1
EXHIBIT 4.02
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is dated as of June
21, 2000, by and between CUPERTINO ELECTRIC, INC., a Delaware corporation
formerly known as Delaware Synergism, Inc. (the "Company"), BANCAMERICA CAPITAL
INVESTORS SBIC I, L.P., a Delaware limited partnership ("BancAmerica"),
TA/ADVENT VIII L.P., a Delaware limited partnership ("TA/Advent VIII"),
TA/ATLANTIC AND PACIFIC IV L.P., a Delaware limited partnership ("TA/AP IV"),
TA EXECUTIVES FUND LLC, a Delaware limited liability company ("TA Executives"),
TA INVESTORS LLC, a Delaware limited liability company ("TA Investors"), TA
SUBORDINATED DEBT FUND, L.P., a Delaware limited partnership ("TA Sub Debt"),
GPH CE PARTNERS, a Delaware partnership ("GPH CE") and 0000 XXXXXXXX XXXXX
FUND, LLC, a Delaware limited liability company ("Exchange Place"). TA/Advent
VIII, TA/AP IV, TA Executives, TA Investors, TA Sub Debt, GPH CE and Exchange
Place may be referred to herein collectively as "TA." Each of BancAmerica and
TA may be referred to herein as an "Investor" and collectively, as the
"Investors."
Statement of Purpose
The Company, the Investors, Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx, Xxxxxx
X. Xxxxxxx, Xxxxxxxx X. Xxxx, the Xxxxxxxx Xxxxxxx Long Trust, the Ravizza
Children's Trust II and the Ravizza Children's Trust III (the "Selling
Stockholders") have entered into a Senior Subordinated Note, Warrant and Common
Stock Purchase Agreement dated as of June 21, 2000 (the "Purchase Agreement")
providing for the issuance to certain Investors of Notes (as defined in the
Purchase Agreement) and Warrants (as defined in the Purchase Agreement) by the
Company and the sale to certain Investors of Common Stock (as defined in the
Purchase Agreement) by the Selling Stockholders. The parties hereto desire to
agree to certain aspects of their relationship as holders of such Notes,
Warrants and Common Stock pursuant to this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
SECTION 1. Definitions.
For the purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Additional Shares of Common Stock" means all shares of Common Stock
issued after the date hereof other than: (a) shares issued in connection with a
Stock Dividend or a Stock Subdivision, (b) Warrant Shares, (c) shares issued
upon the exercise or conversion of Options or Convertible Securities
outstanding on the date hereof, other than Incentive Stock Plan Pool Shares,
and (d) Incentive Stock Plan Pool Shares.
"Board" means the Board of Directors of the Company.
2
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company as in effect immediately after the Effective Time.
"Convertible Securities" means evidences of indebtedness, shares of
stock or other securities that, directly or indirectly, are exchangeable for or
exercisable or convertible into Common Stock.
"Demand Registration" means a demand registration requested pursuant to
Section 6(b) hereof.
"Equity Holder" means each Investor and any other holder of any portion
of the Warrant Securities or the Purchased Capital Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value Per Share" means as of a particular date (a) if the
Common Stock is Publicly Traded at the time of determination, the average of
the closing prices on such day of the Common Stock on all domestic securities
exchanges on which the Common Stock is then listed, or, if there have been no
sales on any such exchange on such day, the average of the highest bid and
lowest asked prices on all such exchanges at the end of such day or, if on any
such day the Common Stock is not so listed, the closing price quoted on the
Nasdaq Stock Market or if there have been no sales on the Nasdaq Stock Market
on such day the average of the highest bid and lowest asked prices quoted on
the Nasdaq Stock Market on such day, or if on any day such security is not
quoted on the Nasdaq Stock Market, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as reported by
the OTC Bulletin Board, the National Quotation Bureau, Incorporated, or any
similar successor organization, in each such case averaged over a period of
twenty (20) days consisting of the day as of which "Fair Market Value" is being
determined and the nineteen (19) consecutive Business Days prior to such day;
or (b) if the Common Stock is not Publicly Traded at the time of determination,
the value of a share of Common Stock based on the per share price for which all
the outstanding shares of Common Stock (on a Fully Diluted basis, assuming
receipt of applicable consideration for any conversion, exchange or exercise of
any Convertible Securities or Options) could be sold in an arm's-length
transaction to a third party, treating the Company and its subsidiaries as a
going concern and assuming such sale was between a willing buyer and a willing
seller and without regard to any discount for minority interest, restrictions
on transfer or lack of marketability. The Fair Market Value Per Share shall be
determined initially by the Board of Directors of the Company in good faith
within ten (10) days of any event for which such determination is required and
such determination (including the basis therefor) shall be promptly provided to
the Equity Holders who have delivered a Put Notice or a notice pursuant to
Section 5(b) or as required by Section 7(c)(vi). Such determination shall be
binding on each Equity Holder unless such Equity Holder objects thereto in
writing within ten (10) Business Days of receipt. In the event the Company and
an Equity Holder cannot agree on the Fair Market Value Per Share within ten
(10) Business Days of the date of such Equity Holder's objection, the Fair
Market Value Per Share shall be determined by a disinterested appraiser (which
may be a national or regional investment bank or national accounting firm)
mutually selected by the Company and such Equity Holder, the fees and expenses
of which shall be paid fifty percent (50%) by the Company and fifty
2
3
percent (50%) by such Equity Holder unless (i) such determination results in a
Fair Market Value Per Share more than one hundred ten percent (110%) of the
Fair Market Value Per Share initially determined by the Company in which case
such fees and expenses shall be borne by the Company or (ii) such determination
results in a Fair Market Value Per Share less than ninety percent (90%) of the
Fair Market Value Per Share initially determined by the Company in which case
such fees and expenses shall be borne by such Equity Holder. Any selection of a
disinterested appraiser shall be made in good faith within seven (7) Business
Days after the end of the last ten (10) Business Day period referred to above
and any determination of Fair Market Value Per Share by a disinterested
appraiser shall be made within thirty (30) days of the date of selection.
"Fully Diluted" means, with respect to the Common Stock, as of a
particular time the total outstanding shares of Common Stock as of such time,
determined by treating all outstanding Options then vested and exercisable as
having been exercised and by treating all outstanding Convertible Securities
then convertible or exchangeable as having been so converted or exchanged;
provided, that for purposes of Section 7 if at any time of determination, the
event giving rise to any adjustment under Section 7 would trigger any
anti-dilution rights of such Options or Convertible Securities or otherwise
increase the number of shares of Common Stock subject to such Options or into
which such Convertible Securities are convertible or exchangeable, the number
of shares of Common Stock deemed to be outstanding immediately after such
issuance shall include also such increase in the number of shares of Common
Stock subject to such Options or into which such Convertible Securities are
convertible or exchangeable.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Incentive Stock Plan" means the incentive stock plan or plans which
the Company may establish on or after the date hereof, and pursuant to which
the Company may issue Options to purchase shares of Common Stock to officers,
employees, directors, independent contractors, and third party consultants and
vendors providing services to the Company.
"Incentive Stock Plan Pool Shares" means (a) up to 89,268 shares of
Common Stock (subject to appropriate adjustment for Stock Dividends, Stock
Subdivisions and Stock Combinations) issued or issuable pursuant to Options
granted under the Incentive Stock Plan during the Incentive Stock Restricted
Period and (b) any shares of Common Stock issued or issuable pursuant to
Options granted under the Incentive Stock Plan thereafter; provided, that in no
event shall the exercise price per share of Common Stock obtainable upon
exercise of any such Options be less than the fair market value thereof on the
date of grant as determined in good faith by the Company's Compensation
Committee; and provided, further, that in no event shall the number of shares
of Common Stock issuable to members of the Ravizza Family and the Ryley Family
pursuant to Options granted under the Incentive Stock Plan during the Incentive
Stock Restricted Period exceed 16,738 shares (subject to appropriate adjustment
for Stock Dividends, Stock Subdivisions and Stock Combinations).
"Incentive Stock Restricted Period" means the twenty-four month period
commencing the date hereof.
3
4
"Legally Available Funds" means, with respect to any redemption of the
Securities pursuant to Section 5 hereof, the amount of funds of the Company
legally available for such redemption as required under Section 160 of the
Delaware General Corporation or any comparable provision of any succeeding
laws.
"NASD" means the National Association of Securities Dealers, Inc.
"Option" shall mean any option, warrant or other right to subscribe for
or purchase shares of Common Stock.
"Other Securities" shall mean any stock and other securities of the
Company or any other Person which Holder at any time shall be entitled to
receive pursuant to Section 7 hereof in lieu of or in addition to Common Stock.
"Publicly Traded" means, with respect to any security, that such
security is (a) listed on a domestic securities exchange, (b) quoted on the
Nasdaq Stock Market or (c) traded in the domestic over-the-counter market,
which trades are reported by the OTC Bulletin Board, the National Quotation
Bureau, Incorporated, or any similar successor organization.
"Registrable Securities" means all shares of Common Stock constituting
Purchased Capital Stock or Warrant Securities currently owned or hereafter
acquired by the Investors and their successors and any assignee that acquires
in excess of 10% of the Purchased Capital Stock and Warrant Securities
(assuming full exercise of the Warrants), whether pursuant to conversion or
exercise of securities convertible into Common Stock or Options, warrants or
other rights to subscribe for Common Stock or otherwise, and any other common
equity securities of the Company issued in exchange for, upon a
reclassification of, or in a distribution with respect to, the Common Stock.
Registrable Securities shall cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been declared
effective under the Securities Act by the Commission and such Registrable
Securities have been disposed of pursuant to such effective registration
statement or (ii) the entire amount of Registrable Securities held by a
particular Person are or, in the opinion of counsel reasonably satisfactory to
the Company, may be distributed to the public during any ninety (90) day period
pursuant to Rule 144 (or any successor provision then in force) under the
Securities Act.
"Restrictions on Purchase" means the occurrence of any of the following
at the time of the closing of a redemption under Section 5: (i) the purchase of
the Securities is prohibited by the terms of the Senior Credit Agreement
(unless such prohibition has been expressly waived by the requisite lenders
thereunder) or (ii) the Company would not have sufficient Legally Available
Funds to redeem the Securities.
"Sale of the Company" has the meaning assigned thereto in the
Stockholders Agreement.
"Senior Credit Agreement" means Credit Agreement dated as of June 21,
2000 among the Company, various financial institution and Bank of America N.A.,
as agent, as in effect on the date hereof and as changed, amended, supplemented
or otherwise modified, or refunded,
4
5
replaced or refinanced in compliance with the requirements of Section 10.11 of
the Purchase Agreement.
"Stockholders Agreement" means the Stockholders Agreement dated as of
the date hereof, by and among the Company, the Investors and the other
stockholders of the Company.
"Stock Combination" means a combination of outstanding shares of Common
Stock into a smaller number of shares of Common Stock.
"Stock Dividend" means a dividend payable in, or other distribution of,
Common Stock.
"Stock Subdivision" means a subdivision of outstanding shares of Common
Stock into a larger number of shares of Common Stock, including without
limitation by means of a stock split.
"Warrant Securities" means the Warrants and the Warrant Shares.
"Warrant Shares" means (a) the shares of Common Stock or Other
Securities issued or issuable under the Warrants and, (b) all other shares of
the Company's Capital Stock issued with respect to such shares pursuant to
Section 3 or Section 7 or by way of Stock Dividend, Stock Subdivision or other
reclassification or in connection with any merger, consolidation, share
exchange, recapitalization or other reorganization affecting the Company's
Capital Stock, or acquired by way of any rights offering or similar offering
made in respect of the Capital Stock referred to in this clause (b) or the
foregoing clause (a).
In addition to the foregoing definitions, the capitalized terms set
forth in Exhibit A hereto shall have the meaning assigned to them in the
Sections of this Agreement or the Purchase Agreement referenced in Exhibit A.
SECTION 2. Termination of Rights under Certain Provisions.
The rights under the following Sections of this Agreement shall
terminate as follows: (a) the rights under Sections 3, 4, 5 and 7 shall expire
upon the later of the consummation of a Qualified Public Offering and the
repayment of the Notes in full and (b) the rights under Section 6 shall expire
when all Registrable Securities cease to be Registrable Securities by the terms
of Section 6 pursuant to the definition of Registrable Securities, provided,
however, the indemnity and contribution covenants contained in Section 6(h)
shall survive any termination pursuant to this Section 2 in accordance with
Section 6(h)(v); and provided, further, that all rights of an Equity Holder
with respect to Put Securities covered by a Put Notice or notice under Section
5(b) delivered prior to the consummation of a Qualified Public Offering and the
repayment of the Notes in full in accordance with Section 5(a) or 5(b) shall
survive any termination pursuant to this Section 2.
5
6
SECTION 3. Contractual Preemptive Rights.
(a) Eligible Offering. Except as otherwise provided in Section 3(d),
the Company hereby grants to each Equity Holder the right to purchase a portion
of any future offering of equity securities of the Company or of any security
or other obligation convertible into or exchangeable for or carrying rights or
options to purchase equity securities of the Company (an "Eligible Offering").
The portion of any Eligible Offering which such Equity Holder may purchase
shall bear the same ratio to the aggregate amount of securities covered by such
Eligible Offering as the number of shares of Common Stock on a Fully Diluted
basis owned by such Equity Holder bears to the total number of shares of Common
Stock on a Fully Diluted basis owned by all stockholders of the Company at the
time of such Eligible Offering. If participating in any Eligible Offering
pursuant to the terms of this Section 3 would require any Equity Holder and the
Company to make a filing under the HSR Act, such Equity Holder and the Company
shall expeditiously make any such required filings, the expenses of which
(including any applicable filing fees and attorneys fees and expenses of such
Equity Holder but exclusive of any internal expenses of such Equity Holder)
shall be borne by the Company. If the HSR Act shall require the termination of
a waiting period prior to any Equity Holder's purchasing securities in any
Eligible Offering, the closing of the sale of securities to such Equity Holder
pursuant to this Section 3 shall, notwithstanding any time periods specified
herein, take place following the termination of such waiting period.
(b) Notice of an Eligible Offering. Before issuing any securities
pursuant to an Eligible Offering, the Company shall give written notice thereof
to each Equity Holder. Such notice must specify the security or securities the
Company proposes to issue and the consideration that the Company intends to
receive for such security or securities and if such securities would constitute
voting securities under the HSR Act shall offer to each Equity Holder the
option to purchase non-voting securities freely convertible into such voting
securities (with the terms of such non-voting securities to be reasonably
acceptable to any Equity Holder that indicates a desire to purchase such
non-voting securities). For a period of 15 Business Days following the delivery
of such notice, each Equity Holder shall be entitled, by written notice to the
Company, to elect to purchase up to the portion of the securities being sold in
the Eligible Offering calculated in accordance with Section 3(a). If any such
election is made by any Equity Holder, the Company shall sell to such Equity
Holder, and such Equity Holder shall purchase from the Company, for the
consideration and on the terms set forth in the Company's notice of such
Eligible Offering, the number of securities that such Equity Holder has elected
to purchase. The Company may sell the remainder of the securities to be sold in
the Eligible Offering, if any, pursuant to the provisions set forth in Section
3(c).
(c) Sale to Third Parties. If elections to exercise the rights pursuant
to Section 3(a) are not made with respect to any securities included in an
Eligible Offering within the 15 Business Day period described in Section 3(b),
or if there remain securities to be sold after the sale of securities to the
Equity Holders, then the Company may issue such securities to third persons,
but only for a consideration not less than that set forth in the Company's
notice and only within a period of 90 days after the 15 Business Day period
describe in Section 3(b).
6
7
(d) Exception to Eligible Offering. The Equity Holders shall not have
any preemptive rights under this Section 3 to purchase any of the following
securities issued by the Company:
(i) Warrant Shares;
(ii) securities issued in connection with any Stock Dividend or
Stock Subdivision;
(iii) securities issued upon the exercise or conversion of
Options and Convertible Securities outstanding on the date hereof, other than
Incentive Stock Plan Pool Shares;
(iv) Incentive Stock Plan Pool Shares; and
(v) securities issued in connection with a Qualified Public
Offering.
SECTION 4. Option to Put.
(a) Put Rights. Each Equity Holder may elect by giving the Company
written notice thereof pursuant to Section 5(a), from time to time, at any time
after the occurrence of a Put Event to sell to the Company (at a price
established pursuant to Section 5(b)) the Warrant Securities or the Purchased
Capital Stock or any portion thereof (collectively, the "Put Securities") and
the Company shall be required to purchase such Put Securities or portion
thereof in accordance with the terms hereof and Section 5.
(b) Put Events. The right of the Equity Holders to require the Company
to purchase the Put Securities or any portion thereof under Section 4(a) shall
be exercisable upon or at any time or from time to time after the occurrence of
any of the following events or circumstances, or upon the agreement or
authorization by or on behalf of the Company or any of its stockholders to
undertake any of the following (each a "Put Event"):
(i) September 21, 2005;
(ii) Any Change of Control;
(iii) Except for the Mergers and Redemptions, any merger or
consolidation in which the Company is not the surviving corporation, share
exchange by the Company's stockholders, voluntary sale, conveyance, exchange,
transfer or other disposition to another Person of all or substantially all of
the assets of the Company and its Subsidiaries, or the liquidation, winding up
or dissolution of the Company or any of its Subsidiaries; or
(iv) the occurrence of an Event of Default.
7
8
SECTION 5. Manner of Redemption.
(a) Put Notice. Each Equity Holder shall give notice of exercise (the
"Put Notice") of the option under Section 4 to put the Put Securities or any
portion thereof to the Company not less than 30 nor more than 60 days prior to
the date set forth in the notice as the date fixed for redemption (the
"Redemption Date"), to the Company (the date of delivery of the Put Notice, the
"Exercise Date"). All redemption notices shall set forth the Redemption Date
and the Put Securities to be redeemed.
(b) Exercise Notice. Within 5 Business Days after receipt of a Put
Notice from any Equity Holder, the Company shall give written notice of such
exercise (the "Exercise Notice") to each other Equity Holder holding Put
Securities (such other holders being referred to herein collectively as the
"Other Holders"). Each Other Holder will have the right to participate in the
redemption and require the Company to redeem all or any portion of such Other
Holder's Put Securities by delivering written notice thereof to the Company
within 10 Business Days following receipt of the Exercise Notice. All such
notices delivered by such Other Holders will be deemed to have been delivered
as of the date of the initial Put Notice and taken together will be deemed to
be one exercise of the rights of such Equity Holders and Other Holders to put
all or a portion of their Put Securities as provided hereunder.
(c) Redemption Price. The purchase price (the "Redemption Price") of
the Put Securities or any part thereof to be redeemed by the Company hereunder
shall be calculated (for the purposes of a redemption under this Section 5) as
of the Exercise Date (the "Redemption Price Calculation Date") and shall be
equal to (i) in the case of any Warrant, the product of (A) the difference of
(1) the Put Price Per Share minus (2) the Exercise Price (as defined in the
Warrant) per share then in effect multiplied by (B) that portion of the Warrant
(expressed in shares of Common Stock) to be redeemed and (ii) in the case of
any Warrant Shares or any Purchased Capital Stock, the product of (A) the Put
Price Per Share multiplied by (B) that number of shares of Common Stock to be
redeemed.
The "Put Price Per Share" shall mean an amount equal to the highest of:
(i) the Fair Market Value Per Share; and
(ii) the book value per share of Common Stock determined in
accordance with GAAP.
(d) Closing. On the Redemption Date, the holders of the Put Securities
to be redeemed shall surrender such Put Securities to the Company on tender by
the Company of the Redemption Price in cash or other immediately available
funds. Payment of the Redemption Price shall only be out of Legally Available
Funds. In the event any appraisal to be conducted in connection with the
determination of Fair Market Value Per Share has not been completed five (5)
Business Days prior to the Redemption Date, the Redemption Date shall be
postponed until five (5) Business Days after the completion of such appraisal.
8
9
(e) Partial Exercise. If a Warrant is redeemed only in part, the
Company shall issue a new warrant or warrants for the remaining portion of such
Warrant, which warrant shall be registered in the name of and delivered to the
appropriate holder. If any Warrant Shares or Purchased Capital Stock are
redeemed only in part, the Company shall issue a new share certificate for the
remaining Warrant Shares or Purchased Capital Stock, which share certificate
shall be registered in the name of and delivered to the appropriate holder.
(f) No Restrictive Agreements; Legally Available Funds.
(i) Covenant Not to Impair Put Rights. The Company covenants and
agrees that, after the date hereof, it shall not, without the prior written
consent of the Required Equity Holders, enter into or agree to become subject
to any term, condition, provision or agreement (other than pursuant to the
Senior Credit Agreement) that would restrict in any way the performance of the
Company's obligations under this Section 5.
(ii) Restrictions on Purchase. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be required to redeem any
portion of the Securities to the extent that at the time of the Redemption Date
there exist any Restrictions on Purchase.
(iii) Remedial Action. Upon receipt of a Put Notice, if the
Company believes that at the time of the Redemption Date, the Company would not
have sufficient Legally Available Funds to perform its obligations under this
Section 5, then the Company shall promptly use all reasonable efforts to cause
such Legally Available Funds to become available in any manner permitted or
contemplated by the Delaware General Corporation Law or any comparable
provision of any succeeding laws. Upon receipt of a Put Notice, if there are
any other Restrictions on Purchase, the Company shall promptly use all
reasonable efforts to obtain relief from such Restrictions on Purchase,
including effecting a refinancing, obtaining the consent of the requisite
number of holders of Senior Indebtedness or otherwise, in each case, as soon as
possible. If, notwithstanding the Company's reasonable efforts pursuant hereto,
the Company is unable to fulfill its obligations under this Section 5 because
of insufficient Legally Available Funds or due to the existence of one or more
other Restrictions on Purchase, the Company shall give prompt written notice
thereof to each Holder of Put Securities specifying in reasonable detail the
nature thereof and the extent, if any, to which the Company would be able to
fulfill its obligations under this Section 5.
(iv) Equity Holder Options. If any Restrictions on Purchase
exist on the proposed Redemption Date, then, notwithstanding anything to the
contrary herein, the Company shall not be obligated to repurchase Put
Securities on such Redemption Date to the extent of such Restrictions on
Purchase and each Equity Holder may elect pursuant to written notice given by
such Equity Holder to the Company: (A) that the put rights pursuant to the Put
Notice shall remain exercised and the Redemption Date shall be deferred until
fifteen (15) Business Days after all such Restrictions on Purchase cease to
exist at which time the Redemption Price plus interest accruing from the
Redemption Price Calculation Date at thirteen percent (13%) per annum
compounded annually ("Interest") shall be paid to the holders of Put Securities
to be redeemed; provided, that, as and to the extent that such Restrictions on
Purchase cease to exist, the Company shall promptly make partial payments of
the Redemption Price plus Interest accrued on such partial payment to the
holders of Securities to be redeemed, in which case there shall be a series of
redemptions, each of
9
10
which shall take place as soon as practicable and in any event not more than
five (5) Business Days after such Restrictions on Purchase have ceased to exist
to an extent that would permit such partial payments of the Redemption Price in
increments of not less than One Hundred Thousand Dollars ($100,000) ("Partially
Available Funds"); or (B) the exercise of the put rights pursuant to Section
4(a) shall be rescinded in whole or in part at the option of such Equity Holder
(with the result that such Equity Holder may require the Company to redeem the
Put Securities held by it at any time thereafter).
(g) Limit on Grant of Other Put or Redemption Rights. The Company
covenants and agrees that from the date hereof, so long as any Equity Holder
holds any Put Securities, the Company shall not grant, directly or indirectly,
to any Person or agree to otherwise become obligated in respect of (i) any
rights to require the Company to purchase or redeem equity securities of the
Company upon the demand of any Person or (ii) rights in the nature or
substantially in the nature of those set forth in Sections 4 and 5; in each
case, without the prior written consent of the Required Equity Holders or
unless such rights are expressly subject and subordinated to the put rights of
the holders of Put Securities pursuant to Sections 4 and 5 on terms reasonably
satisfactory to the Required Equity Holders; provided, however, nothing in this
Section 5(g) shall restrict the Company from obtaining or exercising any rights
to purchase or redeem equity securities of the Company held by any other
person. The Company represents and warrants that it has not previously entered
into any agreement granting any such rights to any Person.
(h) Qualified Public Offering. For a period of 120 days (the "QPO
Standstill Period") from the date the Company notifies the Equity Holders that
it has initiated the preparation of the Initial Public Offering that will be a
Qualified Public Offering, the Equity Holders shall not be entitled to require
the Company to redeem or complete the redemption of any Put Securities to be
redeemed under Sections 4 and 5; provided, however, that (i) the QPO Standstill
Period shall terminate immediately upon the Company's ceasing preparation of
such Qualified Public Offering and (ii) the Company shall be entitled to only
one QPO Standstill Period for the term of this Agreement. Upon the termination
of the QPO Standstill Period, the Company shall immediately take all
commercially reasonable measures to promptly redeem any Put Securities to be
redeemed under Sections 4 and 5.
SECTION 6. Registration Rights.
(a) Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option, warrant or other right to purchase,
or a security convertible into, Registrable Securities, whether or not such
acquisition or conversion has actually been effected and whether or not there
exist any restrictions or limitations on such acquisition or conversion. If the
Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company may
act upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities
issuable upon exercise of an option, warrant or other right or upon conversion
of another security shall be deemed outstanding for the purposes of this
Agreement. A holder of Registrable Securities who is a holder by possession of
the right to acquire directly or indirectly Registrable Securities (upon
conversion or exercise of any securities or otherwise) shall not be required to
convert or exercise such security (or otherwise
10
11
acquire such Registrable Securities) to participate in any registered offering
hereunder prior to the closing of such offering.
(b) Demand Registration.
(i) Demand Registration by the Required Equity Holders. At any
time nine months after the date on which the Company shall have consummated an
Initial Public Offering, each of (A) BancAmerica, (B) TA and (C) holders of a
majority of the Warrant Shares (the "Electing Investor") may make a written
request for registration of Registrable Securities under the Securities Act,
and under the securities or blue sky laws of any jurisdiction reasonably
designated by the Electing Investor; provided, that subject to Section
6(b)(iii) below, the Company will not be required to effect more than one
registration at the request of each Electing Investor pursuant to this Section
6(b)(i) and the Company will not be required to effect any such registration if
such request relates to an offering reasonably expected to be less than $10.0
million of Registrable Securities. If, in the good faith determination of the
Board, it would be seriously detrimental to the Company and its stockholders to
proceed with the Demand Registration, the Company shall have the right to defer
such Demand Registration for a period of not more than ninety (90) days;
provided that such right to delay a Demand Registration shall be exercised by
the Company not more than once for any Demand Registration.
(ii) Company Obligation to Register. Each request for a Demand
Registration pursuant to Section 6(b)(i) shall specify the amount of the
Registrable Securities proposed to be sold, the intended method of disposition
thereof and the jurisdictions in which registration is reasonably desired. Upon
a request for a Demand Registration, the Company shall (x) promptly and in any
event at least 30 days prior to the filing date give written notice of such
request to all other holders of Registrable Securities (who shall, subject to
subsection (iii) hereof, be entitled to participate in such registration on the
same basis as the Electing Investor), and (y) with reasonable promptness and in
any event not later than 60 days after the Company's receipt of such request,
file a registration statement with the Commission relating to such Registrable
Securities as to which such request for a Demand Registration relates and use
its best efforts to cause all Registrable Securities that such other holders
have requested to be registered to be registered under the Securities Act. A
registration shall not constitute a Demand Registration until it has become
effective and remains continuously effective for a period of not less than nine
(9) months or such shorter period which will terminate when all Registrable
Securities covered by such Registration Statement have been sold (but not
before the expiration of the period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable). In any registration
initiated as a Demand Registration, the Company shall pay all Registration
Expenses in connection therewith, whether or not such Demand Registration
becomes effective; provided, however, that the Company shall not be required to
pay Registration Expenses in connection with a Demand Registration, the request
of which has been subsequently withdrawn by the Electing Investor unless the
withdrawal is based upon material adverse information concerning the Company of
which the Electing Investor was not aware at the time of such request, in which
case such Registration Expenses shall be borne by the holders of securities
(including Registrable Securities) requesting such registration in proportion
to the number of shares for which registration was requested.
11
12
(iii) Underwriting Procedures. If the Electing Investor so
elects, the offering of such Registrable Securities pursuant to such Demand
Registration shall be in the form of a firm commitment underwritten offering
and the managing underwriter or underwriters selected for such offering shall
be the Approved Underwriter selected in accordance with Section 6(b)(iv). In
such event, if the Approved Underwriter advises the Company, which advice shall
be confirmed in writing, that in its opinion marketing considerations require a
limitation on the number of securities to be sold, the Company shall include in
such registration only the number of securities which, in the good faith
opinion of such Underwriter, can be sold, selected in the following order:
(x) first, the Registrable Securities requested to be
included by the holders of Registrable Securities in such registration;
and if the number of such Registrable Securities exceeds the amount of
securities the Approved Underwriter has opined can be sold, then such
holders shall participate pro rata, based on the number of Registrable
Securities requested to be included by each such holder; and
(y) second, any other securities entitled to be included
in such registration, pro rata, based on the number of securities to be
included by each holder thereof; provided, that such entitlement is not
a violation of Section 6(j).
To the extent Registrable Securities held by the Electing Investor are
excluded from the offering to be made pursuant to the Demand Registration
requested by the Electing Investor, then the Electing Investor shall have the
right to one additional Demand Registration under this Section 6(b) with
respect to such Registrable Securities. Such additional Demand Registration
shall be subject to the provisions and limitations of this Section 6(b).
(iv) Selection of Underwriters. In connection with requesting a
Demand Registration of Registrable Securities pursuant to Section 6(b)(i), the
Company may select and obtain an investment banking firm of first class
national reputation to act as the managing underwriter of the offering (the
"Approved Underwriter"); provided, that the Approved Underwriter shall, in any
case, be acceptable to the Electing Investor in its reasonable judgment.
(c) Piggy-Back Registration. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company for its own account, or an offering for the account of any
stockholder of the Company or any group of such stockholders (other than a
registration statement on Form S-4 or S-8 or any successor forms or any other
forms not available for registering capital stock for sale to the public), then
the Company shall give written notice of such proposed filing to each holder of
Registrable Securities at least 30 days before the anticipated filing date, and
such notice shall describe in detail the proposed registration and distribution
(including whether the offering will be underwritten and those jurisdictions
where registration under the securities or blue sky laws is intended) and offer
such holders the opportunity to register the number of Registrable Securities
as each such holder may request. The Company shall use its best efforts, within
10 days of the notice provided for in the preceding sentence, to cause the
managing underwriter or underwriters of a proposed underwritten offering (the
"Company Underwriter") to permit the holders of Registrable Securities who have
requested to participate in the registration for such offering to include such
Registrable Securities in such offering on the same terms and conditions as the
securities of the
12
13
Company included therein, including execution of an underwriting agreement in
customary form. Notwithstanding the foregoing, if the Company Underwriter
delivers a written opinion to the holders of Registrable Securities that
marketing considerations require a limitation on the number of securities to be
sold, the Company shall include in such registration only that number of
Registrable Securities which, in the good faith opinion of the Company
Underwriter, can be sold, selected in the following order:
(i) first, the securities to be included in such registration
statement by the Company;
(ii) second, the securities requested to be included in such
registration pursuant to any demand registration;
(iii) third, Registrable Securities, pro rata, based on the
number of securities requested to be included by each holder of
Registrable Securities; and
(iv) fourth, other securities entitled to be included in such
registration, pro rata, based on the number of securities requested to
be included by each holder of such securities.
The Company shall bear all Registration Expenses in connection with any
registration pursuant to this Section 6(c). The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 6(c)
prior to the effectiveness of such registration whether or not any holder of
Registrable Securities has elected to include securities in such registration.
(d) Form S-3 Registration.
(i) Requests for Registration on Form S-3. After its Initial
Public Offering, the Company shall use its best efforts to qualify to register
securities on Form S-3 (or any successor to such form). In addition to the
rights contained in the foregoing provisions of this Agreement, any holder of
Registrable Securities shall have the right to request the registration of any
Registrable Securities on Form S-3 effective on the later of (x) nine months
following the Initial Public Offering and (y) the date the Company has
qualified for the use of Form S-3. All such requests shall be in writing and
shall state the number of shares of Registrable Securities to be disposed of
and the intended methods of disposition of such shares by such holder or
holders. If the Company shall receive from a holder of Registrable Securities a
written request that the Company effect a registration on Form S-3 pursuant to
this Section 6(d)(i), the Company shall (i) promptly give written notice of the
proposed registration to all other holders of Registrable Securities and (ii)
use its best efforts to effect as quickly as is reasonably practicable the
registration of the Registrable Securities specified in such request, together
with the Registrable Securities of any other holder or holders joining in such
request as are specified in a written request given within 15 days after
receipt of such written notice from the Company. Registrations effected
pursuant to this Section 6(d) shall not be counted as a Demand Registration for
purposes of Section 6(b).
(ii) Underwriting Procedures. If the holder of Registrable
Securities requesting registration on Form S-3 so elects, the offering of such
Registrable Securities pursuant to a
13
14
registration effected pursuant to Section 6(d)(i) shall be in the form of a
firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be an Approved Underwriter
selected by such holder in the same manner as described in Section 6(b)(iv). In
such event, if the Approved Underwriter advises the Company, which advice shall
be confirmed in writing, that in its opinion marketing considerations require a
limitation on the number of securities to be sold, then the Company shall
include in such registration only the number of Registrable Securities which,
in the good faith opinion of such Approved Underwriter, can be sold, selected
in the order specified in Section 6(b)(iii).
(e) Holdback Agreements.
(i) Restrictions on Public Sale by Holders. In order to
participate in a registration effected hereby, to the extent not inconsistent
with applicable law, each holder of Registrable Securities agrees that it will
not (other than pursuant to such registration) effect any public sale or
distribution of any Registrable Securities being registered or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 under the Securities Act,
during the period beginning on the date of filing of such registration
statement and ending on the later of (i) 90 days after the effective date of
such registration statement or the commencement of a public distribution of the
Registrable Securities pursuant to such registration statement or (ii) the
expiration of any lock-up period required by the underwriters, if any, of such
offering; provided, that such restrictions shall not be more restrictive in
duration or scope than restrictions imposed on (A) any other Person that has
been granted registration rights by the Company, (B) any officer or director of
the Company or (C) any holder of 5% of the outstanding shares of Common Stock,
determined on a Fully Diluted basis; and, provided, further, that the Company
will waive such restrictions if the Company waives similar restrictions imposed
upon any Person described in clauses (A), (B) or (C). Nothing contained herein
shall limit the ability of Affiliates of the Investors to engage in brokerage,
investment advisory, investment company, financial advisory, anti-raid
advisory, merger advisory, financing, asset management, trading, market making,
arbitrage and other similar activities conducted in the ordinary course of
business of such Affiliates.
(ii) Restrictions on Public Sale by the Company. The Company
agrees that it will not (other than pursuant to such registration) effect any
public sale or distribution of any of its securities, or any securities
convertible into or exchangeable or exercisable for such securities (except
pursuant to registrations on Form S-4 or S-8 or any successor to such forms or
any other forms not available for registering capital stock for sale to the
public) during the period beginning on the filing of any registration statement
in which the holders of Registrable Securities are participating and ending on
the later of (i) 90 days after the effective date of any such registration
statement and (ii) the expiration of any lock-up period required by the
underwriters, if any, of such offering.
(f) Registration Procedures.
(i) Obligations of the Company. Whenever registration of
Registrable Securities has been requested pursuant to Sections 6(b), (c) or (d)
of this Agreement, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in
14
15
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection with any such request, the Company shall, as
expeditiously as possible:
(A) prepare and file with the Commission (as promptly as
practicable, but in any event not later than 60 days after receipt of a request
to file a registration statement with respect to Registrable Securities) a
registration statement on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate and which form shall be
available for the sale of such Registrable Securities in accordance with the
intended method of distribution thereof, and use its best efforts to cause such
registration statement to become effective; provided, that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall (X) provide one counsel selected by the holders of a majority
of the Registrable Securities being registered in such registration ("Holders'
Counsel") with an adequate and appropriate opportunity to participate in the
preparation of such registration statement and each prospectus included therein
(and each amendment or supplement thereto) to be filed with the Commission,
which documents shall be subject to the review of Holders' Counsel, and (Y)
notify the Holders' Counsel and each seller of Registrable Securities of any
stop order issued or threatened by the Commission and take all reasonable
action required to prevent the entry of such stop order or to remove it if
entered;
(B) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than nine months or such shorter period
which will terminate when all Registrable Securities covered by such
registration statement have been sold (but not before the expiration of the
period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, if applicable), and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(C) as soon as reasonably possible, furnish to each
seller of Registrable Securities, prior to filing a registration statement,
copies of such registration statement as it is proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
(D) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller of Registrable Securities reasonably requests, and
to continue such qualification in effect in such jurisdictions for as long as
is permissible pursuant to the laws of such jurisdictions, or for as long as
any such seller requests or until all of such Registrable Securities are sold,
whichever is shortest, and do any and all other acts and things which may be
reasonably necessary or advisable to enable any such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; provided, that the Company shall not be obligated to effect, or take
any action to effect, any such registration or qualification in any particular
jurisdiction in which the Company would be required
15
16
to execute a general consent to service of process in effecting such
registration or qualification unless the Company is already subject to service
in such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(E) use its best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers of Registrable Securities to consummate the disposition of such
Registrable Securities;
(F) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement
contains 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 light of the circumstances under which they were made, and
the Company shall promptly prepare a supplement or amendment to such prospectus
and furnish to each seller a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, after delivery to
the purchasers of such Registrable Securities, such prospectus shall not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made;
(G) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Sections
6(b), (c) or (d)) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities;
(H) make available for inspection by any seller of
Registrable Securities, any managing underwriter participating in any
disposition pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or any managing
underwriter (each, an "Inspector" and collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such registration statement. The Inspectors shall conduct their
investigations in a manner reasonably calculated to minimize disruption of the
Company's business operations. Records that the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (A) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or to confirm that no such misstatement or omission has
been made, (B) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, or (C) the information in
such Records has been made generally available to the public or is required to
be filed with, or made available as supplemental information to, the
Commission. Each seller of Registrable Securities agrees that it shall, upon
16
17
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(I) if such sale is pursuant to an underwritten offering,
obtain a "cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by "cold comfort" letters as Holders' Counsel or the managing
underwriters reasonably request;
(J) furnish, at the request of any seller of Registrable
Securities on the date such securities are delivered to the underwriters for
sale pursuant to such registration or, if such securities are not being sold
through underwriters, on the date the registration statement with respect to
such securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to
the underwriters, if any, and to the seller making such request, covering such
legal matters with respect to the registration in respect of which such opinion
is being given as such seller or underwriters may reasonably request and are
customarily included in such opinions;
(K) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable but no later than 15 months
after the effective date of the registration statement, an earnings statement
covering a period of 12 months beginning after the effective date of the
registration statement, in a manner which satisfies the provisions of Section
11(a) of the Securities Act;
(L) cause all such Registrable Securities to be listed on
each securities exchange or automated quotation system on which similar
securities issued by the Company are then listed; provided that the applicable
listing requirements are satisfied;
(M) keep each seller of Registrable Securities advised in
writing as to the initiation and progress of any registration under Sections
6(b), (c) or (d) hereunder;
(N) provide officers' certificates and other customary
closing documents;
(O) cooperate with each seller of Registrable Securities
and each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD; and
(P) use its best efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby and cooperate with the holders of such Registrable Securities to
facilitate the disposition of such Registrable Securities pursuant thereto.
(ii) Seller Information. The Company shall be entitled to
require each seller of Registrable Securities as to which any registration is
being effected to furnish to the Company such
17
18
information regarding such Seller and the distribution of such securities as
the Company may from time to time reasonably request in writing.
(iii) Notice to Discontinue. Each holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 6(f)(i)(F), such holder
shall forthwith discontinue disposition of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 6(f)(i)(F) and, if so directed by the Company, such
holder shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such holder's possession, of the
prospectus covering such Registrable Securities which is current at the time of
receipt of such notice. If the Company shall give any such notice, the Company
shall extend the period during which such registration statement shall be
maintained effective pursuant to this Agreement (including without limitation
the period referred to in Section 6(f)(i)(B)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(f)(i)(F) to and including the date when the holder shall have
received the copies of the supplemented or amended prospectus contemplated by
and meeting the requirements of Section 6(f)(i)(F).
(g) Expenses.
(i) Registration Expenses. The Company shall pay all expenses
(other than underwriting discounts and commissions) arising from or incident to
the performance of, or compliance with, this Agreement, including without
limitation, (i) Commission, stock exchange and NASD registration and filing
fees, (ii) all fees and expenses incurred in complying with securities or blue
sky laws (including reasonable fees, charges and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
all printing, engraving, messenger and delivery expense, (iv) the fees, charges
and disbursements of counsel to the Company and of its independent public
accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including without limitation any fees and expenses in
connection with any "cold comfort" letters and any special audits incident to
or required by any registration or qualification) regardless of whether such
registration statement is declared effective and (v) all fees, charges and
disbursements of Holder's Counsel (collectively, "Registration Expenses").
(ii) Other Expenses. The Company will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
securities of the same class are then listed or the qualification for trading
of the securities to be registered in each inter-dealer quotation system in
which securities of the same class are then traded.
(h) Indemnification; Contribution.
(i) Indemnification by the Company. The Company agrees to
indemnify, to the full extent permitted by law, each holder of Registrable
Securities, its officers, directors, partners, members, managers, employees and
agents and each Person who controls (within the meaning of
18
19
the Securities Act or the Exchange Act) such holder from and against any and
all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation and, subject to Section 6(h)(iii) hereof, reasonable
fees, disbursements and other charges of legal counsel) arising out of or based
upon any untrue, or alleged untrue, statement of a material fact contained in
any registration statement, prospectus or preliminary prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the Company
by such holder expressly for use therein. The Company shall also indemnify any
underwriters of the Registrable Securities, their officers, directors and
employees and each Person who controls such underwriters (within the meaning of
the Securities Act and the Exchange Act) to the same extent as provided above
with respect to the indemnification of the holders of Registrable Securities.
(ii) Indemnification by Holders. In connection with any
registration statement in which a holder of Registrable Securities is
participating pursuant to Sections 6(b), (c) or (d) hereof, each such holder
shall furnish to the Company in writing such information with respect to such
holder as the Company may reasonably request or as may be required by law for
use in connection with any such registration statement or prospectus and each
holder agrees to indemnify, to the extent permitted by law, the Company, any
underwriter retained by the Company and their respective directors, officers,
members, managers, employees and each Person who controls the Company or such
underwriter (within the meaning of the Securities Act and the Exchange Act) to
the same extent as the foregoing indemnity from the Company to the holders, but
only with respect to any such information furnished in writing by such holder
expressly for use in such registration statement. Notwithstanding the
provisions of this Section 6(h)(ii), a holder of Registrable Securities shall
not be required to pay any indemnification in an amount in excess of the net
proceeds received by such holder in the offering to which such registration
statement relates.
(iii) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder (the "Indemnified Party") agrees to give
prompt written notice to the indemnifying party (the "Indemnifying Party")
after the receipt by the Indemnified Party of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided, that the
failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party hereunder,
unless (and then solely to the extent that) the Indemnifying Party is
materially prejudiced thereby. If notice of commencement of any such action is
given to the Indemnifying Party as above provided, the Indemnifying Party shall
be entitled to participate in and, to the extent it may wish, jointly with any
other Indemnifying Party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to employ
separate legal counsel in any such action and participate in the defense
thereof, but the fees, disbursements and other charges of such legal counsel
(other than reasonable costs of investigation) shall be paid by the Indemnified
Party unless (x) the Indemnifying Party agrees to pay the same, (y) the
Indemnifying Party fails to assume the defense of such action with legal
counsel satisfactory to the Indemnified Party in its reasonable judgment or (z)
the named parties to any such action (including any impleaded parties) have
been advised by such legal
19
20
counsel that either (A) representation of such Indemnified Party and the
Indemnifying Party by the same legal counsel would be inappropriate under
applicable standards of professional conduct or (B) there may be one or more
legal defenses available to it which are different from or additional to those
available to the Indemnifying Party. In either of such cases the Indemnifying
Party shall not have the right to assume the defense of such action on behalf
of such Indemnified Party. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent shall not be
unreasonably withheld.
(iv) Contribution. If the indemnification provided for in this
Section 6(h) from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative faults of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Sections 6(h)(i), 6(h)(ii) and
6(h)(iii), any fees, charges or expenses (including fees, disbursements and
other charges of legal counsel) reasonably incurred by such party in connection
with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(h)(iv) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 6(h)(iv), a holder of
Registrable Securities shall not be required to contribute any amount in excess
of the amount by which the net proceeds received by such holder in the offering
to which such registration statement relates exceeds the amount of any damages
that such holder has otherwise been required to pay. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person.
(v) Survival. The indemnity and contribution covenants contained
in this Section 6(h) shall remain operative and in full force and effect
regardless of (x) any investigation made by or on behalf of a holder or any
person controlling a holder, (y) any sale of any Registrable Securities
pursuant to this Agreement and receipt by the holders of the proceeds thereof,
or (z) any termination of this Agreement for any reason, including after the
initial filing of the registration statement to which these indemnity and
contribution covenants relate.
(i) Rules 144 and 144A. The Company covenants that following
consummation of its Initial Public Offering it shall duly and timely file any
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the Commission thereunder; and
that it shall take such further action as each holder of Registrable
20
21
Securities may reasonably request (including providing any information
necessary to comply with Rules 144 and 144A under the Securities Act), all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 or Rule 144A under the Securities Act,
as such rules may be amended from time to time, or any similar rules or
regulations hereafter adopted by the Commission. The Company shall, upon the
request of any holder of Registrable Securities, deliver to such holder a
written statement as to whether it has complied with such requirements. Without
limiting the foregoing, the Company agrees that:
(i) it will, if required by law, maintain a registration
statement (containing such information and documents as the Commission shall
specify) with respect to the Common Stock under Section 12 of the Exchange Act
and will timely file such information, documents and reports as the Commission
may require or prescribe for companies whose stock has been registered pursuant
to said Section 12;
(ii) it will, if a registration statement with respect to the
Common Stock under Section 12 is effective, or if required by Section 15(d) of
the Exchange Act, make whatever filings with the Commission or otherwise make
generally available to the public such financial and other information as may
be necessary to enable the holders of Registrable Securities to be permitted to
sell shares of Common Stock pursuant to the provisions of Rule 144 promulgated
under the Securities Act (or any successor rule or regulation thereto); and
(iii) it will, at any time when any holder of Registrable
Securities desires to make sales of any Registrable Securities in reliance on
Rule 144A under the Securities Act (or any successor rule or regulation),
provide such holder and any prospective purchaser therefrom with the
information required by Rule 144A and otherwise cooperative with the holder in
connection with such sale.
The Company represents and warrants that any registration statement or
any information document or report filed with the Commission in connection with
the foregoing or any information so made public shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein
not misleading. The Company agrees to indemnify and hold harmless (or to the
extent the same is not enforceable, make contribution to) the seller of
Registrable Securities, its partners, officers, directors, employees and agents
and each broker, dealer or underwriter (within the meaning of the Securities
Act) acting for any such seller in connection with any offering or sale by such
seller of Registrable Securities or any person, firm or corporation controlling
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) such seller and any such broker, dealer or underwriter from
and against any and all losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arising out of or resulting from any breach of the
foregoing representation or warranty, all on terms and conditions comparable to
those set forth in Section 6(h) of this Agreement.
(j) Limitation on Registration Rights of Others. The Company represents
and warrants that it has not granted to any Person the right to request or
require the Company to register any securities issued by the Company. The
Company covenants and agrees that, so long
21
22
as any Registrable Securities remain outstanding, the Company will not,
directly or indirectly, grant to any Person or agree to or otherwise become
obligated in respect of rights of registration in the nature or substantially
in the nature of those set forth hereunder, unless approved in writing by the
Investors.
SECTION 7. Anti-Dilution.
(a) Issuance of Common Stock. If at any time the Company shall issue or
sell any Additional Shares of Common Stock (whether directly or in connection
with a merger, share exchange or otherwise) for a consideration per share less
than the greater of $134.43, as adjusted on the same basis as any adjustments
required (or that would have been required if the Warrants were then
outstanding) to be made to the Exercise Price (as defined in the Warrants)
pursuant to Section 3(a) of the Warrants (including without limitation as the
result of any adjustment to the Aggregate Number pursuant to Section 3(a)(iv)
thereunder) (the "Trigger Price"), and Fair Market Value Per Share (in each
case, determined as of the date of issuance of such Additional Shares of Common
Stock), the Company shall offer for sale to each Equity Holder at a purchase
price of $.001 per share, in proportion to each Equity Holder's holdings of
Warrant Shares and Purchased Capital Stock, the opportunity to purchase
concurrently with the issuance of such Additional Shares of Common Stock, a
number of shares of Common Stock (which at the option of each Equity Holder
shall be shares of either Class A Common Stock or Class B Common Stock)
necessary to make the aggregate number of shares of Purchased Capital Stock and
Warrant Shares (the "Aggregate Number") equal to the product of the Aggregate
Number in effect immediately prior thereto and a fraction, (A) the numerator of
which shall be the number of shares of Common Stock outstanding on a Fully
Diluted basis immediately following such issuance (including the number of such
Additional Shares of Common Stock so issued) and (B) the denominator of which
shall be the number of shares of Common Stock outstanding on a Fully Diluted
basis immediately prior to the issuance of such Additional Shares of Common
Stock plus the number of shares of Common Stock which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at the greater of the Trigger Price and Fair Market Value
Per Share; provided, however, the provisions of this Section 7(a) shall not
apply to any issuance of shares of Common Stock upon the exercise or conversion
of any Options or Convertible Securities, provided that any adjustment required
to have been made upon the issuance of such Options or Convertible Securities
pursuant to Section 7(b) shall have been made.
(b) Options and Convertible Securities. If at any time the Company
shall in any manner (whether directly, or by assumption in a merger in which
the Company is the surviving corporation or otherwise) issue or sell any
Options or Convertible Securities (other than Incentive Stock Plan Pool
Shares), whether or not the rights to subscribe, purchase, exchange or convert
thereunder are immediately exercisable, and the consideration per share for
which shares of Common Stock may at any time thereafter be issuable pursuant to
such Options or Convertible Securities shall be less than the greater of the
Trigger Price and Fair Market Value Per Share (in each case determined as of
the date of issuance of such Options or Convertible Securities) then the
Company shall offer to each Equity Holder the opportunity to purchase, in
proportion to each Equity Holder's holdings of Warrant Shares and Purchased
Capital Stock, the number of shares of Common Stock required by Section 7(a)
pursuant to the terms thereof
22
23
assuming that (1) the maximum number of Additional Shares of Common Stock
issuable pursuant to all such Options or Convertible Securities shall be deemed
to have been issued as of the date of issuance of such Options or Convertible
Securities and (2) the aggregate consideration for such maximum number of
Additional Shares of Common Stock shall be deemed to be the minimum
consideration received and receivable by the Company for the issuance of such
Additional Shares of Common Stock pursuant to the terms of such Options or
Convertible Securities.
(c) Miscellaneous. The following provisions shall be applicable to the
making of any issuances of Common Stock provided in this Section 7(a) and (b):
(i) The sale or other disposition of any issued shares of Common
Stock owned or held by or for the account of the Company or any of its
Subsidiaries shall be deemed an issuance thereof for the purposes of this
Section 7.
(ii) To the extent that any shares of Common Stock or any
Options or Convertible Securities (1) are issued solely for cash consideration,
the consideration received by the Company therefor shall be deemed to be the
amount of the cash received by the Company therefor, (2) are offered by the
Company for subscription, the consideration received by the Company shall be
deemed to be the subscription price, or (3) are sold to underwriters or dealers
for public offering, the consideration received by the Company shall be deemed
to be the public offering price, in any such case excluding any amounts paid or
receivable for accrued interest or accrued dividends. To the extent that any
portion of such issuance shall be for a consideration other than cash, the
amount of such consideration shall be deemed to be the fair market value of
such consideration at the time of such issuance, determined in the manner set
forth in Section 7(c)(vi).
(iii) The consideration for any shares of Common Stock issuable
pursuant to the terms of any Convertible Securities or Options shall be equal
to (1) the consideration received by the Company for issuing any warrants,
options or other rights to subscribe for or purchase such Convertible
Securities or Options, plus (2) the consideration paid or payable to the
Company in respect of the subscription for or purchase of such Convertible
Securities or Options, plus (3) the consideration, if any, payable to the
Company upon the exercise of the Options or the right of conversion or exchange
of such Convertible Securities; provided, however, notwithstanding the
foregoing the consideration for any shares of Common Stock issuable pursuant to
the terms of any Options granted pursuant to the Incentive Stock Plan that are
not Incentive Stock Plan Pool Shares shall be deemed to be $0.
(iv) In case of the issuance at any time of any shares of Common
Stock or Convertible Securities in payment or satisfaction of any dividends
upon any class of stock other than Common Stock, the Company shall be deemed to
have received for such shares of Common Stock or Convertible Securities
consideration equal to the amount of such dividend so paid or satisfied.
(v) Notice of Proposed Actions. In case the Company shall
propose to take any action (including without limitation the issuance of any
Additional Shares of Common
23
24
Stock, Options or Convertible Securities) that would require the Company to
offer for sale to any Equity Holder shares of Common Stock pursuant to Section
7(a) or 7(b), then in each such case the Company shall give to each such Equity
Holder written notice of such proposed action, which shall describe the action
and specify the date on which it is proposed to take place, and shall also set
forth the number of shares of Common Stock such Equity Holder is entitled to
purchase pursuant to this Section 7 and the aggregate purchase price therefor.
Such notice shall be so given at least thirty (30) days prior to the date of
the taking of such proposed action and shall constitute a binding offer of the
Company to sell such shares of Common Stock (which at the option of each Equity
Holder shall be shares of either Class A Common Stock or Class B Common Stock)
to such Equity Holder on the terms set forth therein.
(vi) Fair Market Value. Whenever Common Stock is to be issued
pursuant to Section 7(a) or (b) in addition to any certificate required to be
provided by Section 7(c)(ii), the Company shall also promptly provide to such
holder a certificate signed by the chief financial officer of the Company,
setting forth a description of the basis on which the Board determined the fair
market value of any evidences of indebtedness, shares of stock, other
securities, warrants, other subscription or purchase rights, or other property.
In the case of any determination of fair market value, any recipient may
object to the determination in such certificate by giving written notice within
ten (10) Business Days of the receipt of such certificate and, if such
recipient and the Company cannot agree to the fair market value within ten (10)
Business Days of the date of such recipient's objection, the fair market value
shall be determined by a national or regional investment bank or a national
accounting firm mutually selected by such recipient and the Company, the fees
and expenses of which shall be paid fifty percent (50%) by the Company and
fifty percent (50%) by such recipient unless (i) such determination results in
a fair market value more than one hundred ten percent (110%) of the fair market
value determined by the Board, in which case such fees and expenses shall be
paid by the Company (or (ii) such determination results in a fair market value
less than ninety percent (90%) of the fair market value determined by the
Board, in which case such fees and expenses shall be paid by such recipient.
The Company shall keep at its principal office copies of all such certificates
and cause the same to be available for inspection at said office during normal
business hours by any holder of Purchased Capital Stock or Warrant Shares or
any prospective purchaser of such Capital Stock if so designated by any such
holder.
(d) Other Action Affecting Common Stock. If at any time the Company
shall take any action of the type contemplated in Section 7(a) or (b) hereof
but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then, unless in the opinion of the Board
such action will not have a material adverse effect upon the rights of holders
of Purchased Capital Stock and Warrant Shares (taking into consideration, if
necessary, any prior actions which the Board deemed not to materially adversely
affect the rights of such holders), the Company shall issue Common Stock to
such holders in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(e) No Impairment and Other Covenants.
(i) No Impairment. The Company will not, by amendment of the
Company Charter Documents or through any reorganization, recapitalization,
transfer of assets,
24
25
consolidation, merger, share exchange, dissolution or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of this Section 7, and will at all times in good faith assist in the
carrying out of all such terms and in taking of all such action as may be
necessary or appropriate to protect the rights of each holder of Purchased
Capital Stock or Warrant Shares against the type or nature of dilution or other
impairment for which protection is contemplated to be afforded such holder in
this Section 7. Without limiting the generality of the foregoing, the Company
agrees that it (a) will not increase the par value of the Common Stock, (b)
will not create any class of common equity security other than the Class A
Common Stock and the Class B Common Stock and (c) will take all such action as
may be reasonably necessary or appropriate so that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock under this
Section 7.
(ii) Reservation of Authorized Common Stock. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares such number of its duly authorized shares of Class A Common Stock and
Class B Common Stock as shall be sufficient to enable the Company at any time
to fulfill all of its obligations hereunder.
(iii) Affirmative Actions to Permit Exercise and Realization of
Benefits. If any shares of Common Stock to be issued pursuant to this Section 7
hereof require registration with or approval of any governmental authority
under any federal or state law before such shares or other securities may be
validly delivered, then the Company covenants that it will, at its sole
expense, secure such registration or approval, as the case may be. The
Company's obligation hereunder shall apply also to approvals or expirations of
waiting periods required under the HSR Act and with respect to any filings
under the HSR Act, whether by the Company, any holder of Purchased Capital
Stock or Warrant Shares or any other Person, the Company shall bear the costs
of all such filing fees with respect to such filings, provided, however, that
the Company shall not be responsible for any internal expenses of the Equity
Holders with respect to such filings. The Company further agrees that at the
request of any Equity Holder it will take all actions reasonably requested by
such Equity Holder to prevent the applicability of the short-swing profit
recovery provisions of Section 16 of the Securities Exchange Act of 1934 to any
issuance of shares of Common Stock pursuant to this Section 7.
(iv) Validly Issued Shares. The Company covenants that all
shares of Common Stock that may be issued pursuant to this Section 7 shall upon
delivery by the Company be duly authorized and validly issued, fully paid and
nonassessable, free from all taxes, liens and charges with respect to the issue
or delivery thereof and otherwise free of all other security interests,
encumbrances and claims of any nature whatsoever other than those created by
any holder of Purchased Capital Stock or Common Stock issued pursuant to
Section 7(a) or (b).
(vi) Stamp Taxes. The Company shall pay all stamp taxes
attributable to the issuance of shares of Common Stock pursuant to this Section
7.
(f) Restrictions following Initial Public Offering; Restrictions on
Grants of Incentive Stock Plan Pool Shares.
25
26
(i) Restrictions following Initial Public Offering. Following
the Initial Public Offering and until the Notes have been repaid in full the
Company shall not without the prior written consent of the Investors take any
action which would require any shares of Common Stock to be issued pursuant to
this Section 7.
(ii) Restrictions on Grants of Incentive Stock Plan Pool Shares.
During the Incentive Stock Restricted Period, the Company shall not without the
prior written consent of each Investor grant Options to members of the Ravizza
Family and the Ryley Family to purchase in excess of 16,738 shares of Common
Stock (subject to appropriate adjustment for Stock Dividends, Stock
Subdivisions and Stock Combinations).
SECTION 8. Specific Performance and Injunctive Relief. Each of the
parties hereto acknowledges and agrees that in the event of any breach of this
Agreement by the Company, the Investors would be irreparably harmed and could
not be made whole by monetary damages, and therefore the Company hereby waives
the defense in any action for specific performance or injunctive relief that a
remedy at law would be adequate. The Company agrees that the Investors, in
addition to any other remedy to which they may be entitled at law or in equity,
shall be entitled to compel specific performance of this Agreement and to
obtain injunctive relief in any action instituted in a court of proper
jurisdiction.
SECTION 9. Miscellaneous.
(a) Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
(b) Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein, and there are no restrictions, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the parties hereto
with respect to the subject matter hereof. In the event of any inconsistency or
conflict between the provisions contained herein and the provisions of the
Certificate of Incorporation or Bylaws of the Company, the provisions hereof
shall control and the parties hereto shall use their best efforts to cause the
Company to correct such inconsistency or conflict.
(c) Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopy, recognized
overnight courier service or personal delivery:
(i) if to the Company:
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
26
27
(ii) if to BancAmerica:
BancAmerica Capital Investors SBIC I, L.P.
Bank of America Corporate Center
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxx
Telecopy: (000) 000-0000
(iii) if to TA:
TA/Advent VIII L.P.
TA/Atlantic and Pacific IV L.P.
TA Executives Fund LLC
TA Investors LLC
TA Subordinated Debt Fund, L.P.
c/o TA Associates, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
GPH CE Partners
x/x Xxxxxxx, Xxxxxxx & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. XxXxxxxx, P.C.
Telecopy: (000) 000-0000
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
(d) Applicable Law. The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under applicable principles of
conflicts of laws.
(e) Severability. The invalidity, illegality or unenforceability of one
or more of the provisions of this Agreement in any jurisdiction shall not
affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.
27
28
(f) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns and the registration rights and the
other Equity Holder rights contained in this Agreement shall be automatically
transferred to any subsequent holder of Warrant Securities, Purchased Capital
Stock or Registrable Securities. Notwithstanding any transfer of such rights,
all of the obligations of the Company hereunder shall survive any such transfer
and shall continue to inure to the benefit of all Equity Holders.
(g) Defaults. A default by any party to this Agreement in such party's
compliance with any of the terms or conditions hereof or performance of any of
the obligations of such party hereunder shall not constitute or excuse a
default by any other party.
(h) Recapitalizations, Exchanges, Etc. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to the Warrant
Securities, Purchased Capital Stock, Put Securities or Registrable Securities,
to any and all shares of Capital Stock of the Company or any successor or
assign of the Company (whether by merger, consolidation, share exchange, sale
of assets or otherwise and including securities issued in exchange for Capital
Stock in connection with a merger) which may be issued in respect of, in
exchange for, or in substitution of the Warrant Securities, Purchased Capital
Stock, Put Securities or Registrable Securities, by reason of a stock dividend,
recapitalization, reclassification, merger, consolidation, share exchange or
otherwise.
(i) Amendments; Waivers. This Agreement may not be amended, modified or
supplemented and no waivers of or consents to departures from the provisions
hereof may be given unless consented to in writing by the Company and the
Required Equity Holders.
(j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same Agreement. Signatures may be exchanged by telecopy,
with original signatures to follow. Each party to this Agreement agrees that it
will be bound by its own telecopied signature and that it accepts the
telecopied signatures of the other parties to this Agreement.
(k) No Inconsistent Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted under this Agreement.
(l) Modification of Company Charter Documents. The Company shall not
amend or consent to any modification, supplement or waiver of any provision of
the Company Charter Documents in any manner which would have an adverse effect
on the rights of any Equity Holder hereunder or under the Stockholders
Agreement without the prior written consent of such Equity Holder (which
consent shall not be unreasonably withheld or delayed).
(m) Put Rights on Sale of the Company. The Company acknowledges that
under Section 6 of the Stockholders Agreement, each Investor is entitled to a
require the Company to purchase its shares of Purchased Capital Stock
immediately prior to the consummation of a Sale of Company on the terms set
forth therein. The Company agrees that it will take all necessary measures to
ensure that each Investor receives the purchase price payable to it for its
shares of Purchased Capital Stock pursuant to Section 6 of the Stockholders
Agreement in the event such
28
29
Investor exercises its rights pursuant thereto in connection with the Sale of
Company and agrees that it will not transfer on its stock records or issue any
of the shares of the Company's capital stock to be transferred or issued in
such Sale of Company unless such Investor has received such payment in respect
of its Purchased Capital Stock.
(n) Regulatory Requirements and Restrictions. In the event of any
reasonable determination by an Equity Holder that, by reason of any existing or
future federal or state law, statute, rule, regulation, guideline, order, court
or administrative ruling, request or directive (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful) (any
such item, a "Regulatory Requirement"), such Equity Holder is effectively
restricted or prohibited from holding any Put Security, Registrable Security,
Warrant Security or Purchased Capital Stock (including any shares of capital
stock or other securities distributable to such Equity Holder in any merger,
reorganization, readjustment or other reclassification), or otherwise realize
upon or receive the benefits intended under this Agreement, the Company shall,
and shall use its best efforts to have its stockholders, take such commercially
reasonable action as such Equity Holder may deem reasonably necessary to permit
such Equity Holder to comply with such Regulatory Requirement. The reasonable
costs of taking such action, whether by the Company, any Equity Holder or
otherwise, shall be borne by the Company. Such action to be taken may include
without limitation the Company's authorization of one or more new classes of
capital stock for which the Warrants may be exercised or making such
modifications and amendments to the Company Charter Documents, the Warrants or
any other documents and instruments related to or executed in connection
herewith as may be deemed reasonably necessary by such Equity Holder, but shall
not include the redemption or repurchase of any securities for cash until all
Senior Indebtedness is paid in full in cash and all commitments to extend
credit under the Senior Credit Agreement are terminated. Such Equity Holder
shall give written notice to the Company of any such determination and the
action or actions necessary to comply with such Regulatory Requirement, which
notice and determination shall be conclusive absent manifest error, and the
Company shall take all steps necessary to comply with such determination as
expeditiously as possible.
* * *
29
30
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed as of the date first above written.
CUPERTINO ELECTRIC, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
BANCAMERICA CAPITAL INVESTORS SBIC I, L.P.
By: BancAmerica Capital Management SBIC I, LLC,
Its general partner
By: /s/ XXX X. XXXXX
---------------------------------------------
Xxx X. Xxxxx
Managing Director
TA/ADVENT VIII L.P.
By: TA Associates VIII LLC, its General Partner
By: TA Associates, Inc., its Manager
By: *
------------------------------------
TA/ADVENT ATLANTIC AND PACIFIC IV L.P.
By: TA Associates L.P., its General Partner
By: TA Associates, Inc., its General Partner
By: *
-------------------------------------
30
31
TA INVESTORS LLC
By: TA Associates L.P., its General Partner
By: *
---------------------------------------
TA EXECUTIVES FUND LLC
By: TA Associates L.P., its Manager
By: *
---------------------------------------
TA SUBORDINATED DEBT FUND, L.P.
By: TA Associates SDF LLC, its General Partner
By: TA Associates, Inc., its Manager
By: *
-----------------------------------
* /s/ XXXXX XXXXXX
--------------------------------------
Xxxxx Xxxxxx, Managing Director
31
32
EXHIBIT A
INDEX TO ADDITIONAL DEFINED TERMS
Term Section
---- -------
Affiliate 1.01 (Purchase Agreement)
Aggregate Number 7(a) (this Agreement)
Agreement Preamble (this Agreement)
Approved Underwriter 6(b)(iv) (this Agreement)
Business Days 1.01 (Purchase Agreement)
Change of Control 1.01 (Purchase Agreement)
Commission 1.01 (Purchase Agreement)
Class A Common Stock 1.01 (Purchase Agreement)
Class B Common Stock 1.01 (Purchase Agreement)
Common Stock 1.01 (Purchase Agreement)
Company Preamble (this Agreement)
Company Charter Documents 1.01 (Purchase Agreement)
Company Underwriter 6(c) (this Agreement)
Electing Investor 6(b)(i)
Eligible Offering 3(a) (this Agreement)
Event of Default 13.01 (Purchase Agreement)
Exercise Date 5(a) (this Agreement)
Exercise Notice 5(b) (this Agreement)
GAAP 1.01 (Purchase Agreement)
Holders' Counsel 6(f)(i)(A) (this Agreement)
Indemnified Party 6(h)(iii) (this Agreement)
Indemnifying Party 6(h)(iii) (this Agreement)
Initial Public Offering 1.01 (Purchase Agreement)
Inspector(s) 6(f)(i)(H) (this Agreement)
Interest 5(f)(iv) (this Agreement)
Investor Preamble (this Agreement)
Mergers and Redemptions 1.01 (Purchase Agreement)
Other Holders 5(b) (this Agreement)
Notes 1.01 (Purchase Agreement)
Partially Available Funds 5(f)(iv) (this Agreement)
Person 1.01 (Purchase Agreement)
Purchase Agreement Preamble (this Agreement)
Purchased Capital Stock 1.01 (Purchase Agreement)
Put Event 4(b) (this Agreement)
Put Notice 5(a) (this Agreement)
Put Price Per Share 5(c) (this Agreement)
Put Securities 4(a) (this Agreement)
QPO Standstill Period 5(h) (this Agreement)
Qualified Public Offering 1.01 (Purchase Agreement)
Ravizza Family 1.01 (Purchase Agreement)
32
33
Records 6(f)(i)(H) (this Agreement)
Redemption Date 5(a) (this Agreement)
Redemption Price 5(c) (this Agreement)
Redemption Price Calculation Date 5(c) (this Agreement)
Registration Expenses 6(g)(i) (this Agreement)
Regulatory Requirement 9(n) (this Agreement)
Required Equity Holders 1.01 (Purchase Agreement)
Ryley Family 1.01 (Purchase Agreement)
Securities Act 1.01 (Purchase Agreement)
Selling Stockholders Preamble (this Agreement)
Senior Indebtedness 12.01 (Purchase Agreement)
Subsidiary 1.01 (Purchase Agreement)
Warrants 1.01 (Purchase Agreement)
Trigger Price 7(a) (this Agreement)
33
34
TABLE OF CONTENTS
Page No.
--------
SECTION 1. Definitions.................................................................1
SECTION 2. Termination of Rights under Certain Provisions..............................5
SECTION 3. Contractual Preemptive Rights...............................................6
SECTION 4. Option to Put...............................................................7
SECTION 5. Manner of Redemption........................................................8
SECTION 6. Registration Rights........................................................10
SECTION 7. Anti-Dilution..............................................................22
SECTION 8. Specific Performance and Injunctive Relief.................................26
SECTION 9. Miscellaneous..............................................................26
