1
Exhibit 9.1
SECOND AMENDED AND RESTATED
INVESTORS' AGREEMENT
dated as of
March 26, 2001
among
XXXXX PET CARE ENTERPRISES, INC.
XXXXX PET CARE COMPANY
SUMMIT CAPITAL INC.
SUMMIT/DPC PARTNERS, L.P.
J.P. XXXXXX PARTNERS (B.H.C.A.), L.P.
BASEBALL PARTNERS
DLJ MERCHANT BANKING PARTNERS, L.P.
DLJ INTERNATIONAL PARTNERS, C.V.
DLJ OFFSHORE PARTNERS, C.V.
DLJ MERCHANT BANKING FUNDING, INC.
DLJ FIRST ESC, X.X.
XXXXXXXXX, XXXXXX, XXXXXXXX & CO., L.P.
PNC CAPITAL CORP.
AND
CERTAIN OTHER PERSONS SIGNATORY HERETO
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS.....................................................................................1
ARTICLE 2
CORPORATE GOVERNANCE AND MANAGEMENT
2.1 COMPOSITION OF THE BOARD.......................................................................11
2.2 REMOVAL AND RESIGNATION........................................................................12
2.3 VACANCIES......................................................................................13
2.4 ACTION BY THE BOARD............................................................................13
2.5 CONFLICTING CHARTER OR BYLAW PROVISIONS........................................................15
2.6 SUBSIDIARY GOVERNANCE..........................................................................15
ARTICLE 3
RESTRICTIONS ON TRANSFER
3.1 GENERAL........................................................................................15
3.2 LEGENDS........................................................................................15
3.3 PERMITTED AND REQUIRED TRANSFERS...............................................................15
3.4 RESTRICTIONS ON TRANSFERS......................................................................16
3.5 REGULATION Y MATTERS...........................................................................16
3.6 REGULATED HOLDERS..............................................................................17
ARTICLE 4
RIGHTS OF FIRST OFFER, TAG ALONG RIGHTS; DRAG ALONG OBLIGATIONS AND CERTAIN REPURCHASES
4.1 RIGHTS OF FIRST OFFER..........................................................................17
4.2 RIGHT TO PARTICIPATE IN TRANSFER (TAG-ALONG RIGHTS)............................................19
4.3 REPURCHASES OF PREFERRED STOCK.................................................................20
4.4 OBLIGATIONS TO PARTICIPATE IN CERTAIN TRANSFERS (DRAG ALONG OBLIGATIONS).......................21
4.5 CONTRACTUAL PREEMPTIVE RIGHTS..................................................................22
4.6 TERMINATION UPON INITIAL PUBLIC OFFERING.......................................................23
ARTICLE 5
REGISTRATION RIGHTS
5.1 DEMAND REGISTRATION............................................................................23
5.2 INCIDENTAL REGISTRATION........................................................................25
5.3 HOLDBACK AGREEMENTS............................................................................26
5.4 REGISTRATION PROCEDURES........................................................................26
5.5 INDEMNIFICATION BY THE ISSUER..................................................................29
5.6 INDEMNIFICATION BY PARTICIPATING SHAREHOLDERS..................................................30
5.7 CONDUCT OF INDEMNIFICATION PROCEEDINGS.........................................................30
5.8 CONTRIBUTION...................................................................................31
5.9 PARTICIPATION IN PUBLIC OFFERING...............................................................32
5.10 COOPERATION BY THE ISSUER......................................................................32
5.11 NO TRANSFER OF REGISTRATION RIGHTS.............................................................32
5.12 RULE 144 INFORMATION...........................................................................32
Second Amended and Restated
Investors' Agreement
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5.13 XXXXX XXXX RIGHTS..............................................................................32
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
6.1 CONFIDENTIALITY................................................................................32
6.2 COOPERATION IN REFINANCINGS....................................................................33
6.3 REPORTS........................................................................................33
6.4 LIMITATIONS ON SENIOR REGISTRATION RIGHTS......................................................33
6.5 CERTAIN NOTICES................................................................................33
6.6 RESERVATION OF SHARES..........................................................................33
6.7 MEETINGS OF STOCKHOLDERS.......................................................................33
ARTICLE 7
MISCELLANEOUS
7.1 ENTIRE AGREEMENT...............................................................................34
7.2 BINDING EFFECT: BENEFIT.......................................................................34
7.3 ASSIGNABILITY..................................................................................34
7.4 AMENDMENT; WAIVER; TERMINATION.................................................................34
7.5 NOTICES........................................................................................35
7.6 HEADINGS.......................................................................................36
7.7 COUNTERPARTS...................................................................................37
7.8 APPLICABLE LAW.................................................................................37
7.9 SPECIFIC ENFORCEMENT...........................................................................37
7.10 CONSENT TO JURISDICTION; EXPENSES..............................................................37
7.11 SEVERABILITY...................................................................................37
Second Amended and Restated
Investors' Agreement
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SECOND AMENDED AND RESTATED
INVESTORS' AGREEMENT
This Second Amended and Restated Investors' Agreement (this
"AGREEMENT") dated as of March 26, 2001 is entered into by and among (i) Xxxxx
Pet Care Enterprises, Inc. (the "COMPANY"), (ii) Xxxxx Pet Care Company
("XXXXX"), (iii) Summit Capital Inc. ("SUMMIT"), (iv) Summit/DPC Partners, L.P.
("SUMMIT/DPC"), (v) X.X. Xxxxxx Partners (B.H.C.A.), L.P., successor by merger
to Chase Manhattan Investment Holdings, Inc. (referred to herein as "X.X.
XXXXXX" or sometimes as "CHASE"), (vi) DLJ Merchant Banking Partners, L.P., DLJ
International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking
Funding, Inc., DLJ First ESC, L.P., (each of the foregoing in this clause (vi),
a "DLJ ENTITY", and collectively, the "DLJ ENTITIES"), (vii) Bruckmann, Xxxxxx,
Xxxxxxxx & Co., L.P. ("BRS"), (viii) PNC Capital Corp. ("PNC"), (ix) Baseball
Partners and (x) the other Persons listed on the signature pages hereto.
WITNESSETH:
WHEREAS, certain securityholders entered into that certain First
Amended and Restated Investors' Agreement, dated as of August 3, 1998, by and
among the Company, Xxxxx, Summit/DPC, Chase, the DLJ Entities and certain other
securityholders and various amendments thereto (as so amended, the "ORIGINAL
AGREEMENT"); and
WHEREAS, the undersigned, constituting the Company, Xxxxx and the
holders of more than 75% of the shares of Common Stock of the Company that are
subject to this Agreement (including the Warrants on an "as-if exercised" basis)
desire to amend and restate the Original Agreement in its entirety on the terms
of this Agreement.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. (a) The following terms, as used herein, have the
following meanings:
"2001 REGISTRABLE SECURITIES" means Registrable Securities that are the
2001 Warrants or Common Stock issued upon exercise of such warrants.
"2001 WARRANTS" means the warrants issued pursuant to the Loan and
Warrant Agreement.
"ADVERSE PERSON" means any Person whom the board of directors of the
Issuer determines is a competitor or a potential competitor of the Issuer.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no securityholder of the Issuer shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in the
Issuer. For the purpose of this definition, the term "CONTROL" (including with
correlative meanings, the terms "CONTROLLING", "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
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Investors' Agreement
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"AFFILIATED EMPLOYEE BENEFIT TRUST" means any trust that is a successor
to the assets held by a trust established under an employee benefit plan subject
to ERISA or any other trust established directly or indirectly under such plan
or any other such plan having the same sponsor.
"BANK HOLDING COMPANY AFFILIATE" means with respect to any Shareholder
subject to the provisions of Regulation Y, (i) if such Shareholder is a bank
holding company, any company controlled by such bank holding company, and (ii)
otherwise, the bank holding company that controls such Shareholder and any
Person (other than such Shareholder) controlled by such bank holding company.
"BENEFICIALLY OWN" shall have the meaning set forth in Rule 13d-3 of
the Exchange Act.
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in Nashville, Tennessee or New York City are authorized
by law to close.
"BYLAWS" means the bylaws of the Company, as amended or restated from
time to time.
"CHASE INVESTORS" means X.X. Xxxxxx Partners (B.H.C.A.), L.P.,
successor by merger to Chase Manhattan Investment Holdings, Inc., and its
Permitted Transferees.
"CLASS I DIRECTOR" means any director of the Board then serving in one
of the Board positions specified as a "Class I" position by the Bylaws of the
Company.
"CLASS II DIRECTOR" means any director of the Board then serving in one
of the Board positions specified as a "Class II" position by the Bylaws of the
Company.
"CLASS III DIRECTOR" means any director of the Board then serving in
one of the Board positions specified as a "Class III" position by the Bylaws of
the Company.
"COMMON STOCK" means authorized Class A Common Stock, par value $.0001
per share, of the Company and authorized Class B Common Stock, par value $.0001
per share, of the Company, and any stock into which such Class A Common Stock or
Class B Common Stock may hereafter be converted or changed.
"COMPANY SECURITIES" means any securities issued by the Company
including, but not limited to, the Common Stock and the Warrants.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" shall have the meaning assigned to such term in the
Warrants.
"FULLY DILUTED" means, with respect to Common Stock or Preferred Stock
and without duplication, all outstanding shares of, and all shares issuable in
respect of securities convertible into or exchangeable or exercisable for,
Common Stock or Preferred Stock, as the case may be, stock appreciation rights
or options, warrants and other irrevocable rights to purchase or subscribe for
Common Stock or Preferred Stock, as the case may be, including the Warrants, or
securities convertible into or exchangeable for Common Stock or Preferred Stock,
as the case may be; provided that no Person shall be deemed to own such number
of Fully Diluted shares of Common Stock or Preferred Stock, as the case may be,
that such Person has the right to acquire from any Person other than the Company
or Xxxxx.
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Investors' Agreement
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"INDEPENDENT FINANCIAL EXPERT" means a nationally recognized investment
banking firm that specializes in providing valuation and valuation related
services selected by the Issuer which the Issuer has determined after due
inquiry (i) does not (and whose directors, officers, employees and Affiliates do
not), have a direct or indirect material financial interest in or other material
relationship with the Issuer, the DLJ Entities, Chase, Baseball Partners, the
Summit Investors, the Xxxxx Xxxx Investors or any of their respective Affiliates
(so long as the DLJ Entities, the Chase Investors, the Summit Investors, the
Xxxxx Xxxx Investors or their Permitted Transferees, as the case may be,
beneficially own more than 5% of the number of shares of any class of equity
securities of the Issuer), and (ii) has not been and, at the time it is called
upon hereunder is not (and none of whose directors, officers, employees or
Affiliates is), a director or officer of the Issuer, the DLJ Entities, Baseball
Partners, the Chase Investors, the Summit Investors, the Xxxxx Xxxx Investors
(so long as the DLJ Entities, the Summit Investors, the Xxxxx Xxxx Investors or
their Permitted Transferees, as the case may be, beneficially own more than 5%
of the number of shares of any class of equity securities of the Issuer);
provided that an Independent Financial Expert may be compensated for opinions or
services it provides as an Independent Financial Expert.
"INITIAL PUBLIC OFFERING" means the initial sale after the date hereof
of any class of Common Stock pursuant to an effective registration statement
under the Securities Act (other than a registration statement on Form X-0, Xxxx
X-0 or any successor forms) pursuant to which the Company receives aggregate net
proceeds of at least $50 million.
"IPO CLOSING DATE" means the date on which an Initial Public Offering
is consummated.
"ISSUER" means the Company as the issuer of the Company Securities
and/or Xxxxx as the issuer of the Preferred Stock, as the context requires.
"LIQUIDATION VALUE" shall have the meaning assigned to such term in the
Certificate of Incorporation of Xxxxx.
"LOAN AND WARRANT AGREEMENT" means that certain Loan and Warrant
Agreement dated as of March 26, 2001 among the Company, Xxxxx and certain
Lenders (as defined in the Loan and Warrant Agreement) providing for a multiple
advance term loan in an amount equal to at least $25 million.
"MANAGEMENT INVESTORS" means Xxxxx X. Xxxxxxx, Xxxx X. Xxxxxxxx, Xxx X.
Xxxx, Xxx X. Xxxxxxxx and Xxxx Xxxxx.
"PERCENTAGE OWNERSHIP" means, with respect to any Shareholder or any
group of Shareholders at any time, (i) the number of shares of Fully Diluted
Common Stock that such Shareholder or group of Shareholders beneficially owns
(and (without duplication) has the right to acquire) at such time, divided by
(ii) the total number of shares of Fully Diluted Common Stock at such time.
"PERMITTED TRANSFEREE" means:
(i) in the case of any DLJ Entity or any Person described in the
following clauses (A) through (E), (A) any other DLJ Entity, (B) any
general or limited partner of any such entity (a "DLJ PARTNER"), and
any corporation, partnership, Affiliated Employee Benefit Trust or
other entity which is an Affiliate of any DLJ Partner (collectively,
the "DLJ AFFILIATES"), (C) any managing director, general partner,
director, limited partner, officer or employee of such DLJ Entity or a
DLJ Affiliate, or the heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of any of the foregoing Persons
referred to in this clause (C) (collectively, the "DLJ ASSOCIATES"),
(D) any trust, the beneficiaries of which, or any corporation, limited
liability company or
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Investors' Agreement
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partnership, the stockholders, members or general or limited partners
of which, include only such XXX Xxxxxx, XXX Xxxxxxxxxx, XXX Associates,
their spouses or their lineal descendants and (E) a voting trustee for
one or more DLJ Entities, DLJ Affiliates or DLJ Associates under the
terms of a voting trust designed to conform with the requirements of
the insurance laws of the State of New York;
(ii) in the case of Summit/DPC or any Person described in the
following clauses (A) through (E), (A) any other Summit Investor, (B)
any general or limited partner or shareholder of Summit/DPC, and any
corporation, partnership or other entity that is an Affiliate of a
Summit Investor (collectively, the "SUMMIT AFFILIATES"), (C) any
general partner, limited partner, shareholder, officer or director of
Summit/DPC or a Summit Affiliate, or any spouse, lineal descendant,
sibling, parent, heir, executor, administrator, testamentary trustee,
legatee or beneficiary of any of the foregoing persons described in
this clause (C) (collectively, the "SUMMIT ASSOCIATES"), and (D) any
trust, the beneficiaries of which, or any corporation, limited
liability company or partnership, stockholders, members or general or
limited partners of which include only Summit/DPC, such Summit
Affiliates, Summit Associates or any institution described in clause
(E) following, or (E) any institution qualified as tax-exempt under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
(iii) in the case of any Chase Investor or any Person described in
the following clauses (A) through (E), (A) any corporation, partnership
or other entity that is an Affiliate of any Chase Investor (including
Baseball Partners so long as it remains an Affiliate of Chase) or any
entity described in clause (C) or (D) hereof; (B) any other Chase
Investor; (C) any Person who at the time owns (directly or indirectly)
at least a majority of the shares of any Chase Investor; (D) any Person
at least a majority of whose shares shall at the time be owned
(directly or indirectly) by any Chase Investor or by any Person who
owns (directly or indirectly) at least a majority of the shares of any
Chase Investor; (E) any corporation, partnership, business association
or other entity substantially all of whose equity holders are
Affiliates or employees of any Chase Investor or any entity described
in clause (C) or (D) hereof; and (F) a third party, if, in the good
faith reasonable judgment of Chase, such transfer is required to be
effected by Chase because of a Regulatory Problem, it being understood
that transfers pursuant to this clause (F) shall only be for that
quantity of Common Stock as is deemed necessary by Chase to remedy such
Regulatory Problem; and provided, that (with respect to clause (F)
only) no such transfer shall be made to a third party that is an
Adverse Person and that any such transfer of Common Stock and/or
Warrants representing an amount in excess of 5% of the Common Stock on
a Fully Diluted basis shall be subject to the provisions of Section 4.1
hereof unless (I) otherwise directed by a governmental authority having
jurisdiction over bank holding companies or (II) a violation of
Regulation Y would occur as a result thereof;
(iv) in the case of Dartford or any Person described in the
following clauses (A) through (E), (A) any other Xxxxx Xxxx Investor,
(B) any corporation, partnership or other entity which is an Affiliate
of a Xxxxx Xxxx Investor (collectively, the "XXXXX XXXX Affiliates"),
(C) any member, shareholder, director, general partner, limited partner
or officer of Dartford or a Xxxxx Xxxx Affiliate, or any spouse, lineal
descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of any of the foregoing
persons described in this clause (C) (collectively, the "DARTFORD
ASSOCIATES"); (D) any trust, the beneficiaries of which, or any
corporation, limited liability company or partnership, stockholders,
members or general or limited partners of
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Investors' Agreement
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which include only Dartford, Xxxxx Xxxx Affiliates, Dartford Associates
or any institution described in clause (E) following, or (E) any
institution qualified as tax-exempt under Section 501(c)(3) of the
internal Revenue Code of 1986, as amended;
(v) in the case of BRS or any Person described in the following
clauses (A) through (E), (A) any other Xxxxx Xxxx Investor, (B) any
Xxxxx Xxxx Affiliate, (C) any member, shareholder, director, general
partner, limited partner or officer of BRS or a Xxxxx Xxxx Affiliate,
or any spouse, lineal descendant, sibling, parent, heir, executor,
administrator, testamentary trustee, legatee or beneficiary of any of
the foregoing persons described in clause (C) (collectively, the "BRS
ASSOCIATES"); (D) any trust, the beneficiaries of which, or any
corporation, limited liability company or partnership, stockholders,
members or general or limited partners of which include only BRS, Xxxxx
Xxxx Affiliates, BRS Associates or any institution described in clause
(E) following or (E) any institution qualified as tax-exempt under
Section 501(c)(3) of the internal Revenue Code of 1986, as amended;
(vi) in the case of PNC or any Person described in the following
clauses (A) through (E), (A) any other Xxxxx Xxxx Investor, (B) any
Xxxxx Xxxx Affiliate, (C) any member, shareholder, general partner,
limited partner, officer or director of PNC or a Xxxxx Xxxx Affiliate,
or any spouse, lineal descendant, sibling, parent, heir, executor,
administrator, testamentary trustee, legatee or beneficiary of any of
the foregoing persons described in clause (C) (collectively, the "PNC
ASSOCIATES"); (D) any trust, the beneficiaries of which, or any
corporation, limited liability company or partnership, stockholders,
members or general or limited partners of which included only PNC,
Xxxxx Xxxx Affiliates, PNC Associates or any institution described in
clause (E) following, (E) any institution qualified as tax-exempt under
Section 501(c)(3) of the internal Revenue Code of 1986, as amended, or
(F) a third party, if, in the good faith reasonable judgment of PNC,
such transfer is required to be effected by PNC because of a Regulatory
Problem, it being understood that transfers pursuant to this clause (F)
shall only be for that quantity of Common Stock as is deemed necessary
by PNC to remedy such Regulatory Problem; and provided, that (with
respect to clause (F) only) no such transfer shall be made to a third
party that is an Adverse Person and that any such transfer of Common
Stock representing an amount in excess of 5% of the Common Stock on a
Fully Diluted basis shall be subject to the provisions of Section 4.1
hereof unless (I) otherwise directed by a governmental authority having
jurisdiction over bank holding companies or (II) a violation of
Regulation Y would occur as a result thereof;
(vii) in the case of Xxxxx Xxxx L.L.C. or any Person described in
the following clauses (A) through (E), (A) any other Xxxxx Xxxx
Investor, (B) any Xxxxx Xxxx Affiliate, (C) any member, shareholder,
general partner, limited partner, officer or director of Xxxxx Xxxx
L.L.C. or a Xxxxx Xxxx Affiliate, or any spouse, lineal descendant,
sibling, parent, heir, executor, administrator, testamentary trustee,
legatee or beneficiary of any of the foregoing persons described in
clause (C) (collectively, the "XXXXX XXXX L.L.C. ASSOCIATES"); and (D)
any trust, the beneficiaries of which, or any corporation, limited
liability company or partnership, stockholders, members or general or
limited partners of which include only Xxxxx Xxxx L.L.C., Xxxxx Xxxx
Affiliates, Xxxxx Xxxx L.L.C. Associates or any institution described
in clause (E) following or (E) any institution qualified as tax-exempt
under Section 501(c)(3) of the internal Revenue Code of 1986, as
amended;
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Investors' Agreement
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(viii) in the case of Baseball Partners or any Person described in
the following clauses (A) through (D), (A) any general or limited
partner or shareholder of Baseball Partners, and any corporation,
partnership or other entity that is an Affiliate of Baseball Partners
(collectively, the "BASEBALL PARTNERS AFFILIATES"), (B) any general
partner, limited partner, shareholder, officer or director of a
Baseball Partners Affiliate, or any spouse, lineal descendant, sibling,
parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of any of the foregoing persons described in this clause
(B) (collectively, the "BASEBALL PARTNERS ASSOCIATES"), and (C) any
trust, the beneficiaries of which, or any corporation, limited
liability company or partnership, stockholders, members or general or
limited partners of which include only Baseball Partners, Baseball
Partners Affiliates, Baseball Partners Associates or any institution
described in clause (D) following, or (D) any institution qualified as
tax-exempt under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended;
(ix) in the case of any other Shareholder, (A) the Issuer, (B) a
Person to whom Shares are transferred from such other Shareholder (1)
by will or the laws of descent and distribution or (2) by gift without
consideration of any kind; provided that in the case of clause (2)
preceding such transferee is the spouse or the lineal descendant,
sibling or parent of such Shareholder, (C) a trust that is for the
exclusive benefit of such other Shareholder, its Permitted Transferees
under (B) above or any institution described in clause (D) following,
(D) any institution qualified as tax-exempt under Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, or (E) a partnership,
limited liability company, corporation or other business organization
that is "controlled by" (as defined in the definition of the term
"AFFILIATE"), and a majority of capital stock or interests entitled to
a majority of all distributions (including liquidating distributions)
are owned beneficially by, such other Shareholder and any one or more
of the persons described in clauses (B) through (D) preceding; and
(x) any other Person approved of by the Board in accordance with
Section 2.4 hereof with respect to a particular transfer.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PREFERRED STOCK" means the 14.25% Senior Exchangeable Preferred Stock
of Xxxxx.
"PUBLIC OFFERING" means any primary or secondary public offering of
equity securities of the Issuer pursuant to an effective registration statement
under the Securities Act other than pursuant to a registration statement filed
in connection with a transaction of the type described in Rule 145 of the
Securities Act or for the purpose of issuing securities pursuant to an employee
benefit plan.
"REGISTRABLE SECURITIES" means, at any time, with respect to any
Shareholder or its Permitted Transferees, any shares of Common Stock, or
Warrants or Warrant Shares then owned by such Shareholder or its Permitted
Transferees until (i) a registration statement covering such Common Stock,
Warrants or Warrant Shares has been declared effective by the SEC and such
securities have been disposed of pursuant to such effective registration
statement, (ii) such securities are sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met or such securities may be sold pursuant to Rule
144(k) or (iii) such securities are otherwise transferred and in connection
therewith the Issuer has delivered a new certificate
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Investors' Agreement
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or other evidence of ownership for such securities not bearing the legend
required pursuant to this Agreement and such securities may be resold without
subsequent registration under the Securities Act.
"REGISTRATION EXPENSES" means (i) all registration and filing fees,
(ii) 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 securities registered), (iii) printing expenses, (iv)
internal expenses of the Issuer (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
(v) reasonable fees and disbursements of counsel for the Issuer and customary
fees and expenses for independent certified public accountants retained by the
Issuer (including expenses relating to any comfort letters or costs associated
with the delivery by independent certified public accountants of a comfort
letter or comfort letters requested pursuant to Section 5.4(h) hereof), (vi) the
reasonable fees and expenses of any special experts retained by the Issuer in
connection with such registration, (vii) reasonable fees and expenses of up to
one counsel for the Shareholders participating in the offering (A) selected by
the DLJ Entities or their Permitted Transferees in any offering where at least
50% of the number of securities proposed to be sold are beneficially owned by
the DLJ Entities or their Permitted Transferees, (B) selected by the Summit
Investors or their Permitted Transferees in any offering where at least 50% of
the number of securities proposed to be sold are beneficially owned by the
Summit Investors or their Permitted Transferees, (C) selected by the Xxxxx Xxxx
Investors or their Permitted Transferees in any offering where at least 50% of
the number of securities proposed to be sold are beneficially owned by the Xxxxx
Xxxx Investors or their Permitted Transferees, or (D) selected by Chase or its
Permitted Transferees in any offering where at least 50% of the number of
securities proposed to be sold are beneficially owned by Chase or its Permitted
Transferees, (viii) fees and expenses in connection with any review of
underwriting arrangements by the National Association of Shares Dealers, Inc.
(the "NASD") including fees and expenses of any "qualified independent
underwriter" and (ix) fees and disbursements of underwriters customarily paid by
issuers or sellers of securities, but shall not include any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities, or
any out-of-pocket expenses (except as set forth in clause (vii) above) of the
Shareholders or any fees and expenses of underwriter's counsel.
"REGULATED HOLDER" means a Shareholder which is a bank, a bank holding
company or an Affiliate of any of the foregoing.
A Regulated Holder shall be deemed to have a "REGULATORY PROBLEM" when
(i) such Regulated Holder's investment in the Securities exceeds any limitation
to which it is subject, or is otherwise not permitted, under any law, rule or
regulation of any governmental authority (including any position to that effect
taken by such governmental authority) or (ii) restrictions are imposed on such
Regulated Holder which, in its reasonable judgment, make it illegal or unduly
burdensome for such Regulated Holder to continue to hold such Securities.
"REGULATION Y" shall mean Regulation Y promulgated by the Board of
Governors of the Federal Reserve System (12 C.F.R. 225) or any successor
regulation.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means shares of Common Stock, the Warrants and the
Preferred Stock held by the Shareholders.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHAREHOLDER" means each Person (other than the Company or Xxxxx) who
shall be a party to this Agreement, whether in connection with the execution and
delivery hereof as of August 3, 1998,
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Investors' Agreement
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pursuant to Section 7.3 or otherwise, or bound by this Agreement by reason of
being a party to the Original Agreement, in each case, so long as such Person
shall beneficially own any Securities.
"SHARES" means shares of Common Stock and shares of Preferred Stock of
the Issuer held by the Shareholders.
"SHORT-FORM DEMAND REGISTRATION" means a Demand Registration on Form
S-2 or S-3 (or any successor forms).
"SHORT-FORM DATE" means the date on which the Issuer in question
becomes eligible to use Forms S-2 or S-3 (or any successor forms) for
registration of its securities.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"SUMMIT INVESTORS" means Summit/DPC, Xxxxx Xxxxxxx Xxxxxx, J. Xxxxx
Xxxxxx, Xxxx X. Xxxxxxxxx, Xxx X. Xxxxxxxxx, The 1989 Xxxxxxxxx Trust, and Xxxx
X. Xxxxxxxxx but not including the Management Investors.
"SUMMIT-INVESTOR SHARES" means all Shares held by the Summit Investors.
"TAG-ALONG PORTION" means:
(i) where the Selling Person is selling Preferred Stock, the
number of shares of Preferred Stock held by the Tagging Person
multiplied by a fraction, the numerator of which is the number of
shares of Preferred Stock proposed to be sold by the Selling Person and
its Permitted Transferees pursuant to Section 4.2, and the denominator
of which is the aggregate number of shares of Preferred Stock on a
Fully Diluted basis;
(ii) where the Selling Person is selling Common Stock, the number
of shares of Common Stock held (or, without duplication, acquirable
under the Warrants) by the Tagging Person multiplied by a fraction, the
numerator of which is the number of shares of Common Stock proposed to
be sold by the Selling Person and its Permitted Transferees pursuant to
Section 4.2, and the denominator of which is the aggregate number of
shares of Common Stock on a Fully Diluted basis; and
(iii) where the Selling Person is selling Warrants, the number of
shares of Common Stock held (or, without duplication, acquirable under
the Warrants) by the Tagging Person multiplied by a fraction the
numerator of which is the number of shares of Common Stock for which
the Warrants proposed to be sold by a Selling Person and its Permitted
Transferees pursuant to Section 4.2 are exercisable, and the
denominator of which is the aggregate number of shares of Common Stock
on a Fully Diluted basis; provided that where a Tag Along Right
includes the right to sell Common Stock, any Tagging Person that is a
holder of Warrants may, in lieu of exercising Warrants, transfer
Warrants for some or all of that number of shares of Common Stock as
would otherwise have constituted its Tag Along Portion, in which event
the price to be received with respect to each such Warrant shall be the
price per share of Common Stock applicable to the Tag Along Offer, less
the then applicable exercise price of the Warrants in question.
Second Amended and Restated
Investors' Agreement
8
12
"THIRD PARTY" means a prospective purchaser of Securities in an
arm's-length transaction from a Shareholder where such purchaser is neither a
Shareholder nor Permitted Transferee of a Shareholder.
"UNDERWRITTEN PUBLIC OFFERING" means a firmly underwritten public
offering of Registrable Securities of the Issuer pursuant to an effective
registration statement under the Securities Act.
"WARRANTS" means (i) the warrants issued on or about October 5, 1995 to
certain of the Shareholders (or certain predecessors-in-interest thereto) for
the purchase of an aggregate of 5,417,912 shares of Common Stock (subject to
adjustment as provided therein) and (ii) the warrants issued pursuant to the
Loan and Warrant Agreement.
"WARRANT SHARES" means the shares of Common Stock issuable by the
Company upon exercise of the Warrants.
"XXXXX XXXX" means Xxxxx Xxxx Pet Food Company, Inc.
"XXXXX XXXX INVESTORS" means the Persons listed on the signature pages
hereto as the "Xxxxx Xxxx Investors."
"XXXXX XXXX MERGER" means the merger of DPC/WH MergeCo, Inc. with and
into WH Holdings pursuant to the Xxxxx Xxxx Merger Agreement.
"XXXXX XXXX MERGER AGREEMENT" means that certain Agreement and Plan of
Merger dated of June 10, 1998 among WH Holdings, Xxxxx Xxxx, the Company, DPC/WH
Merge Co., Inc., Xxxxx, Dartford, Xxxxx Xxxx L.L.C., BRS and PNC, as the same
may be amended or restated from time to time.
"XXXXX XXXX REPRESENTATIVE" means any individual designated from time
to time in an instrument delivered to the Company and signed by the record
holders of at least 60% of the Common Stock then held of record by all of the
Xxxxx Xxxx Investors. As of the date of this Agreement, Xxxxxxx X. Xxxxxxxx is
the Xxxxx Xxxx Representative.
(b) The term "DLJ ENTITIES", to the extent such entities shall
have transferred any of their Securities to "Permitted Transferees", shall mean
the DLJ Entities and the Permitted Transferees of the DLJ Entities, taken
together, and any right or action that may be exercised or taken at the election
of the DLJ Entities may be exercised or taken at the election of the DLJ
Entities and such Permitted Transferees.
(c) The term "SUMMIT INVESTORS", to the extent such Shareholders
shall have transferred any of their Securities to "PERMITTED TRANSFEREES", shall
mean the Summit Investors and their respective Permitted Transferees, and any
right or action that may be exercised or taken at the election of such
Shareholders may be exercised or taken at the election of such Shareholders and
their respective Permitted Transferees.
(d) The term "XXXXX XXXX INVESTORS", to the extent such
Shareholders shall have transferred any of their Securities to "PERMITTED
TRANSFEREES", shall mean the Xxxxx Xxxx Investors and their respective Permitted
Transferees, and any right or action that may be exercised or taken at the
election of such Shareholders may be exercised or taken at the election of such
Shareholders and their respective Permitted Transferees.
(e) The term "CHASE INVESTORS", to the extent such Shareholders
shall have transferred any of their Securities to "PERMITTED TRANSFEREES", shall
mean Chase and its Permitted
Second Amended and Restated
Investors' Agreement
9
13
Transferees and any right or action that may be exercised or taken at the
election of such Shareholders may be exercised or taken at the election of such
Shareholders and their respective Permitted Transferees.
(f) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
---- -------
Approving Parties 4.4
Associate 2.1
Cause 2.2
Chase Designee 2.1
Confidential Information 6.1(b)
Demand Registration 5.1(a)
Demand Right Holder 5.1(a)
DLJMB 2.1(a)
DLJMB Designee 2.1(a)
Dragalong Notice 4.4
Final Order Period 4.1(a)
Final Section 4.1 Offer 4.1(a)
Following Shareholder 5.2(b)
Group 3.5
Holders 5.1(a)(ii)
Incidental Registration 5.2(a)
Indemnified Party 5.7
Indemnifying Party 5.7
Initial Order Period 4.1(b)
Initial Section 4.1 Offer 4.1(b)
Initial Section 4.1 Offer Notice 4.1(a)
Initiating Shareholder 5.1(a)
Inspectors 5.4(g)
Maximum Offering Size 5.1(d)
New Securities 6.4
Nominee 2.3(a)
Offered Securities 4.5
Original Agreement Recitals
Pro-Rata Portion 4.1(b)
Records 5.4(g)
Regulation D 4.4
Representatives 6.1(b)
Requesting Shareholder 4.5
Sale of the Company Proposal 4.4
Second Order Period 4.1(b)
Second Section 4.1 Offer 4.1(b)
Section 4.1 Sale 4.1(a)
Section 4.1 Sale Price 4.1(a)
Section 4.1 Seller 4.1(a)
Section 4.2 Response Notice 4.2(a)
Section 4.4 Seller 4.4
Seller 4.3(c)
Selling Person 4.2(a)
Shareholder 7.3
Second Amended and Restated
Investors' Agreement
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14
Subsequent Section 4.1 Offer 4.1(b)
Subsequent Order Period 4.1(b) 4.1(b)
Summit-Investor Designee 2.1
Surrendered Shares 4.3(c)
Tag-Along Notice 4.2(a)
Tag-Along Notice Period 4.2(a)
Tag-Along Offer 4.2(a)
Tag-Along Right 4.2(a)
Tag-Along Sale 4.2(a)
Tag-Along Seller 4.2(a)
Tagging Person 4.2(a)
Termination Date 4.3(c)
transfer 3.1(a)
Underlying Shares 4.2(c)
WH Holdings Recitals
Xxxxx Xxxx Designee 2.1
ARTICLE 2
CORPORATE GOVERNANCE AND MANAGEMENT
2.1 Composition of the Board.
(a) The Board shall consist of seven members or such greater number as
is established in accordance with the Bylaws, and the Company shall take such
action as is necessary to cause the following persons to be nominated, in
accordance with the Bylaws, to stand for election to serve as directors in the
positions (i.e., as Class I Directors, Class II Directors or Class III
Directors) specified below:
(i) at any time the Summit Investors own of record 50% or more of
the number of shares of Common Stock owned thereby as of August 3, 1998
(including Warrants on an as if exercised basis and disregarding stock
splits, recapitalizations and similar adjustments in number of shares
and stock dividends), one individual designated by Summit on behalf of
the Summit Investors, and, as long as the Board is classified, such
individual shall stand for election as a Class III Director (the
"SUMMIT-INVESTOR DESIGNEE");
(ii) at any time the Xxxxx Xxxx Investors own of record 50% or
more of the number of shares of Common Stock owned thereby as of August
3, 1998 (including those owned of record by IBJ Whitehall Bank & Trust
Company as of August 3, 1998 pursuant to the escrow established in
connection with the Xxxxx Xxxx Merger) (including Warrants on an as if
exercised basis and disregarding stock splits, recapitalizations and
similar adjustments in number of shares and stock dividends), one
individual designated by BRS, which individual shall stand for election
as a Class I Director (the "XXXXX XXXX DESIGNEE");
(iii) at any time the Chase Percentage Ownership is 5% or greater,
two individuals shall be designated by Chase (each, a "CHASE DESIGNEE")
to stand for election and, so long as the Board is classified, one
Chase Designee shall stand for election to serve as a Class III
Director and the second Chase Designee shall stand for election to
serve as a Class II Director;
Second Amended and Restated
Investors' Agreement
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(iv) at any time the Percentage Ownership of the DLJ Entities is
5% or greater, one individual (the "DLJMB DESIGNEE") shall be
designated by DLJ Merchant Banking Partners, L.P. ("DLJMB") to stand
for election and, so long as the Board is classified, the DLJMB
Designee shall stand for election to serve as a Class III Director;
(v) the chief executive officer of the Company shall be designated
to stand for election and, so long as the Board is classified, the
chief executive officer shall stand for election to serve as a Class II
Director; and
(vi) in addition to the individuals contemplated above, one
individual designated by a majority of the directors designated
pursuant to clauses (i) through (v) above; provided, such individual
must be an independent director and such individual shall stand for
election to serve as a Class I Director.
Director positions for which a nominee is not specified in accordance
with the preceding provisions of this Section 2.1(a) shall be specified in
accordance with the Bylaws.
At the Company's request, each Shareholder entitled to vote for the
election of directors to the Board shall vote its Securities and execute written
consents to increase the Board size and to elect independent directors to
accommodate the requirements for listing the Securities on any national
securities exchange or market system on which the Board determines that any of
the Securities shall be listed or included or to include at least two
individuals who are "NON-EMPLOYEE DIRECTORS" for purposes of, and as such term
is referred to in, Rule 16b-3 of the Exchange Act. Each Shareholder entitled to
vote for the election of directors to the Board agrees that it will vote its
Securities or execute consents, as the case may be, and take all other
reasonable action (including taking reasonable steps to cause the Company to
call a special meeting of shareholders) in order to ensure that the composition
of the Board is as set forth in this Section 2.1(a). The parties to this
Agreement acknowledge and agree that, due to the existence of stockholders
entitled to vote for the election of directors that are not parties to this
Agreement, the right to designate an individual pursuant to this Section 2.1(a)
and the obligations of the Shareholders to vote for or consent to any individual
designated in accordance with this Section 2.1(a) may not be sufficient to
ensure that such individual shall be elected to the Board.
(b) [RESERVED]
2.2 Removal and Resignation.
(a) Each Shareholder agrees that it will not vote any of its
Securities in favor of the removal of any director who shall have been
designated or nominated pursuant to Section 2.1(a) unless (i) such
removal shall be for Cause (as defined below) or (ii) the Person(s)
entitled to designate or nominate such director shall have consented to
or requested such removal in writing (and, in the case of any such
request, such Shareholder shall vote its Securities in favor of such
removal). Removal for "Cause" shall mean removal of a director because
of such director's (A) willful and continued failure substantially to
perform his duties with the Company in his established position, (B)
willful conduct which is injurious to the Company or any of its
Subsidiaries, monetarily or otherwise, (C) conviction for, or guilty
plea to, a felony or a crime involving moral turpitude, (D) abuse of
illegal drugs or other controlled substances or habitual intoxication
or (E) willful breach of this Agreement.
(b) At any time the Summit-Investor Designee is serving on the
Board when the Summit Investors' Percentage Ownership is less than 5%,
upon the request of a
Second Amended and Restated
Investors' Agreement
12
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majority of the other directors of the Board, the Summit Investors
shall use their commercial best efforts to cause the Summit-Investor
Designee to resign from the Board.
(c) At any time the Xxxxx Xxxx Designee is serving on the Board
when the Xxxxx Xxxx Investors' Percentage Ownership is less than 5%,
upon the request of a majority of the other directors of the Board, the
Xxxxx Xxxx Investors shall use their commercial best efforts to cause
the Xxxxx Xxxx Designee to resign from the Board.
(d) At any time a Chase Designee is serving on the Board when
Chase's Percentage Ownership is less than 5%, upon the request of a
majority of the other directors of the Board, Chase shall use its
commercial best efforts to cause both of the Chase Designees to resign
from the Board.
(e) At any time the DLJMB Designee is serving on the Board when
the Percentage Ownership of the DLJ Entities is less than 5%, upon the
request of a majority of the other directors of the Board, DLJMB shall
use its commercial best efforts to cause the DLJMB Designee to resign
from the Board.
2.3 Vacancies. The Shareholders recognize that under the terms of the
certificate of incorporation and the Bylaws that any vacancy in the Board,
whether arising through death, resignation, or removal of a director, or through
an increase in the number of directors of any class, shall be filled by the
majority vote of the remaining directors, although less than a quorum, or by a
sole remaining director. In the event of such vacancy, each Shareholder entitled
to vote for the election of directors to the Board agrees that it will use
commercial best efforts to cause its Board nominee, if any and if then serving
on the Board, to fill any such vacancy in the following manner.
(a) any vacancy created by the death, disability, retirement,
resignation or removal of any individual (a "FORMER DIRECTOR")
designated under clauses (i), (ii), (iii) or (iv) of Section 2.1(a)
shall be filled by the applicable person or persons that designated the
Former Director so long such person or persons remains entitled to
designate an individual under the applicable clause of Section 2.1(a);
and
(b) any vacancy created by an increase in the number of directors
of any class shall be filled in accordance with the Bylaws.
2.4 Action by the Board. (a) A quorum of the Board shall consist
initially of four directors; provided, whenever more or less than seven
directors are serving on the Board, a quorum shall consist of a majority of the
number of directors then serving. Subject to the additional requirements under
Section 2.4(b), all actions of the Board shall require the affirmative vote of
at least a majority of the directors at a duly convened meeting of the Board at
which a quorum is present or the unanimous written consent of the Board;
provided that, in the event there is a vacancy on the Board and an individual
has been nominated to fill such vacancy, the first order of business shall be to
fill such vacancy.
(b) Until consummation of an Initial Public Offering, no action by the
Company (including but not limited to any action by the Board or any committee
thereof) shall be taken after the date hereof with respect to any of the
following matters without the affirmative approval of the Board, which majority
must include (i) at least one of the Chase Designees and (ii) at least one of
(A) for so long as the Summit Investors own at least 33 1/3% of the number of
shares of Common Stock owned thereby as of August 3, 1998 (treating, for these
purposes, the Warrants on an as if exercised basis and, in each case,
disregarding stock splits, recapitalizations and similar adjustments in number
of shares and stock dividends), the Summit-Investor Designee or (B) for so long
as the Xxxxx Xxxx Investors own at least 50% of the number
Second Amended and Restated
Investors' Agreement
13
17
of shares of Common Stock owned thereby as of August 3, 1998 (treating, for
these purposes, the Warrants on an as if exercised basis and, in each case,
disregarding stock splits, recapitalizations and similar adjustments in number
of shares and stock dividends), the Xxxxx Xxxx Designee:
(i) (x) any merger or consolidation of the Company with or into
any Person, other than a wholly owned Subsidiary, or of any Subsidiary
with or into any Person other than the Company or any other
wholly-owned Subsidiary; or (y) any sale of any Subsidiary or any
significant operations of the Company or any Subsidiary or any
acquisition or disposition of assets, business, operations or
securities by the Company or any Subsidiary (in a single transaction or
a series of related transactions) having a value in each case in this
clause (y) in excess of $25,000,000;
(ii) the declaration of any dividend on or the making of any
distribution with respect to, or the redemption, repurchase or other
acquisition of, any securities of the Company or any Subsidiary, except
as expressly permitted by this Agreement or the Certificate of
Designations of the Preferred Stock and except for repurchases of
securities from individuals in connection with the termination of their
employment;
(iii) any liquidation, dissolution, commencement of bankruptcy,
liquidation or similar proceedings with respect to the Company or any
Subsidiary;
(iv) (A) any incurrence by the Company or any Subsidiary of
indebtedness for borrowed money in excess of $25,000,000 in the
aggregate (or the guaranty by the Company or any Subsidiary of any such
indebtedness) other than an incurrence or guaranty permitted by the
existing terms of the credit facilities of the Company or any
Subsidiary thereof or (B) any issuance of any security by the Company
or any Subsidiary other than issuances of securities in connection with
any employee stock offering or any stock option plan approved by the
Board or as consideration in any acquisition (whether stock purchase,
asset purchase or merger), which acquisition has been approved in
accordance with this Agreement including Section 2.4(b)(i) if
applicable to such acquisition;
(v) any transaction or series of related transactions (not
otherwise expressly permitted by this Agreement) between the Company or
any Subsidiary, on the one hand, and any stockholder or Affiliate of
the Company or any Subsidiary, on the other hand, other than
transactions involving an amount less than $500,000;
(vi) the appointment of the Chief Executive Officer;
(vii) any amendment to the certificate of incorporation or bylaws
of the Company or any adoption of or amendment to the certificate of
incorporation or bylaws of any significant Subsidiary (i.e. any
Subsidiary whose revenues for the latest twelve month period are at
least equal to 10% of the consolidated revenues of the Company and all
of its Subsidiaries);
(viii) the approval of any Person as a Permitted Transferee under
clause (x) of the definition of "Permitted Transferee"; or
(ix) any amendment of the definition of the term "Permitted
Transferee", which amendment shall be consistent with the intention of
the parties hereunder.
Second Amended and Restated
Investors' Agreement
14
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2.5 Conflicting Charter or Bylaw Provisions. Each Shareholder shall
vote its shares of Common Stock, and shall take all other actions necessary, to
ensure that the Company's certificate of incorporation and bylaws facilitate and
do not at any time conflict with any provision of this Agreement.
2.6 Subsidiary Governance. Subject to paragraph 8(b) of the Certificate
of Designations of the Preferred Stock, each of the Company and each Shareholder
agrees that the board of directors of Xxxxx shall be comprised of the
individuals who are serving as directors on the Board in accordance with Section
2.1(a). Each Shareholder agrees to vote its shares of Common Stock and to cause
its representatives on the Board, subject to their fiduciary duties, to vote and
take other appropriate action to effectuate the agreements in this Section 2.6
in respect of Xxxxx.
ARTICLE 3
RESTRICTIONS ON TRANSFER
3.1 General. (a) Each Shareholder understands and agrees that the
Securities purchased on or prior to the date hereof (including Securities issued
in connection with the Xxxxx Xxxx Merger) have not been registered under the
Securities Act and are restricted securities. Each Shareholder agrees that it
will not, directly or indirectly, sell, assign, transfer, grant a participation
in, pledge or otherwise dispose of ("TRANSFER") any Securities (or solicit any
offers to buy or otherwise acquire, or take a pledge of any Securities) except
in compliance with the Securities Act and the terms and conditions of this
Agreement.
(b) Any attempt to transfer any Securities not in compliance with this
Agreement shall be null and void and neither the Issuer thereof nor any transfer
agent shall give any effect in the Issuer's stock records to such attempted
transfer.
3.2 Legends. (a) In addition to any other legend that may be required,
each certificate for Securities that is issued to any Shareholder after the date
hereof shall bear a legend in substantially the following form:
(a) "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SECOND AMENDED AND RESTATED
INVESTORS' AGREEMENT DATED AS OF MARCH 26, 2001, AS AMENDED OR RESTATED FROM
TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM XXXXX PET CARE
ENTERPRISES, INC., XXXXX PET CARE COMPANY OR ANY SUCCESSOR THERETO."
(b) If any Securities shall cease to be Registrable Securities under
clause (i) or clause (ii) of the definition thereof, the Issuer thereof shall,
upon the written request of the holder thereof, issue to such holder a new
certificate evidencing such shares without the first sentence of the legend
required by Section 3.2(a) endorsed thereon. If any Securities cease to be
subject to any and all restrictions on transfer set forth in this Agreement, the
Issuer thereof shall, upon the written request of the holder thereof, issue to
such holder a new certificate evidencing such Securities without the second
sentence of the legend required by Section 3.2(a) endorsed thereon.
3.3 Permitted and Required Transfers.
(a) Notwithstanding anything in this Agreement to the contrary, any
Shareholder may at any time transfer any or all of its Securities to one or more
of its Permitted Transferees without the consent of the Board or any other
Shareholder or group of Shareholders and without compliance with Sections 3.4,
Second Amended and Restated
Investors' Agreement
15
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4.1 and 4.2 so long as (i) such Permitted Transferee shall have agreed in
writing to be bound by the terms of this Agreement and (ii) the transfer to such
Permitted Transferee is not in violation of applicable federal or state
securities laws.
(b) Notwithstanding anything in this Agreement to the contrary, without
the consent of the Board or any other Shareholder or group of Shareholders and
without compliance with Sections 3.4, 4.1 and 4.2, on or before April 30, 2001,
Chase shall be permitted to transfer any or all of the 2001 Warrants to Baseball
Partners so long as (i) Baseball Partners agrees that the 2001 Warrants
transferred from Chase and the Common Stock issued upon exercise of such
warrants shall be bound by the terms of this Agreement and (ii) the transfer to
Baseball Partners shall not be in violation of applicable federal or state
securities laws.
3.4 Restrictions on Transfers. (a) Except as provided in Section 3.3,
each Shareholder and the Permitted Transferees of such Shareholder may transfer
their shares of Common Stock and Warrants only:
(i) in a Public Offering in connection with the exercise of its
rights under Article 5 hereof;
(ii) [RESERVED];
(iii) subject to Sections 3.4(c), 4.1 and 4.2, in a sale pursuant
to Rule 144 (or any successor provision) under the Securities Act or
otherwise;
(iv) [RESERVED]; or
(v) subject to Section 3.4(c), in connection with any transfer of
shares of Preferred Stock in a transaction in which shares of Preferred
Stock and such Company Securities shall be transferred to the same
transferee.
(b) Subject to Section 3.4(c) and Section 4.2, transfers of shares of
Preferred Stock shall be permitted provided any such transfer is not in
violation of applicable federal or state securities laws and such transfer does
not occur prior to an Initial Public Offering.
(c) In no event shall any transfers pursuant to Section 3.4(a)(iii) or
(a)(v), or any transfers of shares of Preferred Stock hereof be made to an
Adverse Person; provided, notwithstanding the current prohibition on transfers
to Adverse Persons, if a transfer to an Adverse Person occurs, this clause (c)
shall not restrict tag-along transfers pursuant to Section 4.2.
(d) The restrictions on transfer set forth in this Section 3.4 shall
terminate upon the consummation of an Initial Public Offering.
(e) In the event any transfer pursuant to Section 3.4(a)(iii) hereof
shall be made for consideration other than cash, then the selling Shareholder
shall obtain and deliver to the Issuer, within ten days of the consummation of
such transfer, an opinion of an Independent Financial Expert with respect to the
fair market value of the non-cash consideration received by such selling
Shareholder.
3.5 Regulation Y Matters. Notwithstanding anything in this Agreement or
the Warrants to the contrary, no Shareholder that owns securities which are
subject to the provisions of Regulation Y shall, and no such Shareholder shall
permit any of its Bank Holding Company Affiliates to, transfer any such
Securities held by it, to any Person other than (a) any Permitted Transferee of
such Shareholder in
Second Amended and Restated
Investors' Agreement
16
20
accordance with Section 3.3 hereof, (b) in connection with any Public Offering
or public sale of securities of the Issuer (including a public sale pursuant to
Rule 144 or 144A under the Securities Act or any similar rules then in force),
(c) to a Person or "group" of Persons (within the meaning of the Exchange Act, a
"GROUP") if, after such sale, such Person or Group in the aggregate would own or
control securities which possess in the aggregate the ordinary voting power to
elect a majority of the Issuer's directors, provided that such sale has been
approved by the Issuer's board or a committee thereof, (d) to a Person or Group
if, after such sale, such Person or Group in the aggregate would own or control
securities of the Issuer (excluding the portion of the Securities being disposed
of by such Shareholder (or such Bank Holding Company Affiliate, as the case may
be) in connection with such sale) which possess in the aggregate the ordinary
voting power to elect a majority of the Issuer's directors, (e) to a Person or
Group if, after such sale, such Person or Group would not, in the aggregate,
own, control or have the right to acquire more than 2% of the outstanding
securities of any class of voting securities of the Issuer, (f) to a Person or
Group if, prior to such sale, such Person or Group in the aggregate already owns
or controls securities of the Issuer which possess in the aggregate the ordinary
voting power to elect a majority of the Issuer's directors, or (g) in connection
with a merger, consolidation or similar transaction involving the Issuer if,
after such transaction, a Person or Group would own or control securities which
possess in the aggregate the ordinary voting power to elect a majority of the
surviving corporation's directors, provided that such transaction has been
approved by the Issuer's board or a committee thereof. Notwithstanding the
foregoing, nothing in this Section 3.5 shall restrict or be deemed to restrict
transfers to other parties to this Agreement pursuant to any provision hereof,
including, without limitation, Sections 3.3, 3.4, 4.1, 4.2 and 4.3 hereof. The
Shareholders acknowledge that, in connection with the transactions contemplated
by the Loan and Warrant Agreement, the Company and Xxxxx have entered into the
letter agreement attached hereto as Exhibit A with X.X. Xxxxxx. To the extent
the Company's, Xxxxx'x or X.X. Xxxxxx'x obligations under such attached letter
agreement are inconsistent with their respective obligations under this
Agreement, the terms of such attached letter agreement will govern so that
compliance with the letter agreement terms will not give rise to a breach or
violation of the other terms of this Agreement.
3.6 Regulated Holders. Notwithstanding anything to the contrary herein,
if any Regulated Holder is required to effect a transfer of any of its
Securities because it has a Regulatory Problem, then the Issuer shall provide
reasonable assistance to such Regulated Holder in connection with efforts by
such Regulated Holder to dispose of any such Securities in a prompt and orderly
manner.
ARTICLE 4
RIGHTS OF FIRST OFFER; TAG ALONG RIGHTS; DRAG ALONG OBLIGATIONS AND
CERTAIN REPURCHASES
4.1 Rights of First Offer. (a) If any Shareholder desires to transfer
any shares of Common Stock or Warrants to any Person other than a transfer
permitted under Sections 3.3, 3.4(a)(i) or 3.4(a)(v) or pursuant to a Sale of
the Company Proposal that is approved by the Approving Parties, such Shareholder
(the "SECTION 4.1 SELLER") shall give written notice (an "INITIAL SECTION 4.1
OFFER NOTICE") to the Company and the non-transferring Shareholders that such
Section 4.1 Seller desires to effect such a transfer (a "SECTION 4.1 Sale") and
setting forth the number of shares of Common Stock or Warrants proposed to be
transferred by the Section 4.1 Seller, the consideration per share that such
Section 4.1 Seller proposes to be paid for such shares (the "SECTION 4.1 SALE
PRICE") and any other material terms sought by the Section 4.1 Seller.
(b) The giving (pursuant to Section 7.5) of an Initial Section 4.1
Offer Notice to the Company and each non-transferring Shareholder shall
constitute an offer (the "INITIAL SECTION 4.1 OFFER") by such Section 4.1 Seller
to sell to such Shareholder for cash on the terms set forth in the Initial
Section 4.1 Offer Notice and this Section 4.1 the Shares subject to the Section
4.1 Sale at the Section 4.1 Sale Price. Each Shareholder receiving an Initial
Section 4.1 Offer shall have a 30-day period after
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receipt of such offer (the "INITIAL ORDER PERIOD") in which to accept such offer
as to all of such Shareholder's Pro Rata Portion by giving a written notice of
acceptance to such Section 4.1 Seller (together with a copy thereof to the
Company) prior to the expiration of such 30-day period.
If every Shareholder receiving an Initial Section 4.1 Offer Notice does
not elect to purchase Shares in such Initial Section 4.1 Offer, the Section 4.1
Seller shall not be required to sell any Shares accepted pursuant to the Initial
Section 4.1 Offer, but shall, within 5 days after the expiration of the Initial
Order Period, provide written notice to all Shareholders that did accept the
Initial Section 4.1 Offer, informing them that they have the right to increase
the number of Shares that they accepted pursuant to the Initial Section 4.1
Offer (the "SECOND SECTION 4.1 OFFER"). Each such Shareholder will then have a
5-day period after receipt of the Second Section 4.1 Offer (the "SECOND ORDER
PERIOD") in which to accept such offer as to all of such Shareholder's portion
of the Shares not accepted pursuant to the Initial Section 4.1 Offer (on the
basis of such Shareholder's Pro Rata Portion compared to the Pro Rata Portion of
all other Shareholders receiving the Second Section 4.1 Offer). So long as the
Shareholders have not elected to purchase all of the Shares subject to any offer
made pursuant to the preceding provisions of this Section 4.1, the Section 4.1
Seller shall not be required to sell any Shares pursuant to any prior offer made
pursuant to the preceding provisions of this Section 4.1, but shall, within five
days after the expiration of the order period for the immediately preceding
offer made pursuant to this Section 4.1, provide written notice to all
Shareholders that did accept their full Pro Rata Portion of the immediately
preceding offer, giving them final notice that they have the right to increase
the number of Shares that they accepted pursuant to the Initial Section 4.1
Offer (the "FINAL SECTION 4.1 OFFER"). Each such Shareholder will then have a
5-day period after receipt of a Final Section 4.1 Offer (the "FINAL ORDER
PERIOD") in which to accept such offer as to all of such Shareholder's portion
of the Shares not accepted pursuant to preceding offers made to this Section 4.1
(on the basis of such Shareholder's Pro Rata Portion compared to the Pro Rata
Portion of all other Shareholders receiving the Final Section 4.1 Offer).
If any Shareholder fails to notify the Section 4.1 Seller or the
Company prior to the expiration of the Initial Order Period, the Second Order
Period, or the Final Order Period, as applicable, referred to above, it will be
deemed to have declined the Section 4.1 Offer, Second Section 4.1 Offer, or the
Final Section 4.1 Offer as applicable.
For purposes of this Section 4.1 only, "PRO RATA PORTION" means, with
respect to any Shareholder other than the Section 4.1 Seller, the fraction that
results from dividing (i) the number of shares of Common Stock, on a Fully
Diluted basis, that such Shareholder beneficially owns (or, without duplication,
has the right to acquire) by (ii) that number of shares of Common Stock, on a
Fully Diluted basis, owned by all Shareholders (other than the Section 4.1
Seller) (or which, without duplication, they have the right to acquire).
In the event any Shareholder declines (or is deemed to decline) to
exercise its right of first offer with respect to the Company Securities it is
offered to purchase under this Section 4.1 pursuant to the Final Section 4.1
Offer, the Section 4.1 Seller shall immediately notify the Company thereof and
the Company may, upon receipt of such notice, following the expiration of the
Final Order Period, by giving notice of acceptance to such Section 4.1 Seller
within five days after the expiration of the Final Order Period, (x) exercise
the right of first offer with respect to the number of shares of Common Stock or
Warrants, as the case may be, which such Shareholder has declined pursuant to
the Final Section 4.1 Offer or (y) allocate such unsubscribed for Securities to
any other Shareholder or Shareholders on such basis as the Company determines is
proper under the circumstances.
(c) The Shareholders or the Company exercising their rights of first
offer as to shares of Common Stock or Warrants subject to the Section 4.1 Sale
shall purchase and pay, by bank or certified check, for all shares of Common
Stock or Warrants accepted within a 10-day period of the date on which
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all shares of Common Stock or Warrants subject to the right of first offer have
been accepted; provided that if the purchase and sale of such shares of Common
Stock or Warrants is subject to any prior regulatory approval, subject to
Section 4.1(d)(iii), the time period during which such purchase and sale may be
consummated shall be extended until the expiration of five Business Days after
all such approvals shall have been received.
(d) Upon the earlier to occur of (i) full rejection or deemed rejection
of any Section 4.1 Offer by all recipients thereof, (ii) the failure of the
Shareholders and/or the Company to elect to purchase all the shares of Common
Stock or Warrants subject to the Section 4.1 Offer pursuant to the procedures in
Section 4.1(b) or (iii) the failure to obtain any required consent or regulatory
approval for the purchase of the Company Securities subject thereto within 45
days of full acceptance of any Section 4.1 Offer, then, subject to Section 4.2,
the Section 4.1 Seller shall have a 90-day period during which to effect a
transfer of any or all of the shares of Common Stock or Warrants subject to the
Section 4.1 Sale on substantially the same or more favorable (as to the Section
4.1 Seller) terms and conditions as were set forth in the Section 4.1 Offer
Notice at a price in cash (or marketable securities or other property (or any
combination thereof) having a fair market value not less than 100% of the
Section 4.1 Sale Price); provided that if the transfer is subject to regulatory
approval, the 90-day period in which it may be consummated shall be extended
until the expiration of five Business Days after all such approvals shall have
been received. If the Section 4.1 Seller does not consummate the sale of the
shares of Common Stock or Warrants subject to the Section 4.1 Offer in
accordance with the foregoing time limitations, such Shareholder may not sell
any shares of Common Stock or Warrants in accordance with Section 3.4(a)(iii)
without repeating the foregoing procedures.
(e) A Section 4.1 Seller may transfer securities in accordance with
Section 4.1(d) for consideration other than cash only if such Shareholder has
first obtained and delivered to each of the Shareholders an opinion of an
Independent Financial Expert that the fair market value of the non-cash
consideration that such Shareholder proposes to accept as consideration for such
Shares, together with any cash consideration, is at least equal to 100% of the
Section 4.1 Sale Price.
4.2 Right To Participate In Transfer (Tag-Along Rights). (a) If any
Shareholder (the "SELLING PERSON") proposes to transfer (other than transfers
(i) of shares of Common Stock or Warrants in a Public Offering, (ii) to
Permitted Transferees of the Selling Person or (iii) where prior to or after
giving effect to such transfer or transfers, the Selling Person and its
Permitted Transferees continue to have beneficial ownership of at least 75% of
the number of the securities of the type proposed to be transferred that were
beneficially owned by such Selling Person as of August 3, 1998 (or such later
date as such Shareholder first became a party to or bound by this Agreement)),
in a transaction otherwise permitted by Section 3.4 hereof, a number of shares
of Common Stock or Preferred Stock equal to or exceeding 10% of the number of
such outstanding securities on a Fully Diluted basis, or Warrants, together with
any Common Stock proposed to be transferred, exercisable for 10% of the Common
Stock on a Fully Diluted basis, in a single transaction or in a series of
related transactions (a "TAG-ALONG SALE"), the other Shareholders may, at their
option, elect to exercise their rights under this Section 4.2 (each such
Shareholder, a "TAGGING PERSON"); provided, however, with respect to any such
transfer also governed by Section 4.1 hereof, the Shareholders holding Common
Stock and Warrants (and the Company) shall have first been afforded the
opportunity to acquire any Common Stock or Warrants sold in a Tag-Along Sale in
accordance with the provisions of Section 4.1. Any sale by a Shareholder of
Common Stock, Warrants or Preferred Stock, as the case may be, that occurs
within six months of any other sale by such Shareholder of the same securities
shall be conclusively deemed to be related to such previous transaction. In the
event of such a proposed transfer, the Selling Person shall (after the
conclusion of the relevant periods referred to in Section 4.1(d), if applicable)
provide each other Shareholder written notice of the terms and conditions of
such proposed transfer ("TAG-ALONG NOTICE"). The Tag-Along Notice shall identify
the number and type of securities subject to the offer ("TAG-ALONG OFFER"), the
cash price at which the transfer is proposed to
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be made, and all other material terms and conditions of the Tag-Along Offer.
Each Tagging Person shall have the right (a "TAG-ALONG RIGHT"), exercisable by
written notice ("SECTION 4.2 RESPONSE NOTICE") given to the Selling Person and
the Company within 25 days (or, in the case of a transfer of shares of Preferred
Stock, 14 days) after receipt of the Tag-Along Notice (the "TAG-ALONG NOTICE
PERIOD"), to require the Selling Person to include in the proposed transfer the
number of securities held by such Tagging Person as is specified in such notice;
provided that if the aggregate number and kind of securities proposed to be sold
by all Tagging Persons in such transaction exceeds the number and kind of
securities which can be sold on the terms and conditions set forth in the
Tag-Along Notice, then only the Tag-Along Portion of each Tagging Person shall
be sold pursuant to the Tag-Along Offer. If the Tagging Persons exercise their
Tag-Along Rights hereunder, each Tagging Person shall deliver to the Selling
Person the certificate or certificates representing the securities of such
Tagging Person to be included in the transfer, together with a limited
power-of-attorney authorizing the Selling Person to transfer such securities on
the terms set forth in the Tag-Along Notice. Delivery of such certificate or
certificates representing the securities to be transferred and the limited
power-of-attorney authorizing the Selling Person to transfer such securities
shall constitute an irrevocable acceptance of the Tag-Along Offer by such
Tagging Persons. If, at the end of a 120-day period after such delivery, the
Selling Person has not completed the transfer of all such securities on
substantially the same terms and conditions set forth in the Tag-Along Notice,
(A) the Selling Person shall return to each Tagging Person the limited
power-of-attorney (and all copies thereof) together with all certificates
representing the Shares which such Tagging Person delivered for transfer
pursuant to this Section 4.2 and such Tagging Person shall not thereafter have
the right to require the Selling Person to include any Securities in such
proposed transfer, and (B) any transfer to be completed after the end of such
120-day period shall be subject to the rights of the Shareholders under this
Section 4.2.
(b) In the event of a transfer of shares of Preferred Stock in a Public
Offering or pursuant to Rule 144A of the Securities Act to which Section 4.2(a)
is applicable, (i) the Tag-Along Notice need not specify the terms and
conditions of the Tag-Along Offer, (ii) the Tag-Along Notice Period shall be 5
days and (iii) the Section 4.2 Response Notice shall constitute an irrevocable
agreement of the Tagging Person providing such Section 4.2 Response Notice to
sell the Tag Along Portion of Preferred Stock at the price and on the terms and
conditions pursuant to which the Selling Person shall consummate the Tag-Along
Sale.
(c) In the event of a transfer subject to Section 4.2(a) of Warrants,
such transfer shall be deemed a transfer of the shares of Common Stock for which
the number of Warrants proposed to be transferred would be exercisable
("UNDERLYING SHARES"). The price per share of Common Stock shall be deemed to
equal the price per Warrant divided by the number of Underlying Shares minus the
applicable Exercise Price.
(d) Concurrently with the consummation of the Tag-Along Sale, the
Selling Person shall notify the Tagging Persons thereof, shall remit to the
Tagging Persons the total consideration (by bank or certified check) for the
securities of the Tagging Persons transferred pursuant thereto, and shall,
promptly after the consummation of such Tag-Along Sale, furnish such other
evidence of the completion and time of completion of such transfer and the terms
thereof as may be reasonably requested by the Tagging Persons.
(e) If at the termination of the Tag-Along Notice Period any Tagging
Person shall not have elected to participate in the Tag-Along Sale, such Tagging
Person will be deemed to have waived its rights under Section 4.2(a) with
respect to the transfer of its securities pursuant to such Tag-Along Sale.
4.3 Repurchases of Preferred Stock. (a) Notwithstanding anything to the
contrary in Section 5(b) of the Certificate of Designations of the Preferred
Stock, as consideration for the agreement
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of the Shareholders and their Permitted Transferees not to transfer any shares
of Preferred Stock prior to an Initial Public Offering, Xxxxx shall have the
right, at any time and from time to time, to repurchase, in whole or in part, on
a pro rata basis, from the Shareholders and their Permitted Transferees any
shares of Preferred Stock owned by such Shareholders, at a purchase price in
cash equal to 112% of the Liquidation Value of such Preferred Stock on the date
of such repurchase, plus any accrued and unpaid cash dividends.
(b) If Xxxxx elects to exercise its right to require any Shareholder to
sell shares of Preferred Stock pursuant to Section 4.3(a), Xxxxx shall deliver a
written notice to each Shareholder whose shares it wishes to repurchase, which
notice shall state the price per share and the terms and conditions of such
repurchase.
(c) Upon the receipt of any notice pursuant to Section 4.3(b), the
shares subject to repurchase pursuant to Section 4.3(a) (collectively,
"SURRENDERED SHARES") shall be repurchased within 30 Business Days of the date
(the "TERMINATION DATE") of receipt of such notice. On the repurchase date, the
Shareholder selling such Surrendered Shares (the "SELLER") shall deliver to
Xxxxx the certificate or certificates representing the Surrendered Shares owned
by such Seller on such date against delivery by Xxxxx to such Seller of the
repurchase price. All certificates for Surrendered Shares shall be duly endorsed
in favor of Xxxxx by the Seller. If any Seller shall fail to deliver such duly
endorsed certificate or certificates to Xxxxx within the time required, Xxxxx
shall cause its books and records to show that the Surrendered Shares are bound
by the provisions of this Section 4.3 and that the Surrendered Shares, until
transferred to Xxxxx, shall not be entitled to any proxy, dividend or other
rights from the date by which such certificate or certificates should have been
delivered to Xxxxx.
4.4 Obligations to Participate in Certain Transfers (Drag Along
Obligations). If (a) a Third Party offers to purchase from any one or more of
the shareholders of the Company in a single transaction or series of related
transactions (whether by merger, recapitalization, consolidation, sale, transfer
or exchange of the Company's capital stock) (i) Securities representing 80% or
more of the outstanding shares of Common Stock (determined on a Fully Diluted
basis) or (ii) all or substantially all of the assets of the Company (each, a
"SALE OF THE COMPANY PROPOSAL"), (b) such proposal is acceptable to (A) Chase
and (B) at least one of Summit or BRS (the "APPROVING PARTIES"), (c) in the case
of a stock sale, the Approving Parties own less than the number of shares and
Warrants offered for purchase in such transaction and (d) in the case of a stock
sale, the Shareholders have not exercised their tag along rights pursuant to
Section 4.2 to the extent necessary to cover the full number of Securities
subject to the Sale of the Company Proposal, then the Company shall send a copy
of the Sale of the Company Proposal (the "DRAGALONG NOTICE") to all of the other
Shareholders. Each of the Shareholders will consent to and raise no objections
to the Sale of the Company Proposal or the process thereof. If the Sale of the
Company Proposal is structured as the sale of stock or recapitalization, each of
the other Shareholders will sell all (or such portion as is required by the
remaining portions of this Section 4.4) of its Securities offered for purchase
by, and pursuant to the terms and conditions of, the Sale of the Company
Proposal. If the Sale of the Company Proposal is structured as a merger or
consolidation, each of the Shareholders will waive all dissenter's rights,
appraisal rights or similar rights in connection with such merger or
consolidation. If the Sale of the Company Proposal is structured as a sale of
all or substantially all of the assets of the Company or Xxxxx, at the request
of the Board, each of the Shareholders shall take such actions as may be
necessary to approve the sale and to cause a liquidation of the Company or its
subsidiaries, as applicable, following the consummation of such transaction.
Upon receipt of the Dragalong Notice, each of the Shareholders
(including the Approving Parties) shall be obligated to sell a percentage of its
Securities on the terms set forth in the Sale of the Company Proposal. The
percentage of Securities referred to in the preceding sentence shall equal (a) a
percentage mutually agreed upon by all Shareholders participating or required to
participate in such transaction (so
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long as the aggregate number of Securities equals the number of shares of Common
Stock (determined as if the Warrants had been fully exercised) offered in the
Sale of the Company Proposal) or (b) in the absence of any such agreement, the
percentage of the outstanding shares of Common Stock (determined as if the
Warrants had been fully exercised) offered to be purchased pursuant to the Sale
of the Company Proposal.
The obligations of the Shareholders to participate in a Sale of the
Company Proposal are also subject to the satisfaction of the following
condition: the consideration to be received in the Sale of the Company
Transaction shall be distributed pro rata among the holders of the shares of
Common Stock; provided that, notwithstanding the foregoing, the holders of the
Warrants, to extent they have not exercised the Warrants prior to or in
connection with the Sale of the Company Transaction, shall be entitled to
receive with respect to each Warrant Share the consideration payable with
respect to a share of Common Stock less the exercise price payable to acquire
such Warrant Share.
If the Company enters into any negotiation or transaction for which
Rule 506 of Regulation D ("REGULATION D") promulgated under the Securities Act
(or any similar rule then in effect) may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), the holders of Common Stock will, at the request of the Board,
appoint a purchaser representative (as such term is defined in Rule 501 of
Regulation D) reasonably acceptable to the Board. If any holder of any shares of
Common Stock appoints the purchaser representative designated by the Board, the
Company will pay the fees of such purchaser representative, but if any such
holder of Common Stock declines to appoint the purchaser representative
designated by the Board, such holder will appoint another purchaser
representative (reasonably acceptable to the Board), and such holder will be
responsible for the fees of the purchaser representative so appointed.
4.5 Contractual Preemptive Rights. If the Company proposes to issue,
sell or otherwise transfer any shares of Common Stock (or any security
convertible or exchangeable into Common Stock) of the Company (the "OFFERED
SECURITIES"), each Shareholder who is an accredited investor (as defined under
Rule 501 of Regulation D) shall have the right to purchase the number of Offered
Securities provided below in this Section 4.5; provided, that the provisions of
this Section 4.5 shall not apply to any issuances (a) to any employee of the
Company or any of its Subsidiaries pursuant to any stock option or similar
benefit plan or any employee stock offering approved by the Board, (b) in
connection with a Public Offering, (c) of any Common Stock in payment of any
dividend on the Common Stock pursuant to the terms of the certificate of
incorporation of the Company, (d) of any Common Stock in a merger, stock
exchange, purchase of assets or similar transaction, (e) of the Warrants or of
any Common Stock upon exercise of the Warrants or (f) of any Common Stock to any
Person that is not a Shareholder or an Affiliate of a Shareholder at the time of
issuance. The Company shall give each Shareholder at least 20 days' prior
written notice of any such proposed issuance setting forth in reasonable detail
the proposed terms and conditions thereof and shall offer to each Shareholder
the opportunity to purchase such securities at the same price, on the same terms
(including, if more than one type of security is issued, each type of security
in the same proportion offered), and at the same time as the securities are
proposed to be issued by the Company. A Shareholder may exercise its preemptive
rights by delivery of an irrevocable written notice to the Company not more than
10 days after delivery of the Company's notice, which notice shall state the
number of Offered Securities such Shareholder (each a "REQUESTING SHAREHOLDER"
and collectively, the "REQUESTING SHAREHOLDERS") would like to purchase. If the
total number of Offered Securities requested to be purchased exceeds the total
number of Offered Securities proposed to be issued and sold by the Company, then
the Company will issue and sell the Offered Securities to the Requesting
Shareholders pro rata based on the number of Shares (determined on a
Fully-Diluted basis) owned by each such Shareholder prior to the issuance at
hand. If the total number of Offered Securities requested to be purchased does
not equal the total number of Offered Securities proposed to be issued and sold
by the Company, the Company shall give notice to each Requesting Shareholder and
the Requesting
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Shareholders shall have three (3) days to elect to purchase the remaining
Offered Securities; provided, that any over subscription shall be subject to the
pro rata cut-back provision described in the preceding sentence.
4.6 Termination Upon Initial Public Offering. The provisions of this
Article 4 (other than Section 4.3) shall terminate upon consummation of an
Initial Public Offering.
ARTICLE 5
REGISTRATION RIGHTS
5.1 Demand Registration. (a) If the Issuer shall receive a written
request by the DLJ Entities, Chase, Summit on behalf of the Summit Investors or
the Xxxxx Xxxx Investors (as provided in Section 5.13) (each of the foregoing is
referred to as a "DEMAND RIGHT HOLDER;" and the Person making the request is
referred to herein as the "INITIATING SHAREHOLDER") that the Issuer effect the
registration under the Securities Act of all or a portion of such Initiating
Shareholder's shares of Registrable Securities, and specifying the intended
method of distribution thereof, then the Issuer shall promptly give written
notice of such requested registration (a "DEMAND REGISTRATION") at least 30 days
prior to the anticipated filing date of the registration statement relating to
such Demand Registration to the other Shareholders and thereupon will use its
best efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:
(i) the Registrable Securities which the Issuer has been so
requested to register by the Initiating Shareholder, then held by the
Initiating Shareholder; and
(ii) subject to the cut back provisions set forth in Section
5.1(d), all other Registrable Securities of the same type (it being
understood that voting and non-voting common stock will be considered
the same type) as that to which the request by the Initiating
Shareholder relates which any other Shareholder entitled to request the
Issuer to effect an Incidental Registration (as such term is defined in
Section 5.2) pursuant to Section 5.2 (all such Shareholders, together
with the Initiating Shareholder, the "HOLDERS") has requested the
Issuer to register by written request received by the Issuer within 15
days after the receipt by such Holders of such written notice given by
the Issuer,
all to the extent necessary to permit the distribution (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered;
provided, that, notwithstanding the foregoing in this Section 5.1(a), if a
request made pursuant to Section 5.1(a) would require the Company to effect an
Initial Public Offering (disregarding, for these purposes, the $50 million net
proceeds reference in the definition of "Initial Public Offering"), the Board
must approve such offering in the manner provided in Section 2.4(b);
provided further that, subject to Section 5.1(c) hereof, (I) the Company shall
not be obligated to effect more than five Demand Registrations for the Summit
Investors collectively, three Demand Registrations for the DLJ Entities
collectively, five Demand Registrations for the Xxxxx Xxxx Investors
collectively, or five Demand Registrations for Chase pursuant to this Section
5.1(a), and (II) in addition to the foregoing rights, following the Short-Form
Date, the number of Short-Form Demand Registrations for the DLJ Entities, Chase,
the Summit Investors and the Xxxxx Xxxx Investors pursuant to this Section 5.1
shall be unlimited;
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and provided further that the Issuer shall not be obligated to effect a Demand
Registration with respect to Common Stock unless the aggregate proceeds expected
to be received from the sale of the Common Stock requested to be included in
such Demand Registration equal at least (x) if such Demand Registration would
constitute an Initial Public Offering, $50,000,000, or (y) in any other Public
Offering, $20,000,000. In no event will the Issuer be required to effect more
than one Demand Registration within any 6 month period.
Promptly after the expiration of the 15-day period referred to in
Section 5.1(a)(ii) hereof, the Issuer will notify all the Holders to be included
in the Demand Registration of the other Holders and the number of shares of
Registrable Securities requested to be included therein. The Initiating
Shareholder requesting a registration under this Section 5.1(a) may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Issuer revoking such request, in
which case such request, so revoked, shall be considered a Demand Registration
unless such revocation arose out of the fault of the Issuer, in which case such
request shall not be considered a Demand Registration, or unless the
participating Shareholders reimburse the Issuer for all costs incurred by the
Issuer in connection with such registration.
(b) The Issuer will pay all Registration Expenses in connection with
any Demand Registration.
(c) A registration requested pursuant to this Section 5.1 shall not be
deemed to have been effected (i) unless the registration statement relating
thereto (A) has become effective under the Securities Act and (B) has remained
effective for a period of at least 180 days (or such shorter period in which all
Registrable Securities of the Holders included in such registration have
actually been sold thereunder); provided that if after any registration
statement requested pursuant to this Section 5.1 becomes effective (x) 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 and (y)
less than 75% of the Registrable Securities included in such registration
statement has been sold thereunder, such registration statement shall not be
considered a Demand Registration or (ii) if the Maximum Offering Size (as
defined below) is reduced in accordance with Section 5.1(d) such that less than
66 2/3% of the Registrable Securities of the Demand Rights Holders sought to be
included in such registration are included.
(d) If a Demand Registration involves an Underwritten Public Offering
and the managing underwriter shall advise the Issuer and the Holders that, in
its view, (i) the number of shares of Common Stock or Warrants requested to be
included in such registration (including Common Stock or Warrants which the
Issuer proposes to be included which are not Registrable Securities) or (ii) the
inclusion of some or all of the shares of Common Stock or Warrants owned by the
Holders, in any such case, exceeds the largest number of shares which can be
sold without having an adverse effect on such offering, including the price at
which such Shares can be sold (the "MAXIMUM OFFERING SIZE"), the Issuer will
include in such registration, in the priority listed below, up to the Maximum
Offering Size:
(A) first, all 2001 Registrable Securities requested to be
registered by any Holder (allocated, if necessary for the offering not
to exceed the Maximum Offering Size, pro rata among such Holders on the
basis of the relative number of 2001 Registrable Securities so
requested to be included in such registration);
(B) second, all Registrable Securities (other than 2001
Registrable Securities) requested to be registered by any Demand Rights
Holder (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among
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such Demand Rights Holders on the basis of the relative number of
Registrable Securities (other than 2001 Registrable Securities) so
requested to be included in such registration);
(C) third, all Registrable Securities requested to be included in
such registration by any other Holder (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata among such
other Holders on the basis of the relative number of Registrable
Securities so requested to be included in such registration); and
(D) fourth, any Common Stock proposed to be registered by the
Issuer.
(e) Upon written notice to each Selling Shareholder, the Issuer may
postpone effecting a registration pursuant to this Section 5.1 on one occasion
during any period of six consecutive months for a reasonable time specified in
the notice but not exceeding 90 days (which period may not be extended or
renewed), if (i) an investment banking firm of recognized national standing
shall advise the Issuer and the Initiating Shareholder in writing that effecting
the registration would materially and adversely affect an offering of securities
of such Issuer the preparation of which had then been commenced or (ii) such
Issuer is in possession of material non-public information the disclosure of
which during the period specified in such notice such Issuer believes would not
be in the best interests of such Issuer.
5.2 Incidental Registration. (a) If the Company proposes to register
any of its Common Stock or Warrants, or if Xxxxx proposes to register any of its
Preferred Stock, under the Securities Act (other than a registration (x) on Form
S-8 or S-4 or any successor or similar forms, (y) relating to securities
issuable upon exercise of employee stock options or in connection with any
employee benefit or similar plan of the Issuer or (z) in connection with a
direct or indirect merger, acquisition or other similar transaction), whether or
not for sale for its own account, it will at such time, subject to the
provisions of Section 5.2(b) hereof, give prompt written notice at least 20 days
prior to the anticipated filing date of the registration statement relating to
such registration to each Shareholder, which notice shall set forth such
Shareholders' rights under this Section 5.2 and shall offer all Shareholders the
opportunity to include in such registration statement such number of Registrable
Securities of the same type as those proposed to be registered by the Issuer as
each such Shareholder may request (an "INCIDENTAL REGISTRATION"). Upon the
written request of any such Shareholder made within 10 days after the receipt of
notice from the Issuer (which request shall specify the number of Registrable
Securities intended to be disposed of by such Shareholder), the Issuer will use
all reasonable efforts to effect the registration under the Securities Act of
all Registrable Securities of the same type as those proposed to be registered
by the Issuer which the Issuer has been so requested to register by such
Shareholders, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered; provided that (i) if such
registration involves an Underwritten Public Offering, all such Shareholders
requesting to be included in the Issuer's registration must sell their
Registrable Securities to the underwriters selected as provided in Section
5.4(f) on the same terms and conditions as apply to the Issuer or the Selling
Shareholder, as applicable, and (ii) if, at any time after giving written notice
of its intention to register any stock pursuant to this Section 5.2(a) and prior
to the effective date of the registration statement filed in connection with
such registration, the Issuer shall determine for any reason not to register
such stock, the Issuer shall give written notice to all such Shareholders and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. No registration effected under
this Section 5.2 shall relieve the Issuer of its obligations to effect a Demand
Registration to the extent required by Section 5.1 hereof. The Issuer will pay
all Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 5.2.
(b) If a registration pursuant to this Section 5.2 involves an
Underwritten Public Offering (other than in the case of an Underwritten Public
Offering requested by any Demand Rights Holder in a Demand Registration, in
which case the provisions with respect to priority of inclusion in such offering
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set forth in Section 5.1(d) shall apply) and the managing underwriter advises
the Issuer that, in its view, the number of shares of Preferred Stock or Common
Stock or Warrants which the Issuer and the Holders intend to include in such
registration exceeds the Maximum Offering Size, the Issuer will include in such
registration, in the following priority, up to the Maximum Offering Size:
(i) first, so much of the Common Stock proposed to be registered
for the account of the Issuer as would not cause the offering to exceed
the Maximum Offering Size;
(ii) second, all 2001 Registrable Securities requested to be
included in such registration by any Holder (allocated, if necessary
for the offering not to exceed the Maximum Offering Size, pro rata
among such Holders on the basis of the relative number of shares of
2001 Registrable Securities so requested to be included in such
registration); and
(iii) third, all Registrable Securities (other than 2001
Registrable Securities) requested to be included in such registration
by any Shareholder pursuant to Section 5.2 (allocated, if necessary for
the offering not to exceed the Maximum Offering Size, pro rata among
such Shareholders on the basis of the relative number of shares of
Registrable Securities (other than the 2001 Registrable Securities) so
requested to be included in such registration).
5.3 Holdback Agreements. With respect to each and every Underwritten
Public Offering, each Shareholder agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144, or any successor
provision, under the Securities Act, of any Registrable Securities, and not to
effect any such public sale or distribution of any other security of the Issuer
that is convertible into or exchangeable or exercisable for any Common Stock and
that would be a Registrable Security (in each case, other than as part of such
Underwritten Public Offering) during the 14 days prior to the effective date of
the applicable registration statement (except as part of such registration) or
during the period after such effective date that such managing underwriter and
the Issuer shall agree (but not to exceed 180 days or any such shorter period
(but not less than 90 days) as the managing underwriter may suggest).
5.4 Registration Procedures. Whenever Shareholders request that any
Registrable Securities be registered pursuant to Section 5.1 or 5.2 hereof, the
Issuer will, subject to the provisions of such Sections, use all reasonable
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of distribution thereof as quickly as
practicable, and in connection with any such request:
(a) The Issuer will as expeditiously as possible prepare and file
with the SEC a registration statement on any form selected by counsel
for the Issuer and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with
the intended method of distribution thereof, and use all reasonable
efforts to cause such filed registration statement to become and remain
effective for a period of not less than 180 days (or such shorter
period in which all of the Registrable Securities of the Holders
included in such registration statement shall have actually been sold
thereunder).
(b) The Issuer will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish
to each Shareholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such
registration statement as proposed to be filed, and thereafter the
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Issuer will furnish to such Shareholder and underwriter, if any, such
number of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included
in such registration statement (including each preliminary prospectus)
and such other documents as such Shareholder or underwriter may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Shareholder. Each Shareholder
shall have the right to request that the Issuer modify any information
contained in such registration statement, amendment and supplement
thereto pertaining to such Shareholder and the Issuer shall use all
reasonable efforts to comply with such request, provided, however, that
the Issuer shall not have any obligation to so modify any information
if so doing would cause the prospectus to contain an untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(c) After the filing of the registration statement, the Issuer
will promptly notify each Shareholder holding Registrable Securities
covered by such registration statement of any stop order issued or
threatened by the SEC or any state securities commission under state
blue sky laws and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
(d) The Issuer will use all reasonable efforts to (i) register or
qualify the Registrable Securities covered by such registration
statement under such other securities or blue sky laws of such
jurisdictions in the United States as any Shareholder holding such
Registrable Securities reasonably (in light of such Shareholder's
intended plan of distribution) requests, (ii) cause such Registrable
Securities to be listed on any national securities exchange or included
for trading on any automated quotation system on which its Common Stock
is then listed or included for trading and (iii) cause such Registrable
Securities to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the business
and operations of the Issuer and do any and all other acts and things
that may be reasonably necessary or advisable to enable such
Shareholder to consummate the disposition of the Registrable Securities
owned by such Shareholder; provided that the Issuer will not be
required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
paragraph (d), (B) subject itself to taxation in any such jurisdiction
or (C) consent to general service of process in any such jurisdiction.
(e) The Issuer will immediately notify each Shareholder holding
such Registrable Securities covered by such registration statement at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and promptly
prepare and make available to each such Shareholder and file with the
SEC any such supplement or amendment.
(f) In connection with (i) (A) any Demand Registration requested
by the DLJ Entities or their Permitted Transferees or (B) any
registration of Registrable Securities pursuant to this Article 5 in
which 50% or more of the securities proposed to be registered are
securities beneficially owned by the DLJ Entities or their Permitted
Transferees, (ii) (A) any Demand Registration requested by the Summit
Investors or their
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Investors' Agreement
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Permitted Transferees or (B) any registration of Registrable Securities
pursuant to this Article 5 in which 50% or more of the securities
proposed to be registered are securities beneficially owned by the
Summit Investors or their Permitted Transferees, (iii)(A) any Demand
Registration requested by Chase or its Permitted Transferees or (B) any
registration of Registrable Securities pursuant to this Article 5 in
which 50% or more of the securities proposed to be registered are
securities beneficially owned by Chase or its Permitted Transferees,
(iv)(A) any Demand Registration requested by the Xxxxx Xxxx Investors
or their Permitted Transferees or (B) any registration of Registrable
Securities pursuant to this Article 5 in which 50% or more of the
securities proposed to be registered are securities beneficially owned
by the Xxxxx Xxxx Investors or their Permitted Transferees, the Issuer
shall not appoint any underwriters unless the DLJ Entities, Chase, the
Summit Investors, or the Xxxxx Xxxx Investors, as applicable, shall
have approved such appointment. Any Affiliate of any of the DLJ
Entities may be selected as underwriter for an Underwritten Public
Offering. The Issuer will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities, including the engagement of
a "qualified independent underwriter" in connection with the
qualification of the underwriting arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and
substance reasonably satisfactory to the Issuer, the Issuer will make
available for inspection by any Shareholder and any underwriter
participating in any disposition pursuant to a registration statement
being filed by the Issuer pursuant to this Section 5.4 and any
attorney, accountant or other professional retained by any such
Shareholder or underwriter (collectively, the "INSPECTORS"), financial
and other records, pertinent corporate documents and properties of the
Issuer (collectively, the "RECORDS") as shall be reasonably requested
by any such Person, and cause the Issuer's officers, directors and
employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
(h) The Issuer will furnish to each such Shareholder and to each
such underwriter, if any, a signed counterpart, addressed to such
underwriter and the participating Shareholders, of (i) an opinion or
opinions of counsel to the Issuer and (ii) a comfort letter or comfort
letters from the Issuer's independent public accountants, each in
customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as a
majority of such Shareholders or the managing underwriter therefor
reasonably requests.
(i) The Issuer will otherwise use all reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable,
an earnings statement covering a period of 12 months, beginning within
three months after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act.
(j) The Issuer may require each such Shareholder to promptly
furnish in writing to the Issuer information regarding the distribution
of the Registrable Securities as the Issuer may from time to time
reasonably request and such other information as may be legally
required in connection with such registration.
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Investors' Agreement
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(k) Each such Shareholder agrees that, upon receipt of any notice
from the Issuer of the happening of any event of the kind described in
Section 5.4(e) hereof, such Shareholder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Shareholder's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 5.4(e) hereof, and, if so directed by the
Issuer, such Shareholder will deliver to the Issuer all copies, other
than any permanent file copies then in such Shareholder's possession,
of the most recent prospectus covering such Registrable Securities at
the time of receipt of such notice. In the event that the Issuer shall
give such notice, the Issuer shall extend the period during which such
registration statement shall be maintained effective (including the
period referred to in Section 5.4(a) hereof) by the number of days
during the period from and including the date of the giving of notice
pursuant to Section 5.4(e) hereof to the date when the Issuer shall
make available to such Shareholder a prospectus supplemented or amended
to conform with the requirements of Section 5.4(e) hereof.
(l) In any firm underwritten offering of Common Stock, the Issuer
shall require the managing underwriter to agree to purchase Warrants
for shares of Common Stock otherwise includable in such offering
pursuant to this Article 5, at a price per share of Common Stock equal
to the price per share at which such shares of Common Stock are offered
to the public, less (i) underwriting discounts or commissions
attributable to each such share and (ii) the Exercise Price per share.
5.5 Indemnification by the Issuer. The Issuer agrees to indemnify and
hold harmless each Shareholder holding Registrable Securities covered by a
registration statement, its officers, directors, employees, partners and agents,
and each Person, if any, who controls such Shareholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Issuer shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission so made in strict
conformity with information furnished in writing to the Issuer by such
Shareholder or on such Shareholder's behalf expressly for use therein; provided
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, or in any prospectus,
as the case may be, the indemnity agreement contained in this paragraph shall
not apply to the extent that any such loss, claim, damage, liability or expense
results from the fact that a current copy of the prospectus (or such amended or
supplemental prospectus, as the case may be) was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that the Issuer has provided such prospectus to such
Shareholder in a timely manner prior to such sale and it was the responsibility
of such Shareholder under the Securities Act to provide such Person with a
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The Issuer also agrees
to indemnify any underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Shareholders provided in this
Section 5.5.
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Investors' Agreement
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5.6 Indemnification by Participating Shareholders. Each Shareholder
holding Registrable Securities included in any registration statement agrees,
severally but not jointly, to indemnify and hold harmless the Issuer, its
officers, directors and agents and each Person, if any, who controls the Issuer
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Issuer
to such Shareholder, but only (i) with respect to information furnished in
writing by such Shareholder or on such Shareholder's behalf expressly for use in
any registration statement or prospectus relating to the Registrable Securities,
or any amendment or supplement thereto, or any preliminary prospectus or (ii) to
the extent that any loss, claim, damage, liability or expense described in
Section 5.5 results from the fact that a current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) was not sent or given to
the Person asserting any such loss, claim, damage, liability or expense at or
prior to the written confirmation of the sale of the Registrable Securities
concerned to such Person if it is determined that it was the responsibility of
such Shareholder to provide such Person with a current copy of the prospectus
(or such amended or supplemented prospectus, as the case may be) and such
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. Each such Shareholder shall be prepared, if
required by the underwriting agreement, to indemnify and hold harmless
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Issuer provided in this Section 5.6. As a
condition to including Registrable Securities in any registration statement
filed in accordance with Article 5 hereof, the Issuer may require that it shall
have received an undertaking reasonably satisfactory to it from any underwriter
to indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
5.7 Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to this Article 5,
such Person (an "INDEMNIFIED PARTY") shall promptly notify the Person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying
Party is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any and all losses, claims, damages, liabilities and expenses or
liability (to the extent stated above) by reason of such settlement or judgment.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
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Investors' Agreement
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5.8 Contribution. If the indemnification provided for in this Article 5
is held by a court of competent jurisdiction to be unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Issuer and the Shareholders holding Registrable Securities
covered by a registration statement and their related Indemnified Parties on the
one hand and the underwriters and their related Indemnified Parties on the other
hand, in such proportion as is appropriate to reflect the relative benefits
received by the Issuer and such Shareholders on the one hand and the
underwriters on the other hand, from the offering of the Shareholders'
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Issuer and such Shareholders on the
one hand and of such underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Issuer and their related Indemnified Parties on the one hand and
each such Shareholder and their related Indemnified Parties on the other hand,
in such proportion as is appropriate to reflect the relative fault of the Issuer
and of each such Shareholder in connection with such statements or omissions, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuer and such Shareholders on the one hand and such
underwriters on the other hand shall be deemed to be in the same proportion as
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Issuer and such
Shareholders bear to the total underwriting discounts and commissions received
by such underwriters, in each case as set forth in the table on the cover page
of the prospectus. The relative fault of the Issuer and such Shareholders on the
one hand and of such underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer and such Shareholders or by such
underwriters. The relative fault of the Issuer on the one hand and of each such
Shareholder on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuer and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.8 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.8, no underwriter shall be
required to contribute any amount in excess of the underwriting discount
applicable to Securities purchased by such underwriter in such offering, less
the aggregate amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Shareholder shall be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities of such Shareholder were offered to the public exceeds the amount of
any damages which such Shareholder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged 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. Each Shareholder's
obligation to contribute pursuant to this Section 5.8 is several in the
proportion that the proceeds of the offering received by such Shareholder bears
to the total proceeds of the offering received by all such Shareholders and not
joint.
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Investors' Agreement
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5.9 Participation in Public Offering. No Person may participate in any
Underwritten Public Offering hereunder unless such Person (a) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and the provisions of this Agreement in
respect of registration rights.
5.10 Cooperation by the Issuer. In the event any Shareholder shall
transfer any Registrable Securities pursuant to Rule 144A under the Securities
Act, the Issuer shall cooperate, to the extent commercially reasonable, with
such Shareholder and shall provide to such Shareholder such information as such
Shareholder shall reasonably request.
5.11 No Transfer of Registration Rights. None of the rights of
Shareholders under this Article 5 shall be assignable by any Shareholder to any
Person acquiring Securities in any Public Offering or pursuant to Rule 144A of
the Securities Act.
5.12 Rule 144 Information. So long as the Company is subject to Section
13 or Section 15(d) of the Exchange Act, the Company will make all filings
thereunder in a timely manner in order to permit the resale of securities
pursuant to Rule 144 within the limitation of the exemptions provided in Rule
144.
5.13 Xxxxx Xxxx Rights. The rights of the Xxxxx Xxxx Investors under
this Article 5 may only be exercised by the Xxxxx Xxxx Representative; provided,
the exercise of rights by BRS or Xxxxx Xxxx L.L.C. shall not duplicate or
otherwise increase the aggregate rights granted to the Xxxxx Xxxx Investors
under the other provisions of this Article 5.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
6.1 Confidentiality. (a) Each Shareholder hereby agrees that
Confidential Information (as defined below) furnished and to be furnished to it
was and will be made available in connection with such Shareholder's investment
in the Issuer. Each Shareholder agrees that it will use the Confidential
Information only in connection with its investment in the Issuer and not for any
other purpose. Each Shareholder further acknowledges and agrees that it will not
disclose any Confidential Information to any Person; provided that Confidential
Information may be disclosed (i) to such Shareholder's Representatives (as
defined below) in the normal course of the performance of their duties or to any
financial institution providing credit to such Shareholder, (ii) to the extent
required by applicable law, rule or regulation (including complying with any
oral or written questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process to which a
Shareholder is subject; provided that such Shareholder gives the Issuer prompt
notice of such request(s), to the extent practicable, so that the Issuer may
seek an appropriate protective order or similar relief (and the Shareholder
shall cooperate with such efforts by the Issuer, and shall in any event make
only the minimum disclosure required by such law, rule or regulation)), (iii) to
any Person to whom such Shareholder is contemplating a transfer of its Shares
(provided that such transfer would not be in violation of the provisions of this
Agreement and as long as such potential transferee is advised of the
confidential nature of such information and agrees to be bound by a
confidentiality agreement in form and substance satisfactory to the Issuer and
consistent with the provisions hereof) or (iv) if the prior written consent of
the Board (or board of directors of Xxxxx, as applicable) shall have been
obtained. Nothing contained herein shall prevent the use (subject, to the extent
possible, to a protective order) of Confidential Information in connection with
the assertion or defense of any claim by or against the Issuer or any
Shareholder.
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Investors' Agreement
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(b) "CONFIDENTIAL INFORMATION" means any information concerning the
Issuer and Persons which are or become its subsidiaries or the financial
condition, business, operations or prospects of the Issuer and Persons which are
or become its subsidiaries in the possession of or furnished to any Shareholder
(including, without limitation by virtue of its present or former right to
designate a director of the Issuer); provided that the term "Confidential
Information" does not include information which (i) is or becomes generally
available to the public other than as a result of a disclosure by a Shareholder
or its partners, directors, officers, employees, agents, counsel, investment
advisers or representatives (all such persons being collectively referred to as
"REPRESENTATIVES") in violation of this Agreement, (ii) is or was available to
such Shareholder on a non-confidential basis prior to its disclosure to such
Shareholder or its Representatives by the Issuer or (iii) was or becomes
available to such Shareholder on a non-confidential basis from a source other
than the Issuer, provided that such source is or was (at the time of receipt of
the relevant information) not, to the best of such Shareholder's knowledge,
bound by a confidentiality agreement with (or other confidentiality obligation
to) the Issuer or another Person.
6.2 Cooperation in Refinancings. Each Shareholder agrees to cooperate
to the extent commercially reasonable with the Company and Xxxxx and take such
steps as the Board reasonably deems appropriate in any refinancing of debt of
Xxxxx and any of its Subsidiaries in connection with the financing of
transactions contemplated in the Xxxxx Xxxx Merger Agreement including executing
such documents as the Board reasonably determined should be filed with any
governmental agency and conducting presentations to potential investors and
rating agencies. This Section 6.2 shall not be construed to require any
Shareholder to contribute any additional capital to the Company or Xxxxx.
6.3 Reports. The Company will furnish the Shareholders with the
quarterly and annual financial reports that the Company is required to file with
the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act or, in the
event the Company is not required to file such reports, quarterly and annual
reports containing the same information as would be required in such reports.
6.4 Limitations on Senior Registration Rights. The Issuer shall not
enter into any agreement with any holder or prospective holder of any securities
of the Issuer that would allow such holder or prospective holder to include such
securities ("NEW SECURITIES") in any registration filed pursuant to Section 5.1
or 5.2 hereof, unless under the terms of such agreement, such holder's or
prospective holder's registration rights are pari passu or junior to the
registration rights granted under this Agreement.
6.5 Certain Notices. Issuer shall use all reasonable efforts to give
Chase not less than 30 days' notice of any repurchases, redemptions or similar
events.
6.6 Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and delivery upon exercise of the Warrants
such number of its authorized but unissued shares of Class A Common Stock or
Class B Common Stock or other securities of the Company from time to time
issuable upon exercise of the Warrants as will be sufficient to permit the
exercise in full of the Warrants. The Shareholders will take such action as the
Company reasonably requests to ensure that the Company has a sufficient number
of authorized but unissued shares of Class A Common Stock and Class B Common
Stock to permit the Company to comply with this covenant.
6.7 Meetings of Stockholders; Action by Written Consent. Holders of
Warrants, for so long as they are Shareholders, shall have the right to attend
annual and special meetings of the holders of Common Stock. At the Company's
request, the Shareholders will take such action as is required, including voting
the Common Stock owned thereby, to allow the stockholders of the Company to take
action by written consent to the fullest extent permitted by applicable law.
Second Amended and Restated
Investors' Agreement
33
37
ARTICLE 7
MISCELLANEOUS
7.1 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements and understandings, both oral
and written, between the parties with respect to the subject matter hereof and
thereof.
7.2 Binding Effect: Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto, and their respective heirs, successors, legal
representatives and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
7.3 Assignability. Except as provided herein, neither this Agreement
nor any right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by the Company, Xxxxx or any Shareholder, provided
that any Person acquiring Securities who is required by the terms of this
Agreement to become a party hereto shall execute and deliver to the Company and
Xxxxx an agreement to be bound by this Agreement and shall thenceforth be a
"SHAREHOLDER".
7.4 Amendment; Waiver; Termination. (a) No provision of this Agreement
may be waived except by an instrument in writing executed by the party against
whom the waiver is to be effective. No provision of this Agreement may be
amended or otherwise modified except by an instrument in writing executed by the
Company with approval of the Board and (i) holders of at least 75% of the shares
of Common Stock (including those acquirable upon exercise of the Warrants) held
by the parties to this Agreement at the time of such proposed amendment or
modification and, if such amendment or modification affects the duties or rights
under this Agreement of the holders of Preferred Stock, holders of at least 75%
of the Preferred Stock held by the parties to this Agreement at the time of such
proposed amendment or modification or (ii) in the case of any amendment of this
Section 7.4, the holders of all shares of Common Stock and all shares of
Preferred Stock, in each case, held or acquirable (pursuant to the Warrants) by
the parties to this Agreement at the time of such proposed amendment or
modification. Notwithstanding the foregoing, the provisions of Section 2.1 may
be amended with the approval of the Board, the DLJ Entities, Summit/DPC, or in
the event Summit/DPC shall have ceased to exist, Summit, Chase, and the Xxxxx
Xxxx Representative.
(b) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect any DLJ Entity in a manner that would not
also adversely affect a similarly situated Shareholder may be effected only with
the consent of such DLJ Entity.
(c) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect Summit/DPC in a manner that would not also
adversely affect a similarly situated Shareholder may be effected only with the
consent of Summit/DPC, or in the event Summit/DPC shall have ceased to exist,
Summit.
(d) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect Chase in a manner that would not also
adversely affect a similarly situated Shareholder may be effected only with the
consent of Chase.
(e) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect any Xxxxx Xxxx Investor in a manner that
would not also adversely affect a similarly situated Shareholder may be effected
only with the consent of one of the Xxxxx Xxxx Representatives.
Second Amended and Restated
Investors' Agreement
34
38
(f) This Agreement shall terminate on October 5, 2005.
7.5 Notices. All notices and other communications given or made
pursuant hereto or pursuant to any other agreement among the parties, unless
otherwise specified, shall be in writing and shall be deemed to have been duly
given and received when sent by fax (with confirmation in writing via first
class U.S. mail) or delivered personally or on the third Business Day after
being sent by registered or certified U.S. mail (postage prepaid, return receipt
requested) to the parties at the fax number or address set forth below or at
such other addresses as shall be furnished by the parties by like notice:
if to the Company or Xxxxx, to:
Xxxxx Pet Care Enterprises, Inc.
Xxxxx Pet Care Company
000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax:(000) 000-0000
if to the DLJ Entities, to:
DLJ Merchant Banking Funding, Inc.
DLJ Merchant Banking Partners, L.P.
DLJ First ESC, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Fax:(000) 000-0000
and to:
DLJ International Partners, X.X.
XXX Xxxxxxxx Xxxxxxxx, X.X.
x/x XXX Offshore Management N.V.
Xxxx X. Xxxxxxxxxx 0
Xxxxxxxxxx, Xxxxxxx
Xxxxxxxxxxx Antilles
Attention: Xxxxxxxx Xxxxxx
MeesPierson Trust (Curacao) N.V.
Fax: 000-000-000-0000
with copies to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Fax:(000) 000-0000
Second Amended and Restated
Investors' Agreement
35
39
and
DLJ Merchant Banking, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Fax:(000) 000-0000
if to any Summit Investor or Xxxxx Xxxx Investor, to such Summit Investor or
Xxxxx Xxxx Investor at the address specified by such Summit Investor Xxxxx Xxxx
Investor on the signature pages of this Agreement or in a notice given by such
Summit Investor Xxxxx Xxxx Investor;
with copies of any notice given to any Summit Investor to:
Summit Capital Inc.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
and
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
if to X.X. Xxxxxx, to:
X.X. Xxxxxx Partners (B.H.C.A.), L.P.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
if to Baseball Partners, to:
Baseball Partners
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
Any Person who becomes a Shareholder shall provide its address and fax number to
the Company, which shall promptly provide such information to each other
Shareholder.
7.6 Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
Second Amended and Restated
Investors' Agreement
36
40
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
7.8 Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to the
conflicts of laws rules of such state.
7.9 Specific Enforcement. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond, and in addition to all other remedies
which may be available, shall be entitled to obtain equitable relief in the form
of specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
7.10 Consent to Jurisdiction; Expenses. (a) Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in any federal court sitting in New York, New York, or
any New York State court sitting in New York, New York, and each of the parties
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient form. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party by any method provided in Section 7.5 shall be
deemed effective service of process on such party and consents to the personal
jurisdiction of any federal court sitting in New York, New York, or any New York
state court sitting in New York, New York.
(b) In any dispute arising under this Agreement among any of the
parties hereto, the costs and expenses (including, without limitation, the
reasonable fees and expenses of counsel) incurred by the prevailing party shall
be paid by the party that does not prevail.
7.11 Severability. If one or more provisions of this Agreement are held
to be unenforceable to any extent under applicable law, such provision shall be
interpreted as if it were written so as to be enforceable to the maximum
possible extent so as to effectuate the parties' intent to the maximum possible
extent, and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its terms
to the maximum extent permitted by law.
[Signature Pages to Follow]
Second Amended and Restated
Investors' Agreement
37
41
EXHIBIT A
REGULATORY SIDELETTER
AGREEMENT dated as of March 26, 2001 by and among X.X. XXXXXX PARTNERS
(BHCA), L.P. ("Investor"), XXXXX PET CARE ENTERPRISES, INC. (the "Equity
Issuer") and XXXXX PET CARE COMPANY (the "Note Issuer" and together with the
Equity Issuer, the "Issuers").
WHEREAS, Investor is a regulated entity and an indirect subsidiary of
X.X. Xxxxxx Chase & Co. and in connection therewith Investor is subject to
various regulations that may impose restrictions on the type and terms of
Investor's investment in the Issuers;
NOW THEREFORE, in connection with the foregoing, the parties hereby
agree as follows:
Section 1 Regulatory Matters Generally; Regulatory Cooperation.
In the event Investor has the right to acquire any of either Issuer's
securities from either of the Issuers or any other Person (as the result of a
preemptive offer, pro rata offer or otherwise), and Investor reasonably
determines that it has a Regulatory Problem, at Investor's request, the
applicable Issuers will offer to sell to Investor non-voting securities.
Section 2 Cross Marketing Activities.
The Issuers hereby represent and warrant, jointly and severally, that,
to their knowledge, except as otherwise disclosed, neither of the Issuers nor
any of their subsidiaries (i) offers or markets, directly or through any
arrangement, any product or service of any depository institution owned by X.X.
Xxxxxx Xxxxx & Co., or (ii) permits any of its products or services to be
offered or marketed, directly or through any arrangement, by or through any
depository institution owned by X.X. Xxxxxx Chase & Co.
Section 3 Lending Activities.
The Issuers hereby represent and warrant, jointly and severally, that,
to their knowledge, except as otherwise disclosed in the Transaction Documents
(as such term is defined in Section 5 hereto), neither of the Issuers nor any of
their subsidiaries currently has or is expected to have a loan facility, credit
facility, debt financing, line of credit or any other extension of credit from
any depository institution owned by X.X. Xxxxxx Xxxxx & Xx.
Xxxxxxx 0 Xxxxxxxxx.
(x) The Issuers shall give Investor thirty (30) days prior written
notice before taking any affirmative steps which would cause the representations
and warranties contained in Sections 2 or 3 to be untrue.
Second Amended and Restated
Investors' Agreement
Exhibit A-1
42
(b) The Issuers shall use their best efforts to notify Investor
promptly at any time in which the Issuers reasonably believe the representations
contained in Sections 2 or 3 to be untrue whether as a result of either or both
of the Issuers' affirmative actions or otherwise.
Section 5 Participation Interests.
(a) Notwithstanding anything to the contrary contained in the
Investors' Agreement or other transaction documents relating to the Investor's
purchase and ownership of the Issuers' securities (collectively, the
"Transaction Documents"), the Investor shall be permitted to grant participation
interests in the Issuers' securities held by the Investor to affiliates of the
Investor without prior disclosure or consent of the Issuers or any other Person,
so long as the participation agreement or other agreement or document pursuant
to which such participation interest is granted requires such affiliate to
comply with the Transaction Documents as if it were a record owner of such
securities and a direct party to the Transaction Documents.
(b) Notwithstanding anything to the contrary contained in the
Transaction Documents, any and all representations and warranties relating to
the Investor's ownership of the Issuers' securities shall be qualified by the
fact that the Investor has granted participation interests in a pro rata portion
of all of its investments, including its purchase of the Issuers' securities, to
affiliates of the Investor. Such participation interests, however, do not affect
the Investor's status as being the sole record owner of the Issuers' securities
held by the Investor. The Investor acknowledges and agrees that neither the
Issuers nor any other party to the Investors' Agreement will have any obligation
to deal with any participant, and participants shall not have any rights under
the Investors' Agreement by reason of its status as a participant.
Section 6 Definitions.
"Affiliate" means, with respect to any Person, (i) a director or
executive officer of such Person or any Person identified in clause (ii) below,
and (ii) any other Person that, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with such
Person. When such term is used in the context of a Regulatory Problem, it also
has the meaning ascribed to it in any Law.
"Banking Regulations" means all federal, state and foreign Laws
applicable to banks, bank holding companies and their Affiliates, including
without limitation, the Bank Holding Company Act and the Federal Reserve Act.
"Control" means, with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Investors' Agreement" means the Second Amended and Restated Investors'
Agreement, dated as of March 26, 2001, by and among Xxxxx Pet Care Enterprises,
Inc., Xxxxx Pet Care Company, Summit Capital Inc., Summit/DPC Partners, L.P.,
X.X. Xxxxxx Partners (B.H.C.A.), L.P., Baseball Partners, DLJ Merchant Banking
Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V.,
DLJ Merchant Banking Funding, Inc., DLJ First ESC, L.P., Bruckmann, Xxxxxx,
Xxxxxxxx & Co., L.P., PNC Capital Corp., L.L.C. and certain other Persons
signatories thereto, as amended, supplemented or otherwise modified from time to
time.
Second Amended and Restated
Investors' Agreement
Exhibit A-2
43
"Law," with respect to any Person, means (i) all provisions of all
laws, statutes, ordinances, rules, regulations, permits, certificates or orders
of any governmental authority applicable to such Person or any of its assets or
property or to which such Person or any of its assets or property is subject,
including, without limitation, Banking Regulations and SBA Regulations, and (ii)
all judgments, injunctions, orders and decrees of all courts and arbitrators in
proceedings or actions in which such Person is a party or by which it or any of
its assets or properties is or may be bound or subject.
"Person" shall be construed as broadly as possible and shall include an
individual or natural person, a partnership (including a limited liability
partnership), a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental authority.
"Regulatory Problem" means any set of facts or circumstances in which
the Investor's ownership of securities issued by the Issuers (i) gives rise to a
material violation of Law by the Investor or any of its Affiliates, or gives
rise to a reasonable belief by the Investor that such a violation is likely to
occur or (ii) gives rise to a limitation in Law that will impair materially the
ability of the Investor or any Affiliate to conduct its business or gives rise
to a reasonable belief by the Investor that such a limitation is likely to
arise.
"SBA" means the United States Small Business Administration.
"SBA Regulations" means the Small Business Investment Act and the rules
and regulations promulgated by the SBA.
Section 7 Amendments; Benefit.
The terms and provisions of this Agreement may not be modified or
amended, unless pursuant to a written agreement executed by each of the parties
hereof. This Agreement shall be for the benefit of Investor and its Affiliates
and shall apply to each acquisition of securities issued by either or both of
the Issuers to Investor or its Affiliates.
Section 8 Counterparts, Facsimile Signatures.
This Agreement may be executed in any number of counterparts, including
by means of facsimile, and each counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
Section 9 Notices.
All notices, claims, certificates, requests, demands and other
communications to be given to the Investor hereunder or relating to the
Investor's investment in the Issuers shall be addressed as follows:
Second Amended and Restated
Investors' Agreement
Exhibit A-3
44
X.X. Xxxxxx Partners, LLC
Official Notices Clerk
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXX PET CARE ENTERPRISES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XXXXX PET CARE COMPANY
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
X.X.XXXXXX PARTNERS, (BHCA), L.P.
By: JPMP Master Fund Manager, L.P.,
its general partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By: JPMP Capital Corp.,
its general partner
By:
---------------------------------
Name:
-------------------------------
Title:
-----------------------------
Second Amended and Restated
Investors' Agreement
Exhibit A-4
