EXHIBIT 4.14
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of May 19, 1998 among P&L Coal
Holdings Corporation, a Delaware corporation (the "Company"), Xxxxxx Brothers
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Merchant Banking Partners II L.P., a Delaware limited partnership ("Xxxxxx"),
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Xxxxxx Brothers Offshore Investment Partners II L.P., a Bermuda exempted limited
partnership ("Offshore"), LB I Group Inc., a Delaware corporation ("LB I"),
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Xxxxxx Brothers Capital Partners III, L.P., a Delaware limited partnership ("Cap
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III"), Xxxxxx Brothers Capital Partners IV, L.P., a Delaware limited partnership
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("Cap IV"), Xxxxxx Brothers MBG Partners 1998 (A) L.P., a Delaware limited
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partnership ("MBG Partners," collectively with Offshore, LB I, Cap III and Cap
IV, the "Other Xxxxxx Entities"), and the other signatories hereto
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(collectively, the "Management Investors"). Each of the parties to this
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Agreement (other than the Company) and any other Person (as hereinafter defined)
who or which shall become a party to or agree to be bound by the terms of this
Agreement after the date hereof is sometimes hereinafter referred to as a
"Stockholder."
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WITNESSETH
WHEREAS, this Agreement shall become effective (the "Effective Date")
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on the date of, and simultaneously with, the closing under the Ownership
Agreements (as hereinafter defined);
WHEREAS, as of the Effective Date, the Company will have an authorized
capital stock including 30,000,000 shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), and 3,000,000 shares of Class B
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Common Stock, par value $.01 per share (the "Class B Common Stock," and
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collectively with the Class A Common Stock, the "Common Stock").
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WHEREAS, the Company, has entered into a Purchase Agreement dated as
of March 2, 1998 (the "Purchase Agreement") pursuant to which, among other
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things, the Company purchased certain subsidiaries of The Energy Group PLC and
certain related minority interests;
WHEREAS, in connection with the consummation of the transactions
pursuant to the Purchase Agreement, each of Xxxxxx and the Other Xxxxxx Entities
has entered into a Subscription Agreement with the Company, dated as of May 18,
1998 (the "Initial Subscription Agreement"), pursuant to which each such
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Stockholder purchased shares of the Company's capital stock;
WHEREAS, in connection with the consummation of the transactions
pursuant to the Purchase Agreement, Xxxx Xxxxx and Xxxx Xxxxxxxxxx (on behalf of
the Company, Xxxxxx and the Other Xxxxxx Entities) and Irl Xxxxxxxxxx (on behalf
of the Management Investors) agreed to a Management Proposal term sheet, dated
as of May 19, 1998, whereby, among other things, the Company agreed to issue, in
the aggregate, 742,268 shares of Class B Common Stock (the "Management Stock")
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to the Management Investors (equivalent to 3% of the Company's fully-diluted
equity);
WHEREAS, each of the Management Investors has entered into a Common
Stock Ownership Agreement with the Company dated as of the date of this
Agreement (such Common Stock Ownership Agreements, the "Ownership Agreements")
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pursuant to which each such Management Investor has agreed, in accordance with
the terms thereof, to acquire shares of Class B Common Stock;
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WHEREAS, as of the Effective Date, the Management Investors will own,
in the aggregate, 708,769 shares of Class B Common Stock, with 33,499 shares of
the Management Stock remaining as authorized and unissued Class B Common Stock
reserved for future issuance from time to time at the discretion of the
compensation committee of the Board of Directors of the Company; and
WHEREAS, the parties hereto desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Shares (as hereinafter
defined) and to provide for certain rights and obligations and other agreements
in respect of the Shares, all as hereinafter provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1. Definitions.
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As used in this Agreement, the following terms have the following
meanings:
"Acquired Shares" shall mean the shares of Common Stock acquired by
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the Management Investors pursuant to the Ownership Agreements.
"Affiliate", as applied to any Person, shall mean any other Person
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directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract or otherwise.
"Buyout Notice" shall have the meaning set forth in Section 2.7.
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"Common Stock" shall have the meaning set forth in the recitals.
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"Company Notice" shall have the meaning set forth in Section 2.5(b).
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"Effective Date" shall have the meaning set forth in the recitals.
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"Initial Public Offering" shall mean the initial Public Offering.
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"LBHI" shall mean Xxxxxx Brothers Holdings Inc.
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"Offer Price" shall have the meaning set forth in Section 2.5(b).
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"Offered Securities" shall have the meaning set forth in Section
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2.5(b).
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"Offering Notice" shall have the meaning set forth in Section 2.5(b).
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"Options" shall have the meaning given such term in the Ownership
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Agreements.
"Option Shares" shall have the meaning given such term in the
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Ownership Agreements.
"Ownership Agreements" shall have the meaning set forth in the
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recitals.
"Permitted Transferee" shall mean:
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(i) in the case of Xxxxxx or any Other Xxxxxx Entity and Permitted
Transferees of Xxxxxx and the Other Xxxxxx Entities, (A) LBHI or Xxxxxx, as
the case may be, or any controlled Affiliate (other than an individual) of
LBHI, (B) any general or limited partner, director, officer or employee of
Xxxxxx, LBHI or any controlled Affiliate (other than an individual) of
LBHI, (C) the heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any of the individuals referred to in clause
(B), (D) any trust, the beneficiaries of which include only (1) Xxxxxx, (2)
Permitted Transferees referred to in clauses (A), (B) and (C) and (3)
spouses and lineal descendants of Permitted Transferees referred to in
clause (B) and (E) a corporation or partnership, a majority of the equity
of which is owned and controlled by Xxxxxx and/or Permitted Transferees
referred to in clauses (A), (B), (C) and (D); and
(ii) in the case of each Management Investor and Permitted Transferees
of such Management Investor, his or her spouse, the beneficiaries of his or
her estate or any of his or her lineal descendants or legatees or a
testamentary trust for such legatees, or a trust or individual retirement
account, the beneficiaries of which or a corporation or partnership the
stockholders or partners of which include only such Stockholder, his or her
spouse and his or her lineal descendants or a corporation or partnership
wholly owned by them;
provided, that any such Permitted Transferee referred to in clauses (i)-
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(ii) agrees in writing to be bound by the terms of this Agreement in
accordance with Section 2.2.
"Person" shall mean an individual, partnership, corporation, business
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trust, joint stock company, limited liability company, unincorporated
association, joint venture or other entity of whatever nature.
"Proposed Transferee" shall have the meaning set forth in Section 2.6.
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"Public Offering" shall mean the sale of shares of any class of the
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Company's stock to the public pursuant to an effective registration statement
(other than a registration statement on Form S-4 or S-8 or any similar or
successor form) filed under the Securities Act which results in an active
trading market of the lesser of 25% of the outstanding shares of the Common
Stock and a $250 million float in the marketplace. There shall be deemed to be
an "active trading market" if the Common Stock is listed or quoted on a national
exchange or the NASDAQ National Market.
"Sale Notice" shall have the meaning set forth in Section 2.5(b).
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"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Selling Stockholder" shall have the meaning set forth in Section
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2.5(b).
"Shares" shall mean, with respect to any Stockholder, Acquired Shares,
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Option Shares and all other shares of Common Stock, whether now owned or
hereafter acquired (including upon exercise of options, preemptive rights or
otherwise), held by such Stockholder.
"Stockholder" shall have the meaning set forth in the preamble of this
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Agreement.
"Third Party" shall mean any prospective Transferee of Shares (other
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than the Company) that is not a Permitted Transferee of the Stockholder
proposing the Transfer of such Shares to such prospective Transferee.
"Transfer" shall have the meaning set forth in Section 2.1.
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"Transfer Closing Date" shall have the meaning set forth in Section
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3.1.
"Transferee" shall mean any Person who or which acquires Shares
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originally held by a Stockholder.
ARTICLE II
RESTRICTIONS ON TRANSFERS
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Section 2.1. Transfers in Accordance with this Agreement.
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No Stockholder shall, directly or indirectly, transfer, sell, assign,
pledge, hypothecate, encumber, or otherwise dispose of all or any portion of any
Shares or any economic interest therein (including without limitation by means
of any participation or swap transaction) (each of which, and the events
referred to in the last sentence of this Section 2.1, being a "Transfer") to any
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Person, except in compliance with the Securities Act, applicable state and
foreign securities laws and this Agreement. Any attempt to Transfer any Shares
in violation of the terms of this Agreement shall be null and void, and neither
the Company, nor any transfer agent shall register upon its books any Transfer
of Shares by a Stockholder to any Person except a Transfer in accordance with
this Agreement. In addition to the foregoing definition, a Transfer shall be
deemed to include any direct or indirect transfer of any shares of capital stock
of, or other economic interest in, a Stockholder or an Affiliate of a
Stockholder if all or substantially all of the assets of such Person consist,
directly or indirectly, of Shares.
Section 2.2. Agreement to be Bound.
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No Transfer of Shares (other than Transfers (i) in the Initial Public
Offering, if any, (ii) to the Company or (iii) by Xxxxxx or any of the Other
Xxxxxx Entities to any Person who or which is not a Permitted Transferee) shall
be effective unless (i) the certificates representing such Shares issued to the
Transferee shall bear the legend provided in Section 2.3 and (ii) the
Transferee, if not already a party hereto, shall have executed and delivered to
each other party hereto, as a condition precedent to such Transfer, an
instrument or instruments
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substantially in the form of Exhibit A or otherwise reasonably satisfactory to
such parties confirming that the Transferee agrees to be bound by the terms of
this Agreement with respect to the Shares so Transferred to the same extent
applicable to the Transferor thereof.
Section 2.3. Legend.
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A copy of this Agreement shall be filed with the Secretary of the
Company and kept with the records of the Company. Each Stockholder hereby
agrees that each certificate representing Shares issued to any Stockholder, or
any certificate issued in exchange for any similarly legended certificate, shall
bear a legend reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND
SOLD ONLY IF SO REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
THE SHARES REPRESENTED BY THIS CERTIFICATE ALSO ARE SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCKHOLDERS
AGREEMENT AND THE COMMON STOCK OWNERSHIP AGREEMENT, EACH DATED AS OF
MAY 19, 1998, COPIES OF WHICH MAY BE OBTAINED FROM P&L COAL HOLDINGS
CORPORATION (THE "COMPANY"). NO TRANSFER OF SUCH SHARES WILL BE MADE
ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT.
Section 2.4. Transfers to Permitted Transferees and the Company
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(a) None of the restrictions contained in this Agreement with
respect to Transfers of Shares shall apply to any Transfer of Shares by any
Stockholder (i) to a Permitted Transferee of such Stockholder (other than
Sections 2.1, 2.2, 2.3 and 2.4(b)) or (ii) to the Company (or its designee).
(b) Each Permitted Transferee of any Management Investor shall,
and such Management Investor shall cause such Permitted Transferee to, transfer
back to such Management Investor any Shares it owns prior to such Permitted
Transferee ceasing to be a Permitted Transferee of such Management Investor.
Section 2.5. No Transfer Periods; Right of First Offer; Lock-Up.
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(a) The Management Investors may not Transfer Acquired Shares
prior to the earlier of (i) the Initial Public Offering and (ii) the fifth
anniversary of the Effective Date, except for Transfers referred to in Sections
2.4, 2.6 and 2.7 (the "Acquired Shares No Transfer Period"). The Management
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Investors may not Transfer Option Shares prior to the earlier of (i) the second
anniversary of the Initial Public Offering and (ii) the fifth anniversary of the
Effective Date, except for Transfers referred to in Sections 2.4, 2.6 and 2.7
(the "Option Shares No Transfer Period" and, together with the Acquired Shares
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No Transfer Period, the "No Transfer Period"). From and after the expiration of
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the No Transfer Period, with the exception of
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Transfers in accordance with Section 2.4, prior to a Public Offering, each
Management Investor may Transfer Shares but only following compliance and in
accordance with the provisions, as applicable, of this Section 2.5 and Sections
2.6 and 2.7.
(b) If any Management Investor (each a "Selling Stockholder")
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wishes to Transfer any Shares to any Person after the expiration of the No
Transfer Period and prior to a Public Offering (in each case, other than to a
Permitted Transferee and other than pursuant to Section 2.6 or 2.7), such
Selling Stockholder shall, at least 60 days prior to making any such Transfer,
offer to sell such Shares to the Company and Xxxxxx by sending written notice
(the "Offering Notice") to the Company and Xxxxxx, which shall state (i) the
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number of Shares proposed to be Transferred (the "Offered Securities"), (ii) the
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proposed purchase price per Share which the Selling Stockholder is willing to
accept (the "Offer Price"), and (iii) to the extent known, the other terms and
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conditions of such Transfer, including the identity of any proposed transferee.
Upon delivery of the Offering Notice, such offer shall be irrevocable unless and
until the rights of first offer provided for herein shall have been waived in
writing by the Company and Xxxxxx or shall have otherwise expired in accordance
with the terms hereof. For a period of 30 days after receipt of the Offering
Notice, the Company shall have the option to purchase all or any portion of the
Offered Securities at a purchase price equal to the Offer Price and upon the
terms and conditions set forth in the Offering Notice by delivering written
notice to the Selling Stockholder of the exercise of such option prior to the
expiration of such 30-day period. If the Company has not elected to purchase all
of the Offered Securities, it shall deliver written notice to Xxxxxx within 30
days after receipt by the Company of the Offering Notice stating the portion of
the Offered Securities that it has not elected to purchase (the "Company
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Notice"). For a period of 30 days after receiving the Company Notice, Xxxxxx
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shall have the option to purchase all or any portion of the remaining Offered
Securities by delivering written notice to the Selling Stockholder of the
exercise of such option prior to the expiration of such 30-day period; provided
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that Xxxxxx may assign its right to purchase any portion of the Offered
Securities to its Affiliates, the Company and/or the Subsidiaries and Affiliates
of the Company. If Xxxxxx fails to elect to exercise such option for any portion
of the remaining Offered Securities within 30 days after its receipt of the
Company Notice, the Selling Stockholder may Transfer the remaining Offered
Securities on terms that are no more favorable, including with respect to the
Offer Price, to the Transferee(s) thereof than those specified in the Offering
Notice; provided that the restrictions contained in this Section shall continue
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to be applicable to the Offered Securities Transferred after any such Transfer
and the Transferees must agree in writing to be bound by the provisions of this
Agreement prior to any such Transfer and provided further that any such Transfer
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by the Selling Stockholder to a Transferee must be consummated during the 60-day
period immediately subsequent to the expiration of the 30-day period after
Xxxxxx receives the Company Notice. If such Transfer is not consummated within
such 60-day period for any reason, then the restrictions provided for herein
shall again become effective, and no Transfer of such Offered Securities may be
made thereafter by the Selling Stockholder without again offering the same to
the Company and Xxxxxx in accordance with this Section 2.5(b).
(c) Notwithstanding anything to the contrary herein, the
Management Investors may not Transfer Shares, including a Transfer pursuant to
Rule 144 under the Securities Act, during the 14 days prior to, and during (i)
the 90-day period beginning on the date of any Public Offering and (ii) the 180-
day period beginning on the consummation of the Initial Public Offering.
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Section 2.6. Tag-Along Right
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(a) If at any time following the Transfer by Xxxxxx and the Other
Xxxxxx Entities of an aggregate of 7,000,000 Shares (appropriately adjusted for
any stock splits, combinations or other similar events following the date
hereof) and prior to the consummation of an Initial Public Offering, Xxxxxx
and/or any Other Xxxxxx Entity (and/or their Permitted Transferees) proposes to
Transfer Shares to any Person (other than a Permitted Transferee) (each, a
"Proposed Transferee") in any transaction or series of related transactions
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(other than a Public Offering), then Xxxxxx or the Other Xxxxxx Entity proposing
to make such Transfer shall send written notice to each Management Investor
which shall state (i) that such Person desires to make such a Transfer, (ii) the
identity of the Proposed Transferee and the number of Shares proposed to be sold
or otherwise transferred, (iii) the proposed purchase price per Share to be paid
and the other terms and conditions of such Transfer and (iv) the projected
closing date of such Transfer, which in no event shall be prior to 15 days after
the giving of such written notice to each Management Investor.
(b) For a period of 15 days after the giving of the notice
pursuant to clause (a) above, each Management Investor shall have the right to
sell to the Proposed Transferees in such Transfer at the same price and upon the
same terms and conditions as Xxxxxx or the Other Xxxxxx Entity proposing to make
such Transfer that percentage of the total number of Shares held by such
Management Investor equal to the percentage of the total number of Shares then
held in the aggregate by Xxxxxx, the Other Xxxxxx Entities and their Permitted
Transferees which are proposed to be Transferred to such Proposed Transferee.
(c) The rights of each Management Investor under Section 2.6(b)
shall be exercisable by delivering written notice thereof, prior to the
expiration of the 15-day period referred to in clause (b) above, to Xxxxxx or
the Other Xxxxxx Entity proposing to make such Transfer with a copy to the
Company. The failure of any Management Investor to respond within such period in
accordance with the terms hereof shall be deemed to be a waiver of rights by
such Management Investor under this Section 2.6.
(d) In the event that any Management Investor exercises rights
under Section 2.6(b) and following such exercise there is a change in the price
or terms of the proposed transaction with the Proposed Transferee, then Xxxxxx
or the Other Xxxxxx Entity proposing to make such Transfer shall promptly notify
such Management Investor of the revised price or terms and such Management
Investor shall have the right to exercise its rights under Section 2.6(b) by
notice to Xxxxxx or the Other Xxxxxx Entity proposing to make such Transfer
within five business days of receipt of the notice from Xxxxxx or the Other
Xxxxxx Entity proposing to make such Transfer. The failure of such Management
Investor to respond within such five-day period shall be deemed to be a waiver
of his rights under this Section 2.6.
(e) Each Management Investor who or which exercises rights under
Section 2.6(b) shall be required to sell at the same price and upon the same
terms and conditions as Xxxxxx or the Other Xxxxxx Entities proposing to make
such Transfer, including making representations and warranties (which may
include representations and warranties regarding the Company) and providing
indemnifications on a proportionate basis, based on the relative number of
Shares to be Transferred by such Management Investor in comparison to the total
number of Shares to be Transferred; provided that in no event shall any
Management Investor be required to
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make any representations or provide any indemnities with respect to matters
relating solely to Xxxxxx and the Other Xxxxxx Entities (and/or its Permitted
Transferees), such as representations as to title to Shares to be transferred by
Xxxxxx and the Other Xxxxxx Entities or their Permitted Transferees.
(f) For purposes of determining the number of Shares a Management
Investor may Transfer pursuant to this Section 2.6, such Management Investor
shall be deemed to hold the shares of Common Stock issuable upon exercise of any
outstanding options to purchase Common Stock he holds so long as (i) such
options have vested and (ii) the exercise price of such options is below the
proposed price to be paid by the Proposed Transferee in the Transfer to which
such determination relates.
Section 2.7. Bring-Along Right.
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If at any time prior to the consummation of an Initial Public
Offering, Xxxxxx and/or an Other Xxxxxx Entity (and/or their Permitted
Transferees) proposes to sell Shares to a Third Party other than an Affiliate in
any bona fide arm's-length transaction or series of related transactions (other
than a Public Offering), then Xxxxxx shall have the right to deliver a written
notice (a "Buyout Notice") to each Management Investor which shall state (i)
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that Xxxxxx or the Other Xxxxxx Entity proposing to make such Transfer proposes
to effect such transaction, (ii) the identity of the Third Party, the number of
Shares to be sold and the proposed purchase price per Share to be paid and any
other terms and conditions, and (iii) the projected closing date of such sale.
Each such Management Investor agrees that, upon receipt of a Buyout Notice, each
such Management Investor (and his Permitted Transferees) shall be obligated to
sell in such transaction that percentage of the total number of Shares held by
such Management Investor (and his Permitted Transferees) (determined on the
basis set forth in Section 2.6(f)) equal to the percentage of the total number
of Shares then held in the aggregate by Xxxxxx, the Other Xxxxxx Entities and
their Permitted Transferees to be sold in such transaction upon the terms and
conditions of such transaction (and otherwise take all necessary action to cause
consummation of the proposed transaction, including making representations and
warranties (e.g., as to title and absence of liens) and providing related
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indemnifications relating to the Shares owned by such Management Investor (and
his Permitted Transferees); provided, however, that such Management Investor
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shall only be obligated as provided above in this Section 2.7 if each such
Management Investor receives the same per Share consideration as Xxxxxx and the
Other Xxxxxx Entities (and/or their Permitted Transferees).
Section 2.8. Registration Rights.
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(a) The Company hereby grants to the Management Investors the
registration and other rights set forth in Exhibit B.
(b) Following an Initial Public Offering, the Company agrees to
register on Form S-8 (or any replacement form, if such form is not then
available) all Shares and Options issued to the Management Investors.
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ARTICLE III
CLOSING
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Section 3.1. Closing.
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Any Stockholders acquiring or Transferring any Shares pursuant to
Section 2.5 shall mutually determine a closing date (the "Transfer Closing
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Date") which, subject to any applicable regulatory waiting periods, shall not be
more than 60 days after the last notice is given with respect to such Transfer
pursuant to Section 2.5 or after the expiration of the last notice period
pursuant to Section 2.5 applicable to such Transfer. The closing shall be held
at 10:00 a.m., local time, on the Transfer Closing Date at the principal office
of the Company, or at such other time and/or place as the parties may mutually
agree.
Section 3.2. Deliveries at Closing; Method of Payment of Purchase
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Price.
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On the Transfer Closing Date, each selling Stockholder shall deliver
(i) certificates representing the Shares being sold, free and clear of any lien,
claim or encumbrance, and (ii) such other documents, including evidence of
ownership and authority and legal opinions, as the Transferees may reasonably
request. The purchase price shall be paid by wire transfer of immediately
available funds no later than 2:00 p.m. on the Transfer Closing Date.
ARTICLE IV
MISCELLANEOUS
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Section 4.1. No Inconsistent Agreements.
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The Company will not hereafter enter into any agreement with respect
to its securities which is inconsistent with the rights granted to the
Stockholders in this Agreement.
Section 4.2. Recapitalization, Exchanges, etc.
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In the event that any capital stock or other securities are issued in
respect of, in exchange for, or in substitution of, any Shares by reason of any
reorganization, recapitalization, reclassification, merger, consolidation, spin-
off, partial or complete liquidation, stock dividend, split-up, sale of assets,
distribution to stockholders or combination of the Shares or any other change in
capital structure of the Company, appropriate adjustments shall be made with
respect to the relevant provisions of this Agreement so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement and the term "Shares," as used
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herein, shall be deemed to include shares of such capital stock or other
securities, as appropriate.
Section 4.3. Successors and Assigns.
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This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
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Section 4.4. No Waivers, Amendments.
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(a) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
(b) No amendment, modification or supplement to this Agreement
shall be enforced against any holder unless such amendment, modification or
supplement is signed by (i) where such holder is Xxxxxx or an Other Xxxxxx
Entity or one of their Permitted Transferees, a majority of the Shares held by
Xxxxxx, the Other Xxxxxx Entities and their Permitted Transferees and (ii) where
such holder is a Management Investor or one of his Permitted Transferees, a
majority of the Shares held by such Management Investor and his Permitted
Transferees.
(c) Any provision of this Agreement may be waived if, but only
if, such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
Section 4.5. Notices.
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All notices, requests and other communications to any party hereunder
shall be in writing (including telex, telecopier or similar writing) and shall
be given to such party at its address, telex or telecopier number set forth
below, or such other address, telex or telecopier number as such party may
hereinafter specify for the purpose to the party giving such notice. Each such
notice, request or other communication shall be effective (i) if given by telex
or telecopy, when such telex or telecopy is transmitted to the telex or telecopy
number specified in this Section and the appropriate answerback is received or,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or, (iii) if
given by any other means, when delivered at the address specified in this
Section 4.5.
(a) Notices to the Company shall be sent to the Company at each
of the following addresses (or at such other address or addresses as the Company
shall have specified in writing to each of the other Stockholders):
c/x Xxxxxx Brothers Merchant Banking Group
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx
Peabody Holding Company, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Vice-President -- Legal Services
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With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.;
(b) notices to Xxxxxx or the Other Xxxxxx Entities shall be
addressed to the applicable Stockholder at the following address (or at such
other address as Xxxxxx or the Other Xxxxxx Entities shall have specified in
writing to each of the other Stockholders):
c/x Xxxxxx Brothers Merchant Banking Group
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.; and
(c) notices to a Management Investor shall be at such address as
the applicable Management Investor shall have specified in writing to each of
the other Stockholders.
Section 4.6. Inspection.
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So long as this Agreement shall be in effect, this Agreement and any
amendments hereto shall be made available for inspection by a Stockholder at the
principal offices of the Company.
Section 4.7. GOVERNING LAW.
----------------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Section 4.8. Section Headings.
------------------------------
The section headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
Section 4.9. Entire Agreement.
-------------------------------
This Agreement, together with the Ownership Agreements, constitutes
the entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, written or oral, relating to
the subject matter hereof.
12
Section 4.10. Severability.
---------------------------
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdictions, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
Section 4.11. Other Agreements.
-------------------------------
Nothing contained herein shall limit the ability of the Company or
Xxxxxx or the Other Xxxxxx Entities from time to time to enter into separate
agreements or arrangements relating to the Shares held by any stockholder of the
Company other than the Management Investors (including Xxxxxx and the Other
Xxxxxx Entities).
Section 4.12. Counterparts.
---------------------------
This Agreement may be signed in counterparts, each of which shall
constitute an original and which together shall constitute one and the same
agreement.
13
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
P&L COAL HOLDINGS CORPORATION
By: _______________________________________
Name:
Title:
XXXXXX BROTHERS MERCHANT BANKING PARTNERS II
L.P.
By: Xxxxxx Brothers Merchant Banking
Partners II Inc., its general partner
By: _______________________________________
Name:
Title:
XXXXXX BROTHERS OFFSHORE INVESTMENT PARTNERS
II L.P.
By: Xxxxxx Brothers Merchant Banking
Partners II Inc., its general partner
By: _______________________________________
Name:
Title:
LB I GROUP INC.
By: _______________________________________
Name:
Title:
14
XXXXXX BROTHERS CAPITAL PARTNERS III, L.P.
By: Xxxxxx Brothers Holdings Inc., its
general partner
By: _______________________________________
Name:
Title:
XXXXXX BROTHERS CAPITAL PARTNERS IV, L.P.
By: LB I Group Inc., its general partner
By: _______________________________________
Name:
Title:
XXXXXX BROTHERS MBG PARTNERS 1998 (A) L.P.
By: LB I Group Inc., its general partner
By: _______________________________________
Name:
Title:
/s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
15
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ W. Xxxxxx Xxxxxx, Xx.
-----------------------------------
W. Xxxxxx Xxxxxx, Xx.
/s/ Irl X. Xxxxxxxxxx
-----------------------------------
Irl X. Xxxxxxxxxx
/s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxx
-----------------------------------
Xxxxx X. Xxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
16
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxx, Xx.
-----------------------------------
Xxxxx X. Xxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxx, Xx.
-----------------------------------
Xxxxx X. Xxxx, Xx.
/s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Xxxxx X. Xxxxxxxx, Xx.
17
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxxxxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxxxxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
18
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
/s/ Xxxx X. Xxxxxx, Xx.
-----------------------------------
Xxxx X. Xxxxxx, Xx.
/s/ Xxxxxx X. XxXxxxxx
-----------------------------------
Xxxxxx X. XxXxxxxx
19
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------------
Xxxxxx X. XxXxxxxxx
/s/ Xxxxxxx Xxxxxxxxxxx
-----------------------------------
Xxxxxxxx Xxxxxxxxxxx
/s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxx
-----------------------------------
Xxxxx X. Xxxx
EXHIBIT A
FORM OF AGREEMENT TO BE BOUND
[DATE]
To the Parties to the
Stockholders Agreement
dated as of May 19, 1998
Dear Sirs:
Reference is made to the Stockholders' Agreement dated as of May 19,
1998 (the "Stockholders Agreement"), among P&L Coal Holdings Corporation, a
----------------------
Delaware corporation, Xxxxxx Brothers Merchant Banking Partners II L.P., a
Delaware limited partnership, Xxxxxx Brothers Offshore Investment Partners II
L.P., a Bermuda exempted limited partnership, LB I Group Inc., a Delaware
corporation, Xxxxxx Brothers Capital Partners III, L.P., a Delaware limited
partnership, Xxxxxx Brothers Capital Partners IV, L.P., a Delaware limited
partnership, Xxxxxx Brothers MBG Partners 1998 (A) L.P., a Delaware limited
partnership, the other signatories thereto, and each other Stockholder who or
which shall become parties to the Stockholders' Agreement as provided therein.
Capitalized terms used herein and not defined have the meanings ascribed to them
in the Stockholders Agreement.
In consideration of the representations, covenants and agreements
contained in the Stockholders Agreement, the undersigned hereby confirms and
agrees that it shall be bound by all of the provisions thereof.
This letter shall be construed and enforced in accordance with the
laws of the State of New York.
Very truly yours,
___________________________________________
[Permitted Transferee]
EXHIBIT B
REGISTRATION RIGHTS
ARTICLE I
DEFINITIONS
-----------
Section 1.1. Definitions.
-------------------------
Terms defined in the Stockholders Agreement, dated as of May 19, 1998,
among the Company, the Management Investors and the other parties thereto (the
"Stockholders Agreement"), are used herein as therein defined. In addition, the
-----------------------
following terms shall have the meanings ascribed to them below:
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
"Holder" shall mean any Person who is a signatory to the Ownership
------
Agreements and the Stockholders Agreement and any Person who shall hereafter
acquire and hold Registrable Securities pursuant to the provisions of, and
subject to the rights and restrictions set forth in, the Ownership Agreements
and the Stockholders Agreement.
"Piggy-Back Registration" shall mean a Piggy-Back Registration as
-----------------------
defined in Section 2.1.
"Registrable Security" shall mean any outstanding share of Common
--------------------
Stock issued pursuant to the Ownership Agreements or any Option Shares until (i)
a registration statement covering such Common Stock has been declared effective
by the SEC and such share has been disposed of pursuant to such effective
registration statement or (ii) such share is 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 under which it may be sold pursuant
to Rule 144(k).
"SEC" shall mean the Securities and Exchange Commission.
---
"Selling Holder" shall mean a Holder who is selling Registrable
--------------
Securities pursuant to a registration statement under the Securities Act.
"Underwriter" shall mean a securities dealer who purchases any
-----------
Registrable Securities as principal in an underwritten offering and not as part
of such dealer's market-making activities.
ARTICLE II
REGISTRATION RIGHTS
-------------------
Section 2.1. Piggy-Back Registration.
-------------------------------------
If at any time the Company proposes to file a registration statement
under the Securities Act with respect to an offering by the Company for its own
account and/or for the account of any of its security holders of any equity
security (other than a registration statement
2
on Form S-4 or S-8 (or any substitute form that may be adopted by the SEC) or a
registration statement filed in connection with the Initial Public Offering, an
exchange offer or an offering of securities solely to the Company's existing
security holders), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event less than 10 days before the anticipated filing date), and such notice
shall offer such Holders the opportunity to register such number of shares of
Registrable Securities as each such Holder may request (which request shall
specify the Registrable Securities intended to be disposed of by such Holder and
the intended method of distribution thereof and shall be delivered to the
Company at least two days prior to the anticipated filing date) (a "Piggy-Back
----------
Registration"). The Company shall use its best efforts to cause the managing
-------------
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration to
be included on the same terms and conditions to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section 2.1 by giving written notice to the Company
of its request to withdraw. The Company may withdraw a Piggy-Back Registration
at any time prior to the time it becomes effective, provided that, in such
--------
event, the Company shall reimburse Holders of Registrable Securities
requested to be included in such Piggy-Back Registration for all out-of-pocket
expenses (including reasonable counsel fees and expenses) incurred prior to such
withdrawal.
Section 2.2. Reduction of Offering.
-----------------------------------
Notwithstanding anything contained herein, if the managing Underwriter
or Underwriters of an offering described in Section 2.1 determine that the
offering that the Holders, the Company and/or such other Persons intend to make
is such that the success of the offering would be materially and adversely
affected by inclusion of the Registrable Securities requested to be included,
then the Company shall include in such registration: (A) first, the shares, if
any, proposed to be registered by the Company for its own account or for the
account of any other security holder other than a Holder; and (B) second, an
------
amount of Registrable Securities requested to be included in such registration
pursuant to Section 2.1 by any Holder (such amount to be allocated among such
Holders in proportion to the number of Registrable Securities held by such
Holders).
ARTICLE III
REGISTRATION PROCEDURES
-----------------------
Section 3.1. Filings; Information.
----------------------------------
Whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
3
(a) The Company will as expeditiously as practicable prepare and
file with the SEC a registration statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof (it being understood that the Company shall use Form S-3 (or any
replacement form) if such form is then available), and use its best efforts to
cause such filed registration statement to become effective and thereafter to
remain effective for a period of not less than 270 days.
(b) The Company will, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to each Selling
Holder, counsel representing any Selling Holders, and each Underwriter, if any,
of the Registrable Securities covered by such registration statement copies of
such registration statement as proposed to be filed, together with exhibits
thereto, which documents will be subject to review by the foregoing within 5
business days after delivery, and thereafter furnish to such Selling Holder,
counsel 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 Selling Holder or Underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Selling Holder.
(c) After the filing of the registration statement, the Company
will promptly notify each Selling Holder covered by such registration statement
of any stop order issued or threatened by the SEC and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States and such other jurisdictions as any
Selling Holder reasonably (in light of such Selling Holder's intended plan of
distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Selling Holder to consummate
the disposition of the Registrable Securities owned by such Selling Holder;
provided that the Company 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 Company will immediately notify each Selling Holder of
such Registrable Securities, 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
4
necessary to make the statements therein not misleading, and will promptly make
available to each Selling Holder any such supplement or amendment.
(f) The Company will enter into customary agreements (including,
if applicable, 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 in accordance with the intended plan
of distribution of the Selling Holders. The Selling Holders may, at their
option, require that any or all of the representations, warranties and covenants
of the Company or to or for the benefit of such Underwriters also be made to and
for the benefit of such Selling Holders.
(g) The Company will deliver promptly to each Selling Holder of
such Registrable Securities and each Underwriter, if any, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions with
the SEC or its staff with respect to the registration statement and make
available for inspection by any Selling Holder of such Registrable Securities,
any Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
such Selling Holder or Underwriter (collectively, the "Inspectors"), all
----------
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), subject to restrictions imposed by any
-------
governmental authority governing access to classified information, as shall be
reasonably necessary to enable them to perform a reasonable and customary due
diligence investigation, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any Inspectors in
connection with such registration statement. Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the disclosure or release of
such Records is requested or required pursuant to oral questions,
interrogatories, requests for information or documents or a subpoena or other
order from a court of competent jurisdiction or other process; provided that
prior to any disclosure or release pursuant to clause (ii), the Inspectors shall
provide the Company with prompt notice of any such request or requirement so
that the Company may seek an appropriate protective order or waive such
Inspectors' obligation not to disclose such Records; and provided,
--------
further, that if failing the entry of a protective order or the
-------
waiver by the Company permitting the disclosure or release of such Records, the
Inspectors, upon advice of counsel, are compelled to disclose such Records, the
Inspectors may disclose that portion of the Records which counsel has advised
the Inspectors that the Inspectors are compelled to disclose. Each Selling
Holder of such Registrable Securities agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to each Selling Holder and to each
Underwriter, if any, a signed counterpart, addressed to such Selling Holder or
Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a
comfort
5
letter or comfort letters from the Company'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 the Selling Holders of
Registrable Securities included in such offering or the managing Underwriter, if
any, therefor reasonably requests.
(i) The Company will use its best 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 and Rule 158 thereunder.
(j) The Company will use its best efforts (a) to cause all such
Registrable Securities to be listed on a national securities exchange (if such
shares are not already so listed) and on each additional national securities
exchange on which similar securities issued by the Company are then listed (if
any), if the listing of such Registrable Securities is then permitted under the
rules of such exchange or (b) to secure designation of all such Registrable
Securities covered by such registration statement as a NASDAQ "national market
system security" within the meaning of Rule 11Aa2-1 of the SEC or, failing that,
to secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities with the
National Association of Securities Dealers, Inc.
(k) In connection with an underwritten offering, the Company will
participate, at its own expense, to the extent reasonably requested by the
managing underwriter for the offering or the Selling Holder, in efforts to sell
the Registrable Securities under the offering (including, without limitation,
participating in "roadshow" meetings with prospective investors) that would be
customary for primary offerings of equity securities by the Company.
(l) The Company will appoint a transfer agent and registrar for
all such Registrable Securities covered by such registration statement not later
than the effective date of such registration statement.
The Company may require each Selling Holder of Registrable Securities
to promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4.4(e)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(e) hereof, and,
if so directed by the Company, such Selling Holder will deliver to the Company,
at the Company's expense, all copies, other than permanent file copies then in
such Selling Holder's possession, of
6
the most recent prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event the Company shall give such notice, the
Company shall extend the period during which such registration statement shall
be maintained effective (including the period referred to in Section 3.1(a)
hereof) by the number of days during the period from and including the date of
the giving of notice pursuant to Section 4.4(e) hereof to the date when the
Company shall make available to the Selling Holders of Registrable Securities
covered by such registration statement a prospectus supplemented or amended to
conform with the requirements of Section 3.1(e) hereof.
Section 3.2. Registration Expenses.
-----------------------------------
In connection with any registration statement filed pursuant to
Section 2.1, the Company shall pay the following registration expenses incurred
in connection with the registration hereunder (the "Registration Expenses"):
---------------------
(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 Registrable
Securities), (iii) printing expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) fees and expenses incurred
in connection with the listing of the Registrable Securities, (vi) reasonable
fees and disbursements of counsel for the Company and customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of 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 3.1(h) hereof), (vii) reasonable
fees and expenses of any special experts retained by the Company in connection
with such registration, and (viii) reasonable fees and expenses of one counsel
(who shall be reasonably acceptable to the Company) for the Holders. The
Company shall have no obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
--------------------------------
Section 4.1. Indemnification by the Company.
--------------------------------------------
The Company agrees to indemnify and hold harmless each Selling Holder
of Registrable Securities, its officers, directors, employees and agents, and
each person, if any, who controls such Selling Holder within the meaning of the
Securities Act from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Common Stock) to which such Selling Holder, officer, director, employee or agent
or controlling Person may become subject under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement, prospectus or any preliminary
prospectus or any amendment or supplement thereto relating to the Registrable
Securities, (ii) 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, or (iii) any act or
7
failure to act, or any alleged act or failure to act by any Selling Holder in
connection with, or relating in any manner to, the Registrable Securities, and
which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause (i)
or (ii) above and shall reimburse each Selling Holder and each such officer,
director, employee, agent and controlling Person for any legal and other
expenses reasonably incurred by that Selling Holder, officer, director,
employee, agent or controlling Person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred, except insofar as the same are
contained in any information furnished in writing to the Company by such Selling
Holder expressly for use therein. The Company 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 Selling Holders provided in this Section 4.1.
Section 4.2. Indemnification by Holders of Registrable Securities.
------------------------------------------------------------------
Each Selling Holder agrees, severally but not jointly, to indemnify
and hold harmless the Company, its officers, directors and agents and each
Person, if any, who controls the Company within the meaning of the Securities
Act to the same extent as the indemnity from the Company to such Selling Holder
pursuant to clauses (i) and (ii) of Section 4.6, but only with reference to
information related to such Selling Holder furnished in writing by such Selling
Holder or on such Selling Holder'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; provided that the
--------
obligation to indemnify will be individual to each Selling Holder and will be
limited to the net amount of proceeds received by such Selling Holder from the
sale of Registrable Securities pursuant to such registration statement. Each
Selling Holder also agrees 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 Company provided in this Section 4.2, subject to the
proviso in the first sentence of this Section 4.2.
Section 4.3. Conduct of Indemnification Proceedings.
----------------------------------------------------
Promptly after receipt by any person in respect of which indemnity may
be sought pursuant to Section 4.1 or 4.2 (an "Indemnified Party") of notice of
-----------------
any claim or the commencement of any action, the Indemnified Party shall, if a
claim in respect thereof is to be made against the person against whom such
indemnity may be sought (an "Indemnifying Party") notify the Indemnifying Party
------------------
in writing of the claim or the commencement of such action provided that the
failure to notify the Indemnifying Party shall not relieve it from any liability
which it may have to an Indemnified Party otherwise than under Section 4.1 or
4.2 and except to the extent of any actual prejudice resulting therefrom. If
any such claim or action shall be brought against an Indemnified Party, and it
shall notify the Indemnifying Party thereof, the Indemnifying Party shall be
entitled to participate therein, and, to the extent that it wishes, jointly with
any other similarly notified Indemnifying Party, to assume the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
--------
have the right to employ separate
8
counsel to represent the Indemnified Party and its controlling Persons who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the Indemnified Party against the Indemnifying Party, but the
fees and expenses of such counsel shall be for the account 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. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any claim or pending or
threatened proceeding in respect of which the 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 claim or proceeding.
Section 4.4. Contribution.
--------------------------
If the indemnification provided for in Article 4 is unavailable to the
Indemnified Parties in respect of any losses, claims, damages, liabilities or
expenses 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,
liabilities or expenses in such proportion as the Underwriters shall reasonably
request based on the proceeds received by each Indemnifying Party as a result of
a sale of Registrable Securities.
ARTICLE V
MISCELLANEOUS
-------------
Section 5.1. Participation in Underwritten Registrations.
---------------------------------------------------------
No Person may participate in any underwritten registration 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 these registration rights.
Section 5.2. Rule 144.
----------------------
The Company covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act and that it will take
such further action as any Holder may reasonably request, all to the extent
required from time to time to enable Holders to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rules may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
9
Section 5.3. Restrictions on Public Sale by Holder of Registrable
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Securities.
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Each Holder of Registrable Securities agrees not to effect any sale or
distribution of the securities being registered or of a similar security of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 under the Securities Act,
during the 14 days prior to, and during (i) the 90-day period beginning on, the
effective date of any Piggyback Registration for a public offering to be
underwritten on a firm commitment basis (except as part of such underwritten
registration) and (ii) the 180-day period beginning on the consummation of the
Initial Public Offering, unless the investment banks or underwriters managing
the public offering otherwise agree.
