giving effect to the terms of such change or exchange (by way of reorganization,
recapitalization, merger, consolidation or otherwise) and shall also include any
common stock of the Company hereafter authorized and any capital stock of the
Company of any other class hereafter authorized which is not preferred as to
dividends or distribution of assets in liquidation over any other class of
capital stock of the Company or which has ordinary voting power for the election
of directors of the Company.
"Company" shall mean Experian Corporation, a Delaware corporation
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formerly known as IS&S Holdings, Inc. and as Target Marketing Services, Inc.),
and its successors and assigns.
"Company Breach" shall mean, with respect to any Management Investor who
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is employed by the Company or one of its Subsidiaries pursuant to an effective
written employment agreement between the Company and/or one of its Subsidiaries
and such Management Investor, a material breach of such employment agreement by
the Company as a result of which such Management Investor may terminate such
employment agreement pursuant to its express terms and in accordance therewith
(including compliance with any provision providing for notice and the
opportunity to cure).
"Competitor of the Company" shall mean any person that is engaged in any
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business in which the Company or any of its Subsidiaries is engaged, or has
formally developed plans to engage, as of the date of the proposed transfer of
Shares.
"Deemed Offer Date" shall have the meaning given to such term in
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Section 2.1(e).
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"Designated Employee" shall have the meaning given to such term in
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Section 2.2(d).
"Disability" shall mean permanent disability within the meaning of Section
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22(e)(3) of the Internal Revenue Code of 1986, as amended, unless otherwise
defined in a separate written employment agreement between the Company and/or
one of its Subsidiaries and the person whose disability is in question.
"Fair Market Value" shall mean, the fair value of the applicable Shares as
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of the applicable date on the basis of a sale of such Shares in an arms length
private sale between a willing buyer and a willing seller, neither acting under
compulsion (or, in the case of a Vested Stock Option, the fair value of the
Shares that may then be purchased by the holder of such Vested Stock Option upon
exercise thereof, determined as described below, minus the exercise price
applicable thereto). In determining such Fair Market Value, no discount shall
be taken for constituting a minority interest and no upward adjustment or
discount shall be taken relating to the fact that the Shares in question are
subject to the restrictions and entitled to the rights provided hereunder. Such
Fair Market Value shall be determined (i) in good faith by the Board of
Directors of the Company or (ii) in the event the holders of Shares subject to
such Fair Market Value determination disagree with such good faith determination
by the Board of Directors of the Company, then by an independent investment
banking firm, retained by the Company (the fees and expenses of which shall be
shared in one-half shares by the Company, on the one hand, and the holders of
the Shares subject to such Fair Market Value determination, on the other hand)
selected as follows: the Board of Directors of the Company shall select three
independent investment banking firms, none of whom shall be an Affiliate or an
Associate of any Stockholder, and the independent investment banking firm to
perform the calculation shall be selected from such list of three by the holders
of a majority of the Shares subject to such Fair Market Value determination.
The parties hereto agree that the Fair Market Value per share of Common Stock as
of the date of the consummation of the Recapitalization shall be deemed to equal
the purchase price per share of Common Stock paid by the Lead Investors in
connection with the Recapitalization (subject to appropriate adjustments for
stock splits, recapitalizations and the like).
"Initiating Stockholder" shall have the meaning given to such term in
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Section 2.3(a).
"Inside Lead Investors Designees" shall have the meaning given to such
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term in Section 2.6(a).
"Investment Price" shall mean with respect to the purchase of Shares held
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by a Management Investor under Section 2.2, an amount per Share equal to the
price paid for such Share by a Management Investor at the time of the initial
purchase thereof (subject to appropriate adjustments for stock splits,
recapitalizations and the like).
"Investors" means the Lead Investors and the Additional Equity Investors.
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"Involuntary Transfer" shall mean any involuntary sale, transfer,
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encumbrance or other disposition by or in which any Stockholder shall be
deprived or divested of any right, title or interest in or to any Shares,
including without limitation, any levy of execution, transfer in connection with
divorce or other marital dissolution proceedings, transfer in connection with
bankruptcy, reorganization, insolvency or similar proceedings, transfer in
connection with foreclosure upon a pledge, or any transfer to a public officer
or agency pursuant to any abandoned property or escheat law.
"Lead Investor New Securities" shall have the meaning given to such term
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in Section 2.5(b).
"Lead Investors" shall mean the Xxxx Investors and the Xxx Investors.
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"Lead Investors Management Designee" shall have the meaning given to such
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term in Section 2.6(a).
"Lead Investors Outside Director Designee" shall have the meaning given to
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such term in Section 2.6(b).
"Xxx Designees" shall have the meaning given to such term in
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Section 2.6(a).
"Xxx Investors" shall have the meaning given to such term in the
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introductory paragraph of this Agreement.
"Xxx Outside Director Designee" shall have the meaning given to such term
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in Section 2.6(b).
"Management Investors" shall have the meaning given to such term in the
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introductory paragraph of this Agreement.
"New Securities" shall mean any equity security of the Company, whether
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now authorized or not, and any rights, options or warrants to purchase any
equity security of the Company, which the Company proposes to issue or sell to
any person; provided, however, that the term "New Securities" does not include
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(i) securities issued as a stock dividend to all holders of a particular class
of equity securities of the Company pro rata or upon any subdivision or
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combination thereof; (ii) up to 567,000 shares of the Company's Class A Common
Stock, par value $.001 per share, and up to 63,000 shares of the Company's Class
L-1 Common Stock, par value $.001 per share, issued to employees of, or
consultants to, the Company or any of its Subsidiaries, or any of their
respective designees who would constitute Permitted Transferees hereunder; (iii)
shares of Common Stock purchased after the date hereof by the Company from
Management Investors and reissued to new or existing Management Investors; (iv)
Vested Stock Options and shares of Common Stock issued upon the exercise of
Vested Stock Options or upon the conversion of shares of Common Stock or Senior
Preferred Stock pursuant to their terms; (v) securities of the
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Company issued in connection with a Public Offering or a merger; (vi) the
Warrants; or (vii) shares of Common Stock issued upon exercise of the Warrants.
In addition, "New Securities" shall mean, with respect to securities of the
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Operating Company, any equity securities of the Operating Company, whether now
authorized or not, and any rights, options or warrants to purchase any equity
security of the Operating Company, which the Operating Company proposes to issue
or sell to any person other than the Company; provided, however, that the term
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"New Securities" does not include (i) securities issued as a stock dividend to
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all holders of a particular class of equity securities of the Operating Company
pro rata or upon any subdivision or combination thereof; or (ii) the issuance
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of securities of the Operating Company pursuant to a Public Offering or merger.
"Non-voting Preferred Stock" shall mean the Company's Series B Preferred
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Stock, par value $.001 per share, with the rights, preferences and other
provisions set forth on Exhibit B.
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"Offered Shares" shall have the meaning given to such term in
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Section 2.1(a)(i).
"Offer Price" shall have the meaning given to such term in
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Section 2.1(a)(i).
"Operating Company" shall mean Experian Information Solutions, Inc., an
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Ohio corporation (formerly known as Information Systems and Services, Inc. and
as TRW Environmental Management Company), and its successors and assigns.
"Original Issue Price" shall mean, with respect to the Voting Preferred
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Stock, the Series A Original Issue Price, as defined in the Certificate of
Designation, Preferences and Rights of the Series A and Series B Preferred Stock
attached hereto as Exhibit B, and shall mean, with respect to the Non-voting
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Preferred Stock, the Series B Original Issue Price, as defined in the
Certificate of Designation, Preferences and Rights of the Series A and Series B
Preferred Stock attached hereto as Exhibit B.
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"Participating Offeree" shall have the meaning given to such term in
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Section 2.3(a).
"Participation Notice" shall have the meaning given to such term in
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Section 2.3(a).
"Participation Securities" shall have the meaning given to such term in
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Section 2.3(a).
A "Permitted Transfer" shall mean:
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(a) a Transfer of Shares between any Stockholder who is a natural person
and such Stockholder's spouse, children, parents or siblings or a trust for the
benefit of any of them, provided that with respect to any such Transfer, the
Stockholder retains, as trustee or by some other means, the sole authority to
vote such Shares;
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(b) a Transfer of Shares by a Lead Investor to the partners, stock-
holders, officers, employees or consultants of such Lead Investor (which
consultants spend at least 50% of their business hours consulting for such Lead
Investor and maintain an office at the offices of such Lead Investor) or to a
corporation or corporations or to a partnership or partnerships (or other entity
for collective investment, such as a fund) which is at the time of the Transfer
controlled by, controlling or under common control with such Lead Investor;
(c) a Transfer of Shares (i) between or among the Lead Investors and
(ii) between or among the Additional Equity Investors;
(d) a Transfer of Shares between any Stockholder who is a natural person
and such Stockholder's guardian or conservator;
(e) a bona fide pledge of Shares by a Stockholder to a bank or financial
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institution;
(f) a Transfer of Shares by an Investor to any Affiliate of such
Investor;
(g) a Transfer of Shares by the TRW Investor to any Affiliate of the TRW
Investor;
(h) a Transfer made pursuant to a Public Offering or a Rule 144
Transaction; and
(i) a Transfer of Shares by the TRW Investor to one or more of the Xxx
Investors or to one or more of the Xxxx Investors if any such Transfer is
approved by a majority in interest of the Xxxx Investors (with respect to a
Transfer to a Xxx Investor) or by a majority in interest of the Xxx Investors
(with respect to a Transfer to a Xxxx Investor); provided, however, that the
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consent of either the Xxxx Investors or the Xxx Investors, as the case may be,
pursuant to the preceding clause of this paragraph (i) shall not be required for
any such Transfer if the Xxxx Investors or the Xxx Investors, as the case may
be, no longer own any Shares.
A "Permitted Transferee" shall mean any person or entity who shall have
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acquired and who shall hold Shares pursuant to a Permitted Transfer and who has
executed a counterpart of this Agreement.
"Person" or "person" means an individual, corporation, partnership, trust,
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unincorporated association, or government (or any agency or political
subdivision thereof).
"Public Float Date" shall mean the date on which shares of Common Stock
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shall have been sold pursuant to one or more Public Offerings in which the
aggregate gross proceeds to the Company of such shares equal or exceed $50
million.
A "Public Offering" shall mean the completion of a sale of Common Stock
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pursuant to a registration statement which has become effective under the 1933
Act, excluding registration statements on Form X-0, X-0 or similar limited
purpose forms.
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"Recapitalization" shall mean the transactions contemplated by the
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Recapitalization Agreement.
"Recapitalization Agreement" shall mean the Recapitalization Agreement
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dated February 9, 1996, among IS&S Acquisition Corp., TRW Inc., TRW IS&S
International, Inc., Operating Company, TRW Hotel Company, Inc., the Company and
TRW Microwave Inc., as amended.
"Retirement" shall mean, with respect to any Management Investor who is
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employed by the Company or one of its Subsidiaries, normal retirement at or
after reaching age 65.
"Rule 144 Transaction" means a Transfer of Shares (A) complying with Rule
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144 under the 1933 Act as such Rule 144 or a successor thereto is in effect on
the date of such Transfer, provided such Transfer is made pursuant to a "brokers
transaction" as defined in clauses (i) and (ii) of paragraph (g) of Rule 144 as
in effect on the date hereof, and (B) occurring at a time when shares of any
class of Common Stock are registered pursuant to Section 12 of the 1934 Act.
"Sale Request" shall have the meaning given such term in Section 2.4(a).
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"Schedule of Stockholders" shall have the meaning given such term in the
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recitals to this Agreement.
"Senior Preferred Stock" shall mean, collectively, the Voting Preferred
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Stock and the Non-voting Preferred Stock.
"Shares" shall mean all (i) shares of Common Stock held by Stockholders
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from time to time, (ii) shares of Senior Preferred Stock held by the
Stockholders from time to time, (iii) shares of Common Stock or Senior Preferred
Stock subsequently held by Permitted Transferees who acquire them in one or more
Permitted Transfers, and (iv) securities of the Company or any of its
Subsidiaries issued in exchange for, upon reclassification of, or as a
distribution in respect of, any of the foregoing.
"Stockholder" shall mean any party hereto other than the Company,
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including, without limitation, Permitted Transferees.
"Stock Subscription Agreement" shall have the meaning given such term in
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the recitals to this Agreement.
"Subsidiary" with respect to any entity (the "parent") shall mean any
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corporation, firm, association or trust of which such parent, at the time in
respect of which such term is used, (i) owns directly or indirectly more than
fifty percent (50%) of the equity or beneficial interest, on a consolidated
basis, and (ii) owns directly or indirectly through one or more Subsidiaries, or
controls with power to vote, shares of capital stock or beneficial interest
having the power to cast at least a majority of the votes entitled to be cast
for the election of directors, trustees, managers
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or other officials having powers analogous to those of directors of a
corporation. Unless otherwise specifically indicated, when used herein the term
Subsidiary shall refer to a direct or indirect Subsidiary of the Company.
"Take Along Group" shall have the meaning given such term in Section
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2.4(a).
"Third Party" means any Person other than the Company or any of the
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Stockholders.
"Third Party New Securities" shall have the meaning given such term in
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Section 2.5(a)(i).
"THL Designees" shall have the meaning given such term in Section 2.6(a).
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"THL Equity Fund" shall mean Xxxxxx X. Xxx Equity Fund III, L.P.
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"THL Equity Fund Designee" shall have the meaning given such term in
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Section 2.6(a).
"Transfer" shall mean to transfer, sell, assign, pledge, hypothecate,
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give, create a security interest in or lien on, place in trust (voting or
otherwise), assign or in any other way encumber or dispose of, directly or
indirectly and whether or not by operation of law or for value, any Shares, but
shall exclude the conversion of shares of a class of Common Stock into shares of
any other class of Common Stock or the conversion of shares of a series of
Senior Preferred Stock into shares of any class of Common Stock pursuant to
their respective terms.
"Transfer Notice" shall have the meaning given such term in Section
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2.1(a)(i).
"TRW Designee" shall have the meaning given such term in Section 2.6(a).
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"TRW Investor" shall have the meaning given such term in the introductory
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paragraph of this Agreement.
"Vested Stock Options" shall mean fully vested stock options which have
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been granted to Management Investors pursuant to a stock option plan approved by
the Company's directors and stockholders.
"Voluntary Termination" shall include any voluntary termination of
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employment with the Company by a Management Investor, except (i) for a
Retirement or (ii) as otherwise specified in an effective written agreement
between the Company and/or one of its Subsidiaries and such Management Investor.
"Voting Preferred Stock" shall mean the Company's Series A Preferred
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Stock, par value $.01 per share, with the rights, preferences and other
provisions set forth on Exhibit B.
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"Warrants" shall mean the warrants that may be issued by the Company
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pursuant to that certain letter agreement dated September 19, 1996, among by the
Company, the Operating Company, The Chase Manhattan Bank, Chase Securities Inc.,
Bankers Trust Company, BT Securities Corporation, The Bear Xxxxxxx Companies
Inc. and Bear, Xxxxxxx & Co. Inc.
ARTICLE II
Covenants and Conditions
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2.1 Restrictions on Transfers; Rights of First Refusal.
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Except as provided in Section 2.1(f), no Stockholder shall Transfer all or
any part of the Shares owned by him or it to any Person (other than pursuant to
a Permitted Transfer) unless such Stockholder first complies with the applicable
terms and conditions set forth below:
(a) Transfers by the TRW Investor.
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(i) Neither the TRW Investor, nor any of its Permitted
Transferees, shall Transfer any Shares to a Competitor of the Company. If the
TRW Investor or Permitted Tr ansferee thereof proposes to Transfer Shares to
anyone other than a Competitor of the Company or a Permitted Transferee, the TRW
Investor or Permitted Transferee thereof shall give notice of such proposed
Transfer to the Company. Such notice (the "Transfer Notice") shall state that it
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is being delivered under this Section 2.1(a) and that such offer is a bona fide
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offer to purchase such shares by a Third Party which is not a Competitor of the
Company. The Transfer Notice also shall set forth the terms and conditions of
such offer, including the name of the prospective purchaser, the proposed
purchase price per share of such Shares (the "Offer Price"), the payment terms
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(including a description of any proposed non-cash consideration), the type of
disposition and the number of such Shares to be transferred (the "Offered
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Shares"). The Transfer Notice shall state further (i) that the Company may
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acquire, in accordance with the provisions of this Agreement, all of the Offered
Shares for the price and upon the other terms and conditions, including deferred
payment and any non-cash consideration (in each case if applicable), set forth
therein, and (ii) that, if all or part of the consideration to be paid by the
prospective purchaser consists of securities of another entity, the Company may
elect to acquire the portion of the Offered Shares to be sold for such
securities of another entity by the issuance of comparable securities or the
payment of cash with a comparable value (as determined in good faith by the
Board of Directors).
(ii) The Company may elect to purchase all of the Offered
Shares for the price and upon the other terms and conditions set forth in the
Transfer Notice by delivering a written notice to the proposed transferor of the
Company's intent to purchase such Offered Shares on or before the 60th day
following receipt of the Transfer Notice.
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(iii) The closing of the purchase of any Offered Shares
pursuant to Section 2.1(a)(ii) hereof shall take place at the principal office
of the Company on the 180th day following receipt of the Transfer Notice. At
such closing, the Company shall deliver the Offer Price, on the same terms as
set forth in the Transfer Notice (including any non-cash consideration described
therein), payable in respect of the Offered Shares being purchased to the TRW
Investor or Permitted Transferee thereof who delivered the Transfer Notice,
against delivery of original stock certificates, and stock powers duly endorsed
in favor of the Company, representing the Offered Shares being acquired by the
Company. All of the foregoing deliveries will be deemed to have been made
simultaneously and none shall be deemed completed until all have been completed.
(iv) If the Company does not elect to purchase all of the
Offered Shares, all but not less than all of the Offered Shares not purchased by
the Company may be Transferred, but only in accordance with Section 2.1(a)(v)
and the terms of the Transfer Notice, within 270 days after receipt of the
Transfer Notice by the Company, after which date, if the Offered Shares have not
been Transferred, all restrictions contained herein shall again be in full force
and effect.
(v) Any Shares transferred pursuant to this Section 2.1(a)
to any person other than the Company shall remain subject to the transfer
restrictions of this Agreement and each intended transferee pursuant to this
Section 2.1(a) shall execute and deliver to the Company a counterpart of this
Agreement, which shall evidence such transferee's agreement that the Shares
being transferred shall continue to be subject to this Agreement and that as to
such Shares the transferee shall be bound by the restrictions of this Agreement
(x) in the case of any transferee other than a Stockholder, as a TRW Investor
and (y) in the case of a Stockholder, as such Stockholder is bound hereunder.
Notwithstanding clause (x) of the immediately preceding sentence, in no event
shall a transferee of Shares from the TRW Investor or Permitted Transferee
thereof be entitled to the benefit of any rights or privileges set forth in
Section 2.3, Section 2.5 or Section 2.6 of this Agreement; provided, however,
-------- -------
that any such transferee shall be required to vote its Shares in accordance
with the provisions of Section 2.6 of this Agreement, other than any provisions
relating to the designation or election of a member of the Board of Directors by
the TRW Investor or Permitted Transferees thereof.
(b) Transfers by Management Investors. None of the Management
---------------------------------
Investors shall Transfer any Shares except for Permitted Transfers to a
Permitted Transferee, who shall be required to execute and deliver to the
Company a counterpart of this Agreement, which shall evidence such Permitted
Transferee's agreement that the Shares being transferred shall continue to be
subject to this Agreement and that as to such Shares the transferee shall be
bound by the restrictions of this Agreement (x) in the case of any Transferee
other than a Stockholder, as a Management Investor, and (y) in the case of a
Stockholder, as such Stockholder is bound hereunder.
(c) Transfers by Additional Equity Investors. None of the Addi-
----------------------------------------
tional Equity Investors shall Transfer any Shares except for Permitted Transfers
to a Permitted Transferee, who
-12-
shall be required to execute and deliver to the Company a counterpart of this
Agreement, which shall evidence such Permitted Transferee's agreement that the
Shares being transferred shall continue to be subject to this Agreement and that
as to such Shares the Permitted Transferee shall be bound by the restrictions of
this Agreement (x) in the case of any Permitted Transferee other than a
Stockholder, as an Additional Equity Investor and (y) in the case of a
Stockholder, as such Stockholder is bound hereunder. Notwithstanding clause (x)
of the immediately preceding sentence, in no event shall a transferee of Shares
(other than a Permitted Transferee) from an Additional Equity Investor, or
Permitted Transferee thereof, be entitled to the benefit of any rights or
privileges set forth in Section 2.3 or Section 2.5 of this Agreement.
(d) Transfers by Lead Investors.
---------------------------
(i) Prior to the fifth anniversary of the closing under the
Recapitalization Agreement, none of the Xxxx Investors or the Xxx Investors
shall Transfer any Shares, except for Permitted Transfers to Permitted
Transferees, without the prior written consent of (i) the Xxx Investors, with
respect to a Transfer by any Xxxx Investor, or (ii) the Xxxx Investors, with
respect to a Transfer by any Xxx Investor. Any transferee of Shares from a Lead
Investor pursuant to this Section 2.1(d) shall be required to execute and
deliver to the Company a counterpart of this Agreement, which shall evidence
such transferee's agreement that the Shares being transferred shall continue to
be subject to this Agreement and that as to such Shares the transferee shall be
bound by the restrictions of this Agreement (x) in the case of any transferee
other than a Stockholder, as either a Xxxx Investor, if the transferor is a Xxxx
Investor, or a Xxx Investor, if the transferor is a Xxx Investor, and (y) in the
case of a Stockholder, as such Stockholder is bound hereunder.
(ii) Until such time as the TRW Investor and its Permitted
Transferees no longer own any shares of Senior Preferred Stock, the Lead
Investors agree not to Transfer (other than in a Permitted Transfer) to a Third
Party, in one or a series of related transactions, greater than fifty percent
(50%) of the aggregate number of shares of Common Stock owned by the Lead
Investors immediately following consummation of the Recapitalization unless the
Lead Investors Transferring such shares of Common Stock cause such Third Party
to make a bona fide offer to acquire for the Original Issue Price, plus accrued
---- ----
and unpaid dividends, whether or not declared, all then outstanding shares of
Senior Preferred Stock, which offer shall remain open for a period of 30 days.
If the TRW Investor and its Permitted Transferees accept such offer, such
acquisition of Senior Preferred Stock shall be consummated concurrently with the
consummation of the transaction which results in the Lead Investors owning less
than fifty percent (50%) of the aggregate number of shares of Common Stock owned
by the Lead Investors immediately following consummation of the
Recapitalization. Notwithstanding anything to the contrary, the TRW Investor and
its Permitted Transferees shall have the right to exercise their conversion
rights as set forth in Exhibit B for a period of 60 days from the date that
notice of such offer by a Third Party is received by the TRW Investor from the
Lead Investors.
-13-
(e) Involuntary Transfers.
---------------------
(i) Any Involuntary Transfer of the Shares owned by a
Stockholder shall be subject to the prior rights of the Company and Stockholders
hereunder and any such Involuntary Transfer shall be deemed to be an offer made
by the Stockholder who is the subject of such Involuntary Transfer to sell said
Shares at the Fair Market Value to the Company.
(ii) Any Stockholder whose Shares are the subject of an
Involuntary Transfer shall notify the Company in writing within ten (10) days of
such Involuntary Transfer, but the failure to give such notice shall not affect
the rights of the parties hereunder. Upon the Company's receipt of such notice
(or if no notice is received, upon the senior management of the Company becoming
aware that such Involuntary Transfer has occurred or is about to occur), the
Company forthwith will notify the Lead Investors of such receipt. The Company
shall act upon the deemed offer under this Section within the time periods and
following the applicable procedures set forth in this Section 2.1(e).
(iii) The Company may elect to purchase any or all of the
Shares subject to an Involuntary Transfer by delivering a written notice to the
Stockholder who is the subject of such Involuntary Transfer of the Company's
intent to purchase such Shares on or before the 90th day following the later to
occur of the date of the Company's receipt of written notice setting forth the
existence of such an Involuntary Transfer and the date of such Involuntary
Transfer (the later of such dates is referred to herein as the "Deemed Offer
------------
Date"). The closing of the purchase by the Company of any Shares pursuant to
----
this Section 2.1(e) shall take place at the principal office of the Company on
the 180th day following the Deemed Offer Date. At such closing, the Company
shall deliver to the Stockholder who is the subject of such Involuntary Transfer
the Fair Market Value of Shares being purchased, against delivery of original
stock certificates and stock powers duly endorsed in favor of the Company
representing the Shares being acquired by the Company. The Company, at is
option, may pay the Fair Market Value of such Shares in the form of company
check, wire transfer, or delivery of a promissory note bearing interest at the
applicable federal rate and having a maturity date not later than five years
from the date of issuance thereof. All of the foregoing deliveries will be
deemed to have been made simultaneously and none shall be deemed completed until
all have been completed. All Shares which the Company does not elect to
purchase pursuant to this Section 2.1(e) may be transferred pursuant to an
Involuntary Transfer.
(f) The restrictions on transfer set forth in this Section 2.1
shall not apply to a Transfer of Shares which is (i) a Permitted Transfer
(provided that the Permitted Transferee executes and delivers a counterpart of
this Agreement agreeing to be bound hereby as set forth in this Section 2.1),
(ii) pursuant to a Public Offering, (iii) made after a Public Offering, pursuant
to a Rule 144 Transaction, (iv) pursuant to Sections 2.2 or 2.4 hereof, (v)
pursuant to Section 2.3 following compliance with Section 2.1(a), 2.1(b), 2.1(c)
or 2.1(d), in each case to the extent applicable to the proposed transferor, or
(vi) made after the Public Float Date.
-14-
(g) The Company, by action of its Board of Directors, may assign
its rights to purchase Shares pursuant to Section 2.1 (a) or Section 2.1 (e) to
one or more of the Stockholders.
2.2 Call by the Company.
-------------------
(a) If the employment of a Management Investor by the Company or
any of its Subsidiaries shall terminate (a "Call Event") for any reason prior to
----------
the earlier to occur of (i) the initial Public Offering or (ii) a Change of
Control, then the Company shall have the right to purchase (the "Call Option"),
-----------
by delivery of a written notice (the "Call Notice") to such terminated Manage-
-----------
ment Investor no later than ninety (90) days after the date of such Call Event,
and such Management Investor and such Management Investor's Permitted
Transferees (the "Call Group") shall be required to sell all (but not less than
----------
all) of the Shares and Vested Stock Options which are owned by the members of
the Call Group on the date of such Call Event (collectively, the "Call
----
Securities") at a price per share equal to the Call Price (as defined in Section
----------
2.2(b) below) of such Shares as of the date the Call Notice is delivered;
provided however that this Section 2.2 shall not apply to Xxxx X. Xxxxxxx.
(b) For purposes of this Section 2.2, the term "Call Price" shall
----------
mean (1) with respect to shares of Common Stock,
(i) in the event of a termination of a Management Investor
without Cause or by reason of death or Disability or by such Management Investor
upon Company Breach or Retirement, the Fair Market Value of such shares of
Common Stock; and
(ii) in the event of a termination of a Management Investor
for Cause, in the event of the Voluntary Termination by a Management Investor,
or in the event of a termination for any reason other than those expressly
provided in subparagraph (i) above, the lower of (x) the Investment Price of
such shares of Common Stock or (y) the Fair Market Value of such shares of
Common Stock; and
(iii) with respect to any Vested Stock Option, the difference
between (x) the Call Price, as determined above, payable in respect of shares of
Common Stock minus (y) the exercise price of such Vested Stock Option.
(c) The closing of any purchase of Call Securities by the Company
pursuant to paragraph 2.2(a) shall take place at the principal office of the
Company no later than the 180th day after the Call Event. At such closing, the
Company shall deliver to the Call Group consideration in an amount equal to the
aggregate Call Price payable in respect of such Call Securities, against
delivery of (i) original stock certificates and stock powers duly endorsed in
favor of the Company representing the Call Securities and (ii) the delivery of
an executed agreement, in form reasonably satisfactory to the Company,
evidencing the cancellation of any Vested Stock Options. The Company, at its
option, may pay the consideration for such Call
-15-
Securities in the form of company check or wire transfer, provided, however,
-------- -------
that if at the time of such closing, the Company is then prohibited from
redeeming with immediately available funds all or a portion of the Call
Securities pursuant to the terms of any credit facility, indenture or similar
agreement or instrument then binding on the Company, then the Company may
deliver a promissory note bearing interest at the applicable federal rate and
with a maturity date not later than five years from the date of issuance thereof
with respect to the Call Price or the portion thereof not able to be paid in
immediately available funds, and such promissory note shall require the Company
to make prepayments on the principal amount thereof when and if permitted by the
Company's credit facilities from time to time. All of the foregoing deliveries
will be deemed to be made simultaneously and none shall be deemed completed
until all have been completed.
(d) Notwithstanding anything set forth in this Section 2.2 to the
contrary, prior to the exercise by the Company of its Call Option to purchase
Call Securities pursuant to this Section 2.2, one or more new or existing
employees of the Company or any Subsidiary may be designated by the Board of
Directors of the Company (individually a "Designated Employee" and collectively,
-------------------
"Designated Employees") who shall have the right, but not the obligation, to
--------------------
exercise the Call Option and to acquire, in lieu of the Company, some or all (as
determined by the Company) of the Call Securities that the Company is entitled
to purchase from the Call Group hereunder, on the same terms and conditions as
set forth in Section 2.2(c) which apply to the repurchase of Call Securities by
the Company, except that the Designated Employees shall not be entitled to
deliver a promissory note for all or any portion of the Call Price.
Concurrently with any such purchase of Call Securities by any such Designated
Employee, such Designated Employee shall execute a counterpart of this
Agreement, whereupon such Designated Employee shall be deemed a "Management
Investor" and shall have the same rights and be bound by the same obligations as
the other Management Investors hereunder.
(e) If neither the Company nor any Designated Employee elects to
exercise the Call Option and deliver a Call Notice within 90 days of a Call
Event, then the Call Option provided in this Section 2.2 shall terminate but the
Management Investor and his Permitted Transferees shall continue to hold such
Call Securities pursuant to all of the other provisions of this Agreement and
other applicable agreements (including without limitation, any restrictions on
the vesting of stock options).
2.3 Tag Along. Except as provided in Section 2.3(c), no Stockholder
---------
shall Transfer any shares of Common Stock to a Third Party without complying
with the following terms and conditions set forth in Sections 2.3(a) and 2.3(b)
below; provided, that this Section 2.3 shall not in any way limit or affect the
--------
restrictions of Section 2.1 and any Stockholder may be an Initiating Stockholder
(as defined below) under this Section 2.3 only if such Transfer is made in
accordance with the applicable provisions of Section 2.1(a), 2.1(b), 2.1(c) or
2.1(d):
(a) After complying with the provisions of Section 2.1(a), 2.1(b),
2.1(c) or 2.1(d), the Stockholder (the "Initiating Stockholder") desiring to
----------------------
Transfer any shares of Common Stock shall give not less than thirty (30) days
prior written notice of such intended Transfer to
-16-
each other Stockholder ("Participating Offeree") and to the Company. Such notice
---------------------
(the "Participation Notice") shall set forth the terms and conditions of such
--------------------
proposed Transfer, including the name of the prospective transferee, the number
of shares of Common Stock proposed to be transferred (the "Participation
-------------
Securities") by the Initiating Stockholder, the purchase price per share
----------
proposed to be paid therefor and the payment terms and type of Transfer to be
effectuated. The Participation Notice shall state further that the Initiating
Stockholder complied with, or obtained waivers with respect to compliance with,
the applicable paragraph of Section 2.1 hereof with respect to such proposed
Transfer and, if applicable, that the Offered Shares were not purchased by the
Company, or its designee, pursuant to the right of first refusal described at
Section 2.1(a). Within 20 days following the delivery of the Participation
Notice by the Initiating Stockholder to each Participating Offeree and to the
Company, each Participating Offeree shall, by notice in writing to the
Initiating Stockholder and to the Company, have the opportunity and right to
sell to the purchasers in such proposed Transfer (upon the same terms and
conditions as the Initiating Stockholder) up to that number of shares of Common
Stock owned by such Participating Offeree as shall equal the product of (x) a
----------
fraction, the numerator of which is the number of shares of Common Stock owned
by such Participating Offeree as of the date of such Participation Notice and
the denominator of which is the sum of (A) the aggregate number of shares of
Common Stock owned as of the date of such Participation Notice by each
Initiating Stockholder and by all Participating Offerees plus (B) the aggregate
number of shares of Common Stock issuable pursuant to Vested Stock Options as of
the date of such Participation Notice by each Initiating Stockholder and by all
Participating Offerees, multiplied by (y) the number of Participation
-------------
Securities. The amount of Participation Securities to be sold by any Initiating
Stockholder shall be reduced to the extent necessary to provide for such sales
of shares of Common Stock by Participating Offerees.
(b) At the closing of any proposed Transfer in respect of which a
Participation Notice has been delivered, the Initiating Stockholder, together
with all Participating Offerees electing to sell shares of Common Stock, shall
deliver to the proposed transferee certificates evidencing the shares of Common
Stock to be sold with stock powers duly endorsed in favor of the proposed
transferee and shall receive in exchange therefor the consideration to be paid
or delivered by the proposed transferee in respect of such shares of Common
Stock as described in the Participation Notice.
(c) The provisions of this Section 2.3 shall not apply to (i) any
Permitted Transfer, (ii) any Transfer pursuant to a Public Offering or,
following a Public Offering, to the public pursuant to a Rule 144 Transaction,
(iii) Transfers pursuant to Sections 2.2 or 2.4 hereof or (iv) any Transfer
completed after the Public Float Date.
2.4 Drag Along.
----------
(a) Except as provided in Section 2.4(b), if a majority in
interest of the Xxx Investors and a majority in interest of the Xxxx Investors
(referred to in this Section 2.4 collectively as the "Take Along Group") shall
----------------
determine jointly to sell or exchange (in a business
-17-
combination or otherwise) any of their Shares in one or a series of bona fide
---- ----
arms-length transactions to a Third Party who is not an Affiliate or an
Associate of the Take Along Group, then, upon thirty (30) days written notice
from the Take Along Group, which notice shall include reasonable details of the
proposed sale or exchange including the proposed time and place of closing and
the consideration to be received by the Stockholders (such notice being referred
to as the "Sale Request"), each other Stockholder shall be obligated to, and
------------
shall (i) sell, transfer and deliver, or cause to be sold, transferred and
delivered, to such Third Party, in the same transaction at the closing thereof
the same percentage of such Stockholder's shares of Common Stock as is equal to
the percentage of the shares of Common Stock owned by the Take Along Group as of
the date of the Sale Request that are being sold by the Take Along Group in such
transaction or transactions, (ii) deliver certificates for all of his or its
shares of Common Stock at the closing, free and clear of all claims, liens and
encumbrances, (iii) upon request, consent to the cancellation of all Vested
Stock Options for an amount per underlying share of Common Stock equal to the
difference between the consideration per share of Common Stock referenced in the
preceding clause (i) and the exercise price of such Vested Stock Options, and
(iv) if stockholder approval of the transaction is required, vote his or its
Shares in favor thereof. Each Stockholder (including the members of the Take
Along Group) shall receive the same consideration per share of Common Stock upon
any sale pursuant to this Section 2.4.
(b) The provisions of this Section 2.4 shall not apply to (i) any
Transfer pursuant to a Public Offering or pursuant to a Rule 144 Transaction, or
(ii) any Transfer completed after the Public Float Date.
2.5 Preemptive Rights.
-----------------
(a) Preemptive Rights on Issuances to Third Parties.
------------------------------------------------
(i) Notice to Lead Investors. If the Company or the
------------------------
Operating Compancy proposes to issue New Securities to any Person other than a
Lead Investor ("Third Party New Securities"), the Company shall give each Lead
--------------------------
Investor who then owns any shares of Common Stock written notice of such
proposal (the "Lead Investor Notice"), describing the type of New Securities,
--------------------
the number of New Securities proposed to be issued and the price and the terms
upon which the Company or the Operating Company proposes to issue the same (the
total number of shares of New Securities so proposed to be issued is herein
called "Total Third Party Securities").
----------------------------
(ii) Designation of New Securities to be Purchased by the
----------------------------------------------------
Stockholders. The Company hereby grants to the Lead Investors, so long as they
------------
shall own any shares of Common Stock, the right to designate a portion of the
Total Third Party New Securities for purchase by all the Stockholders pursuant
to the provisions of clause (iv) below. Such portion shall be equal to the
number of the Total Third Party New Securities which the Lead Investors
designate pursuant to the following procedure: (A) each Lead Investor desiring
to designate for purchase by the Stockholders such Lead Investor's Pro Rata
--- ----
Portion of the Total Third Party
-18-
New Securities shall deliver a written notice of such desire to the Company on
or before the 20th day following delivery of the Lead Investor Notice; and (B)
if any Lead Investor does not designate for purchase its Lead Investor's Pro
---
Rata Portion of the Total Third Party New Securities, then the other Lead
----
Investors shall have a right of over-allotment whereby the other Lead Investors
may designate for purchase by the Stockholders, on or before the 5th business
day following the date such non-designating Lead Investor fails to exercise its
designation right, their respective Lead Investor's Pro Rata Portion of Total
--- ----
Third Party New Securities which Lead Investors were entitled to designate for
purchase by the Stockholders but which were not designated for purchase by the
Stockholders. A "Lead Investor's Pro Rata Portion" shall mean (a) under clause
--------------------------------
(A) of the preceding sentence, the ratio of the number of outstanding shares of
Common Stock which such Lead Investor then owns of record to the total number of
outstanding shares of Common Stock then owned of record by all Lead Investors,
and (b) under clause (B) of the preceding sentence, the ratio of the total
number of shares of Common Stock owned by such Lead Investor to the total number
of shares of Common Stock owned by all Lead Investors who elect to designate for
purchase an over-allotment share pursuant to clause (B) of the preceding
sentence. The Company also shall cause the Operating Company to grant to the
Lead Investors, so long as the Operating Company is a Subsidiary of the Company
or, if sooner, until the Operating Company or the Company has made a Public
Offering, a corresponding right to designate for purchase by all Stockholders a
portion of Total Third Party New Securities which the Operating Company, from
time to time, proposes to sell or issue, calculated in the manner described
above with respect to issuances of Total Third Party New Securities by the
Company. At the conclusion of the procedure set forth in the preceding sentences
of this Section 2.5(a)(ii), the Lead Investors shall notify the Company of the
number of Total Third Party New Securities so designated as available for
purchase by the Stockholders under clause (iv) below (such number of New
Securities is herein called the "Lead Investor New Securities").
----------------------------
(iii) Notice to Stockholders of Lead Investor New Securities. The
------------------------------------------------------
Company shall give each Stockholder, as long as such Stockholder shall own any
shares of Common Stock, written notice of the determination of Lead Investor New
Securities, describing the type and number of Lead Investor New Securities
determined pursuant to Section 2.5(a)(ii) and the price and the terms upon which
the Company or the Operating Company proposes to issue the same (which shall be
the same type, price and terms as for the Third Party New Securities). For a
period of twenty (20) days following the delivery of such notice by the Company,
the Company or the Operating Company, as the case may be, shall be deemed
irrevocably to have offered to sell to each Stockholder his or its pro rata
--- ----
share of Lead Investor New Securities for the price and upon the terms specified
in the notice. Each Stockholder may exercise his or its preemptive rights
hereunder by giving written notice to the Company and stating therein the
quantity of Lead Investor New Securities to be purchased.
(iv) Preemptive Right. The Company hereby grants to each Stock-
----------------
holder so long as he or it shall own any shares of Common Stock or, if sooner,
until the Company has made a Public Offering, the right to purchase a pro rata
--- ----
portion of Lead Investor New Securities which the Company, from time to time,
proposes to sell or issue; provided,
--------
-19-
however, that any Lead Investor that fails to designate for purchase its pro
------- ---
rata portion of the Total Third Party New Securities pursuant to Section
----
2.5(a)(ii) shall not be entitled to exercise any preemptive rights pursuant to
this Section 2.5(a)(iv) with respect to such issuance of the Third Party New
Securities. The Company also shall cause the Operating Company to grant to each
Stockholder, so long as the Operating Company is a Subsidiary of the Company or,
if sooner, until the Operating Company or the Company has made a Public
Offering, the right to purchase a pro rata portion of Lead Investor New
--- ----
Securities which the Operating Company, from time to time, proposes to sell or
proposes to sell or issue. A Stockholder's pro rata portion, for purposes of
--- ----
this Section 2.5(a)(iv), is the ratio of the number of outstanding shares of
Common Stock which such Stockholder then owns of record to the total number of
shares of Common Stock then outstanding. Each Stockholder who has a preemptive
right under this Section 2.5(a)(iv) shall have a right of over-allotment such
that if any Stockholder fails to exercise his or its right hereunder to purchase
his or its pro rata portion of Lead Investor New Securities, the other
--- ----
Stockholders may purchase the non-purchasing Stockholder's portion on a pro rata
--- ----
basis determined on the basis of the total number of shares of Common Stock
owned by such Stockholder as compared to all shares of Common Stock owned by all
Stockholders who elect to purchase an over-allotment share pursuant to this
sentence; such right of over-allotment shall expire if not exercised within five
(5) business days from the date such non-purchasing Stockholder fails to
exercise his or its right hereunder to purchase his or its pro rata share of
--- ----
Lead Investor New Securities. If a Stockholder converts any shares of Preferred
Stock into shares of Common Stock prior to the expiration of the twenty (20) day
period described in Section 2.5(a)(iii), the number of shares of Common Stock
owned of record by such Stockholder (for purposes of (i) determining such
Stockholder's pro rata portion pursuant to the two immediately preceding
--- ----
sentences of this Section 2.5(a)(iv), and (ii) determining the pro rata basis
--- ----
pursuant to the immediately preceding sentence of this Section 2.5(a)(iv)) shall
be deemed to include the number of shares of Common Stock issued with respect to
the shares of Preferred Stock being converted by such Stockholder.
(b) Preemptive Rights on Issuances to Lead Investors.
------------------------------------------------
(i) Notice. If the Company or the Operating Company
------
proposes to issue New Securities to any Lead Investor (other than Third Party
New Securities pursuant to the provisions of Section 2.5(a)(iv), the Company
shall give each Stockholder who then owns any shares of Common Stock written
notice of such proposal, describing the type of New Securities, the number of
New Securities proposed to be issued and the price and terms upon which the
Company or the Operating Company proposes to issue the same. For a period of
twenty (20) days following the delivery of such notice by the Company, the
Company or the Operating Company, as the case may be, shall be deemed
irrevocably to have offered to sell to each Stockholder his or its pro rata
--- -----
share of such New Securities for the price and upon the terms specified in the
notice. Each Stockholder may exercise his or its preemptive rights hereunder by
giving written notice to the Company and stating therein the quantity of such
New Securities to be purchased.
-20-
(ii) Grant. The Company hereby grants to each Stockholder so long
-----
as he or it shall own any shares of Common Stock or, if sooner until the Company
has made a Public Offering, the right to purchase a pro rata portion of New
--- ----
Securities which the Company, from time to time, proposes to sell or issue to
any Lead Investor (other than Third Party New Securities pursuant to Section
2.5(a)(iv). The Company shall also cause the Operating Company to grant to each
Stockholder, so long as the Operating Company is a Subsidiary of the Company or,
if sooner, until the Operating Company or the Company has made a Public
Offering, the right to purchase a pro rata portion of New Securities which the
--- ----
Operating Company, from time to time, proposes to issue or sell to any Lead
Investor (other than Third Party New Securities pursuant to Section 2.5(a)(iv)).
A Stockholder's pro rata portion, for purposes of this Section 2.5(b), is the
--- ----
ratio of the number of outstanding shares of Common Stock which such Stock-
holder then owns of record to the total number of shares of Common Stock then
outstanding. Each Stockholder who has a preemptive right under this Section
2.5(b) shall have a right of over-allotment such that if any Stockholder fails
to exercise his or its right hereunder to purchase his or its pro rata portion
--- ----
of New Securities to be issued to any Lead Investor (other than Third Party New
Securities pursuant to Section 2.5(a)(iv)), the other Stockholders may purchase
the non-purchasing Stockholder's portion on a pro rata basis determined on the
--- ----
basis of the total number of shares of Common Stock owned by such Stockholder as
compared to all shares of Common Stock owned by all Stockholders who elect to
purchase an over-allotment share pursuant to this sentence; such right of over-
allotment shall expire if not exercised within five (5) business days from the
date such non-purchasing Stockholder fails to exercise his or its right
hereunder to purchase his or its pro rata share of New Securities to be issued
--- ----
to any Lead Investor (other than Third Party New Securities pursuant to Section
2.5(a)(iv). If a Stockholder converts any shares of Preferred Stock into shares
of Common Stock prior to the expiration of the twenty (20) day period described
in Section 2.5(b)(i), the number of shares of Common Stock owned of record by
such Stockholder (for purposes of (i) determining such Stockholder's pro rata
--- ----
portion pursuant to the two immediately preceding sentence of this Section
2.5(b)(ii), and (ii) determining the pro rata basis pursuant to the immediately
--- ----
preceding sentence of this Section 2.5(b)(ii)) shall be deemed to include the
number of shares of Common Stock issued with respect to the shares of Preferred
Stock being converted by such Stockholder.
(c) Non-Voting Securities. Any Stockholder that elects to pur-
---------------------
chase a portion of Lead Investor New Securities pursuant to Section 2.5(a)(iv)
or New Securities pursuant to Section 2.5(b)(ii) may elect that all or a portion
of the securities purchased by it be in the form of non-voting securities;
provided, however, that no such election shall be permitted if such election
-------- -------
could result in adverse tax or accounting consequences to the Company or any of
its Subsidiaries, as determined by the Company's Board of Directors.
(d) Sale by the Company or the Operating Company. If any Stock-
--------------------------------------------
holder who has a preemptive right under this Section 2.5 fails to exercise in
full his or its preemptive right within the twenty (20) day period and after the
expiration of the five (5) day period for the exercise of the over-allotment
provision of this Section 2.5, the Company or the Operating Company shall have
six (6) months thereafter to sell (i) the Lead Investor New Securities with
-21-
respect to which the preemptive right was not exercised pursuant to Section
2.5(a)(iv) or (ii) the New Securities to the Lead Investors pursuant to Section
2.5(b), in each case, at a price and upon terms no more favorable to the
purchasers thereof than specified in the Company's notice given pursuant to
Section 2.5(a)(iii) or Section 2.5(b)(i), as the case may be. The Company or the
Operating Company, as the case may be, shall have six (6) months following the
expiration of such five (5) day period to sell the New Securities (less the
number of Lead Investor New Securities sold to the Stockholders pursuant to
Section 2.5(a)(iv) or less the number of New Securities sold to the Stockholders
pursuant to Section 2.5(b)(ii)), at a price and upon terms no more favorable to
the purchasers thereof than specified in the Company's notice given pursuant to
Section 2.5(a)(iii) or Section 2.5(b)(i), as the case may be.
(e) Closing. The closing of any issuance pursuant to this
-------
Section 2.5 shall take place as proposed by the Company with respect to the New
Securities to be issued; provided, however, that the Lead Investors shall have
-------- -------
the right to cause the Company to delay such closing for up to thirty (30) days
following the expiration of the twenty (20) day notice period of Section
2.5(a)(iii) or Section 2.5(b)(i), as the case may be. At such closing, the
Company shall deliver certificates for the Lead Investor New Securities
(pursuant to a sale under Section 2.5(a)(iv) or New Securities (pursuant to a
sale under Section 2.5(b)(ii)) in the respective names of the purchasing
Stockholders against receipt of the consideration therefor.
(f) Termination. The right of any Lead Investor to designate for
-----------
purchase, and the right of any Stockholder to purchase, any securities pursuant
to this Section 2.5 shall terminate upon the closing of the Company's first
Public Offering.
2.6 Corporate Governance. Until the tenth anniversary of the date
---------------------
hereof:
(a) Election of Directors. The Company and the Stockholders shall
---------------------
take all action, including but not limited to (i) instructing their director
designees provided herein to take such actions and (ii) voting their Shares, so
that the Company's and the Operating Company's Boards of Directors shall be
identical in number and membership and designated as set forth below.
Notwithstanding anything to the contrary in the foregoing sentence, the TRW
Investor shall have none of the obligations described in the foregoing sentence
during any time that the TRW Investor no longer has the right to designate a
member of the Board of Directors as a result of the operation of Section
2.6(c)(iii). The number of members of the Board of Directors initially shall be
fixed at eight (8), subject to increase and decrease in the manner set forth
below, and designated as follows: two (2) members shall be designated by the Xxx
Investors (the "THL Designees"); one (1) member shall be designated by THL
-------------
Equity Fund (the "THL Equity Fund Designee" and, together with the THL
------------------------
Designees, collectively the "Xxx Designees"); one (1) member shall be designated
-------------
by Xxxx Fund V (the "Xxxx Fund V Designee"); one (1) member shall be designated
--------------------
by Xxxx Fund V-B (the "Xxxx Fund V-B Designee"); one (1) member shall be
----------------------
designated by BCIP (the "BCIP Designee" and, together with the Xxxx Fund V
-------------
Designee and the Xxxx Fund V-B Designee, the "Xxxx Designees"); one (1) member
--------------
shall be designated by the TRW Investor (the "TRW Designee"); and one (1) member
------------
shall be designated by the Lead Investors,
-22-
which designee shall be a member of the Company's or the Operating Company's
management and who initially shall be X. Xxx Xxxxxxxx (the "Lead Investors
--------------
Management Designee"). The Xxxx Fund V Designee, the Xxxx Fund V-B Designees,
-------------------
the BCIP Designee, the THL Designees and the THL Equity Fund Designee shall be
referred to herein collectively as the "Inside Lead Investors Designees."
--------------------------------
(b) Increase in Director Designees. The Xxx Investors shall have
------------------------------
the option, at any time, to designate one (1) additional member of the Board of
Directors, who shall not be an employee of the Company or the Operating Company
(the "Xxx Outside Director Designee"). The Xxxx Investors shall have the option,
-----------------------------
at any time, to designate one (1) additional member of the Board of Directors,
who shall not be an employee of the Company or the Operating Company (the "Xxxx
----
Outside Director Designee"). The Lead Investors shall have the option, at any
-------------------------
time, to designate one (1) additional member of the Board of Directors, who
shall not be an employee of the Company or the Operating Company (the "Lead
----
Investors Outside Director Designee") and up to two (2) additional members of
-----------------------------------
the Board of Directors, who shall be members of the Company's or the Operating
Company's management (the "Additional Lead Investors Management Designees").
----------------------------------------------
The Xxxx Outside Director Designee shall be deemed a "Xxxx Designee" but shall
not be deemed an "Inside Lead Investors Designee." The Xxx Outside Director
Designee shall be deemed a "Xxx Designee" but shall not be deemed an "Inside
Lead Investor Designee."
(c) Reduction in Director Designees.
-------------------------------
(i) In the event the Xxx Investors own, in the aggregate,
less than ten percent (10%) of the shares of Common Stock outstanding (including
shares of Common Stock issuable upon conversion or exercise of securities then
convertible or exercisable into shares of Common Stock), then the Xxx Investors
no longer shall have the right to designate the Xxx Outside Director Designee.
In the event the Xxx Investors own, in the aggregate, less than five percent
(5%) of the shares of Common Stock outstanding (including shares of Common Stock
issuable upon conversion or exercise of securities then convertible or
exercisable into shares of Common Stock), then the number of THL Designees shall
be reduced from two (2) to one (1), with the result that the total number of Xxx
Designees shall be reduced from three (3) to two (2). In the event the Xxx
Investors no longer own any shares of Common Stock, the Xxx Investors no longer
shall have any right to designate any members of the Board of Directors.
(ii) In the event that the Xxxx Investors own, in the
aggregate, less than ten percent (10%) of the shares of Common Stock outstanding
(including shares of Common Stock issuable upon conversion or exercise of
securities then convertible or exercisable into shares of Common Stock), then
the Xxxx Investors no longer shall have the right to designate the Xxxx Outside
Director Designee. In the event the Xxxx Investors own, in the aggregate, less
than five percent (5%) of the shares of Common Stock outstanding (including
shares of Common Stock issuable upon conversion or exercise of securities then
convertible or exercisable into shares of Common Stock), then BCIP no longer
shall have the right to designate the BCIP
-23-
Designee, with the result that the total number of Xxxx Designees shall be
reduced from three (3) to two (2). In the event the Xxxx Investors no longer own
any shares of Common Stock, the Xxxx Investors no longer shall have any right to
designate any members of the Board of Directors.
(iii) In the event the TRW Investor or its Permitted
Transferees own less than the number of Shares owned by the TRW Investor
immediately following consummation of the Recapitalization, the TRW Investor
shall no longer have any right to designate any member of the Board of
Directors. Any reduction in the number of Shares owned by the TRW Investor or
its Permitted Transferees that results from (i) a reverse stock split, reverse
stock dividend or similar change in the capital structure of the Company
pursuant to actions taken by the Company without any act on the part of the TRW
Investor or its Permitted Transferees, or (ii) the sale of their Shares pursuant
to Section 2.4, shall not result in the loss of the TRW Investor's right to
designate a member of the Board of Directors; provided, however, that a
-------- -------
reduction in the number of Shares owned by the TRW Investor or its Permitted
Transferees that results from the sale of their Shares pursuant to Section 2.4
shall result in the loss of the TRW Investor's right to designate a member of
the Board of Directors if, following any such sale, the TRW Investor and its
Permitted Transferees own less than 50% of the number of Shares owned by the TRW
Investor immediately following consummation of the Recapitalization. Upon
conversion of any shares of Preferred Stock, the calculation of the number of
Shares owned by the TRW Investor and its Permitted Transferees for purposes of
this Section 2.6(c)(iii) shall include all shares of Class A Common Stock issued
pursuant to such conversion (except any shares of Class A Common Stock issued
pursuant to Section 5(b)(ii)(B) of the Certificate of Designation) and shall
exclude all shares of Class L-1 Common Stock issued pursuant to such conversion.
(iv) The Company and the Stockholders shall take all action,
including but not limited to (i) instructing their director designees provided
herein to take such actions and (ii) voting their Shares, so that the number of
members of the Board of Directors of the Company and the Operating Company are
reduced by one (1) member for each reduction in (A) THL Designees pursuant to
the second sentence of Section 2.6(c)(i), (B) the BCIP Designee pursuant to the
second sentence of Section 2.6(c)(ii), and (C) the TRW Designee pursuant to
Section 2.6(c)(iii).
(d) Designation of Director Designees. The THL Designees shall be
---------------------------------
designated by the vote or consent of a majority in interest of the Shares held
by the Xxx Investors; the THL Equity Fund Designee shall be elected by the vote
or consent of a majority in interest of the Shares held by the THL Equity Fund;
the Xxxx Fund V Designee shall be elected by the vote or consent of a majority
in interest of the Shares held by Xxxx Capital Fund V, L.P.; the Xxxx Fund V-B
Designee shall be elected by the vote or consent of a majority in interest of
the Shares held by Xxxx Capital Fund V-B, L.P.; the BCIP Designee shall be
elected by the vote or consent of a majority in interest of the Shares held by
BCIP Associates; the TRW Designee shall be elected by the vote or consent of a
majority interest of the Shares held by the TRW Investor; and the Lead Investors
Management Designee, the Additional Lead Investors Management Designees and the
-24-
Lead Investors Outside Designee each shall be elected by the unanimous vote or
consent of the Shares held by the Lead Investors. Any Stockholder (or group of
Stockholders) entitled to designate directors hereunder also shall be entitled
to request that the director designated by that Stockholder (or group of
Stockholders) pursuant to this Section 2.6 be removed or replaced and the other
Stockholders hereby agree to take any action, including the voting of their
Shares or instructing their director designees to take action, to effectuate
such request.
(e) Restrictions on Other Agreements. No Stockholder shall grant
--------------------------------
any proxy or enter into or agree to be bound by any voting trust with respect to
the Shares nor shall any Stockholder enter into any stockholders' agreement or
arrangement of any kind with any Person with respect to the Shares on terms that
are inconsistent with or which violate or conflict with the provisions of this
Agreement including, but not limited to, agreements or arrangements with respect
to the acquisition, disposition or voting of Shares; provided, however, that the
-------- -------
provisions of Section 4.9 with respect to action by stockholder representation
shall not be deemed inconsistent with this Section 2.6(e).
(f) Stockholder Action. Each Stockholder agrees that, in his or
------------------
its capacity as a stockholder of the Company, such Stockholder will vote, or
grant proxies relating to such Shares to vote, all of his or its Shares in favor
of any merger, consolidation, sale or transfer of Shares or any similar
transaction pursuant to Section 2.4 hereof if, and to the extent that, approval
of the Company's stockholders is required in order to effect such transaction,
subject to any fiduciary obligations he or it may have to the other
Stockholders.
(g) Related Transactions. Except for agreements of even date
--------------------
herewith entered into and delivered in connection with the Recapitalization, or
as otherwise approved by the Board of Directors, the Company shall not, and
shall use its best efforts not to permit any Subsidiary to, enter into any
transaction, on a basis less favorable than would at the time be obtainable for
a comparable transaction in arms-length dealing with a Third Party who is not an
Affiliate of the Company or any Stockholder, with any director, officer,
employee or holder of more than 2% of the outstanding shares of Common Stock of
the Company, member of the family of any such person, or any Person in which in
such person, or members of the family of any such person, is a director,
officer, trustee, partner or holder of more than 5% of the outstanding capital
stock thereof.
(h) Corporate Operations. Except as otherwise specifically
--------------------
provided in this Agreement and subject to all relevant common law and statutory
obligations of fairness, so long as the Lead Investors, together with Chase
Equity Associates, L.P., BT Investment Partners, Inc., and BancBoston Ventures
Inc. or their affiliates, in the aggregate, hold at least 30% of the Common
Stock, each of the Stockholders will, upon request of the Lead Investors, vote
all Shares owned by them in favor of any one or more of the following matters
approved by all of the Inside Lead Investor Designees:
-25-
(i) any merger, consolidation, recapitalization, liquidation
or sale of all (or substantially all) of the assets of the Company or any
Subsidiary;
(ii) any payment by the Company or any Subsidiary of
dividends or redemption of capital stock (other than as required or permitted
pursuant to this Agreement or the Company's Certificate of Incorporation);
(iii) the issuance by the Company or any Subsidiary of any
debt or equity security through public or private financing; and
(iv) any acquisition by the Company or any Subsidiary.
(i) Board Action. All action by the Board of Directors of the
------------
Company or the Operating Company shall be taken only upon the vote or consent
of a majority of all members of the Board of Directors as of the time of the
taking of such action, which majority shall include all Inside Lead Investors
Designees.
2.7 Withholding of Taxes. The Company shall have the right to
--------------------
withhold (or cause one of the Company's subsidiaries to withhold) from any
amounts payable under this Agreement to any Management Investor or any amounts
otherwise payable by the Company to such Management Investor, or require such
Management Investor to remit to the Company, an amount sufficient to satisfy all
federal, state and local withholding tax requirements, whether arising on
account of the matters contemplated by this Agreement, any other agreement
between such Management Investor and the Company or otherwise.
ARTICLE III
Registration Rights
-------------------
3.1 Certain Definitions. As used in this Article III, the following
--------------------
terms shall have the following respective meanings:
"Holder" means the person who is then the record owner of Registrable
------
Securities which have not been sold to the public.
The terms "register", "registered" and "registration" shall refer to a
-------- ---------- ------------
registration effected by preparing and filing a registration statement in
compliance with the 1933 Act and applicable state securities laws for the
purpose of effecting a public sale of securities.
"Registration Expenses" shall mean all expenses (other than Selling
---------------------
Expenses) incurred by the Company in compliance with Sections 3.2 or 3.3 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
-26-
registration, the reasonable fees and disbursements of one counsel for all the
selling Holders and, if requested by either the Xxx Investors or the Xxxx
Investors, the reasonable fees and disbursements of one counsel for each of the
Xxx Investors as a group and the Xxxx Investors as a group.
"Registrable Securities" shall mean (i) all shares of Common Stock
----------------------
held by any party hereto as of the date hereof, (ii) all shares of Common Stock
hereinafter acquired by any Stockholder, and (iii) any other common equity
securities of the Company issued in exchange for, upon a reclassification of, or
in a distribution with respect to, such Common Stock. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (a) a registration statement (other than a registration statement on Form
S-8) with respect to the sale of such securities shall have become effective
under the 1933 Act and such securities shall have been disposed of in accordance
with such registration statement, (b) a registration statement on Form S-8 with
respect to such securities shall have become effective under the 1933 Act, (c)
such securities shall have been sold under in a Rule 144 Transaction (or any
successor provision) under the 1933 Act, (d) such securities shall have been
otherwise transferred and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company or (e)
such securities shall have been issued and then ceased to be outstanding.
"SEC" means the Securities and Exchange Commission.
---
"Selling Expenses" shall mean all underwriting discounts, selling
----------------
commissions and transfer taxes applicable to the sale of Registrable Securities.
3.2 Demand Registrations.
---------------------
(a) Subject to paragraph (b) hereof,
(i) if the Company shall receive, prior to its initial
Public Offering, a written request (specifying that it is being made pursuant to
this Section 3.2) from both a majority in interest of the Xxx Investors, or
transferees thereof who have become parties to this Agreement, and a majority in
interest of the Xxxx Investors, or transferees thereof who become parties to
this Agreement, that the Company file a registration statement under the 1933
Act, then the Company shall (i) promptly (at least thirty (30) days prior to the
filing date) give written notice to all other Holders of such request, (ii) with
reasonable promptness, and in any case not later than ninety (90) days after
receipt by the Company of such written request for a demand registration, file a
registration statement with the SEC relating to such Registrable Securities as
to which such request for a demand registration relates and (iii) use its
commercially reasonable efforts to cause to be registered under the 1933 Act all
Registrable Securities of the same class that Holders have requested be
registered.
-27-
(ii) if the Company shall receive, following its initial
Public Offering, a written request (specifying that it is being made pursuant to
this Section 3.2) from a majority in interest of either the Xxx Investors, or
transferees thereof who have become parties to this Agreement, or the Xxxx
Investors, or transferees thereof who have become parties to this Agreement (in
either case, the Holders delivering such request are referred to herein
collectively as the "Requesting Holders") that the Company file a registration
------------------
statement under the 1933 Act, covering the registration of Registrable
Securities with an anticipated gross proceeds of at least $50 million (including
anticipated gross proceeds, if any, to the Company and any other Holders), then
the Company shall (i) promptly (at least thirty (30) days prior to the filing
date) give written notice to all other Holders of such request, (ii) with
reasonable promptness, and in any case not later than ninety (90) days after
receipt by the Company of such written request for a demand registration, file a
registration statement with the SEC relating to such Registrable Securities as
to which such request for a demand registration relates and (iii) use its
commercially reasonable efforts to cause to be registered under the 1933 Act all
Registrable Securities of the same class that Holders have requested be
registered.
(b) If the total amount of Registrable Securities that all Holders
request to be included in an offering exceeds the amount of securities that the
underwriters reasonably believe compatible with the success of the offering,
then the Company will include in such registration only the number of securities
which, in the good faith opinion of such underwriters, can be sold, selected pro
---
rata based on the number of Registrable Securities which each of the Holders
----
requesting to be included owns, or has the right to acquire pursuant to the
exercise of Vested Stock Options.
(c) At any time following the Company's initial Public Offering,
Requesting Holders shall be entitled to request, and the Company shall be
obligated to effect, as many registrations of Registrable Securities pursuant to
this Section 3.2 as may be requested by the Requesting Holders until such time
as they shall no longer own any Registrable Securities.
3.3 Piggyback Registration. If, at any time, either the Company or
-----------------------
the Operating Company determines to register any of its equity securities
(including securities convertible into equity securities) for its own account or
for the account of others under the 1933 Act in connection with the public
offering of such securities (including registrations pursuant to Section 3.2),
the Company shall, at each such time, promptly give each Holder written notice
of such determination no later than thirty (30) days before filing a
registration statement with the SEC; provided, however, that registrations
-------- -------
relating solely to securities to be offered by the Company or the Operating
Company (or other person for whose account the registration is made) in
connection with any acquisition, merger, employee stock option or employee stock
purchase or savings plan on Form S-4 or S-8 (or successor forms) under the 1933
Act shall not be subject to this Section 3.3. Upon the written request of any
Holder received by the Company within thirty (30) days after the giving of any
such notice by the Company, the Company shall use its commercially reasonable
efforts to cause to be registered under the 1933 Act all of the Registrable
Securities of such Holder that each Holder has requested be registered. If the
total
-28-
amount of Registrable Securities that are to be included by either the Company
or the Operating Company for its own account and at the request of Holders
thereof exceeds the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, then the Company or the
Operating Company will include in such registration only the number of
securities which in the opinion of such underwriters can be sold, in the
following order:
(i) first, the equity securities of the Company or the
Operating Company, unless the registration is pursuant to Section 3.2, in which
event the provisions related to allocation of Registrable Shares set forth in
Section 3.2 shall be controlling; and
(ii) then, the Registrable Securities requested to be
included by the Holders pro rata based on the number of Registrable Securities
--- ----
which each of them owns, or has the right to acquire pursuant to the exercise of
Vested Stock Options.
3.4 Obligations of the Company.
---------------------------
(a) Whenever required under Section 3.2 hereof to use its
commercially reasonable efforts to effect the registration of any Registrable
Securities, the Company shall or, with respect to registrations undertaken by
the Operating Company, shall cause the Operating Company to:
(i) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective,
including, without limitation, filing of pre-effective and post-effective
amendments and supplements to any registration statement or prospectus necessary
to keep the registration statement current;
(ii) as expeditiously as reasonably possible, 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 1933 Act with respect to the
disposition of all securities covered by such registration statement and, if
necessary for the effective disposition of the Registrable Securities covered
thereby, to keep each registration statement effective (and in compliance with
the 1933 Act) by such actions as may be necessary or appropriate for a period of
120 days after the effective date of such registration statement;
(iii) as expeditiously as reasonably possible, furnish to the
Holders such numbers of copies of a prospectus, including any preliminary
prospectus, in conformity with the requirements of the 1933 Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them;
(iv) as expeditiously as reasonably possible, use its
commercially reasonable efforts to register and qualify the securities covered
by such registration statement
-29-
under such securities or "blue sky" laws of such jurisdictions as may be
requested by the underwriters of said offering or, if none, by the Holders;
provided, however, 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 jurisdiction, and further
provided that (anything in this Agreement to the contrary notwithstanding with
respect to the bearing of expenses) if any jurisdiction in which the securities
shall be qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
stockholders, then such expenses shall be payable by selling stockholders pro
---
rata, to the extent required by such jurisdiction;
----
(v) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the disposition
or such Registrable Securities;
(vi) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, upon discovery that, or upon 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 to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any such seller
promptly prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit 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 under which they were made;
(vii) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the 1933 Act;
(viii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement;
(ix) use its commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on any securities
exchange or automated inter-dealer quotation system on which any class of
Registrable Securities is then listed, and if not then listed on any such
exchange or system, use its best efforts to list all Registrable Securities
covered
-30-
by such registration statement on either the New York Stock Exchange or the
Nasdaq National Market;
(x) use its commercially reasonable efforts to obtain a
"cold comfort" letter from the Company's independent public accountants in
customary form, addressed to each Holder participating in the registration, and
covering such matters of the type customarily covered by "cold comfort" letters
as the Holders of a majority (by number of shares) of the Registrable Shares
being sold or the underwriters retained by such Holders reasonably request; and
(xi) use its commercially reasonable efforts to obtain an
opinion of counsel to the Company addressed to the underwriters of the sale of
Registrable Securities being registered covering such matters as are customarily
covered by such an opinion.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under this Agreement,
the Company will give the Holders of Registrable Securities on whose behalf such
Registrable Securities are to be so registered and their underwriters, if any,
and their respective counsel and accountants, the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the SEC, and each amendment thereof or supplement thereto, and
will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers, its
counsel and the independent public accountants who have certified its financial
statements, as shall be necessary, in the opinion of such Holders or such
underwriters or their respective counsel, in order to conduct a reasonable and
diligent investigation within the meaning of the 1933 Act. Without limiting the
foregoing, each registration statement, prospectus, amendment, supplement or any
other document filed with respect to a registration under this Agreement shall
be subject to review and reasonable approval by the Holders registering
Registrable Securities in such registration and by their counsel.
3.5 Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company or the Operating Company to take any action pursuant
to Article III that the Holders shall furnish to the Company or the Operating
Company such information regarding them, the Registrable Securities held by
them, and the intended method of disposition of such securities as the Company
or the Operating Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company or the Operating Company.
3.6 Expenses of Registration. All Selling Expenses shall be borne
------------------------
by the Holders of securities registered under this Article III pro rata on the
--- ----
basis of the number of their shares so registered. All Registration Expenses
incurred in connection with a registration pursuant to Sections 3.2 or 3.3
hereof shall be borne by the Company or the Operating Company.
3.7 Underwriting.
------------
(a) In connection with any registration of Registrable Securities
under this Agreement, the Company will, or, with respect to registrations
undertaken by the Operating Company, will cause the Operating Company to, if
requested by the underwriters for any
-31-
Registrable Securities included in such registration, enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain
such representations and warranties by the Company or the Operating Company, as
the case may be, and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, provisions relating to indemnification and
contribution. The Holders on whose behalf Registrable Securities are to be
distributed by such underwriters shall be parties to any such underwriting
agreement, and the representations and warranties by, and the other agreements
on the part of, the Company or the Operating Company, as the case may be, to and
for the benefit of such underwriters shall be also made to and for the benefit
of such Holders of Registrable Securities. Such underwriting agreement shall
comply with Section 3.8.
(b) Such underwriters shall be selected as follows: (i) in the
case of a registration pursuant to Section 3.2, (A) by agreement of a majority
in interest of the Xxx Investors and a majority in interest of the Xxxx
Investors if each of the Xxx Investors and the Xxxx Investors are selling
Registrable Securities in such registration, or (B) by the Xxx Investors if the
Xxxx Investors are not selling any Registrable Securities in such registration,
or by the Xxxx Investors if the Xxx Investors are not selling any Registrable
Securities in such registration; or (ii) in all other cases, by the Company.
3.8 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under Article III:
(a) To the fullest extent permitted by law, the Company will, or
will cause the Operating Company to, indemnify and hold harmless each Holder
requesting or joining in a registration, any underwriter (as defined in the 0000
Xxx) for it, and each person, if any, who controls such Holder or such
underwriter within the meaning of the 1933 Act, from and against any losses,
claims, damages, expenses (including reasonable attorneys' fees and expenses and
reasonable costs of investigation) or liabilities, joint or several, to which
they or any of them may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages, expenses or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based on any untrue or alleged untrue statement of any material fact
contained in such registration statement including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto, or
arise out of or are based upon 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 arise out of any violation by the Company
or the Operating Company of any rule or regulation promulgated under the 1933
Act applicable to the Company or the Operating Company and relating to action or
inaction required of the Company or the Operating Company in connection with any
such registration; and the Company will, or will cause the Operating Company to,
promptly reimburse each Holder, each
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person controlled by such Holder and any underwriter for any legal or other
expenses reasonably 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 3.8(a) 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 or the
Operating Company (which consent shall not be unreasonably withheld), nor shall
the Company or the Operating Company be liable to anyone for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon an untrue statement or omission made in connection with such
registration statement, preliminary prospectus, final prospectus or amendments
or supplements thereto in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, underwriter or control person. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Holder, underwriter or control person and shall survive the transfer of such
securities by such Holder.
(b) To the fullest extent permitted by law, each Holder requesting
or joining in a registration will severally and not jointly indemnify and hold
harmless each of the Company and the Operating Company, as the case may be, each
of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company or the Operating
Company within the meaning of the 1933 Act, and each agent and any underwriter
for the Company or the Operating Company and any person who controls any such
agent or underwriter and each other Holder and any person who controls such
Holder (within the meaning of the 0000 Xxx) against any losses, claims, damages
or liabilities to which the Company or the Operating Company or any such
director, officer, control person, agent, underwriter, or other Holder may
become subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon an untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission was made
in such registration statement, preliminary or final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished by such Holder with respect to such Holder expressly for
use in connection with such registration; and such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or the Operating
Company or any such director, officer, control person, agent, underwriter, or
other Holder in connection with investigating or defending any such loss, claim,
damage, liability or action; provided however, the indemnity obligation of each
-------- -------
such Holder hereunder shall be limited to and shall not exceed the net proceeds
actually received by such Holder upon a sale of Registrable Securities pursuant
to a registration statement hereunder; and provided further that the indemnity
--------
agreement contained in this Section 3.8(b) shall not apply to amounts paid in
settlements effected without the consent of such Holder (which consent shall not
be unreasonably withheld). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or the
Operating Company or any such director, officer, Holder, underwriter or control
person and shall survive the transfer of such securities by such Holder.
-33-
(c) Any person seeking indemnification under this Section 3.8 will
(i) give prompt notice to the indemnifying party of any claim with respect to
which it seeks indemnification (but the failure to give such notice will not
affect the right to indemnification hereunder, unless the indemnifying party is
materially prejudiced by such failure) and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest may exist between such
indemnified and indemnifying parties with respect to such claim, permit such
indemnifying party, and other indemnifying parties similarly situated, jointly
to assume the defense of such claim with counsel reasonably satisfactory to the
parties. In the event that the indemnifying parties cannot mutually agree as to
the selection of counsel, each indemnifying party may retain separate counsel to
act on its behalf and at its expense. The indemnified party shall in all events
be entitled to participate in such defense at its expense through its own
counsel. If such defense is not assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the reasonable fees and expenses of such additional counsel.
(d) If for any reason the foregoing indemnification is unavailable
to any party or insufficient to hold it harmless as and to the extent
contemplated by the preceding paragraphs of this Section 3.8, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage, expense or liability
in such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the applicable indemnified party, as the
case may be, on the other hand, and also the relative fault of the Company and
any applicable indemnified party, as the case may be, as well as any other
relevant equitable considerations.
3.9 Reports Under Securities Exchange Act of 1934. With a view to
---------------------------------------------
making available to the Holders and their Permitted Transferees the benefits of
Rule 144 and Rule 144A promulgated under the 1933 Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company or the Operating Company to the public without registration, the
Company agrees to use and to cause the Operating Company to use its best efforts
to take all action that may be required as a condition to the availability of
Rule 144, Rule 144A or such other rules or regulations, including, without
limitation, to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Company or the Operating Company;
-34-
(b) file with the SEC in a timely manner all reports and other
documents required of the Company or the Operating Company under the 1933 Act
and the 1934 Act (including, without limitation, under Section 13 or Section 15
of the 0000 Xxx); and
(c) furnish to any Holder forthwith upon request a written
statement by the Company or the Operating Company that it has complied with the
reporting requirements of Rule 144 (at any time after ninety (90) days after the
effective date of said first registration statement filed by the Company or the
Operating Company), and of the 1933 Act and the 1934 Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company or the Operating Company, and such
other reports and documents so filed by the Company or the Operating Company as
may be reasonably requested in availing any Holder of any rule or regulation of
the SEC permitting the selling of any such securities without registration.
3.10 No Inconsistent Agreements. The Company agrees that neither it
--------------------------
nor the Operating Company has entered into, and neither it nor the Operating
Company will hereafter enter into, any Agreement with respect to the
registration of its securities that is inconsistent with (or superior to) the
rights granted to the Holders of Registrable Securities in this Agreement.
3.11 Stock Split. If, on or after the receipt by the Company of a
-----------
request for registration of a public offering pursuant to Section 3.2 hereof,
the proposed managing underwriter or underwriters of such offering reasonably
believes that the number of shares to be registered is less than the minimum
number necessary for the success of such offering, the Company will promptly
prepare and submit to its Board of Directors, use its best efforts to cause to
be adopted by its Board of Directors and stockholders, and, if so adopted, file
and cause to become effective, an amendment to its certificate of incorporation
so as to cause each share of its outstanding Common Stock to be converted into
such number of shares of such Common Stock so that the number of shares of
Registrable Securities to be registered is equal to the minimum number which
such managing underwriter or underwriters reasonably believes is necessary for
the success of such offering. Each Stockholder, together with his or its
Permitted Transferees, hereby agrees to vote the Shares held by him or it in
favor of adopting such amendment.
3.12 Lock-up Agreements. Each of the parties to this Agreement agrees to
------------------
enter into customary lock-up agreements with respect to all of their Shares with
a duration of 180 days following the closing of an initial Public Offering and
with a duration of 90 days following the closing of any subsequent Public
Offering.
ARTICLE IV
Miscellaneous
-------------
4.1 Remedies.
--------
(a) Each of the parties to this Agreement hereby acknowledges
that, in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party will be without an adequate remedy at law. Each
of the parties therefore agrees that, in the event
-35-
of a breach of any material provision of this Agreement, the aggrieved party
will be entitled to institute and prosecute proceedings to enforce specific
performance of such provision or to enjoin the continuing breach of such
provision, as well as to obtain damages for breach of this Agreement. By seeking
or obtaining any such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled. In addition,
any transfers of Shares in violation of this Agreement are void.
(b) In any action or proceeding brought to enforce any provision
of this Agreement, or where any provision hereof is successfully asserted as a
defense, the prevailing party shall be entitled to recover reasonable attorneys'
fees in addition to any other available remedy.
4.2 Entire Agreement; Amendment. This Agreement, together with the
----------------------------
Exhibits hereto, sets forth the entire understanding of the parties, and
supersedes all prior agreements and all other arrangements and communications,
whether oral or written, with respect to the subject matter hereof. The
Schedule of Stockholders attached hereto as Exhibit A may be amended to reflect
---------
changes in the composition of the Stockholders and changes in stock ownership
that may occur from time to time as a result of Permitted Transfers, Transfers
permitted under Article II hereof, or issuances of capital stock permitted under
Article II hereof, including, without limitation, the issuance of securities
that do not constitute New Securities. Amendments to the Schedule of
Stockholders reflecting Permitted Transfers, Transfers permitted under Article
II hereof, or issuances of capital stock permitted under Article II hereof,
including, without limitation, the issuance of securities that do not constitute
New Securities, shall become effective when the amended Schedule of
Stockholders, and a copy of the Agreement as executed by any new transferee or
holder of capital stock, are filed with the Company. Amendments to the Schedule
of Stockholders reflecting Transfers pursuant to waivers under Article II hereof
shall become effective when the waivers and amended Schedule of Stockholders, as
executed by all required parties, and a copy of this Agreement as executed by
any new transferee, or holder of capital stock, are filed with the Company and
with each Lead Investor. Any other amendment, revision or termination of this
Agreement shall require the prior written consent of the Management
Representative, each of the Xxx Investors, each of the Bain Investors, the TRW
Investor and each of the Additional Equity Investors.
4.3 Severability. The invalidity or unenforceability of any particular
-------------
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if the invalid or
unenforceable provision were omitted.
4.4 Notices. All notices and other communications necessary or
--------
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given three business days after mailing by certified
mail, when delivered by hand, or when delivered by telecopier upon confirmation
of receipt, or one day after sending by an overnight delivery service that
guarantees next-day delivery, to the respective addresses of the parties set
forth below:
(a) for notices and communications to the Company:
-36-
EXPERIAN CORPORATION
000 Xxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
FAX: (000) 000-0000
ATTN: Corporate Secretary
With a copy to each of:
XXXXXX X. XXX COMPANY
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Xxxxxxx X. XxXxxx
and
XXXX CAPITAL, INC.
Two Xxxxxx Place, 7th Fl.
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Xx. Xxxxxx X. Xxxxx
and
XXXXXXXX, XXXXXXX & XXXXXXX
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
and
ROPES & XXXX
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: X. Xxxxxxxx Malt, Esq.
Xxxxx X. Xxxxxx, Esq.
(b) For notices and communications to the Stockholders, to the
respective addresses set forth in the Schedule of Stockholders.
By notice complying with the foregoing provisions of this Section 4.4, each
party may change the mailing address for future notices and communications to
such party.
4.5 Binding Effect; Assignment. This Agreement shall be binding
--------------------------
upon and inure to the benefit of the parties hereto and to their respective
transferees, successors, assigns, heirs and
-37-
administrators; provided, however, that the rights under this Agreement may
-------- -------
may not be assigned except as expressly provided herein. No such assignment
shall relieve an assignor of its obligations hereunder.
4.6 Governing Law. This Agreement shall be governed by the laws of
-------------
the State of Delaware (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
4.7 Termination. Without affecting any other provision of this
-----------
Agreement requiring termination of any rights in favor of any Stockholder,
Permitted Transferee or any other transferee of Shares, the provisions of
Articles II and III of this Agreement shall terminate as to such Stockholder,
Permitted Transferee or other transferee, when, pursuant to and in accordance
with this Agreement, such Stockholder, Permitted Transferee or other transferee,
as the case may be, no longer owns any Shares; provided, that termination
--------
pursuant to this Section 4.7 shall only occur in respect of a Stockholder after
all Permitted Transferees in respect thereof also no longer own any Shares.
4.8 Recapitalizations, Exchanges, Etc. The provisions of this
----------------------------------
Agreement shall apply, to the full extent set forth herein with respect to
Shares, to any and all shares of capital stock of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Shares, by reason of a stock dividend, stock split, stock
issuance, reverse stock split, combination, recapitalization, reclassification,
merger, consolidation or otherwise. Upon the occurrence of any such events,
amounts hereunder shall be appropriately adjusted.
4.9 Stockholder Representative.
--------------------------
(a) Each Management Investor hereby designates and appoints (and
each Permitted Transferee of each such Management Investor is hereby deemed to
have so designated and appointed) X. Xxx Xxxxxxxx, with full power of
substitution (the "Management Investor Representative"), as the representative
----------------------------------
of each such person to perform all such acts as are required, authorized or
contemplated by this Agreement to be performed by any such person and hereby
acknowledges that the Management Investor Representative shall be the only
person authorized to take any action so required, authorized or contemplated by
this Agreement by each such person. Each such person further acknowledges that
the foregoing appointment and designation shall be deemed to be coupled with an
interest and shall survive the death or incapacity of such person. Each such
person hereby authorizes (and each such Permitted Transferee will be deemed to
have authorized) the other parties hereto to disregard any notice or other
action taken by such person pursuant to this Agreement except for the Management
Investor Representative. The other parties hereto are and will be entitled to
rely on any action so taken or any notice given by the Management Investor
Representative and are and will be entitled and authorized to give notices only
to the Management Investor Representative for any notice contemplated by this
Agreement to be given to any such person. A successor to the Management Investor
Representative may be chosen by a majority in interest of the Shares held by the
-38-
Management Investors, provided that notice thereof is given by the new
Management Investor Representative to the Company and to the other Stockholders.
(b) The Stockholders agree that the Management Investor
Representative shall not have any liability arising out of or in connection with
the exercise of his powers or the discharge of his duties hereunder while acting
as a representative under this Agreement, except that such representative shall
be subject to liability for his gross negligence or willful misconduct. Such
representative shall not in any event be liable with respect to any action taken
or omitted to be taken by him in good faith or in accordance with and in
reliance upon the opinion of counsel or independent auditors or upon information
obtained by him from any governmental authority or other specialist.
4.10. Action Necessary to Effectuate the Agreement. The parties
--------------------------------------------
hereto agree to take or cause to be taken all such corporate and other action as
may be necessary to effect the intent and purposes of this Agreement.
4.11. Purchase for Investment; Legend on Certificate. Each of the
----------------------------------------------
parties acknowledges that all of the Shares held by such party as shown on the
Schedule of Stockholders attached as Exhibit A hereto are being (or have been)
---------
acquired for investment and not with a view to the distribution thereof and that
no transfer, hypothecation or assignment of Shares may be made except in
compliance with applicable federal and state securities laws. All of the
certificates representing Shares of the Company which are now or hereafter owned
by the Stockholders and which are subject to the terms of this Agreement shall
have endorsed in writing, stamped or printed, thereon the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS, INCLUDING RESTRICTIONS ON TRANSFER, OF A STOCKHOLDERS' AGREEMENT
DATED AS OF SEPTEMBER 19, 1996, AS AMENDED FROM TIME TO TIME, AND NONE OF SUCH
SECURITIES, OR ANY INTEREST THEREIN, SHALL BE TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF EXCEPT AS PROVIDED IN THAT AGREEMENT. A COPY OF THE
STOCKHOLDERS' AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY AND WILL BE
MAILED TO ANY PROPERLY INTERESTED PERSON WITHOUT CHARGE WITHIN FIVE (5) DAYS
AFTER RECEIPT OF A WRITTEN REQUEST."
4.12. Effectiveness of Transfers. All Shares Transferred by a
--------------------------
Stockholder (other than pursuant to an effective registration statement under
the 1933 Act or a Rule 144 Transaction) shall be held by the transferee thereof
pursuant to this Agreement. Such transferee shall, except as otherwise
expressly stated herein, have all the rights and be subject to all of the
obligations of a Stockholder under this Agreement automatically and without
requiring any further act by such transferee or by any parties to this
Agreement. Without affecting the preceding sentence, if such transferee is not
a Stockholder on the date of such Transfer, then such transferee, as a condition
to such Transfer, shall confirm such transferee's obligations hereunder in
accordance with Section 4.13 hereof. No Shares shall be Transferred on the
Company's books and records, and no Transfer of Shares shall be otherwise
effective, unless any such Transfer is made in accordance
-39-
with the terms and conditions of this Agreement, and the Company is hereby
authorized by all of the Stockholders to enter appropriate stop transfer
notations on its transfer records to give effect to this Agreement.
4.13. Additional Stockholders. Subject to the restrictions on
-----------------------
Transfers of Shares contained herein, any person or entity acquiring Shares
(except for transferees acquiring shares of Common Stock (i) in an offering
registered under the 1933 Act or (ii) in a Rule 144 Transaction) shall, on or
before the Transfer or issuance to him or it of Shares, sign a counterpart
signature page hereto in form reasonably satisfactory to the Company and shall
thereby become a party to this Agreement; provided, however, that a transferee
--------- --------
which is a Permitted Transferee under clause (e) of the definition of Permitted
Transfer shall not be obligated to so agree until foreclosure on its pledge,
which event shall be subject to the provisions of Section 2.1(e) of this
Agreement.
4.14. No Waiver. No course of dealing and no delay on the part of
---------
any party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as waiver thereof or otherwise prejudice such party's
rights, powers and remedies. No single or partial exercise of any rights,
powers or remedies conferred by this Agreement shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
4.15. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart.
4.16. Headings. All headings and captions in this Agreement are for
--------
purposes of references only and shall not be construed to limit or affect the
substance of this Agreement.
4.17 Consent to Jurisdiction. The Company and each of the
-----------------------
Stockholders, by its or his execution hereof, (i) hereby irrevocably submit to
the exclusive jurisdiction of the state courts of the State of Delaware for the
purposes of any claim or action arising out of or based upon this Agreement or
relating to the subject matter hereof, (ii) hereby waive, to the extent not
prohibited by applicable law, and agree not to assert by way of motion, as a
defense or otherwise, in any such claim or action, any claim that it or he is
not subject personally to the jurisdiction of the above-named courts, that its
or his property is exempt or immune from attachment or execution, that any such
proceeding brought in the above-named court is improper, or that this Agreement
or the subject matter hereof may not be enforced in or by such court, and (iii)
hereby agree not to commence any claim or action arising out of or based upon
this Agreement or relating to the subject matter hereof other than before the
above-named courts nor to make any motion or take any other action seeking or
intending to cause the transfer or removal of any such claim or action to any
court other than the above-named courts whether on the grounds of inconvenient
forum or otherwise. The Company and each of the Stockholders hereby consent to
service of process in any such proceeding in any manner permitted by Delaware
law, and agree that service of process by registered or certified mail, return
receipt requested, at its address specified pursuant to Section 4.4 hereof is
reasonably calculated to give actual notice.
4.18 WAIVER OF RIGHT TO JURY TRIAL. THE COMPANY AND EACH OF THE
-----------------------------
STOCKHOLDERS, BY ITS OR HIS EXECUTION HEREOF, WAIVE THEIR
-40-
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THE COMPANY AND EACH OF THE STOCKHOLDERS ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE
TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE COMPANY AND EACH OF
THE STOCKHOLDERS FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS OR HIS, AS THE CASE MAY BE, LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS OR HIS, AS THE CASE MAY BE, JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE TRANSACTION CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Remainder of Page Intentionally Left Blank]
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EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
EXPERIAN CORPORATION
By:
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
[Signatures continue on following pages]
S-1
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
XXXXXX X. XXX EQUITY FUND III, L.P.
By: THL Equity Advisors III Limited Partnership,
its General Partner
By: THL Equity Trust III, its General Partner
By:
------------------------------------
Title:
------------------------------------
XXXXXX X. XXX FOREIGN FUND III, L.P.
By: THL Equity Advisors III Limited Partnership,
its General Partner
By: THL Equity Trust III, its General Partner
By:
------------------------------------
Title:
------------------------------------
THL-CCI LIMITED PARTNERSHIP
By: THL Investment Management Corp.,
its General Partner
By:
---------------------------------
Title:
---------------------------------
[Signatures continue on following pages]
S-2
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
XXXX CAPITAL FUND V, L.P.
By: Xxxx Capital Partners V, L.P.,
its general partner
By: Xxxx Capital Investors V, Inc.,
its general partner
By: ____________________________________
Title: Managing Director
XXXX CAPITAL FUND V-B, L.P.
By: Xxxx Capital Partners V, L.P.,
its general partner
By: Xxxx Capital Investors V, Inc.
its general partner
By: ____________________________________
Title: Managing Director
BCIP ASSOCIATES
By: ____________________________________
Title: a general partner
RGIP, LLC
By: ____________________________________
Title: Managing Member
BCIP TRUST ASSOCIATES, L.P.
By: ____________________________________
Title: a general partner
[Signatures continue on following pages]
S-3
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
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IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
CHASE EQUITY ASSOCIATES, L.P.
By: CHASE CAPITAL PARTNERS
it's General Partner
By:
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Name: Xxxxxxx X. Xxxxxx
Title: Managing General Partner
[Signatures continue on following pages]
S-4
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
BANCBOSTON INVESTMENTS INC.
By:
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Name:
Title:
[Signatures continue on following pages]
S-5
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
BT INVESTMENT PARTNERS, INC.
By:
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Name:
Title:
[Signatures continue on following pages]
S-6
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
TRW MICROWAVE INC.
By:
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Name: Xxxxxx X. Xxxxx
Title: President
[Signatures continue on following pages]
S-7
EXPERIAN CORPORATION
STOCKHOLDERS' AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
MANAGEMENT INVESTOR:
Print full legal name of person or entity
purchasing Units:
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Signature of person with authorization to sign
on behalf of person or entity purchasing Units:
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S-8
