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