STOCKHOLDERS AGREEMENT
among
CYPRESS MERCHANT BANKING PARTNERS L.P.,
CYPRESS GOLF LTD.,
CYPRESS MERCHANT BANKING PARTNERS II L.P.,
CYPRESS GOLF C.V. LTD.,
55TH STREET PARTNERS II L.P.,
CLUBCORP, INC.,
XXXXXX X. XXXXXX, XX.,
XXXXXX X. XXXXXX, XX.,
XXXXXXXX XXXXXX XXXXX,
THE XXXXXX FOUNDATION,
THE XXXXXX AND XXXXX XXXXXX FOUNDATION,
THE TRUSTEES OF THE XXXXXX XXXXXX TRUST #1,
THE TRUSTEES OF THE XXXXXX XXXXXX TRUST #2,
THE TRUSTEES OF THE XXXXX XXXXXX TRUST #1
and
THE TRUSTEES OF THE XXXXX XXXXXX TRUST #2
dated as of December 1, 1999
ARTICLE I DEFINITIONS
Section 1.1 Certain Defined Terms
Section 1.2 Other Defined Terms
Section 1.3 Other Definitional Provisions
ARTICLE II TRANSFER OF COMMON SHARES
Section 2.1 Restrictions on Transfer
Section 2.2 Tag-Along Rights
Section 2.3 Drag-Along Rights
Section 2.4 Transferees
Section 2.5 Compliance with Transfer Provisions
ARTICLE III EQUITY PURCHASE RIGHTS
Section 3.1 Equity Purchase Rights
Section 3.2 Equity Repurchase Program
ARTICLE IV REGISTRATION RIGHTS
Section 4.1 Demand Registrations
Section 4.2 Piggyback Registrations
Section 4.3 Registration Procedures
Section 4.4 Registration Expenses
Section 4.5 Limitations on Sale or Distribution of Other Securities
Section 4.6 Company Right to Postpone Registration
Section 4.7 No Required Sale
Section 4.8 Indemnification
Section 4.9 Contribution
Section 4.10 Rule 144
ARTICLE V CORPORATE GOVERNANCE
Section 5.1 Board Representation
Section 5.2 Committees
Section 5.3 Consents Rights
Section 5.4 Voting on Certain Matters
Section 5.5 Restrictions on Other Agreements
Section 5.6 Financial and Other Information
Section 5.7 Board Procedures
Section 5.8 Cooperation
Section 5.9 Investments
ARTICLE VI IPO RECAPITALIZATION
Section 6.1 Agreement to Effect Recapitalization
ARTICLE VII REPRESENTATIONS AND WARRANTIES
OF CERTAIN STOCKHOLDERS
Section 7.1 Organization
Section 7.2 Authority
Section 7.3 Non-Contravention
Section 7.4 Consents and Approvals
ARTICLE VIII MISCELLANEOUS
Section 8.1 Conflicting Agreements
Section 8.2 Termination
Section 8.3 Legend
Section 8.4 Further Assurances
Section 8.5 Amendment and Waiver
Section 8.6 Severability
Section 8.7 Effective Date
Section 8.8 Entire Agreement
Section 8.9 Successors and Assigns
Section 8.10 Counterparts
Section 8.11 Remedies
Section 8.12 Notices
Section 8.13 Governing Law; Consent to Jurisdiction
Section 8.14 Interpretation
STOCKHOLDERS AGREEMENT
Stockholders Agreement dated as of December 1, 1999 among Cypress
Merchant Banking Partners L.P., a Delaware limited partnership ("CMBP"), Cypress
Golf Ltd., a Cayman Islands corporation ("GOLF"), Cypress Merchant Banking
Partners II L.P., a Delaware limited partnership ("CMBP II"), Cypress Golf C.V.
Ltd., a Cayman Islands corporation ("GOLF CV"), 00xx Xxxxxx Partners II L.P., a
Delaware limited partnership ("00xx Xxxxxx" and together with CMBP, GOLF, CMBP
II and GOLF CV, the "Investor Stockholders"), ClubCorp, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx Xxxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxx
Xxxxx, Xxxxxxxx Xxxxxx Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxx Xxxxxx and Xxx Xxxxx, as trustees of the Xxxxxx Xxxxxx Trust #1,
an inter vivos trust established under the laws of the State of Texas by an
indenture made and entered on December 6, 1969, Xxxxxxx Xxxxxx, Xxxxxx X.
Xxxxxx, Xx., Xxxx Xxxxx, Xxxxxxxx Xxxxxx Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxx Xxxxxx and Xxx Xxxxx, as trustees of the Xxxxxx
Xxxxxx Trust #2, an inter vivos trust established under the laws of the State of
Texas by an indenture made and entered on December 6, 1969, Xxxxxxx Xxxxxx,
Xxxxxx X. Xxxxxx, Xx., Xxxx Xxxxx, Xxxxxxxx Xxxxxx Xxxxx, Xxxxx X. Xxxxxxxxx,
Xxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxx Xxxxxx and Xxx Xxxxx, as trustees of
the Xxxxx Xxxxxx Trust #1, an inter vivos trust established under the laws of
the State of Texas by an indenture made and entered on December 6, 1969, Xxxxxxx
Xxxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxx Xxxxx, Xxxxxxxx Xxxxxx Xxxxx, Xxxxx X.
Xxxxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxx Xxxxxx and Xxx Xxxxx, as
trustees of the Xxxxx Xxxxxx Trust #2, an inter vivos trust established under
the laws of the State of Texas by an indenture made and entered on December 6,
1969, The Xxxxxx Foundation, a Texas non-profit corporation, The Xxxxxx and
Xxxxx Xxxxxx Foundation, a Texas non-profit corporation, Xxxxxx X. Xxxxxx, Xx.,
Xxxxxx X. Xxxxxx, Xx. and Xxxxxxxx Xxxxxx Xxxxx (collectively, the "Xxxxxx
Stockholders").
Whereas, CMBP, CMBP II, 55th Street, Cypress Offshore Partners L.P.
("COP"), Cypress Merchant Banking II C.V. ("CMBCV"), the Company and certain of
the Xxxxxx Stockholders have entered into a Stock Purchase Agreement, dated as
of October 26, 1999 (the "Stock Purchase Agreement"), (and COP and GOLF and
CMBCV and GOLF CV have entered into Assignment Agreements pursuant to which COP
and CMBCV have assigned their respective rights and obligations under the Stock
Purchase Agreement to GOLF and GOLF CV, respectively), pursuant to which the
Investor Stockholders will purchase (i) 9,375,000 newly issued shares of Common
Stock (as hereinafter defined) and 1,012,500 warrants to purchase Common Stock
from the Company for an aggregate purchase price of $150 million (and, subject
to certain conditions as set forth in the Stock Purchase Agreement), up to an
additional 4,687,500 newly issued shares of Common Stock and 337,500 warrants to
purchase shares of Common Stock) and (ii) 4,687,500 shares of Common Stock from
certain of the Xxxxxx Stockholders for an aggregate purchase price of $75
million; and
Whereas, the parties hereto desire to enter into certain arrangements
relating to the Company, to be effective as of the First Closing.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used herein, the following
terms shall have the following meanings:
"Active Investment" means an investment in a Person where the investor
or its Affiliates have any of (i) the right to appoint a director (in the case
of a corporation) or similar control person (in the case of other organizations)
of such Person or (ii) the right, other than through voting of capital stock, to
control such Person.
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
"Agreement" means this Stockholders Agreement, as it may be amended,
supplemented, restated or modified from time to time in accordance with the
terms hereof.
"beneficial owner" or "beneficially own" has the meaning given such
term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
Common Stock or Voting Securities shall be calculated in accordance with the
provisions of such Rule; provided, however, that for purposes of determining
beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of
any security which may be acquired by such Person whether within 60 days or
thereafter, upon the conversion, exchange or exercise of any warrants, options,
rights or other securities and (ii) no Person shall be deemed to beneficially
own any security solely as a result of such Person's execution of this
Agreement.
"Best IPO Efforts" means (irrespective of market conditions or the
actions of third parties) (i) preparing and filing with the Commission a
registration statement for an Initial Public Offering in accordance with the
advice of an Independent Investment Banking Firm and other professionals, (ii)
using best efforts to resolve any and all comments on such registration
statement of the staff of the Commission, (iii) using best efforts to obtain an
order of the Commission declaring such registration statement effective, (iv)
selling the Common Stock registered on such registration statement in accordance
with the method of distribution stated therein and (v) using best efforts to
have such shares of Common Stock listed on a national securities exchange or
quoted on the Nasdaq or National Market System; provided that if an Initial
Public Offering shall have been completed, Best IPO Efforts shall be deemed to
have been used for each required period.
"Board" means the Board of Directors of the Company.
"Business Day" shall mean any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in The
City of New York or in Dallas, Texas.
"By-Laws" means the By-Laws of the Company, as in effect on the date
hereof and as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof, the terms of the Certificate
of Incorporation and the terms of this Agreement.
"Capital Stock" means, with respect to any Person at any time, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited) or equivalent ownership interests in or issued by such
Person.
"Capitalized Lease Obligations" means all of the portions of any
obligation of the Company or any of its Subsidiaries as lessee under a lease
which at the time would be required to be capitalized on a balance sheet of the
Company or such Subsidiary prepared in accordance with GAAP.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as in effect on the date hereof and as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and the terms of this Agreement.
"Charitable or Non-Profit Entity" means any trust, corporation,
partnership or other entity described under Sections 170(c), 2055(a) and 2522(a)
of the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, and any
successor commission or agency having similar powers.
"Common Stock" means the common stock, par value $.01 per share, of
the Company and (i) any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization and (ii) in the event the Company effects the
Recapitalization as contemplated by Section 6.1 of this Agreement both the Class
A Common Stock and the Class B Common Stock and any securities issued in respect
thereof or in substitution therefor as contemplated by clause (i).
"Company Competitor" means any Person that (i) is primarily engaged in
the ownership or operation of any daily fee or semi-private golf course or
golf-related private club or (ii) is listed on Schedule 5.9 to this Agreement,
for so long as such Person, taken as a whole, continues to be engaged in the
ownership or operation of golf-related facilities to substantially the same
extent as on the date of this Agreement.
"Consent Right" means each of the matters enumerated in Section 5.3 of
this Agreement which require the prior written consent of one of the Investor
Stockholders (or a Permitted Transferee of an Investor Stockholder who is
controlled by such Investor Stockholder) before they can be authorized, effected
or validated.
"Control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Xxxxxx Stockholder Group" means the Xxxxxx Stockholders and their
Permitted Transferees.
"Director" means any member of the Board.
"EBITDA" means, for any period, determined in accordance with GAAP on
a consolidated basis for the Company and its Subsidiaries, the sum of (a) Pretax
Net Income (excluding therefrom, to the extent included in determining Pretax
Net Income, (i) any items of extraordinary gain, including net gains on the sale
of assets other than asset sales in the ordinary course of business, and (ii)
equity in joint venture net income, and adding thereto, to the extent included
in determining Pretax Net Income, any items of extraordinary loss, including net
losses on the sale of assets other than asset sales in the ordinary course of
business), plus (b) depreciation and amortization, plus (c) interest expense
(including but not limited to interest expense pursuant to Capitalized Lease
Obligations), plus (d) to the extent included in determining Pretax Net Income,
non-recurring, non-cash charges, minus (e) to the extent included in determining
Pretax Net Income, non-recurring credits, plus (f) cash distributions received
from any Person the financial results of which are not consolidated with the
financial results of the Company pursuant to GAAP.
"Equity Securities" means any and all shares of Capital Stock of the
Company, securities of the Company convertible into, or exchangeable for, such
shares, and options, warrants or other rights to acquire such shares.
"ESOP" means The ClubCorp Employee Stock Ownership Plan, effective as
of January 1, 1999, as in effect on the date hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" means any and all fees and expenses incident to the
Company's performance of or compliance with its obligations under Article IV
(other than internal expenses incurred by the Company including the services of
the Company's executives and legal department), including: (i) listing and
filing fees of the Commission or any stock exchange registration, (ii) fees and
expenses of compliance with state and provincial securities or "blue sky" laws
and in connection with the preparation of a "blue sky" survey, including
reasonable fees and expenses of "blue sky" counsel, (iii) printing and copying
expenses, (iv) messenger and delivery expenses, (v) expenses incurred in
connection with any road show (including the reasonable out-of-pocket expenses
of the Investor Stockholders), (vi) fees and disbursements of counsel for the
Company, (vii) with respect to each registration, the reasonable fees and
disbursements not in excess of $100,000 of one counsel for the selling Holder(s)
(selected by the Initiating Holder, in the case of a Demand Registration, or by
the Requisite Percentage of Participating Holders, in the case of a Piggyback
Registration, and in each case consented to by the Company, which consent shall
not be unreasonably withheld), (viii) fees and disbursements of the Company's
independent public accountants (including the expenses of any audit and/or "cold
comfort" letter) and (ix) any other fees and disbursements of underwriters, if
any, customarily paid by issuers of securities.
"Fair Market Value" means, as to any securities or other property, the
cash price at which a willing seller would sell and a willing buyer would buy
such securities or property in an arm's-length negotiated transaction without
time constraints.
"First Closing" has the meaning ascribed to such term in the Stock
Purchase Agreement.
"Formula Price" means the Fair Market Value of a share of Common Stock
as determined in good faith from time to time by the Board after consultation
with an Independent Investment Banking Firm.
"Foundation Stockholders" means The Xxxxxx Foundation and The Xxxxxx
and Xxxxx Xxxxxx Foundation.
"Fully-Diluted Basis" with respect to the Common Stock means the
number of shares of Common Stock which are issued and outstanding at the date of
determination plus the number of shares of Common Stock issuable pursuant to any
securities (other than Common Stock), rights or options then outstanding,
convertible into or exercisable for (whether or not subject to contingencies or
passage of time, or both), Common Stock.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles applied in a current period are comparable in all
material respects to those applied in a preceding period, the financial
statements for which period have been audited by the Company's independent
auditors.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of
the Exchange Act.
"Holder" means each Investor Stockholder and any of its Permitted
Transferees, and any Third Party Transferee of any such Investor Stockholder or
Permitted Transferee (i) to the extent the rights and obligations of a Holder
are specifically assigned to such Third Party Transferee by any Investor
Stockholder or its Permitted Transferee in accordance with Section 2.4(b)(ii)
and (ii) who agrees, pursuant to Section 2.4(c), to be bound by the provisions
of this Agreement as a "Holder" hereunder; provided that only a Permitted
Transferee or a Third Party Transferee to whom an Investor Stockholder or
Permitted Transferee specifically assigns the right to require a Demand
Registration shall be permitted to make a Demand Registration Request pursuant
to Section 4.1(a).
"Indebtedness" means, with respect to any Person, without duplication,
(a) all indebtedness of such Person, whether or not contingent, for borrowed
money (including reimbursement obligations in respect of letters of credit,
guarantees or similar instruments), (b) all obligations of such Person for the
deferred purchase price of property or services, (c) all other indebtedness of
such Person evidenced by notes, bonds, debentures, letters of credit or other
similar instruments, (d) all obligations under leases required to be classified
and accounted for as capital leases in accordance with GAAP, and (e) all
indebtedness of others referred to in clauses (a) through (d) above guaranteed
directly or indirectly in any manner by such Person.
"Independent Director" means an individual who:
(i) is not, except for such individual's role as a Director, an
Affiliate of the Company, any Investor Stockholder or any of the Xxxxxx
Stockholders and is not a current or former officer of the Company or any of its
Subsidiaries;
(ii) does not, in addition to such individual's role as a Director,
also act on a regular basis as an individual or representative of an
organization serving as a professional advisor, legal counsel or consultant to
management of the Company or any of its Subsidiaries or to any Investor
Stockholder or any Xxxxxx Stockholder or any of their respective Affiliates; and
(iii) does not represent on a regular basis, and is not a member of
the immediate family of, a Person who does not satisfy the requirements of
clauses (i) or (ii) above.
"Independent Investment Banking Firm" means an investment banking firm
of nationally recognized standing that is, in the reasonable judgment of the
Person engaging such firm, qualified to perform the task for which it has been
engaged.
"Initial Interest" means, with respect to any Stockholder, all of the
shares of Common Stock beneficially owned by such Stockholder immediately
following the First Closing or, if the Second Closing occurs, the Second
Closing.
"Initial Public Offering" means the sale of Common Stock to the public
pursuant to an effective registration statement (other than a registration
statement on Form S-4 (unless such registration was in connection with a
transaction which required the consent of the Investor Stockholders pursuant to
Section 5.3(iii) and to which the Investor Stockholders consented) or S-8 or any
similar or successor form) filed under the Securities Act in connection with an
underwritten offering after which there is an active trading market in such
shares of Common Stock (it being understood that an active trading market shall
be deemed to exist if, among other things, the shares of Common Stock are listed
on a national securities exchange or quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") or National
Market System).
"Investor Director" means any Director designated by the Investor
Stockholders pursuant to Section 5.1 of this Agreement.
"Investor Stockholder Group" means the Investor Stockholders and their
Permitted Transferees.
"Leverage Ratio" means, for any date of calculation, the ratio of
Total Debt as of the date of determination to EBITDA calculated for the four
consecutive fiscal quarters for which financial statements are available prior
to the date of calculation. For purposes of the calculation of the Leverage
Ratio only, with respect to assets not owned at all times during the four fiscal
quarters immediately preceding the date of calculation of EBITDA, there shall be
(i) included in EBITDA the pro forma EBITDA (but calculated to exclude any
increase in EBITDA which would be the result of any expenses that the Company
projects to be eliminated by such proposed acquisition) of any assets acquired
during any such four fiscal quarters and (ii) excluded from EBITDA the EBITDA of
any assets disposed of during any of such four fiscal quarters.
"New Credit Facility" means the First Amended and Restated Credit
Agreement, dated as of September 24, 1999, among the Company, certain lenders
named therein, and Bank of America, N.A. as administrative agent for the
lenders.
"New Securities" means shares of Common Stock of the Company and
rights, options or warrants to purchase such Common Stock, and securities of any
kind whatsoever that are, or may become convertible into or exchangeable for
such Common Stock (other than (i) any securities of the Company offered pursuant
to a registration statement which has been declared effective under the
Securities Act, whereby such securities shall be publicly traded on a national
securities exchange or quoted on the Nasdaq or National Market System, (ii) (1)
shares of Common Stock issued (x) upon exercise of options outstanding on the
date hereof or granted in accordance with clause (ii)(2) of this definition or
(y) to the ESOP in compliance with Section 5.3(xiv), (2) options to purchase
Common Stock granted under option plans existing on the date hereof or any other
plans approved pursuant to Section 5.3(x), (3) shares of Common Stock issuable
upon exercise of the Warrants, and (iii) shares of Common Stock issued to
acquire all or substantially all of the assets or securities of another entity
if such shares of Common Stock are issued directly to such entity or to those
persons owning securities of such entity in connection with the acquisition of
such entity in a transaction in compliance with Sections 5.3(iii), 5.3(iv) and
5.3(xiv)).
"Permitted Transferee" means (i) any Affiliate of a Stockholder, (ii)
a trust, corporation, partnership or other entity, the beneficiaries,
shareholders, partners, or owners, or Persons holding a controlling interest of
which consist of a Stockholder and any Affiliate of a Stockholder, (iii) with
respect to any Stockholder that is a partnership, such Stockholders' partners as
of the date hereof, (iv) any limited partners of any Investor Stockholder, (v)
with respect to each Xxxxxx Stockholder, any other Xxxxxx Stockholder, and with
respect to each Investor Stockholder, any other Investor Stockholder, (vi) the
executor, administrator, testamentary trustee, heir, legatee or beneficiary of
any deceased Stockholder and (vii) if the shares of Common Stock are Transferred
pursuant to the provisions of Section 3.2 or in compliance with Section
5.3(viii), the Company. In addition, each Stockholder shall be a Permitted
Transferee of its Permitted Transferees.
"Permitted Transfers" means Transfers of shares of Common Stock (i)
between a Stockholder and its Permitted Transferees so long as such Permitted
Transferees agree to be bound by the provisions of this Agreement to the same
extent as the transferor and (ii) to any Charitable or Non-Profit Entity the
beneficiaries, shareholders, partners, or owners, or Persons holding a
controlling interest of which do not consist of a Stockholder and any Affiliates
of a Stockholder.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any Group comprised of two or more of the foregoing.
"Pretax Net Income" means net profit (or loss) before taxes of the
Company and its Subsidiaries, on a consolidated basis, determined in accordance
with GAAP.
"Qualifying Stockholder" means any member of the Investor Stockholder
Group and any Third Party Transferee of any member of the Investor Stockholder
Group who becomes subject to the obligations of the Investor Stockholder Group
pursuant to Section 2.4(b).
"Redeemable Stock" means any Capital Stock of the Company or its
Subsidiaries which prior to March 24, 2007 is (a) mandatorily redeemable (by
sinking fund or similar payments or otherwise), (b) redeemable at the option of
the holder thereof or (c) convertible into Indebtedness of the Company or its
Subsidiaries.
"Redemption Obligation" means that certain obligation of the Company
to repurchase Capital Stock of the Company pursuant to Section 6.05 of the ESOP.
"Registrable Securities" means any Common Stock beneficially owned by
any Holder, whether beneficially owned as of the First Closing or thereafter
acquired. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration statement with
respect to the sale of such securities shall have been declared effective under
the Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) such securities shall have been sold
pursuant to Rule 144 (or any successor provision) under the Securities Act and
the second sentence of the legend set forth in Section 8.3 has been removed from
the certificate representing such securities or (iii) such securities shall have
ceased to be outstanding.
"Requisite Percentage of Participating Holders" means, with respect to
any registration pursuant to Article IV, Holders of a majority of the total
Registrable Securities which the Company has been requested to register by all
Holders.
"Second Closing" has the meaning ascribed to such term in the Stock
Purchase Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholder" means each Investor Stockholder and each Xxxxxx
Stockholder and each other Person who agrees to be bound by the terms of this
Agreement pursuant to the terms hereof.
"Stockholder Group" means one or more of the Investor Stockholder
Group and the Xxxxxx Stockholder Group.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly, by such
Person.
"Third Party Transferee" means any Person to whom a Stockholder or a
Permitted Transferee Transfers shares of Common Stock, other than a Permitted
Transferee of such Stockholder or such Permitted Transferee.
"Total Debt" means, as of any date of determination, determined for
the Company and its Subsidiaries on a consolidated basis, to the extent that the
following would appear as a liability upon the consolidated balance sheet of the
Company and its Subsidiaries in accordance with GAAP: (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services other than trade payables incurred in the ordinary course
of business, (iv) Capitalized Lease Obligations, and (v) obligations in respect
of Redeemable Stock (excluding, however, (A) the Redemption Obligation and, (B)
for purposes of Sections 3.2 and 5.3(xiv), the shares of Common Stock comprising
the Investor Stockholders' Initial Interest).
"Transfer" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
encumbrance, hypothecation or similar disposition of, any shares of Common Stock
beneficially owned by a Person or any interest in any shares of Common Stock
beneficially owned by a Person.
"Voting Securities" means, at any time, shares of any class of Capital
Stock of the Company which are then entitled to vote generally in the election
of Directors.
"Warrants" has the meaning ascribed to such term in the Stock Purchase
Agreement.
SECTION 1.2. Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
Term Section
Claims 4.8(a)
Xxxxxx Designees 5.1(c)
Demand Exercise Notice 4.1(a)
Demand Registration Request 4.1(a)
Demand Registrations 4.1(a)
Drag-Along Notice 2.3(b)
Dragging Parties 2.3(a)
Equity Purchase Shares 3.1(a)
Initiating Holder 4.1(a)
Initiating Holder Group 4.1(a)
Issuance Notice 3.1(b)
Litigation 8.13
Nasdaq 1.1
Other Holders 4.1(b)
Overallotment Portion 3.2(b)
Overallotment Seller 3.2(b)
Overallotment Shares 3.2(b)
Piggyback Registration 4.2(a)
Recapitalization 6.1
Repurchase Notice 3.2(b)
Repurchase Number of Shares 3.2(a)
Repurchase Offer 3.2(a)
Stockholder Repurchase Number of Shares 3.2(a)
Tag-Along Notice 2.2(b)
Tag-Along Right 2.2(a)
Tag-Along Sale 2.2(a)
Tag-Along Shares 2.2(a)
Third Party 2.3(a)
Transferring Stockholder 2.2(a)
SECTION 1.3. Other Definitional Provisions. (a) The words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Article, Section and Schedule references are to
this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) For purposes of calculating the amount of outstanding shares of
Common Stock or Equity Securities as of any date and the number of shares of
Common Stock or Equity Securities beneficially owned by any Person as of any
date, any shares of Common Stock held in the Company's treasury or owned by any
Subsidiaries of the Company shall be disregarded.
(d) The definitions set forth in Section 1.1 of the terms
"Capitalized Lease Obligation", "EBITDA", "Leverage Ratio", "Pretax Net Income",
"Redeemable Stock", "Redemption Obligation" and "Total Debt" shall be amended
from time to time to conform to the meanings ascribed to such terms in the New
Credit Facility or, if the New Credit Facility shall no longer exist, the
meanings ascribed to such terms in the New Credit Facility immediately prior to
its termination, unless otherwise agreed by the parties hereto; provided that
the definition of "Total Debt" shall continue to include the exclusion contained
in clause (B) in the parenthetical contained in clause (v) of such definition.
ARTICLE II
TRANSFER OF COMMON SHARES
SECTION 2.1. Restrictions on Transfer. (a) During the period
commencing on the First Closing Date and ending on the first anniversary of the
First Closing Date, each Stockholder agrees not to, and to cause its Permitted
Transferees not to, Transfer any shares of Common Stock held by such Stockholder
or Permitted Transferee; provided, that the foregoing shall not be applicable to
Permitted Transfers.
(b) Each Stockholder agrees that it shall not Transfer any Equity
Securities or any management rights in the Company, including without limitation
the right to appoint directors of the Company, to a Person that is a Company
Competitor or an Affiliate of a Company Competitor unless such Transfer is
consented to in writing by the Company and, so long as Cypress has Consent
Rights, in the case of a Transfer by any member of the Xxxxxx Stockholder Group,
the Investor Stockholders.
(c) Each Stockholder agrees that at least 10 Business Days prior to
entering into a definitive agreement to Transfer any Equity Securities
beneficially owned by it, him or her (other than a Permitted Transfer or a
Transfer pursuant to Article IV or similar registration rights under another
agreement), such Stockholder shall give notice to the other Stockholders party
hereto that it may enter into such an agreement.
(d) No Stockholder shall Transfer any shares of Common Stock, other
than pursuant to a Permitted Transfer, unless such Stockholder has complied with
the provisions of this Article II applicable to such Stockholder.
SECTION 2.2. Tag-Along Rights. (a) Subject to Section 2.1, if any
member of the Xxxxxx Stockholder Group (each a "Transferring Stockholder") shall
desire to Transfer any shares of Common Stock in one transaction or a series of
related transactions to any Person (including any Group), other than pursuant to
a Permitted Transfer, and such Person (together with its Affiliates)
beneficially owns, or such transaction or series of transactions will result in
such Person (together with its Affiliates) beneficially owning more than 10% of
the outstanding Equity Securities (either such transaction or series of related
transactions, a "Tag-Along Sale"), then the Investor Stockholders shall have the
right (the "Tag-Along Right") to participate on a pro rata basis with such
member of the Xxxxxx Stockholder Group in such Transfer and, in connection
therewith, to require the proposed transferee to purchase from the Investor
Stockholders, a number of the Investor Stockholders' shares of Common Stock (the
"Tag-Along Shares") equal to the product of (i) a fraction, the numerator of
which is the number of shares of Common Stock proposed to be sold by the
Transferring Stockholder and the denominator of which is the aggregate number of
shares of Common Stock beneficially owned as of such date by the Xxxxxx
Stockholder Group, multiplied by (ii) the number of shares of Common Stock
beneficially owned by the Investor Stockholder Group as of such date. In the
event that the proposed transferee is unwilling to purchase all of the shares of
Common Stock that the Transferring Stockholder and Investor Stockholders propose
to Transfer hereunder, the number of shares of Common Stock that a Stockholder,
including the Transferring Stockholder, may sell pursuant to this Section 2.2(a)
shall be determined, on a pro rata basis, by multiplying the maximum number of
shares of Common Stock that the proposed transferee of the Tag-Along Shares is
willing to purchase on the terms set forth in the Tag-Along Notice (as defined
below) by a fraction, the numerator of which is the number of shares of Common
Stock that such Stockholder proposes to sell hereunder (subject to the maximum
amount for each Stockholder calculated pursuant to the preceding sentence) and
the denominator of which is the aggregate number of shares of Common Stock that
all Stockholders exercising rights under this Section 2.2, including the
Transferring Stockholder, propose to sell hereunder. Any shares of Common Stock
sold by the Investor Stockholders pursuant to this Section 2.2 shall be sold by
the Investor Stockholders for the same consideration per share and upon the same
terms and conditions as such proposed Transfer by any Transferring Stockholder
(or no less favorable terms and conditions than those received by the
Transferring Stockholder in any series of related transactions, taking such
transactions as a whole).
(b) The Transferring Stockholder shall give prior written notice of
such intended Tag-Along Sale to the Investor Stockholders at least 20 Business
Days prior to the proposed consummation of such Tag-Along Sale. Such notice
(the "Tag-Along Notice") shall set forth the terms and conditions of such
proposed Tag-Along Sale, including the name of the proposed transferee, the
number of shares of Common Stock proposed to be Transferred (including the
number of shares of Common Stock previously or proposed to be Transferred to the
applicable transferee or its Affiliates in a related transaction), the purchase
price per share of Common Stock proposed to be paid therefor, the form of
consideration (and if such consideration consists in whole or in part of
property other than cash, the Transferring Stockholder will provide such
information, to the extent reasonably available to such Transferring
Stockholder, relating to such consideration as the Investor Stockholders may
reasonably request in order to evaluate such non-cash consideration). The
Tag-Along Right may be exercised by the Investor Stockholders upon delivery of a
written notice to the Transferring Stockholder within 10 Business Days after the
receipt of the Tag-Along Notice. Such written notice shall state the aggregate
number of shares of Common Stock that the Investor Stockholders propose to
include in such Transfer (provided that the aggregate number of shares of Common
Stock the Investor Stockholders propose to include shall not exceed the number
of Tag-Along Shares).
(c) The closing of the purchase of the Tag-Along Shares shall take
place concurrently with and at the location of the closing of the Transfer of
the shares by the Transferring Stockholder within 20 Business Days after the
date of the Tag-Along Notice or within such other time as shall be agreed upon
by the Transferring Stockholder and the Investor Stockholders selling Tag-Along
Shares. At such closing, the purchaser thereof shall deliver the consideration
to be paid to the Investor Stockholders (if such consideration includes cash, by
wire transfer of federal or other immediately available funds in the appropriate
amount to an account designated by the Investor Stockholders) against delivery
of the certificates representing the Tag-Along Shares so purchased, duly
endorsed in blank by the person or persons in whose name a stock certificate is
registered or accompanied by a duly executed assignment separate from
certificate.
(d) The exercise or nonexercise of the rights of the Investor
Stockholders in this Section 2.2 to participate in one or more Transfers by
members of the Xxxxxx Stockholder Group shall not adversely affect the Investor
Stockholders' rights to participate in subsequent Transfers by members of the
Xxxxxx Stockholder Group.
SECTION 2.3. Drag-Along Rights. (a) If at any time following the
third anniversary of the First Closing, the Company or any member of the Xxxxxx
Stockholder Group receives an offer from a Person other than a Stockholder or an
Affiliate of a Stockholder (a "Third Party") to purchase or otherwise acquire
all of the shares of Common Stock then outstanding (whether by merger,
consolidation, by purchase of stock or otherwise) and, subject to compliance
with Section 5.3 of this Agreement, such offer is proposed to be accepted by the
Company or such Xxxxxx Stockholder (the "Dragging Parties"), then the Investor
Stockholders hereby agree that, if requested by the Dragging Parties, they will
Transfer to such Third Party on the same terms and conditions (including,
without limitation, time of payment and form of consideration) as to be paid and
given to the Dragging Parties all, but not less than all, of the Equity
Securities owned by them.
(b) The Dragging Parties will give written notice (the "Drag-Along
Notice") to the Investor Stockholders of any proposed Transfer giving rise to
the rights of the Dragging Parties set forth in Section 2.3(a) as soon as
practicable following the acceptance of the offer referred to in Section 2.3(a).
The Drag-Along Notice will set forth the name of the proposed transferee or
acquiring Person, the proposed amount and form of consideration (and if such
consideration consists in part or in whole of property other than cash, the
Dragging Parties will provide such information, to the extent reasonably
available to the Dragging Parties, relating to such consideration as the
Investor Stockholders may reasonably request in order to evaluate such non-cash
consideration) and the other material terms and conditions of the offer. In
connection with any such sale, the Investor Stockholders will agree (i) to make
or agree to the same representations, covenants, indemnities (with respect to
all matters other than the Dragging Parties' ownership of shares of Common
Stock) and agreements as the Dragging Parties so long as they are made severally
and not jointly and the liabilities thereunder are borne on a pro rata basis
based on the number of shares Transferred by each Stockholder, (ii) to make the
same representations and warranties (and provide related indemnification) as to
their ownership of their shares of Common Stock as are given by the Dragging
Parties with respect to each such other Stockholder's ownership of shares of
Common Stock and (iii) to pay their proportionate share of the reasonable costs
incurred in connection with such transaction to the extent not paid or
reimbursed by the Company or the transferee or acquiring Person. If the
Transfer referred to in the Drag-Along Notice is not consummated within 90 days
from the date of the Drag-Along Notice, the Dragging Parties must deliver
another Drag-Along Notice in order to exercise their rights under this Section
2.3 with respect to such Transfer or any other Transfer.
SECTION 2.4. Transferees. (a) Any Permitted Transferee of a
Stockholder shall be subject to the terms and conditions of this Agreement as if
such Permitted Transferee were the transferor Stockholder, including, without
limitation, having the rights and being subject to the obligations of the
transferor Stockholder under this Article II. Prior to the initial acquisition
of beneficial ownership of any shares of Common Stock by any Permitted
Transferee, and as a condition thereto, each Stockholder agrees to cause its
respective Permitted Transferees to agree in writing with the other parties
hereto to be bound by the terms and conditions of this Agreement to the extent
described in the preceding sentence.
(b) No Third Party Transferee shall have any rights or obligations
under this Agreement, except that
(i) if a Third Party Transferee of an Investor Stockholder (or any
member of the Investor Stockholder Group) together with its Affiliates acquires
shares of Common Stock representing at least 50% of the Investor Stockholders'
Initial Interest, such Third Party Transferee and its Affiliates (A) shall be
subject to the obligations of the Investor Stockholders under Sections 2.1, 2.3,
2.5, 5.1, 5.5, 5.8, 5.9, 8.4 and Article VI and (B) shall have the rights of the
Investor Stockholders under Sections 2.2 (but shall only have the Tag-Along
Right of the Investor Stockholders if the Investor Stockholders elect to assign
such right to such Third Party Transferee) and 8.4 and Articles III (but no
Third Party Transferee shall be permitted to further assign rights under Section
3.2 in connection with any subsequent Transfer of shares of Common Stock by such
Third Party Transferee), IV (but shall only have the right to request a Demand
Registration if the Investor Stockholders elect to assign such right to such
Third Party Transferee) and V (other than Sections 5.3 and 5.4) (but shall only
have the rights of the Investor Stockholders under Sections 5.1 and 5.2 if and
to the extent the Investor Stockholders elect to assign such rights to such
Third Party Transferee; provided that (x) if, immediately following the Transfer
to such Third Party Transferee, the Investor Stockholders have the right to
designate one Director pursuant to Section 5.1, the Investor Stockholders cannot
assign their rights under Section 5.2 to such Third Party Transferee at such
time, but shall be permitted to assign such rights to such Third Party
Transferee effective at such time as the Investor Stockholders no longer have
the right to designate a Director pursuant to Section 5.1 so long as at such
time, such Third Party Transferee continues to have the right to designate a
Director, (y) no Third Party Transferee to whom the Investor Stockholders assign
any rights under Section 5.1 shall be permitted to further assign such rights in
connection with any subsequent Transfer of shares of Common Stock by such Third
Party Transferee, and (z) notwithstanding the provisions of Section 5.1, if the
Investor Stockholders assign their right to designate two Directors to a Third
Party Transferee, such right of the Third Party Transferee shall terminate if
such Third Party Transferee (together with its Affiliates) ceases to
beneficially own a number of shares of Common Stock equal to at least 50% of the
Investor Stockholders' Initial Interest and any such right to designate one
Director shall terminate if such Third Party Transferee (together with its
Affiliates) ceases to beneficially own a number of shares of Common Stock equal
to at least 25% of the Investor Stockholders' Initial Interest).
(ii) if a Third Party Transferee of a Xxxxxx Stockholder (or any
member of the Xxxxxx Stockholder Group) together with its Affiliates acquires
shares of Common Stock representing at least 10% of the outstanding Voting
Securities, then such Third Party Transferee and its Affiliates (A) shall be
subject to the obligations of the Xxxxxx Stockholders under Sections 2.1, 2.2,
2.5 and 8.4 and Articles V and VI and (B) shall have the rights of the Xxxxxx
Stockholders under Sections 2.3 and 8.4.
(c) Prior to the consummation of a Transfer described in Section
2.4(b) to the extent rights and obligations are to be assigned, and as a
condition thereto, the applicable Third Party Transferee shall (i) agree in
writing with the other parties hereto to be bound by the terms and conditions of
this Agreement to the extent described in Section 2.4(b) and (ii) provide the
Company and the other parties to this Agreement at such time complete
information for notices under this Agreement.
SECTION 2.5. Compliance with Transfer Provisions. Any Transfer or
attempted Transfer of shares of Common Stock in violation of any provision of
this Agreement shall be void.
ARTICLE III
EQUITY PURCHASE RIGHTS
SECTION 3.1. Equity Purchase Rights. (a) The Company hereby grants
to each member of the Investor Stockholder Group, and each member of the Xxxxxx
Stockholder Group the right to purchase its, his or her pro rata portion of all
or any part of New Securities which the Company may, from time to time, propose
to sell or issue. A pro rata portion, for purposes of this Agreement, is the
ratio of the number of shares of Common Stock beneficially owned by each such
Stockholder immediately prior to any purchase to the total number of shares of
Common Stock of the Company issued and outstanding at such time on a Fully
Diluted Basis. The number or amount of New Securities which the members of the
Investor Stockholder Group and the Xxxxxx Stockholder Group may purchase
pursuant to this Section 3.1(a) shall be referred to as the "Equity Purchase
Shares". The equity purchase right provided in this Section 3.1(a) shall apply
at the time of issuance of any right, warrant or option or convertible or
exchangeable security and not to the conversion, exchange or exercise thereof.
(b) The Company shall give written notice of a proposed issuance or
sale described in Section 3.1(a) to the members of the Investor Stockholder
Group and the Xxxxxx Stockholder Group within two Business Days following any
meeting of the Board at which any such issuance or sale is approved. Such
notice (the "Issuance Notice") shall set forth the material terms and conditions
of such proposed transaction, including the name of any proposed purchaser(s) or
the proposed manner of disposition, the number or amount and description of the
shares proposed to be issued and the proposed purchase price per share,
including a description of any non-cash consideration sufficiently detailed to
permit valuation thereof. Such notice shall also be accompanied by any written
offer from the prospective purchaser to purchase such New Securities. The
Issuance Notice shall be received by the members of the Investor Stockholder
Group and the Xxxxxx Stockholder Group at least 20 days prior to the proposed
issuance or sale.
(c) At any time during the 20-day period following the receipt of an
Issuance Notice, such Stockholders shall have the right to irrevocably elect to
purchase up to the number of the Equity Purchase Shares at the purchase price
set forth in the Issuance Notice (or if such price includes property other than
cash, the equivalent in cash of such price) and upon the other terms and
conditions specified in the Issuance Notice by delivering a written notice to
the Company. Except as provided in the following sentence, such purchase shall
be consummated concurrently with the consummation of the issuance or sale
described in the Issuance Notice. The closing of any purchase by any member of
the Investor Stockholder Group or any member of the Xxxxxx Stockholder Group may
be extended beyond the closing of the transaction described in the Issuance
Notice to the extent necessary to obtain required governmental approvals and
other required approvals and the Company and the offeree shall use their
respective best efforts to obtain such approvals.
(d) If none of the members of the Investor Stockholder Group or the
Xxxxxx Stockholder Group elect pursuant to Section 3.1(c) to purchase any of the
Equity Purchase Shares, the Company shall be free to complete the proposed
issuance or sale described in the Issuance Notice on terms no less favorable to
the Company than those set forth in the Issuance Notice, provided that (x) such
issuance or sale is closed within 90 days after the expiration of the 20-day
period described in Section 3.1(c), (y) the price at which the New Securities
are transferred must be equal to or higher than the purchase price described in
the Issuance Notice and (z) subject to Section 3.1(e), the amount of securities
to be issued or sold by the Company may be reduced. Such periods within which
such issuance or sale must be closed shall be extended to the extent necessary
to obtain required governmental approvals and other required approvals and the
Company shall use its commercially reasonable efforts to obtain such approvals.
(e) To the extent that, after the election to acquire Equity Purchase
Shares pursuant to the purchase right under this Section 3.1, the number of New
Securities shall be reduced (whether at the discretion of the Company or
otherwise), then the number of shares or other amount of Equity Purchase Shares
that the members of the Investor Stockholder Group and the Xxxxxx Stockholder
Group have the right to acquire under this Section 3.1 shall be reduced pro rata
and such Stockholders' elections shall be deemed to have been their respective
irrevocable commitments to purchase such reduced number of shares or other
amount of such Equity Purchase Shares.
SECTION 3.2. Equity Repurchase Program. (a) If, on the fifth
anniversary of the First Closing Date (as defined in the Stock Purchase
Agreement) and on each anniversary of the First Closing Date thereafter, (i) the
Company (A) is not using its Best IPO Efforts to pursue and complete an Initial
Public Offering and (B) has not continuously used its best efforts (without
interruption) to pursue and complete an Initial Public Offering for at least the
eighteen month period immediately preceding such anniversary and (ii) the
Company's Leverage Ratio is less than 3.5x, the Company shall make an offer (a
"Repurchase Offer") to each Qualifying Stockholder to repurchase a pro rata
portion of a number of shares of Common Stock equal to the Repurchase Number of
Shares (as defined below). For purposes of this Section 3.2, the eighteen month
period referred to in clause (B) shall not begin to run until the Company shall
have filed the registration statement referred to in clause (i) of the
definition of Best IPO Efforts. The "Repurchase Number of Shares" shall be
equal to the aggregate number of shares of Common Stock that could be purchased
at a price equal to the Fair Market Value of each share (determined by an
Independent Investment Banking Firm selected by the Investor Stockholders and
reasonably acceptable to the Company; it being understood that Fair Market Value
shall be determined on the basis of a public market valuation of the Company
without any control premium) for an amount of cash equal to the amount of cash
the Company could borrow without causing its Leverage Ratio to exceed 3.5x. The
number of shares to be repurchased from each Qualifying Stockholder (the
"Stockholder Repurchase Number of Shares") shall be equal to the product of (i)
the Repurchase Number of Shares, multiplied by (ii) a fraction, the numerator of
which is equal to the number of shares of Common Stock beneficially owned by
such Qualifying Stockholder and the denominator of which is equal to the total
number of shares of Common Stock beneficially owned by all Qualifying
Stockholders; provided that, for purposes of this calculation, the Investor
Stockholders may determine the aggregate Stockholder Repurchase Number of Shares
for all of the Investor Stockholders and allocate such aggregate number of
shares among the Investor Stockholders in their discretion. For purposes of
this Section 3.2, the number of shares of Common Stock beneficially owned by all
Qualifying Stockholders shall exclude any additional shares of Common Stock
acquired by the Qualifying Stockholders after the First Closing (other than
shares acquired in the Second Closing, if any, and shares acquired upon exercise
of the Warrant).
(b) If the Company is required to make a Repurchase Offer pursuant to
Section 3.2, within 5 Business Days of the applicable anniversary of the First
Closing Date, the Company shall send a notice (a "Repurchase Notice") to each
Qualifying Stockholder which shall set forth the Repurchase Number of Shares,
the Stockholder Repurchase Number of Shares for each Qualifying Stockholder, the
purchase price per share (which shall be the Fair Market Value as determined
above) and the closing date for such repurchase which shall be no later than 20
Business Days after the date of the Repurchase Notice. Within 5 Business Days
after delivery of the Repurchase Notice by the Company to the Qualifying
Stockholders, the Qualifying Stockholders shall, by written notice to the
Company elect to sell to the Company all or a portion of its applicable
Stockholder Repurchase Number of Shares upon the terms set forth in the
Repurchase Notice; provided, that if one or more Qualifying Stockholders do not
exercise in full their right to sell their Stockholder Repurchase Number of
Shares (such number minus the number of shares to be repurchased being herein
referred to as the "Overallotment Shares "), a portion of the Overallotment
Shares equal to the applicable Overallotment Portion (as defined below) may be
sold by each other Qualifying Stockholder (each, an "Overallotment Seller") who
has exercised its rights in full to have the Company repurchase its applicable
Stockholder Repurchase Number of Shares. As used herein, the term
"Overallotment Portion" means a number of shares of Common Stock equal to the
product of (x) the quotient determined by dividing (A) the aggregate number of
outstanding shares of Common Stock beneficially owned by such Overallotment
Seller by (B) the aggregate number of outstanding shares of Common Stock
beneficially owned by the Overallotment Sellers and (y) the total number of
Overallotment Shares; provided that, for purposes of this calculation, the
Investor Stockholders shall be permitted to allocate the aggregate Overallotment
Portion to which they are entitled among themselves in their discretion. If a
Qualifying Stockholder has not delivered written notice to the Company that it
elects to participate in the Repurchase Offer within the 5 Business Day period
provided above for the delivering of such notice, then the Company shall not be
obligated to repurchase any shares of Common Stock from such Qualifying
Stockholder; provided, that the failure of a Qualifying Stockholder to exercise
its rights with respect to any Repurchase Offer shall not limit such Qualifying
Stockholder from exercising its rights with respect to any future Repurchase
Offer.
ARTICLE IV
REGISTRATION RIGHTS
SECTION 4.1. (a) At any time and from time to time after an Initial
Public Offering, any Investor Stockholder (and any other Holder to whom an
Investor Stockholder has specifically transferred its rights under this Section
4.1) shall have the right to require the Company to file a registration
statement under the Securities Act covering all or any part of their respective
Registrable Securities, by delivering a written request therefor to the Company
specifying the number of Registrable Securities to be included in such
registration by such Holder(s) and the intended method of distribution thereof.
All such requests pursuant to this Section 4.1(a) are referred to herein as
"Demand Registration Requests" and the registrations so requested are referred
to herein as "Demand Registrations" (with respect to any Demand Registration,
the Holder making such demand for registration being referred to as the
"Initiating Holder" and, in the case that the Initiating Holder is an Investor
Stockholder, such Initiating Holder, together with the other Investor
Stockholders and their Permitted Transferees, the "Initiating Holder Group").
As promptly as practicable, but no later than 10 Business Days after receipt of
a Demand Registration Request, the Company shall give written notice (the
"Demand Exercise Notice") of such Demand Registration Request to all Holders of
record of Registrable Securities.
(b) The Company shall include in a Demand Registration (i) the
Registrable Securities of the Initiating Holder and the other members of the
Initiating Holder Group that shall have made a written request to the Company
for inclusion thereof in such registration (which request shall specify the
maximum number of Registrable Securities intended to be disposed of by such
other members) within the time specified below and (ii) the Registrable
Securities of any other Holder (other than members of the Initiating Holder
Group) (collectively, the "Other Holders") that shall have made a written
request to the Company for inclusion thereof in such registration (which request
shall specify the maximum number of Registrable Securities intended to be
disposed of by such Holder(s)) within 30 days after the receipt of the Demand
Exercise Notice.
(c) The Company shall, as expeditiously as practicable following a
Demand Registration Request, use its commercially reasonable efforts to (i)
effect the registration under the Securities Act (including by means of a shelf
registration pursuant to Rule 415 under the Securities Act if so requested by
the Initiating Holder and if the Company is then eligible to use such a
registration) of the Registrable Securities which the Company has been so
requested to register by the Initiating Holder Group and the Other Holders (to
the extent permitted to be included in accordance with the terms hereof), for
distribution, in accordance with such intended method of distribution, and (ii)
if requested by the Initiating Holder, obtain acceleration of the effective date
of the registration statement relating to such registration.
(d) The rights of Holders of Registrable Securities to request Demand
Registrations pursuant to Section 4.1(a) are subject to the following
limitations: (i) in no event shall the Company be required to effect more than
four Demand Registrations pursuant to this Agreement whether requested by an
Investor Stockholder or a Third Party Transferee and (ii) the Company shall not
be obligated to effect more than one Demand Registration under which the
aggregate number of Registrable Securities to be included in such Demand
Registration would not exceed 15% of the Investor Stockholders' Initial
Interest. Upon assignment by the Investor Stockholders of the right to initiate
a Demand Registration to a Third Party Transferee in accordance with Section
2.4(b) with respect to Registrable Securities, such Investor Stockholders shall
cease to have the right to initiate such Demand Registration with respect to
such Registrable Securities.
(e) A registration requested pursuant to this Section 4.1 will not be
deemed to have been effected unless the relevant registration statement has
become effective, provided that if, after it has become effective, the offering
of Registrable Securities pursuant to such registration is subject to any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for an aggregate of more than 30 days in the 210
days following the date of effectiveness, such registration will be deemed not
to have been effected.
(f) If a requested registration pursuant to this Section involves an
underwritten offering, the Initiating Holder shall have the right to select in
good faith an investment banker or bankers and managers of nationally recognized
standing to administer the offering; provided, however, that such investment
banker or bankers and managers shall be reasonably satisfactory to the Company.
The Company shall notify the Initiating Holder if the Company objects to any
investment banker or manager selected by the Initiating Holder pursuant to this
Section 4.1(f) within 10 Business Days after the Initiating Holder has notified
the Company of such selection.
(g) If the managing underwriter of any underwritten offering shall
advise the Holders participating in a Demand Registration that the Registrable
Securities covered by the registration statement cannot be sold in such offering
within a price range acceptable to the Initiating Holder, then the Initiating
Holder shall have the right to notify the Company that it has determined that
the registration statement be abandoned or withdrawn, in which event the Company
shall abandon or withdraw such registration statement. If a requested
registration pursuant to this Section 4.1 involves an underwritten offering and
the managing underwriter advises the Company that, in its opinion, the number of
securities requested to be included in such registration (including securities
of the Company or other holders who are entitled to and who desire to exercise
"piggyback" or similar registration rights which are not Registrable Securities)
exceeds the number which can be sold in such offering within a price range
acceptable to the Initiating Holder, the Company will include in such
registration only the Registrable Securities requested to be included in such
registration pursuant to this Section 4.1. In the event that the number of
Registrable Securities requested to be included in such registration exceeds the
number which, in the opinion of such managing underwriter, can be sold in such
offering within a price range acceptable to the Initiating Holder, the Company
shall include in such registration the number of Registrable Securities proposed
to be sold by the Initiating Holder Group (to the extent the managing
underwriter believes that such Registrable Securities can be sold in such
offering within such price range, and if they cannot and the Initiating Holder
chooses not to exercise its right provided in the first sentence of this
paragraph, such smaller number of Registrable Securities of the members of the
Initiating Holder Group as specified by the Initiating Holder) and, to the
extent the managing underwriter believes that additional Registrable Securities
can be sold in such offering within such price range, the number of Registrable
Securities proposed to be sold by the Other Holders, allocated pro rata among
the Other Holders on the basis of the relative number of Registrable Securities
requested to be registered pursuant to clause (ii) of Section 4.1(b) by each
such Holder. In the event that the number of Registrable Securities requested
by all Holders to be included in such registration is less than the number
which, in the opinion of the managing underwriter, can be sold, the Company or
other holders who are entitled to and desire to exercise "piggyback" or similar
registration rights may include in such registration a number of securities that
the Company proposes to sell up to the number of securities that, in the opinion
of the managing underwriter, can be sold in such offering within a price range
acceptable to the Initiating Holder.
(h) If the Company at any time grants to any other holders of Voting
Securities (or securities that are convertible, exchangeable or exercisable into
Voting Securities) any rights to request the Company to effect the registration
under the Securities Act of any such Voting Securities (or any such securities)
on terms (other than with respect to the number of demands permitted to be
requested) more favorable to such holders than the terms set forth in this
Section 4.1, then the Holders shall be entitled to such more favorable rights
and benefits.
SECTION 4.2. Piggyback Registrations. (a) If, at any time following
the Initial Public Offering, the Company proposes or is required to register any
of its Equity Securities under the Securities Act (other than pursuant to (i)
registrations on such form or similar form(s) solely for registration of
securities in connection with an employee benefit plan or dividend reinvestment
plan or a merger, consolidation or acquisition or (ii) a Demand Registration
pursuant to Section 4.1) on a registration statement on Form S-1, Form S-2 or
Form S-3 (or an equivalent general registration form then in effect), whether or
not for its own account, the Company shall give reasonable written notice of its
intention to do so to each of the Holders of record of Registrable Securities.
Upon the written request of any Holder, made within 15 days following the
receipt of any such written notice (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such Holder and
the intended method of distribution thereof), the Company shall use its
commercially reasonable efforts to cause all such Registrable Securities, the
Holders of which have so requested the registration thereof, to be registered
under the Securities Act (with the securities that the Company at the time
proposes to register) to permit the sale or other disposition by such Holders
(in accordance with the intended method of distribution thereof) of the
Registrable Securities to be so registered (such registration, a "Piggyback
Registration"). There is no limitation on the number of Piggyback Registrations
pursuant to the preceding sentence that the Company is obligated to effect. No
registration effected under this Section 4.2(a) shall relieve the Company of its
obligations to effect Demand Registrations.
(b) If, at any time after giving written notice of its intention to
register any Equity Securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
Equity Securities, the Company may, at its election, give written notice of such
determination to all Holders of record of Registrable Securities and (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, without prejudice, however, to the rights of Holders under Section
4.1, and (ii) in the case of a determination to delay such registration of its
Equity Securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other Equity Securities.
(c) Any Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any registration statement pursuant
to this Section 4.2 by giving written notice to the Company of its request to
withdraw; provided, however, that (i) such request must be made in writing prior
to the earlier of the execution of the underwriting agreement or the execution
of the custody agreement with respect to such registration and (ii) such
withdrawal shall be irrevocable and, after making such withdrawal, a Holder
shall no longer have any right to include Registrable Securities in the
registration as to which such withdrawal was made.
(d) If the managing underwriter of any underwritten offering shall
inform the Company by letter of its belief that the number of Registrable
Securities requested to be included in a registration under this Section 4.2
would materially adversely affect such offering, then the Company will include
in such registration, first, the securities proposed by the Company to be sold
for its own account, second, the securities requested to be registered by any
stockholder exercising a demand registration right, and third, the Registrable
Securities and any other securities of the Company with respect to which the
holders thereof are entitled to and desire "piggyback" or similar registration
rights, pro rata among all such holders on the basis of the relative number of
securities of the Company requested to be registered pursuant to Section 4.2(a)
or such other "piggyback" or similar registration rights by each such holder.
(e) If a Piggyback Registration pursuant to this Section involves an
underwritten offering, the Company shall have the right to select in good faith
an investment banker or bankers and managers of nationally recognized standing
to administer the offering.
SECTION 4.3. Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to effect or cause the registration
of any Registrable Securities under the Securities Act as provided in this
Agreement, the Company shall, as expeditiously as practicable:
(a) prepare and file with the Commission a registration statement on
an appropriate registration form of the Commission for the disposition of such
Registrable Securities in accordance with the intended method of disposition
thereof, which form (i) shall be selected by the Company (provided, that if any
registration requested pursuant to this Article IV which is proposed by the
Company to be effected by filing of a registration statement on Form S-3 (or any
successor or similar short-form registration statement) shall be in connection
with an underwritten public offering, and if the managing underwriter shall
advise the Company in writing that, in its opinion, it is of material importance
to the success of such proposed offering to include in such registration
statement information not required to be included pursuant to Form S-3, then the
Company shall supplement such registration statement as reasonably requested by
such managing underwriter) and (ii) shall, in the case of a shelf registration,
be available for the sale of the Registrable Securities by the selling Holders
thereof and such registration statement shall comply as to form in all material
respects with the requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and the Company
shall use its best efforts to cause such registration statement to become
effective (provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, or comparable statements
under securities or "blue sky" laws of any jurisdiction, the Company will
furnish to one counsel for the Holders participating in the planned offering
(selected by the Initiating Holder, in the case of a Demand Registration, or a
majority of the Holders electing to sell securities, in the case of a Piggyback
Registration) and the underwriters, if any, copies of all such documents
proposed to be filed (including all exhibits thereto), which documents will be
subject to the reasonable review and, in the case of a registration pursuant to
Section 4.1, reasonable comment of such counsel, and the Company shall not file
any registration statement or amendment thereto or any prospectus or supplement
thereto pursuant to Section 4.1 to which the Holders of a majority of the
Registrable Securities covered by such registration statement or the managing
underwriter, if any, shall reasonably object in writing);
(b) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement in each case until the earlier of (i) such time as
all such Registrable Securities have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement by the
Holder or Holders thereof and (ii) the expiration of 180 days from the date such
registration statement first becomes effective;
(c) furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits), and
the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, such documents incorporated by reference in
such registration statement, and such other documents, as such seller and
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities as contemplated by such registration statement;
(d) use its commercially reasonable efforts to register or qualify
all Registrable Securities covered by such registration statement under such
other securities or "blue sky" laws of such jurisdictions within the United
States as any sellers of Registrable Securities or any managing underwriter, if
any, shall reasonably request, and do any and all other acts and things that may
be necessary or advisable to enable such sellers or underwriter, if any, to
consummate the disposition of the Registrable Securities in such jurisdictions,
except that in no event shall the Company be required to qualify generally to do
business as a foreign corporation in any jurisdiction where it would not, but
for the requirements of this paragraph (d), be required to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction;
(e) enter into such customary agreements (including an underwriting
agreement in customary form), which may include indemnification provisions in
favor of underwriters and other persons in addition to, or in substitution for,
the provisions of Section 4.8 hereof;
(f) obtain (i) any opinion of counsel for the Company, dated the date
of the closing under the underwriting agreement with respect to such offering,
in customary form and in form and scope reasonably satisfactory to the
underwriter and its counsel, and (ii) any "cold comfort" letter signed by the
independent public accountants in customary form and covering matters of the
type customarily covered by "cold comfort" letters;
(g) notify each Holder selling Registrable Securities covered by such
registration statement and each managing underwriter, if any, as soon as
practicable: (i) when the registration statement, any pre-effective amendment,
the prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed and, with respect to the
registration statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or state securities authority
for amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the securities or
"blue sky" laws of any jurisdiction or the initiation of any proceeding for such
purpose; and (v) of the existence of any fact of which the Company becomes aware
that results in the registration statement, the prospectus related thereto or
any document incorporated therein by reference containing an untrue statement of
a material fact or omitting to state a material fact required to be stated
therein or necessary to make any statement therein not misleading; and, if the
notification relates to an event described in clause (v), the Company shall, as
soon as practicable, prepare and furnish to each such seller and each
underwriter, if any, a reasonable number of copies of a prospectus as
supplemented or amended so that, as thereafter delivered to the purchasers of
such Registrable Securities, the prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading;
(h) use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable after the effective date of
the registration statement (and in any event within 16 months thereafter), an
earning statement (which need not be audited) covering the period of at least 12
consecutive months beginning with the first day of the Company's first calendar
quarter after the effective date of the registration statement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations thereunder;
(i) use its commercially reasonable efforts to cause all such
Registrable Securities covered by such registration statement to be listed on
each national securities exchange or quotation system on which similar
securities issued by the Company are then listed or quoted (if any), and provide
a transfer agent and registrar for such Registrable Securities not later than
the effective date of such registration statement;
(j) enter into such customary agreements (including, if applicable,
an underwriting agreement) and take such other actions as the Initiating Holder,
in the case of a Demand Registration, or the underwriters, if any, shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;
(k) deliver, as soon as practicable, to each Holder participating in
the offering and one counsel for the selling Holders participating in the
offering and the managing underwriter, if any, copies of all correspondence
between the Commission and the Company, its counsel or auditors and any
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement, other than those portions of any such memoranda
that contain information subject to attorney-client privilege with respect to
the Company or other stockholders, and, upon receipt of such confidentiality
agreements as the Company may reasonably request, make reasonably available for
inspection by any seller of such Registrable Securities covered by such
registration statement, by any underwriter, if any, participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such seller or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;
(l) use reasonable efforts to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;
(m) provide a CUSIP number for all Registrable Securities sold
pursuant to the Registration Statement, not later than the effective date of the
registration statement;
(n) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any underwritten
offering;
(o) promptly prior to the filing of any document that is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement), provide copies of
such document to one counsel for the selling Holders and to each managing
underwriter, if any, and make the Company's representatives reasonably available
for discussion of such document and make such changes in such document
concerning the selling holders prior to the filing thereof as such counsel for
such selling holders or underwriters may reasonably request;
(p) furnish to each Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy of the
registration statement and each post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(q) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the National Association of Securities Dealers, Inc.;
(r) use reasonable efforts to make available the executive officers
of the Company to participate with the Holders of Registrable Securities and any
underwriters in any "road shows" or other selling efforts that may be reasonably
requested by the selling Holders in connection with the methods of distribution
for the Registrable Securities;
(s) cooperate with the selling Holders of Registrable Securities and
the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling Holders of Registrable Securities at least two
business days prior to any sale of Registrable Securities; and
(t) take all such other reasonable actions as are necessary or
advisable in order to expedite or facilitate the disposition of such Registrable
Securities.
The Company may require as a condition precedent to the Company's obligations
under this Section 4.3 that each seller of Registrable Securities as to which
any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by law
or by the Commission in connection therewith, provided that such information
shall be used only in connection with such registration. Each Holder of
Registrable Securities agrees that upon receipt of any notice from the Company
of the happening of any event of the kind described in clause (v) of paragraph
(g) of this Section 4.3, such Holder will discontinue such Holder's disposition
of Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of a
supplemented or amended prospectus as contemplated by paragraph (g) of this
Section 4.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of any prospectus covering such Registrable Securities
that was in effect at the time of receipt of such notice. In the event the
Company shall give any such notice, the 180 day period mentioned in paragraph
(b) of this Section 4.3 shall be extended by the number of days during such
period from and including the date of the giving of such notice to and including
the date when each seller of any Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by paragraph (g) of this Section 4.3. If any
such registration statement or comparable statement under "blue sky" laws refers
to any Holder by name or otherwise as the Holder of any securities of the
Company, then such Holder shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to such Holder and the
Company, to the effect that the holding by such Holder of such securities is not
to be construed as a recommendation by such Holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of the
Company or (ii) in the event that such reference to such Holder by name or
otherwise is not in the judgment of the Company, as advised by counsel, required
by the Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such Holder.
SECTION 4.4. Registration Expenses. The Company will pay (or
promptly reimburse the payment of) all Expenses incurred in connection with each
registration statement filed pursuant to this Article IV. All underwriting
discounts and selling commissions applicable to the sale of the Registrable
Securities in connection with any registration statement filed pursuant to this
Article IV shall be borne by the Holders of the Registrable Securities sold
pursuant to such registration statement, pro rata in proportion to the number of
Registrable Securities of each such Holder included in such registration.
SECTION 4.5. Limitations on Sale or Distribution of Other Securities.
(a) To the extent requested in writing by a managing underwriter, if any, of
any registration effected pursuant to Section 4.1 or 4.2, each Holder of
Registrable Securities agrees not to Transfer, including any sale pursuant to
Rule 144 under the Securities Act, any Common Stock (other than as part of such
underwritten public offering) during the time period reasonably requested by the
managing underwriter, not to exceed 90 days from the effective date of the
registration statement (and the Company hereby also so agrees (except that the
Company may effect any sale or distribution of any such securities pursuant to a
registration on Form S-4 (if reasonably acceptable to such managing underwriter)
or Form S-8, or any successor or similar form that is then in effect or upon the
conversion, exchange or exercise of any then outstanding options, warrants,
rights or other securities convertible into or exchangeable or exercisable for
Common Stock) to use its commercially reasonable efforts to cause each holder of
any Equity Security or any security convertible into or exchangeable or
exercisable for any Equity Security of the Company purchased from the Company at
any time other than in a public offering so to agree); provided that with
respect to registrations effected pursuant to Section 4.2, each Holder of
Registrable Securities shall only be required to agree to one such period of
restriction on Transfer in any 365-day period.
(b) The Company hereby agrees that, if it shall previously have
received a request for registration pursuant to Section 4.1, and if such
previous registration shall not have been withdrawn or abandoned or postponed
pursuant to Section 4.6, the Company shall not Transfer any Common Stock (other
than as part of such underwritten public offering, a registration on Form S-4 or
Form S-8 or any successor or similar form that is then in effect or upon the
conversion, exchange or exercise of any then outstanding options, warrants,
rights or other securities convertible into or exchangeable or exercisable for
Common Stock) during the time period reasonably requested by the managing
underwriter, not to exceed 90 days from the effective date of the registration
statement.
SECTION 4.6. Company Right to Postpone Registration. The Company
shall be entitled to postpone for a reasonable period of time (but not exceeding
120 days) the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to Section 4.1 of this Agreement if the
Company determines (i) in its good faith judgment after consultation with its
outside securities counsel that such registration and offering would require
premature disclosure of material information which the Company has a bona fide
business purpose for preserving as confidential or (ii) in its good faith
judgment after consulting with an Independent Investment Banking Firm that the
filing of the registration statement and the related sale of securities of the
Company would be reasonably likely to have an adverse affect on the Company's
financing plans, including sales of securities of the Company, in each case the
Company promptly gives the Holders of Registrable Securities requesting
registration thereof pursuant to Section 4.1 written notice of such delay. If
the Company shall so postpone the filing of a registration statement, such
Holders of Registrable Securities requesting registration thereof pursuant to
Section 4.1 shall have the right to withdraw the request for registration by
giving written notice to the Company within 30 days after receipt of the notice
of postponement and, in the event of such withdrawal, such request shall not be
counted for purposes of the requests for registration to which Holders of
Registrable Securities are entitled pursuant to Section 4.1 hereof. The Company
shall not be permitted to postpone registration pursuant to this Section 4.6
more than once in any 365-day period.
SECTION 4.7. No Required Sale. Nothing in this Agreement shall be
deemed to create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
SECTION 4.8. Indemnification. (a) In the event of any registration
of any securities of the Company under the Securities Act pursuant to this
Article IV, the Company will, and hereby does, indemnify and hold harmless, to
the fullest extent permitted by law, each seller of any Registrable Securities
covered by such registration statement, its directors, officers, affiliates,
employees, stockholders, members and general and limited partners (and the
directors, officers, affiliates, employees, stockholders, members and general
and limited partners thereof), each other Person who participates as an
underwriter in the offering or sale of such securities, each officer, director,
employee, stockholder, member or general and limited partner of such
underwriter, and each other Person, if any, who controls such seller or any such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof ("Claims") and expenses (including reasonable fees of counsel
and any amounts paid in any settlement effected with the Company's consent,
which consent shall not be unreasonably withheld) to which each such indemnified
party may become subject under the Securities Act or otherwise, insofar as such
Claims or expenses arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement under which such securities were registered under the Securities Act,
together with the documents incorporated by reference therein or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or supplement thereto,
together with the documents incorporated by reference therein, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Company shall not be liable to any such indemnified party in any such
case to the extent such Claim or expense arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission of a material fact made in such registration statement or
amendment thereof or supplement thereto or in any such prospectus or any
preliminary, final or summary prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such indemnified
party specifically for use therein. Such indemnity and reimbursement of
expenses shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified party and shall survive the Transfer of
such securities by such seller.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 4.1 or 4.2 is being
effected (and, if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 4.1 or 4.2, any underwriter) shall, severally and not jointly, indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 4.8) to the extent permitted by law the Company,
its officers and directors, each Person controlling the Company within the
meaning of the Securities Act and all other prospective sellers and their
directors, officers, general and limited partners and respective controlling
Persons with respect to any untrue statement or alleged untrue statement of any
material fact in, or omission or alleged omission of any material fact from,
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or its
representatives by or on behalf of such Holder or underwriter specifically for
use therein and reimburse such indemnified party for any legal or other expenses
reasonably incurred in connection with investigating or defending any such Claim
as such expenses are incurred; provided, however, that the aggregate amount that
any such Holder shall be required to pay pursuant to this Section 4.8(b) and
Sections 4.8(c) and 4.9 shall in no case be greater than the amount of the net
proceeds received by such person upon the sale of the Registrable Securities
pursuant to the registration statement giving rise to such Claim. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of such indemnified party
and shall survive the Transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 4.8 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(d) Any person entitled to indemnification under this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 4.8, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 4.8, except to the extent the
indemnifying party is materially prejudiced thereby, and shall not relieve the
indemnifying party from any liability that it may have to any indemnified party
otherwise than under this Article IV. In case any action or proceeding is
brought against an indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that if (i) the
indemnifying party fails to take reasonable steps necessary to defend diligently
the action or proceeding within 20 days after receiving notice from such
indemnified party that the indemnified party believes it has failed to do so; or
(ii) representation of both parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct, then, in any
such case, the indemnified party shall have the right to assume or continue its
own defense as set forth above (but with no more than one firm of counsel for
all indemnified parties in each jurisdiction who shall be approved by the
majority of the participating Holders in the registration in respect of which
such indemnification is sought), and the indemnifying party shall be liable for
any reasonable expenses therefor. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (x) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (y) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) The indemnity agreements contained herein shall be in addition to
any other rights to indemnification or contribution that any indemnified party
may have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made or omitted by or on behalf
of any indemnified party and shall survive the Transfer of the Registrable
Securities by any such party.
(f) The indemnification and contribution required by this Section 4.8
and Section 4.9 shall be made by periodic payments of reasonable frequency of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
SECTION 4.9. Contribtuion. (a) If for any reason the indemnity
provided for in Section 4.8 is unavailable or is insufficient to hold harmless
an indemnified party under Section 4.8(a), (b) or (c), then each indemnifying
party and the Company agree to contribute to the amount paid or payable by such
indemnified party in respect of any losses, claims, damages or liabilities (i)
as between the Company and the holders of Registrable Securities covered by a
registration statement, on the one hand, and the underwriters, on the other, in
such proportion as is appropriate to reflect the relative benefits received by
the Company and such holders, on the one hand, and the underwriters, on the
other, from the offering of the 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 Company and
such holders, on the one hand, and of the underwriters, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations, and (ii) as between the Company, on the one hand, and each
holder of Registrable Securities covered by a registration statement, on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company and of each such holder in connection with such statements or omissions,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and such holders, on the one hand, and the underwriters,
on the other, 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 Company and such holders bear to the total
underwriting discounts and commissions received by the underwriters. The
relative fault of the Company and such holders, on the one hand, and of the
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 Company and such holders or by the underwriters. The relative
fault of the Company, on the one hand, and of each such holder, on the other,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of 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.
(b) The Company and the holders of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 4.9
were determined by pro rata allocation (even if the underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the next 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 next 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 4.9, no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public exceeds the amount of any damages that such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and no holder of Registrable Securities shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such holder were offered to the
public exceeds the amount of any damages that such holder 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 Stockholder's obligation to contribute pursuant to this
Section 4.9 is several in the proportion that the proceeds of the offering
received by such Stockholder bears to the total proceeds of the offering
received by all the Stockholders and not joint.
SECTION 4.10. Rule 144. The Company covenants and agrees that (i) so
long as it remains subject to the reporting provisions of the Exchange Act, it
will timely file the reports required to be filed by it under the Securities Act
or the Exchange Act (including, but not limited to, the reports under Sections
13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
under the Securities Act), and (ii) it will take such further action as any
Investor Stockholder (or any Third Party Transferee to whom any Investor
Stockholder transfers the right to make a Demand Registration) of Registrable
Securities 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 (x) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (y)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Investor Stockholder (or any Third Party Transferee to whom any
Investor Stockholder transfers the right to make a Demand Registration), the
Company will deliver to such Investor Stockholder (or any Third Party Transferee
to whom any Investor Stockholder transfers the right to make a Demand
Registration) a written statement as to whether it has complied with such
requirements.
ARTICLE V
CORPORATE GOVERNANCE
SECTION 5.1. Board Representation. (a) Effective as of the First
Closing, the Board shall be comprised of 7 members of whom four shall be the
Directors immediately prior to the First Closing, two shall be designees of the
Investor Stockholders and one shall be an Independent Director. The designees
of the Investor Stockholders shall have been designated by the Investor
Stockholders prior to the First Closing and each such Person shall continue to
be an Investor Director until at least the earlier of (i) the first anniversary
of the First Closing and (ii) the date such Person ceases to be an Affiliate of
any Investor Stockholder (whether as a result of death, termination of
employment or otherwise). Within three months of the First Closing, the Xxxxxx
Stockholders shall designate an Independent Director who shall fill the vacancy
existing at the First Closing.
(b) After the First Closing, the Board shall be comprised of 7
members (or the Board may be reduced to 6 members, if the Investor Stockholders
(and their assigns) shall be entitled to designate less than two Directors), of
whom (i) one shall be an Independent Director, selected as described below, and
(ii) (A) two shall be designees of the Investor Stockholders so long as the
Investor Stockholders (together with their Permitted Transferees) beneficially
own at least 50% of their Initial Interest or (B) one shall be a designee of the
Investor Stockholders so long as the Investor Stockholders (together with their
Permitted Transferees) beneficially own less than 50% of their Initial Interest
but at least 25% of their Initial Interest; provided that the size of the Board
may be increased at any time to up to 9 members (and thereafter reduced to not
less than 7 members (or 6 members, if the Investor Stockholders (and their
assigns) shall be entitled to designate less than two Directors)); provided that
if the Board consists of more than 7 members, at least one of the additional
member(s) must be an Independent Director who shall be designated by the Xxxxxx
Stockholders. If the Investor Stockholders (together with their Permitted
Transferees) beneficially own less than 25% of their Initial Interest, then the
Investor Stockholders shall not be entitled to designate any Directors. Each
Independent Director shall be selected by the Xxxxxx Stockholders. Each of the
Xxxxxx Stockholders, the Investor Stockholders and the Company shall take such
action as may be required under applicable law to include in the slate of
nominees recommended by the Board the designees of the Investor Stockholders and
each Independent Director designated by the Xxxxxx Stockholders. Each of the
Investor Stockholders agrees that so long as the Xxxxxx Stockholder Group has
the right to vote an aggregate of 50% or more of the outstanding Voting
Securities, the Investor Stockholders shall take such action as may be required
under applicable law to include in the slate of nominees recommended by the
Board the Persons designated by the Xxxxxx Stockholder Group to fill the
positions on the Board not required to be filled by an Independent Director or a
designee of the Investor Stockholders (such Persons, the "Xxxxxx Designees").
(c) Each of the Xxxxxx Stockholders and the Investor Stockholders
agrees to vote (and use its best efforts to cause each of its Permitted
Transferees to vote, if applicable), or act by written consent with respect to,
any Voting Securities beneficially owned by it, at each annual or special
meeting of stockholders of the Company at which Directors are to be elected or
to take all actions by written consent in lieu of any such meeting as are
necessary, to cause the designees of the Investor Stockholders, the Xxxxxx
Designees and each Independent Director designated by the Xxxxxx Stockholders to
be elected to the Board and to otherwise effect the intent of the provisions of
Section 5.1(a) and (b). The Company agrees to use its best efforts to cause the
election of each such designee to the Board, including nominating such
individuals to be elected as members of the Board as provided herein.
(d) In the event that a vacancy is created at any time by the death,
disability, retirement, resignation or removal (with or without cause) of any
Investor Director or Independent Director, the remaining Directors and the
Company shall cause the vacancy created thereby to be filled by a new designee
as soon as possible, who is designated in the manner and by the persons
specified in Section 5.1(b), and the Company, each Investor Stockholder and each
Xxxxxx Stockholder hereby agrees to take, at any time and from time to time, all
actions necessary to accomplish the same. Upon the written request of the
Investor Stockholders, each Xxxxxx Stockholder shall vote (and use its best
efforts to cause each of its Permitted Transferees to vote, if applicable), or
act by written consent with respect to, all Voting Securities beneficially owned
by it and otherwise take or cause to be taken all actions necessary to remove
any Investor Director and to elect any replacement Director designated as
provided in the first sentence of this Section 5.1(d). Unless an Investor
Stockholder shall otherwise request in writing, no Xxxxxx Stockholder or any of
its Permitted Transferees shall take any action to cause the removal of any
Investor Directors. At the written request of the Xxxxxx Stockholders, each
Investor Stockholder shall take the actions described in the second preceding
sentence with respect to any Independent Director designated by the Xxxxxx
Stockholders or to any Xxxxxx Designee.
(e) Without the written consent of the Investor Stockholders, the
Company agrees not to take any action that would cause the number of Directors
constituting the entire Board to be less than 7 (unless the Investor
Stockholders (and their assigns) shall be entitled to designate less than two
Directors, in which case, less than 6) or greater than 9 and each Xxxxxx
Stockholder and Investor Stockholder agrees to use its best efforts to cause the
number of Directors constituting the entire Board to be no less than 7 (or 6,
under the circumstances described above) or greater than 9.
(f) Except to the extent specifically provided for pursuant to
Section 2.4, the rights of the Investor Stockholders and its Permitted
Transferees granted under this Section 5.1 may be exercised only by the Investor
Stockholders or any Permitted Transferee that is controlled by any of the
Investor Stockholders, notwithstanding any Transfer to any Permitted Transferee
of the Investor Stockholders.
SECTION 5.2. Committees. For so long as the Investor Stockholders
are entitled pursuant to Section 5.1(b) to designate at least one Director, the
Company shall cause any executive committee, compensation committee, audit
committee, investment committee, nominating committee or other committee of the
Board to include at least one Investor Director.
SECTION 5.3. Consents Rights. In addition to any vote or consent of
the Board or the stockholders of the Company required by law or the Certificate
of Incorporation, until such time as the members of the Investor Stockholder
Group beneficially own less than either (x) 50% of the Investor Stockholders'
Initial Interest or (y) 8% of the total outstanding Equity Securities (provided
that if, following any issuance of Equity Securities by the Company, the members
of the Investor Stockholder Group beneficially own less than 8% of the total
outstanding Equity Securities, the members of the Investor Stockholder Group
shall not be deemed to beneficially own less than 8% of the total outstanding
Equity Securities for purposes of this Section 5.3 until such time as any member
of the Investor Stockholder Group Transfers any Equity Securities), the prior
written consent of an Investor Stockholder (or a Permitted Transferee of an
Investor Stockholder that is controlled by such Investor Stockholder) shall be
necessary for authorizing, effecting or validating the following actions by the
Company:
(i) amendments to the Certificate of Incorporation or By-Laws;
(ii) (A) the sale, lease, transfer, mortgage, encumbrance or other
disposition of any of the Company's or its Subsidiaries properties or assets, in
one transaction or a series of related transactions, including, without
limitation, Capital Stock in any Subsidiaries of the Company, to any Person
other than its wholly-owned Subsidiaries, except for such properties or assets
having an aggregate fair market value, as determined in good faith by the Board,
of less than $30 million in any fiscal year or (B) the transfer of properties or
assets , in one transaction or a series of related transactions, having an
aggregate fair market value, as determined in good faith by the Board, of less
than $25 million in the aggregate in any fiscal year to joint ventures,
partnerships, corporations or other business entities in which it is or thereby
becomes a participant;
(iii) the merger or consolidation of the Company or sale, directly or
indirectly, of all or substantially all of the Company's assets;
(iv) the acquisition (directly or through any of its Subsidiaries) by
merging or consolidating with, or by purchasing all or a substantial portion of
the stock or assets of, or by any other manner acquiring, any business,
properties, assets or Person, in one transaction or a series of related
transactions, for consideration (including assumed debt) or the making of any
investment in any other Person, in the aggregate in any fiscal year in excess of
10% of the operating revenue of the Company and its consolidated Subsidiaries
for its next preceding fiscal year (as shown on its audited financial statements
for the next preceding fiscal year); provided that no more than $10 million of
such consideration shall consist of Equity Securities so long as such Equity
Securities issued in any such transaction are valued at the Formula Price;
provided, further, that in connection with any such transaction in which the
Investor Stockholders will provide additional equity to the Company, at the time
any Investor Stockholder consents to such transaction, such Investor Stockholder
will specify the amount of any such additional equity commitment.
(v) the incurrence of any Indebtedness (other than (1) short-term
Indebtedness incurred to refinance existing short-term Indebtedness or otherwise
incurred in the ordinary course of business consistent with past practice, (2)
Indebtedness incurred under the New Credit Facility, as in effect on the date
hereof, (3) Indebtedness incurred to repurchase Common Stock pursuant to Section
3.2 but only if the Company cannot satisfy its obligations under Section 3.2
with borrowings under the New Credit Facility, and (4) Indebtedness of the
Company or any of its Subsidiaries to the Company or any of its wholly-owned
Subsidiaries), assumption, guarantee, endorsement or otherwise as an
accommodation becoming responsible for the obligations of any other Person, or
the making of any loan, advance or capital contribution (other than to the
Company or any of its wholly-owned Subsidiaries) in excess of $50 million in the
aggregate in any fiscal year; provided that the foregoing shall not prohibit the
refinancing of the New Credit Facility as each part thereof matures so long as
(A) such new facility provides for an aggregate principal amount of Indebtedness
not in excess of the aggregate principal amount of Indebtedness provided by the
New Credit Facility, (B) such new facility is on commercially reasonable terms,
(C) such new facility expressly permits the Equity Repurchase Program
contemplated by Section 3.2 on no less restrictive terms than the New Credit
Facility and (D) the Investor Stockholders have been consulted in connection
therewith and have been afforded a reasonable opportunity to comment on the
terms and conditions of such new facility;
(vi) the making or commitment to make any capital expenditures in the
aggregate in excess of 7% of the operating revenue of the Company and its
consolidated Subsidiaries for its next preceding fiscal year (as shown on its
audited financial statements for the next preceding fiscal year);
(vii) the redemption, repurchase or prepayment of any Indebtedness of
the Company or any of its Subsidiaries prior to its scheduled maturity or
mandatory prepayment, or amendment or modification of the terms of any
Indebtedness existing on the date hereof or incurred hereafter in compliance
with the provisions of this Section 5.3, in each case, except with respect to
Indebtedness of less than $50 million in the aggregate in any fiscal year;
(viii) the making, declaration, setting aside or payment of any
dividend or making of any other distribution on, or directly or indirectly
redeeming, purchasing or otherwise acquiring, any shares of its Capital Stock or
other equity interests (or those of any of its Subsidiaries) or any securities
or obligations convertible into or exchangeable for any shares of its Capital
Stock or other equity interests, except for (i) the Redemption Obligation, (ii)
dividends or distributions by any wholly owned Subsidiary of the Company to the
Company or any other wholly owned Subsidiary of the Company, (iii) repurchases
of Equity Securities of up to $5.0 million in any fiscal year from Charitable or
Non-Profit Entities; provided that to the extent that less than $5.0 million is
repurchased under this clause (iii) in any fiscal year, such unused amounts may
be used to make repurchases from Charitable or Non-Profit Entities in any
subsequent fiscal year, (iv) repurchases of Equity Securities of up to $2.5
million in any fiscal year from members of the Xxxxxx Stockholder Group
(provided that the Foundation Stockholders shall have the right to participate
in such repurchases pro rata based on the ratio of (x) the Initial Interest of
the Foundation Stockholders to (y) the Initial Interest of all members of the
Xxxxxx Stockholder Group) and (v) repurchases of Equity Securities of up to $2.5
million in any fiscal year from stockholders of the Company other than
Charitable or Non-Profit Entities or members of the Xxxxxx Stockholder Group;
provided that (A) in the case of clauses (i), (iii), (iv) and (v), such
repurchases shall be made at the Formula Price, (B) in the case of clause (iv),
there shall be no repurchases prior to the first anniversary of the First
Closing and (C) in the case of clauses (iii) and (v), there shall be no
repurchases prior to the determination of the Formula Price (and the approval
thereof pursuant to clause (xvi)) at the end of the first quarter of 2000;
(ix) entering into any direct or indirect transaction by the Company
or any of its Subsidiaries with an Affiliate of the Company or any member of the
Xxxxxx Stockholder Group or a family member or an Affiliate thereof (including
without limitation, the purchase, sale, lease or exchange of any property, or
rendering of any service or modification or amendment of any existing agreement
or arrangement), other than a transaction which satisfies all three of the
following criteria: such transaction (i) is in the ordinary course of business,
(ii) involves or has a potential value of $5 million or less and (iii) is no
less favorable to the Company than an arm's-length transaction with a third
party which is not such a party as determined in good faith by the Board;
(x) (A) the removal or election of any Chief Executive Officer or a
similar officer whose responsibility is executive oversight of the Company's and
its Subsidiaries' operations or (B) approval of any new, or material
modification of any existing, executive, officer and director compensation plans
or agreements offered by the Company or any of its Subsidiaries;
(xi) the commencement, undertaking or engaging in any new line of
business or otherwise materially changing the nature of the business engaged in
by the Company and its Subsidiaries on the date hereof;
(xii) the commencement of any proceeding or the filing of any
petition in any court relating to bankruptcy, reorganization, insolvency,
liquidation or relief from debtors involving the Company;
(xiii) the settlement or compromise any litigation (whether or not
commenced prior to the date of this Agreement), other than settlements or
compromises of litigation where the amount paid does not exceed $15 million for
any single litigation matter or related group of litigation matters (provided
such settlement or compromise agreements do not involve any non-monetary
obligations on the part of Company or any of its Subsidiaries);
(xiv) the issuance or sale by the Company of any Common Stock or
other Equity Securities (except, in each case, (1) under the Company stock
option plans, as currently in effect on the date hereof, or as approved pursuant
to clause (x)(B) of this Section 5.3, (2) upon exercise of the Warrants, (3) as
consideration in any transaction of the type described in clause (iv) of this
Section 5.3 which does not require the consent of the Investor Stockholders or
to which the Investor Stockholders have consented, (4) offered pursuant to a
registration statement which has been declared effective under the Securities
Act, whereby such securities shall be publicly traded on a national securities
exchange or quoted on the Nasdaq or National Market System, (5) Common Stock
(provided that (A) after giving effect to such issuance and the pro forma use of
the proceeds therefrom, the Leverage Ratio would not be less than 2.5x, (B) the
Person to whom the Common Stock is issued does not receive Consent Rights or
other similar rights and (C) such Person does not receive more favorable rights
to designate Directors or to participate on committees than those granted to the
Investor Stockholders pursuant to Sections 5.1 and 5.2) and (6) to the ESOP in
connection with any Matching Contribution (as defined in the ESOP) or Pre-Tax
Contribution (as defined in the ESOP) pursuant to the terms thereof);
(xv) make any change in any method of accounting or accounting
practice or policy except as required by changes in GAAP and with the
concurrence of its independent accountants; or
(xvi) the determination of the Formula Price for the purposes of
clauses (iv) and (viii) of this Section 5.3 and any other transaction involving
the issuance or repurchase of Equity Securities by the Company or any Subsidiary
of the Company; provided that, if an Investor Stockholder does not consent to
the Formula Price, the Company and the Investor Stockholders shall attempt to
resolve such differences for a period of 14 days and if, after such 14-day
period the Company and the Investor Stockholders cannot resolve their
differences, the Formula Price shall be determined by an Independent Investment
Banking Firm selected by the Investor Stockholders with the consent of the
Company, which consent shall not be unreasonably withheld.
SECTION 5.4. Voting on Certain Matters. In connection with any vote
or action by written consent of the stockholders of the Company relating to any
matter that constitutes a Consent Right, each Xxxxxx Stockholder agrees (and
agrees to cause each of its Permitted Transferees, if applicable), with respect
to any Voting Securities with respect to which it, he or she has the power to
vote, (i) to vote against (and not act by written consent to approve) such
Consent Right if such Consent Right has not been consented to by the Investor
Stockholders in accordance with the provisions of Section 5.3 and (ii) to take
or cause to be taken all other reasonable actions required, to the extent
permitted by law, to prevent the taking of any action by the Company with
respect to a Consent Right unless such Consent Right has been consented to by
the Investor Stockholders in accordance with the provisions of Section 5.3.
SECTION 5.5. Restrictions on Other Agreements. Except for agreements
with other members of its Stockholder Group, no Stockholder shall enter into or
agree to be bound by any stockholder agreements or similar agreements with any
Person with respect to any Equity Securities (including, without limitation, the
deposit of any shares of Common Stock in a voting trust or forming, joining or
in any way participating in or assisting in the formation of a Group with
respect to any shares of Common Stock); provided that in no event shall any
Stockholder enter into or agree to be bound by stockholder agreements or
arrangements of any kind which are in any manner inconsistent with this
Agreement. Notwithstanding the foregoing, this Section 5.5 shall not prohibit
any agreement with any Person to whom Equity Securities are permitted to be
issued pursuant to Section 5.3(xiv)(5) which is necessary to implement and
solely relates to the provisions of clause (C) of such Section so long as such
agreement is not otherwise inconsistent with this Agreement. Notwithstanding
the foregoing, no provision of this Agreement shall prevent the Company from
entering into a registration rights agreement with any member of the Xxxxxx
Stockholder Group that is identical in all material respects to the provisions
of Article IV except that the Company may provide the members of the Xxxxxx
Stockholder Group the right to require the Company to effect a greater number of
Demand Registrations than provided to the Investor Stockholders; provided, that
the members of the Xxxxxx Stockholder Group shall not be entitled to exercise
more than five Demand Registrations prior to the seventh anniversary of an
Initial Public Offering unless the Investor Stockholders and their Permitted
Transferees cease to own at least 25% of their Initial Interest; provided,
further, that, until such time as the Investor Stockholders (and their assigns)
have used all four of their Demand Registrations, if any member of the Xxxxxx
Stockholder Group has requested a Demand Registration, such member shall have 90
days from the date of such request to consummate such registration and if
consummated within such 90-day period, no member of the Xxxxxx Stockholder Group
shall be permitted to exercise another Demand Registration until at least one
year after the consummation of such Demand Registration and if not consummated
in such period, such member shall terminate such registration and withdraw such
request and no member of the Xxxxxx Stockholder Group shall be permitted to
exercise another Demand Registration until at least the one year anniversary of
the end of such 90-day period.
SECTION 5.6. Financial and Other Information. The Company shall
deliver, or cause to be delivered to the Investor Stockholders as soon as
available, annual, quarterly and monthly financial statements of the Company,
budget and planning information with respect to the Company and its Subsidiaries
and such other information and data with respect to the Company and its
Subsidiaries as the Investor Stockholders may reasonably request, including,
without limitation, full and complete access to the files and records regarding
the business of the Company and its Subsidiaries. The Investor Stockholders
shall be afforded the opportunity to discuss such information with management of
the Company from time to time upon their reasonable request.
SECTION 5.7. Board Procedures. Unless otherwise agreed by the
parties hereto, the Board shall follow the following procedures:
(i) Meetings. Special Meetings of the Board may be held at any time
permitted pursuant to the By-Laws, by oral, telephonic, telegraphic or facsimile
notice duly given or sent, or by written notice sent by two-day courier, in each
case to be received at least two days before any actions to be taken by written
resolution, at least three days before any telephonic meeting and at least seven
days before any in-person meeting to each director. Reasonable efforts shall be
made to ensure that each director actually receives timely notice of any
meeting.
(ii) Agenda. A reasonably detailed agenda shall be supplied to each
Director reasonably in advance of each meeting of the Board, together with other
appropriate documentation with respect to agenda items calling for Board action,
to inform adequately Directors regarding matters to come before the Board. Any
Director wishing to place a matter on the agenda for any meeting of the Board
may do so by communicating with the chairman of the Board sufficiently in
advance of the meeting of the Board so as to permit timely dissemination to all
directors of information with respect to the agenda.
(iii) Reimbursement of Expenses. The Company shall reimburse the
Investor Directors for their reasonable out-of-pocket expenses incurred by them
for the purpose of attending meetings of the Board or committees thereof.
(iv) Repurchases. The Company shall provide to the Board a quarterly
report specifying the number of shares of Common Stock or other Equity
Securities repurchased in such quarter and the prices at which such shares were
repurchased.
SECTION 5.8. Cooperation. Each Xxxxxx Stockholder and Investor
Stockholder shall vote (or act or not act by written consent with respect to)
all of its shares of Common Stock (and any shares of Common Stock with respect
to which it has the power to vote (whether by proxy or otherwise)) and shall, as
necessary or desirable, attend all meetings in person or by proxy for purposes
of obtaining a quorum, and execute all written consents in lieu of meetings, as
applicable, to effectuate the provisions of this Article V.
SECTION 5.9. Investments. (a) The Investor Stockholders agree that,
from the First Closing to the date that is three months after the date the
Investor Stockholders or their Affiliates no longer have a designated nominee on
the Board, the Investor Stockholders or their Affiliates will not make any
Active Investment in or take action to become an Affiliate of, a Company
Competitor; provided, that nothing in this Section 5.9 shall preclude the
Investor Stockholders or their Affiliates from (i) making a non-Active
Investment in any Person, (ii) maintaining or increasing a current investment
(including an Active Investment) in, or maintaining a current Affiliate
relationship with, any Person or (iii) maintaining or increasing an investment
(including an Active Investment) in (including through the making of an Active
Investment in a Company Competitor by an Affiliate), or maintaining an Affiliate
relationship with, any Person that is a Company Competitor but was not a Company
Competitor, and to the knowledge of the Investor Stockholders did not intend to
become a Company Competitor, at the time the Investor Stockholders initiated an
investment or Affiliate relationship with such Person.
(b) The Company represents and warrants to the Investor Stockholders
that the Persons listed on Schedule 5.9 are Persons who are engaged in the
ownership or operation of daily fee or semi-private golf courses or golf-related
private clubs.
ARTICLE VI
IPO RECAPITALIZTION
SECTION 6.1. Agreement to Effect Recapitalization. Each of the
Stockholders hereby agrees that prior to the consummation of an Initial Public
Offering it shall use its reasonable efforts to vote (or act by written consent
with respect to) all of its shares of Common Stock (and any shares of Common
Stock with respect to which it has the power to vote) and shall, as necessary or
desirable, use its reasonable efforts to attend all meetings in person or by
proxy to effectuate a recapitalization (the "Recapitalization") pursuant to
which the following will occur immediately prior to the consummation of the
Initial Public Offering: (i) the authorized Capital Stock of the Company will
include (A) not less than the number of shares of Class B Common Stock that is
50,000,000 more than the number of shares of Common Stock outstanding prior to
the Recapitalization, (B) not less than the number of shares of Class A Common
Stock that is 150,000,000 more than the number of authorized shares of Class B
Common Stock and (C) not less than 150,000,000 shares of preferred stock,
issuable in series; (ii) each share of Common Stock outstanding prior to the
Recapitalization will be converted into one share of Class B Common Stock; (iii)
each option, warrant or other right to acquire shares of Common Stock
outstanding or issuable prior to the Recapitalization shall be converted into an
option, warrant or other right to acquire the same number of shares of Class B
Common Stock on the same terms and conditions; (iv) the Certificate of
Incorporation and By-Laws of the Company will be amended in such manner that the
material terms of the Certificate of Incorporation and By-Laws will include
those set forth in Schedule 6.1 hereto.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
CERTAIN STOCKHOLDERS
Each of Xxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxx, Xx., Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxx Xxxxxx Trust #1 and Xxxxxx Xxxxxx Trust #2, severally and not
jointly, hereby represents and warrants to the Purchasers as follows:
SECTION 7.1. Organization. Such Stockholder, if a trust, has been
duly established and is a valid trust under the laws of the State of Texas.
Each Stockholder that is a trust has provided to the Investor Stockholders a
complete and correct copy of its indenture creating the trust and all amendments
thereto, as in effect on the date of this Agreement.
SECTION 7.2. Authority. Such Stockholder, if a trust, has all
necessary trust power and authority, and if a natural person, has legal capacity
to enter into this Agreement and has taken all action necessary to execute and
deliver this Agreement, to consummate the transactions contemplated hereby and
to perform its obligations hereunder. This Agreement has been duly executed and
delivered by such Stockholder. Assuming the due execution of this Agreement by
the Company, the Purchasers and the other Stockholders, this Agreement
constitutes legal, valid and binding obligations of such Stockholder,
enforceable against it in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
SECTION 7.3. Non-Contravention. Neither the execution of this
Agreement by such Stockholder nor the performance by such Stockholder of its
obligations hereunder nor the consummation by such Stockholder of the
transactions contemplated hereby, will result in (a) if such Stockholder is a
trust, a violation of or a conflict with the indenture creating the trust, (b) a
breach or violation of, or a default under (with or without notice or lapse of
time or both), any term or provision of, or any right of termination,
cancellation, modification or acceleration arising under, any note, bond,
mortgage, indenture, license, contract, commitment arrangement, agreement, lease
or other instrument or obligation to which such Stockholder is a party or is
subject or by which any of its properties or assets are bound, (c) a violation
by such Stockholder of any Government Order (as defined in the Stock Purchase
Agreement), or statute, law, ordinance, rule or regulation, whether federal,
foreign, state or local, to which such Stockholder is subject or by which any of
its properties or assets are bound, or (d) the imposition of any Encumbrance (as
defined in the Stock Purchase Agreement) on the business, properties or assets
of such Stockholder.
SECTION 7.4. Consents and Approvals. No consent, approval, order or
authorization of or notice to, or declaration, filing or registration with any
Governmental Authority (as defined in the Stock Purchase Agreement), or consent,
approval or waiver of any other Person, is required to be made or obtained by
such Stockholder in connection with the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
except those that have been made or obtained prior to the date hereof.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Conflicting Agreements. Each of the Stockholders and
the Company represents and warrants that such party has not granted and is not a
party to any proxy, voting trust or other agreement that is inconsistent with or
conflicts with any provision of this Agreement.
SECTION 8.2. Termination. The provisions of Article II (other than
Section 2.4), Article III, Sections 5.3 and 5.4 and Article VI shall terminate
upon the earlier of the (i) consummation of an Initial Public Offering or (ii)
the tenth anniversary of the date hereof. Subject to Section 2.4, the
provisions of Sections 5.1, 5.2, 5.6, 5.7 and 5.8 shall terminate at such time
as the Investor Stockholders no longer have the right to designate one Director.
In addition, the provisions of Section 5.3 are subject to earlier termination as
specified therein and the provisions of Section 5.9 shall terminate at the time
specified therein. The Investor Stockholders shall cease to have any rights or
obligations (other than under Article IV) under this Agreement as of the date
that they cease to have the right under Section 5.1 to designate at least one
Director.
SECTION 8.3. Legend. (a) All certificates representing the shares
of Common Stock held by each Stockholder shall bear a legend substantially in
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS
AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT AND (A) PURSUANT TO A REGISTRATION
STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER. THE HOLDER OF THIS
CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE
PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.
(b) Upon the sale of any shares of Common Stock pursuant to (i) an
effective registration statement under the Securities Act or pursuant to Rule
144 promulgated thereunder or (ii) another exemption from registration under the
Securities Act or upon the termination of this Agreement, the certificates
representing such shares of Common Stock shall be replaced, at the expense of
the Company, with certificates or instruments not bearing the legends required
by this Section 8.3; provided that the Company may condition such replacement of
certificates under clause (ii) upon the receipt of an opinion of securities
counsel reasonably satisfactory to the Company.
(c) Upon execution of this Agreement, shares of Common Stock
presently held by Stockholders that do not bear a legend as provided in Section
8.3 shall be surrendered to the Company and such instruments shall be endorsed
with said legend and returned to the appropriate Stockholder.
SECTION 8.4. Further Assurances. At any time or from time to time
after the date hereof, the parties agree to cooperate with each other, and at
the request of any other party, to execute and deliver any further instruments
or documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder.
SECTION 8.5. Amendment and Waiver. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or any Stockholder unless such
modification, amendment or waiver is approved in writing by the Company and each
Stockholder. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
SECTION 8.6. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
SECTION 8.7. Effective Date. This Agreement shall become effective
immediately upon the First Closing.
SECTION 8.8. Entire Agreement. Except as otherwise expressly set
forth herein, this document and the Stock Purchase Agreement embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way. Without limiting the generality of the
foregoing, to the extent that any of the terms hereof are inconsistent with the
rights or obligations of any Stockholder under any other agreement with any
other Stockholder or the Company, the terms of this Agreement shall govern.
SECTION 8.9. Successors and Assigns. Except as expressly provided
herein, neither this Agreement nor any of the rights or obligations under this
Agreement shall be assigned, in whole or in part (except by operation of law
pursuant to a merger whose purpose is not to avoid the provisions of this
Agreement), by any party without the prior written consent of the other parties
hereto. Subject to the foregoing, this Agreement shall bind and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
SECTION 8.10. Counterparts. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 8.11. Remedies. (a) Each party hereto acknowledges that
money damages would not be an adequate remedy in the event that any of the
covenants or agreements in this Agreement are not performed in accordance with
its terms, and it is therefore agreed that in addition to and without limiting
any other remedy or right it may have, the non-breaching party will have the
right to an injunction, temporary restraining order or other equitable relief in
any court of competent jurisdiction enjoining any such breach and enforcing
specifically the terms and provisions hereof.
(b) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
SECTION 8.12. Notices. Any notice, request, claim, demand or other
communication under this Agreement shall be in writing, shall be either
personally delivered, delivered by facsimile transmission, or sent by reputable
overnight courier service (charges prepaid) to the address for such Person set
forth below or such other address as the recipient party has specified by prior
written notice to the other parties hereto and shall be deemed to have been
given hereunder when receipt is acknowledged for personal delivery or facsimile
transmission or one day after deposit with a reputable overnight courier
service.
If to the Investor Stockholders:
The Cypress Group
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company:
Clubcorp, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any Xxxxxx Stockholder:
c/o ClubCorp, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to each of:
Xxxxxx & Xxxx, LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 8.13. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of law. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the non-exclusive jurisdiction of the courts of the State of Delaware for any
action, proceeding or investigation in any court or before any governmental
authority ("Litigation") arising out of or relating to this Agreement and the
transactions contemplated hereby and further agrees that service of any process,
summons, notice or document by U.S. mail to its respective address set forth in
this Agreement shall be effective service of process for any Litigation brought
against it in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation
arising out of this Agreement or the transactions contemplated hereby in the
courts of the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Litigation brought in any such court has been brought in an
inconvenient forum. Each of the parties irrevocably and unconditionally waives,
to the fullest extent permitted by applicable law, any and all rights to trial
by jury in connection with any Litigation arising out of or relating to this
Agreement or the transactions contemplated hereby.
SECTION 8.14. Interpretation. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first written above.
CYPRESS MERCHANT BANKING PARTNERS L.P.
By: Cypress Associates L.P., its
General Partner
By: The Cypress Group L.L.C.,
its General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Member
CYPRESS GOLF LTD.
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Director
CYPRESS MERCHANT BANKING PARTNERS II L.P.
55th STREET PARTNERS II L.P.
By: Cypress Associates II LLC,
its General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Member
CYPRESS GOLF C.V. LTD.
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Director
CLUBCORP, INC.
By: /s/Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: CEO
/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
/s/Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
/s/Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxx Xxxxx
THE XXXXXX FOUNDATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
THE XXXXXX AND XXXXX XXXXXX
FOUNDATION
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Chairman
XXXXXX XXXXXX TRUST #1
By: /s/Xxxxxxxx Xxxxxx Xxxxx
Name: Xxxxxxxx Xxxxxx Xxxxx
Title: Signatory by Trustee Consent
XXXXXX XXXXXX TRUST #2
By: /s/Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Signatory by Trustee Consent
XXXXX XXXXXX TRUST #1
By: /s/Xxxxxxxx Xxxxxx Xxxxx
Name: Xxxxxxxx Xxxxxx Xxxxx
Title: Signatory by Trustee Consent
XXXXX XXXXXX TRUST #2
By: /s/Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Signatory by Trustee Consent
