INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT is made as of the 15th day of
March, 1996, by and among ICon CMT Corp., a Delaware corporation (the
"Company"), Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx and Xxxxx Xxxxxxxx and the persons
executing this Agreement as "Investors" on the signature pages hereof (each, an
"Investor").
RECITALS
WHEREAS, the Company and the Investors are parties to the
Subscription Agreement of even date herewith (the "Subscription Agreement")
relating to the purchase by the Investors of the Series A convertible
participating preferred stock, par value $.01 per share, of the Company (the
"Series A Preferred Stock");
WHEREAS, in order to induce the Company to enter into the
Subscription Agreement and to induce the Investors to invest funds in the
Company pursuant to the Subscription Agreement, the Investors and the Company
hereby agree that this Agreement shall govern the rights of the Investors to
cause the Company to register shares of the Common Stock, par value $.01 per
share, of the Company (the "Common Stock") issuable to the Investors upon the
conversion of the Series A Preferred Stock and certain other matters as set
forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Holder" means any person owning or having the
right to acquire Registrable Securities.
(c) The term "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended.
(d) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
order of effectiveness of such registration statement or document.
(e) The term "Registrable Securities" means (i) the Common
Stock issuable or issued upon conversion of the Series A Preferred Stock and
(ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of the shares referenced in (i) above and in this subparagraph (ii),
excluding in all cases (x) any Registrable Securities sold by a person in a
transaction in which his rights under this Section 1 are not assigned or are
assigned in violation of this Agreement and (y) any Registrable Securities that
have already been registered under the Act or which are freely transferable
without registration under the Act due to the lapse of time or otherwise and
which are not subject to any sales volume limitation under Rule 144 (as
hereafter defined) based on the Investor's holdings of Registrable Securities.
(f) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable pursu
ant to then exercisable or convertible securities which are, Registrable
Securities.
(g) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration
(a) At any time after 180 days after the Closing of an
underwritten public offering of Common Stock pursuant to an effective
registration statement under the Act, or, if earlier, the third anniversary of
the date hereof, and until the seventh anniversary of the date hereof, the
Holders shall be entitled to demand registration of the Registrable Securities
under the terms and conditions hereinafter set forth. If the Company receives a
written request from any Holders of at least 125,000 of the Registrable
Securities (as adjusted to reflect any dividend
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or distribution thereon or any split, combination or other reclassification
thereof) that the Company file a registration statement on Form X-0, X-0, X-0 or
other Form available to the Company for registration under the Act covering the
registration of the Registrable Securities (a "Registration") then, the Company
shall, subject to the limitations set forth in this Agreement (including the
limitations of subsection 1.2(b)), (x) within twenty (20) days of the receipt
thereof, give written notice of such request to all Holders (the "Notice of
Request for Registration") and (y) as soon as practicable, use its best efforts
to effect such registration under the Act covering all Registrable Securities
which the Holders request to be registered by notice to the Company within
twenty (20) days of the mailing of the Notice of Request for Registration by the
Company in accordance with this Section 1.2(a) and Section 4.6.
(b) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as part of their request made pursuant to subsection 1.2(a) and the
Company shall include such information in the written notice referred to in
subsection 1.2(a). The underwriter will be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating Holders. In
such event, the right of any Holder to include his Registrable Securities in
such registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2 to the contrary, if the underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated 75% to all Holders thereof participating in such
Registration, including the Initiating Holders, and 25% to holders of other
securities of the Company that request inclusion in such Registration, and among
all Holders participating in the Registration in proportion (as nearly as
practicable) to the amount of Registrable Securities owned by each Holder or as
they may otherwise agree. A registration shall not count as a
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Demand Registration pursuant to this Section 1.2 unless the Holders are able to
register and sell at least eighty percent (80%) of the Registrable Securities
requested to be included in such registration pursuant to Section 1.2(a).
(c) Notwithstanding the foregoing, the Company shall not be
obligated to effect any registration pursuant to this Section 1.2 if at the time
of any request to register Registrable Securities pursuant to this Section 1.2,
the Company is engaged, or has fixed plans to engage within ninety (90) days of
the time of the request, in a registered public offering or is engaged, or has
fixed plans to engage within ninety (90) days of time of the request, in any
other activity that, in the good faith determination of the Board of Directors
of the Company, would be adversely affected by the requested registration to the
material detriment of the Company, then the Company may at its option direct
that such request be delayed for a period not in excess of one hundred twenty
(120) days from the effective date of such offering, or the date of commencement
of such other material activity, as the case may be, such rights to delay a
request to be exercised by the Company not more than once in any twelve month
period.
(d) In addition, the Company shall not be obligated to effect,
or to take any action to effect, any registration pursuant to this Section 1.2:
(i) if a Registration, has become effective and the
Holders have been able to include thereon all of the
shares as to which they have requested registration
pursuant to this Section 1.2 and such Registration
remains effective for at least one year from the
effective date thereof; or
(ii) within one hundred and twenty (120) days after the
effective date of any registration statement effected
by the Company whether for its own account or for the
account of others.
1.3 "Piggy-back" Registration Rights. If (but without any
obligation to do so) the Company proposes to register (including for this
purpose a registration effected by the Company for stockholders other than the
Holders) any of its stock or other securities under the Act in connection with
the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, a registration on any form
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which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities or a registration in which the only Common Stock being registered is
Common Stock issuable upon conversion of debt securities which are also being
registered), the Company shall, at such time, promptly give each Holderwritten
notice of such registration. Upon the written request of each Holder given
within thirty (30) days after mailing of such notice by the Company in
accordance with Section 4.6, the Company shall, subject to the limitations set
forth in this Agreement (including the limitations of Section 1.2(b) and the
provisions of Section 1.8), include in the Company's registration statement
under the Act all of the Registrable Securities that each such Holder has
requested to be registered; provided, however, that nothing in this Section 1.3
shall prevent the Company from at any time abandoning or delaying any such
registration without obligation to any Holder.
1.4 Obligations of the Company. Whenever required under this
Section 1 to effect the registration of any Registrable Securities or to include
Registrable Securities in a Company registration statement, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to (i) in the case of a
Registration pursuant to Section 1.2, one year or (ii) in the case of all other
Registrations, one hundred twenty (120) days or, in either case, if sooner,
until the distribution contemplated in the Registration Statement has been
completed; provided, however, that such 120 day or one year period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company, and provided
further that if applicable rules under the Act governing the obligation to file
a post-effective amendment permits, in lieu of filing a post-effective amendment
which (x) includes any prospectus required by Section 10(a)(3) of the Act or (y)
reflects facts or events representing a material or fundamental change in the
information set forth in the registration statement, the Company may incorporate
by reference information required to be included in (x) and (y) above to the
extent such information is contained in periodic reports filed pursuant to
Section 13 or 15(d) of the 1934 Act in the registration statement,
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provided it promptly sends copies of incorporated by reference information to
the Holders.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
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(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
1.5 Furnish Information.
(a) It shall be a condition precedent to the obligation of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding the Holder, the Registrable Securities
held by the Holder, and the intended method of disposition of such securities as
shall be required to effect the registration of such Holder's Registrable
Securities.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 if, due to the operation of
subsection 1.5(a), the number of shares of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares
required to originally trigger the Company's obligation to initiate such
registration as specified in subsection 1.2(a).
1.6 Expenses of the Registrations. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees and fees and disbursements of counsel for the Company shall
be borne by the Company; provided, however, that the Company shall not bear the
cost of any professional fees or costs of accounting, financial or legal
advisors to any of the Holders other than the reasonable fees (not to exceed
$5,000) of one counsel for the Holders; provided, further, that the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to Section 1.2 if the registration request is subsequently
withdrawn at the request of the Holders of a majority of the Registrable
Securities to be registered in which case, unless the reason for the withdrawal
is a material adverse change in the Company's business or financial condition,
all participating Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to their one
Registration, pursuant to Section 1.2. Notwithstanding the foregoing, each
Holder shall pay all registration expenses which such Holder is required to pay
under applicable law.
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1.7 Expenses of Company Registration. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder, including (without limitation) all
registration, filing, and qualification fees, reasonable fees (not to exceed
$5,000) of one counsel, printers and accounting fees relating or apportionable
thereto, but excluding underwriting discounts and commissions relating to
Registrable Securities; provided, however, that the Company shall not bear the
cost of any professional fees or costs of accounting, financial or legal
advisors to any of the Holders other than the reasonable fees (not to exceed
$5,000) of one counsel to the Holders. Notwithstanding the foregoing, each
Holder shall pay all registration expenses which such Holder is required to pay
under applicable law.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the "Allocated
Securities"), the Allocated Securities to be apportioned 75% to Holders
participating in the offering and 25% to holders of other securities of the
Company participating in the offering, and among all Holders participating in
the offering in proportion (as nearly as practicable) to the amount of
Registrable Securities owned by each Holder or as they may otherwise agree.
1.9 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
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1.10 Indemnification. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each officer, director and each person, if any, who controls such
Holder or underwriter within the meaning of the Act or the 1934 Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, or the 1934 Act, or the securities laws or
regulations of any state or other political jurisdiction ("Blue Sky Laws")
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, any Blue Sky Law
or any rule or regulation promulgated under the Act, the 1934 Act or any Blue
Sky Law, and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably delayed, conditioned or withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder
severally but not jointly will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing
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persons may become subject, under the Act, the 1934 Act or any Blue Sky Law
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 1.10(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel selected by
the indemnifying party and approved by the indemnified party (whose approval
shall not be unreasonably withheld); provided, however, that an indemnified
party (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
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(d) If the indemnification provided for in this Section 1.10
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the registration statement filed in connection with
an initial public offering ("IPO") by the Company;
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(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the registration
statement filed by the Company in connection with an IPO), the Act and the 1934
Act (at any time after it has become subject to such reporting requirements),
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
1.12 Termination of Registration Rights. No Holder shall be
entitled to exercise any right provided for in this Section 1 after January 31,
2003.
2. Pre-emptive Rights.
2.1 Notices; Elections. If, at any time or from time to time
after the date hereof, the Company proposes to issue and sell any securities to
any person, the Company shall, not less than fifteen (15) nor more than sixty
(60) business days prior to the proposed date of sale, give written notice to
each holder of record of Registrable Securities at such holder's address as it
appears on the stock records of the Company, setting forth therein in reasonable
detail the terms and conditions of such securities and the proposed sale
thereof, including without limitation the aggregate amount of securities, the
aggregate purchase price and price per share or unit thereof, and the date of
such issuance and sale. Each Holder shall have the right, but not any
obligation, to purchase, upon such terms and conditions, up to such number or
amount of the securities offered in proportion to the ratio of (1) the number of
Holder Securities (as defined in Section 3.1(a)) then held by such Holder to (2)
the aggregate number of Holder Securities held by all Holders, and all
outstanding shares of Common Stock (excluding any shares of Common Stock that
are Holder Securities). Any Holder electing so to purchase such securities shall
give written notice to such effect to the Company at its principal executive
offices and the Company shall, upon the closing of the sale of such securities,
subject to the payment of the purchase price therefor and the
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satisfaction of any and all conditions thereto, sell to the Holder the
securities which such Holder shall have elected to purchase.
2.2 Exceptions.
Notwithstanding the provisions of Section 2.1, no Holder shall
be entitled to purchase or acquire by reason of this Section 2 any securities of
the Company that are issued or sold (a) to any directors, officers, employees or
consultants of the Company, principally for compensatory or incentive purposes,
whether or not issued or sold pursuant to a registration statement on Form S-8
or a written plan or agreement, provided that the total number of shares so
issued does not exceed 550,000 (as adjusted), (b) in connection with any merger,
consolidation, acquisition of assets (including, without limitation, any
exchange of securities of the Company for securities of another issuer so that
as a result thereof, the Company shall directly or indirectly own 20% or more of
the equity securities of such issuer), joint venture or similar transaction, or
(c) in any public offering of securities subject to an effective registration
statement under the Act. Neither the giving of any notice by the Company nor the
election by any Holder to purchase any securities in accordance with Section 2.1
shall be deemed, in itself, to constitute any offer, agreement to sell or sale
of such securities to such Holder (such offer, agreement and sale of such
securities being effected solely upon the execution and delivery, and in
accordance with the terms and conditions, of the subscription or purchase
agreements or other documentation relating thereto).
3. Come Along/Bring Along Rights
3.1 Come Along
(a) Until the earlier of such time as (a) all the Registrable
Securities have been included, or all the Holders have been afforded an
opportunity to include the Registrable Securities issued or issuable to such
Holder, in a registration statement relating to a sale of securities of the
Company to the public that has become effective under the Act and (b) the
seventh anniversary of the date hereof, whenever any of Xxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxx and Xxxxx Xxxxxxxx (each, a "Management Stockholder") proposes to sell,
exchange or otherwise dispose of any shares of Common Stock, so that the
cumulative aggregate number of shares sold by such Management Stockholders in
one or more transactions after the date hereof exceeds 450,000 (as adjusted to
reflect any dividend or distribution thereon or split, combination or
reclassification thereof), each Holder shall have
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the right (but not the obligation) to sell, exchange or otherwise dispose of
Holder Securities held by such Holder, on the same terms and conditions as those
applicable to such Management Stockholders, as to the same proportion of Holder
Securities held by such Holder as the number of shares of Common Stock proposed
to be sold, exchanged or otherwise disposed of by such Management Stockholders
bears to the total number of shares of Common Stock held by such Management
Stockholders. The term "Holder Securities" shall mean securities of the Company
which constitute securities described in clause (i) of the definition of
Registrable Securities in Section 1.1(e) or in clause (ii) of such definition
(without giving effect to the exclusion set forth in subclause (y) of clause
(ii)).
(b) Not less than ten (10) nor more than sixty (60) business
days prior to the sale, exchange or other disposition of such shares by such
Management Stockholders, the Company shall give written notice to each holder of
record of Holder Securities at such holder's address as it appears on the stock
records of the Company, setting forth therein in reasonable detail the terms and
conditions of such proposed sale, exchange or other disposition, including
without limitation the price per share to be received in such transaction, the
kind and method of payment and the expected date of Closing thereof. Each Holder
may elect to sell, exchange or otherwise dispose of the Series A Preferred Stock
or Registrable Securities held by such holder in accordance with subsection
3.1(a) by giving written notice to such effect to the Company at its principal
executive offices, and the Company and/or the Management Stockholders shall
cause such Holder's shares to be included in such sale, exchange or other
disposition; provided, that such holder shall execute and deliver any agreements
or other documents, and satisfy any other conditions, required of the selling
holders in connection with such proposed sale, exchange or other disposition.
The giving of any notice by the Holder shall not be deemed, in itself, to
constitute any offer, agreement to sell or sale of such securities subject to
such Holder's notice (such offer, agreement and sale of such securities being
effected solely upon the execution and delivery, and in accordance with the
terms and conditions, of the subscription or purchase agreements or other
documentation relating thereto).
(c) If a Holder elects to exercise its rights under Section
3.1(a), it shall be a condition to the closing of any sale, exchange or other
disposition of stock by a Management Stockholder that such electing Holder shall
have received for each share of Holder Securities which the Holder elects to
have included in such sale, exchange or disposition pursuant to Section 3.1, a
total consideration per share which equals or exceeds the Applicable Price. The
term "Applicable Price"
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shall mean (a) if the sale, exchange or other disposition closes before January
1, 1997, $29.16 per share of Common Stock (as adjusted to reflect any dividend
or distribution of securities thereon or any split, combination or
reclassification thereof) and (b) if the sale, exchange or other disposition
closes on or after January 1, 1997, $35 per share of Common Stock (as so
adjusted).
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3.2 Bring Along
(a) If, at any time after the date hereof, the Management
Stockholders propose to sell, exchange or otherwise dispose of a majority of the
shares of Common Stock held by the Management Stockholders (including any merger
or consolidation of the Company with or into another corporation or other
person, whether or not the Company is the surviving or emerging corporation),
such Management Stockholders shall have the right (but not the obligation) to
require each Holder to sell, exchange or otherwise dispose of the same
proportion of the Series A Preferred Stock or Holder Securities owned by such
Holder as the proportion of the shares proposed to be sold, exchanged or
otherwise disposed of by the Management Stockholders bears to the total number
of shares of Common Stock held by such Management Stockholders, for fair value
and on no less favorable terms and conditions than those applicable to the
Management Stockholders and to vote in favor of, or consent to, any transaction
(or series of related transactions) including such proposed sale, exchange or
other disposition.
(b) If the Management Stockholders elect, in accordance with
Section 3.2(a), to require the Holders to sell, exchange or otherwise dispose of
the Series A Preferred Stock or Holder Securities owned by such holders, such
Management Stockholders shall give, or cause the Company to give, not less than
ten (10) nor more than sixty (60) business days prior to the proposed date of
such sale, exchange or disposition, written notice to such effect to each holder
of record of such Series A Preferred Stock or Holder Securities at such holder's
address as it appears on the stock records of the Company, setting forth therein
in reasonable detail the terms and conditions of such proposed sale, exchange or
other disposition, including without limitation the purchase price per share or
unit to be received by such Holder and the expected date of closing of such
sale, exchange or other disposition. Each Holder shall be required to sell,
exchange or otherwise dispose of the Series A Preferred Stock or Holder
Securities owned by such Holder in accordance with such terms and conditions,
and for this purpose, to execute and deliver any purchase agreement or other
documentation no less favorable nor more burdensome to the Holders than that
applicable to the holders of Common Stock and to deliver any certificates
representing such shares at the Closing of such sale, exchange or other
disposition.
(c) Notwithstanding Section 3.2(a) and Section 3.2(b), a
Holder shall not be required to sell, exchange or otherwise dispose of its
Holder Securities or to vote in favor of, or consent to, any transaction (or
series of related
16
transactions) including such proposed sale, exchange or other disposition,
unless such Holder shall receive for each share of Holder Securities to be
included in such sale, exchange or disposition, a total consideration per share
which equals or exceeds the Applicable Price.
4. Miscellaneous.
4.1 Successors and Assigns. Except as otherwise provided in
section 4.2 below and elsewhere herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of
Holder Securities). Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assign any rights, remedies, obligations, or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.
4.2 Transfer of Rights.
(a) The rights granted to the Investors pursuant to Section 1
may not be transferred or assigned, except that such rights are assignable to
(a) an Investor Affiliate and (b) anyone who acquires at least such number of
shares of Series A Preferred Stock as equals the lesser of (i) eighty percent
(80%) of the aggregate number of shares of Series A Preferred Stock purchased by
the Investor and (ii) 50,000 shares of Series A Preferred Stock, subject to
adjustment for stock dividends, distributions, splits, combinations and
recapitalizations; provided, however, that the Company is given written notice
by the transferee at the time of any such permitted transfer stating the name
and address of the transferee and identifying the shares of Series A Preferred
Stock with respect to which such rights are being assigned. An "Investor
Affiliate" is any person controlled by or under common control with an Investor
or another fund as to which an Investor provides investment management or
advisory services.
(b) Notwithstanding anything to the contrary herein, if the
Investor is a partnership, it may transfer rights granted pursuant hereto any of
its partners to whom shares of Series A Preferred Stock are transferred. In the
event of such transfer, such partner shall deemed to be the Investor of such
shares of Series A Preferred Stock and may, subject to paragraph (a) above,
again transfer such right to any other person or entity which acquires such
shares from such partner.
17
4.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to agreements among
New York residents entered into and to be performed entirely within New York
without regard to principles of conflicts of law.
4.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.5 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, upon
confirmed delivery by a recognized courier or messenger service or upon deposit
with the United States Post Office, by registered or certified mail, postage
prepaid and addressed to the party to be notified at the address indicated for
such party on the signature page hereof, or at such other address as such party
may designate by ten (10) days' advance written notice to the other parties.
4.7 Expenses. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
4.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Holder Securities then outstanding. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any Holder Securities then outstanding, each future holder of all such Holder
Securities, and the Company.
4.9 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its
18
terms. The parties hereto shall endeavor to replace any such unenforceable
provision or provisions with a valid and enforceable provision or provisions
which shall have substantially the same economic effect as the unenforceable
provision or provisions.
4.10 Entire Agreement; Amendment; Waiver. This Agreement
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ICON CMT CORP.
By:
---------------------------------
Xxxxx X. Xxxxxx
President
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
INVESTOR:
By:
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Address:
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