Exhibit 10.32
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
OF
MARQUEE HOLDINGS INC.
DECEMBER 23, 2004
ORIGINALLY DATED AS OF OCTOBER 29, 2004
TABLE OF CONTENTS
PAGE
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SECTION 1. BOARD RIGHTS; INVESTOR RIGHTS;
MANAGEMENT ARRANGEMENTS...........................................2
(a) Board of Directors..................................................2
(b) Committees..........................................................6
(c) Certain Actions.....................................................6
(d) Subsidiary Directors...............................................10
(e) Quorum.............................................................10
(f) Chairman...........................................................10
(g) Payments to Directors; Reimbursements..............................10
(h) Competitive Opportunity............................................10
(i) Notice of Meetings.................................................11
SECTION 2. TRANSFERS..........................................................11
(a) Transfer Restrictions..............................................11
(b) Transfer Notice....................................................11
SECTION 3. RIGHT OF FIRST OFFER...............................................12
(a) Company Right of First Offer.......................................12
(b) Investor Right of First Offer......................................12
(c) Investor Over-Allotment Period.....................................12
(d) Restrictions.......................................................13
(e) Exercise...........................................................13
(f) Acceptance of Offer................................................14
(g) Consideration......................................................14
(h) Closing............................................................15
(i) Certain Provisions Applicable to the ROFO..........................15
(j) Time Limitation....................................................15
SECTION 4. DRAG-ALONG RIGHTS..................................................15
(a) Drag-Along Right...................................................15
(b) Notice.............................................................16
(c) Exercise...........................................................16
(d) Certain Restrictions...............................................16
(e) Time Limitation....................................................17
SECTION 5. TAG-ALONG RIGHTS...................................................17
(a) Notice.............................................................17
(b) Tag-Along Right....................................................17
(c) Exercise...........................................................18
(d) Certain Restrictions...............................................19
(e) Time Limitation....................................................19
SECTION 6. PARTICIPATION RIGHTS...............................................19
(a) Participation Rights...............................................19
(b) Offer..............................................................19
(c) Exercise...........................................................20
(d) Irrevocable Acceptance.............................................20
(e) Time Limitation....................................................20
(f) Other Securities...................................................21
(g) Certain Legal Requirements.........................................21
(h) Further Assurances.................................................21
(i) Expenses...........................................................21
(j) Closing............................................................21
(k) Excluded Transactions..............................................22
SECTION 7. REGISTRATION RIGHTS................................................23
(a) Demand Registrations...............................................23
(b) Piggyback Registrations............................................24
(c) Holdback Agreements................................................25
(d) Expenses...........................................................26
(e) Registration Procedures............................................26
(f) Conditions to Investor Rights; Indemnification by Investor.........30
(g) Indemnification and Contribution...................................30
(h) Rule 144...........................................................31
(i) Termination of Demand Registration Rights..........................31
(j) Delay of Registration..............................................32
SECTION 8. LEGEND ON CERTIFICATES.............................................32
(a) Legends............................................................32
SECTION 9. DURATION OF AGREEMENT..............................................32
SECTION 10. INFORMATION RIGHTS.................................................33
(a) Financial Statements and Other Information.........................33
(b) Other Information..................................................34
SECTION 11. REGULATORY MATTERS.................................................34
(a) Cooperation of Other Stockholders..................................34
(b) Covenant Not to Amend..............................................34
(c) Exception..........................................................34
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SECTION 12. EFFECTIVENESS OF AGREEMENT.........................................35
SECTION 13. DEFINITIONS........................................................35
SECTION 14. MISCELLANEOUS......................................................43
(a) Successors, Assigns and Transferees................................43
(b) Specific Performance...............................................43
(c) Governing Law......................................................44
(d) Submission to Jurisdiction; Waiver of Jury Trial...................44
(e) Descriptive Headings...............................................44
(f) Notices............................................................44
(g) Recapitalization, Exchange, Etc. Affecting the Company's Shares....46
(h) Counterparts.......................................................46
(i) Severability.......................................................46
(j) Amendment..........................................................46
(k) Tax Withholding....................................................47
(l) Integration........................................................47
(m) Further Assurances.................................................47
(n) No Strict Construction.............................................47
(o) No Third Party Beneficiaries.......................................47
(p) Amendment and Restatement..........................................48
SCHEDULES
1 -- SCHEDULE OF INVESTORS
EXHIBITS
A -- FORM OF STOCKHOLDER JOINDER
B -- AMENDED AND RESTATED REGULATORY SIDELETTER
C -- MANAGEMENT
STOCKHOLDERS AGREEMENT
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MARQUEE HOLDINGS INC.
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
This AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT (the "AGREEMENT"),
dated as of December 23, 2004 and effective as of the Effective Time, amends and
restates that certain
Stockholders Agreement (the "INITIAL
STOCKHOLDERS
AGREEMENT") entered into as of October 29, 2004, by and among
Marquee Holdings
Inc., a
Delaware corporation (the "COMPANY"), ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P.,
a
Delaware limited partnership ("JPMP BHCA"), ▇.▇. ▇▇▇▇▇▇ Partners Global
Investors, L.P., a
Delaware limited partnership ("JPMP GLOBAL"), ▇.▇. ▇▇▇▇▇▇
Partners Global Investors (Cayman), L.P., a Cayman limited partnership ("JPMP
CAYMAN"), ▇.▇. ▇▇▇▇▇▇ Partners Global Investors (Cayman) II, L.P., a Cayman
limited partnership ("JPMP CAYMAN II"), ▇.▇. ▇▇▇▇▇▇ Partners Global Investors
(Selldown), L.P., a
Delaware limited partnership ("JPMP SELLDOWN"), AMCE
(Ginger), L.P., a
Delaware limited partnership ("GINGER"), AMCE (Luke), L.P., a
Delaware limited partnership ("LUKE") and AMCE (Scarlett), L.P., a
Delaware
limited partnership ("SCARLETT", and together with JPMP BHCA, JPMP Global, JPMP
Cayman, JPMP Cayman II, JPMP Selldown, Ginger, Luke, and any other affiliated
entities designated by JPMP BHCA to the Company in writing prior to the
Effective Time, the "JPMP INVESTORS"), Apollo Investment Fund V, L.P., a
Delaware limited partnership, ("APOLLO FUND V"), Apollo Overseas Partners V,
L.P., a Cayman Island exempted limited partnership, ("APOLLO OVERSEAS"), Apollo
Netherlands Partners V(A), L.P., a Cayman Island exempted limited partnership,
("APOLLO NETHERLANDS V(A)"), Apollo Netherlands Partners V(B), L.P., a Cayman
Island exempted limited partnership, ("APOLLO NETHERLANDS V(B)"), Apollo German
Partners V GmbH & Co KG, a German limited partnership ("APOLLO GERMAN PARTNERS"
and, together with Apollo Fund V, Apollo Overseas, Apollo Netherlands V(A) and
Apollo Netherlands V(B), the "APOLLO INVESTORS"), and the other entities listed
on Schedule 1 attached hereto. The JPMP Investors, the Apollo Investors and the
other entities listed on Schedule 1 attached hereto are sometimes referred to
herein as an "INVESTOR" and collectively as the "INVESTORS" (and the terms
"Investor" and "Investors" may include other Persons, as provided in the
definition of such terms in Section 13 hereof) and the Company, the JPMP
Investors, the Apollo Investors, together with any subsequent stockholders which
become parties hereto are sometimes referred to herein individually by name or
as a "PARTY" and collectively as the "PARTIES". The definitions of certain
capitalized terms used herein are set forth in Section 13 hereto.
RECITALS
WHEREAS, the Company, Marquee Inc., a wholly-owned subsidiary of the
Company ("MARQUEE"), and AMC Entertainment Inc., a
Delaware corporation ("AMC"),
are parties to that certain Agreement and Plan of Merger, dated as of July 22,
2004 (the "MERGER AGREEMENT"), pursuant to which Marquee will be merged with and
into AMC, with AMC remaining as the surviving entity and a wholly-owned
subsidiary of the Company (the "MERGER"); and
WHEREAS the Company, JPMP BHCA and the Apollo Investors are parties to
that certain Subscription Agreement, dated as of July 22, 2004, (the
"SUBSCRIPTION AGREEMENT"), pursuant to which the Company will, as of the
Effective Time, issue, and each of JPMP BHCA and the Apollo Investors will
purchase, shares of common stock of the Company, par value $0.01 per share
("COMMON STOCK"); and
WHEREAS, each of Weston Presidio Capital IV, L.P., WPC Entrepreneur
Fund II, L.P., Credit Suisse Anlagestiftung, SSB Capital Partners (Master Fund)
I, L.P., Caisse de Depot et Placement du Quebec, Co-Investment Partners, L.P.,
CSFB Strategic Partners Holdings II, L.P., CSFB Strategic Partners Parallel
Holdings II, L.P., CSFB Credit Opportunities Fund (Employee), L.P., CSFB Credit
Opportunities Fund (Helios), L.P., Pearl Holdings Limited, Partners Group
Private Equity Performance Holding Limited and ▇▇▇▇ Invest (Guernsey) Limited
(collectively, the "CO-INVESTORS") entered into a subscription agreement with
the Company pursuant to which the Company will, as of the Effective Time, issue,
and the Co-Investors will purchase, shares of Common Stock; and
WHEREAS, each of the JPMP Investors (not including JPMP Selldown,
Ginger, Luke and Scarlett), the Apollo Investors, the Co-Investors and the
Company entered into the Initial
Stockholders Agreement; and
WHEREAS, as of the Effective Time, each of the Investors will hold
such number of shares of Stock representing such Investor's Percentage Interest
in the Company as listed on Schedule 1 attached hereto; and
WHEREAS, each of the Investors and the Company desire to amend and
restate the Initial
Stockholders Agreement to include each of JPMP Selldown,
Ginger, Luke and Scarlett as parties hereto and to amend certain provisions of
the Initial
Stockholders Agreement; and
WHEREAS, pursuant to Section 14(j) of the Initial
Stockholders
Agreement, the JPMP Investors, the Apollo Investors and the Company have the
authority to approve such amendments to the Initial Stockholders Agreement as
are set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
agreements set forth herein and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, hereby agree as follows:
AGREEMENT
SECTION 1. BOARD RIGHTS; INVESTOR RIGHTS; MANAGEMENT ARRANGEMENTS
(a) BOARD OF DIRECTORS. From and after the Effective Time, at each
annual or special meeting at which any directors of the Company are to be
elected, and whenever the stockholders of the Company act by written consent
with respect to the election of directors, each Investor, severally and not
jointly, agrees to vote or otherwise give such Investor's consent in respect of
all Stock (whether now or hereafter acquired) held of record or beneficially
owned by such Investor, and the Company shall take all necessary and desirable
actions within its control, in order to cause:
(i) the authorized number of directors on the board of
directors of the Company (the "BOARD") to be at least seven (7) but no
greater than ten (10) directors, subject to reduction in accordance
with Section 1(a)(ii) herein;
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(ii) the election to the Board of:
(A) that number of directors designated by the JPMP
Investors (each, a "JPMP DESIGNEE") which when added to the
number of JPMP Designees who are then directors and will continue
to serve as directors without regard to such annual or special
meeting or action by written consent does not exceed: (x) three
(3) so long as the JPMP Investors, together with their Permitted
Transferees, collectively own Shares representing at least 66% of
the Initial Investor Shares owned by the JPMP Investors; (y) two
(2) JPMP Designees so long as the JPMP Investors, together with
their Permitted Transferees, collectively own Shares representing
at least 50% but less than 66% of the Initial Investor Shares
owned by the JPMP Investors; (z) one (1) JPMP Designee so long as
the JPMP Investors, together with their Permitted Transferees,
collectively own Shares representing at least 25% but less than
50% of the Initial Investor Shares owned by the JPMP Investors;
PROVIDED, that for as long as either JPMP Selldown or JPMP Global
owns any Shares and the JPMP Investors have the right to
designate any directors pursuant to this clause (A), (i) if the
JPMP Investors have the right to designate at least two
directors, one such director shall be designated by JPMP Selldown
(so long as JPMP Selldown owns Shares) and one such director
shall be designated by JPMP Global (so long as JPMP Global owns
Shares) and (ii) if the JPMP Investors have the right to
designate at least one director, such director shall be
designated by JPMP Selldown or by JPMP Global (in the event that
JPMP Selldown does not own Shares and JPMP Global does own
Shares); PROVIDED, FURTHER, that the designation of JPMP
Designees is a right but not an obligation of the JPMP Investors.
So long as the Apollo Investors are a Principal Investor, the
right of the JPMP Investors to designate JPMP Designees shall be
transferable to an Affiliate of the JPMP Investors or with the
written consent of the Apollo Investors, such consent to be
granted in the sole discretion of the Apollo Investors; PROVIDED,
that such transfer is otherwise in accordance with this
Agreement. If the Apollo Investors are no longer a Principal
Investor, the right of the JPMP Investors to designate JPMP
Designees shall be freely transferable in connection with any
Transfer of Shares made by the JPMP Investors in accordance with
this Agreement;
(B) that number of directors designated by the Apollo
Investors (each, an "APOLLO DESIGNEE") which when added to the
number of Apollo Designees who are then directors and will
continue to serve without regard to such annual or special
meeting or action by written consent does not exceed: (x) three
(3) so long as the Apollo Investors, together with their
Permitted Transferees, collectively own Shares representing at
least 66% of the Initial Investor Shares owned by the Apollo
Investors; (y) two (2) Apollo Designees so long as the Apollo
Investors, together with their Permitted Transferees,
collectively own Shares representing at least 50% but less than
66% of the Initial Investor Shares owned by the Apollo Investors;
(z) one (1) Apollo Designee so long as the Apollo Investors,
together with their Permitted Transferees, collectively own
Shares representing at least 25% but less than 50% of the Initial
Investor Shares owned
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by the Apollo Investors; PROVIDED, that for as long as Apollo
Fund V owns any Shares and the Apollo Investors have the right to
designate any directors pursuant to this clause (B), at least one
Apollo Designee shall be designated by Apollo Fund V; PROVIDED,
FURTHER, that the designation of Apollo Designees is a right but
not an obligation of the Apollo Investors. So long as the JPMP
Investors are a Principal Investor, the right of the Apollo
Investors to designate Apollo Designees shall be transferable to
an Affiliate of the Apollo Investors or with the written consent
of the JPMP Investors, such consent to be granted in the sole
discretion of the JPMP Investors; PROVIDED, that such transfer is
otherwise in accordance with this Agreement. If the JPMP
Investors are no longer a Principal Investor, the right of the
Apollo Investors to designate Apollo Designees shall be freely
transferable in connection with any Transfer of Shares made by
the Apollo Investors in accordance with this Agreement;
(C) the Chief Executive Officer of AMC (the "MANAGEMENT
DESIGNEE"); and
(D) up to three (3) independent directors designated
(and the determination of independence to be made) (x) jointly by
the Principal Investors, if at the time of such designation there
are Principal Investors, (y) by the Principal Investor, if at the
time of such designation there is only one Principal Investor,
and provided that if there is only one Principal Investor, the
Investors owning, in the aggregate, at least a majority of the
then outstanding Shares owned by Investors approve such
designation, and (z) by Investors owning, in the aggregate, at
least a majority of the then outstanding Shares owned by
Investors, if at the time of such request and designation there
is no Principal Investor;
all of which designees shall hold office, subject to their earlier
removal in accordance with clause (a)(iii) below and applicable law,
until their respective successors shall have been elected. Any
reduction in the number of JPMP Designees or Apollo Designees, as the
case may be, shall correspondingly reduce the number of directors on
the Board until such time as either the JPMP Investors and their
Permitted Transferees or the Apollo Investors and their Permitted
Transferees, as the case may be, restore the number of Shares owned by
each of them to the relevant percentage thresholds provided in clause
(a)(ii)(A) or (a)(ii)(B), respectively;
(iii) the removal from the Board (with or without cause) of (x)
any director upon the written request of the Investor that designated
such director; (y) in the case of any director not so designated by
such Investors, by duly adopted action of the Board in accordance with
this Agreement; or (z) in the case of any independent director, upon
the written request of either of the Principal Investors.
(iv) upon any vacancy in the Board as a result of any
individual designated by either the JPMP Investors or the Apollo
Investors pursuant to clause (ii) above ceasing to be a member of the
Board, whether by resignation or otherwise (but not as a result of a
Transfer by either the JPMP Investors or the Apollo Investors of a
number of shares that results in the JPMP Investors or the Apollo
Investors, as applicable, and their respective
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Permitted Transferees, owning a number of Shares that is less than a
relevant threshold percentage provided in clauses (a)(ii)(A) or (B),
as applicable), the election to the Board of an individual designated
by either the JPMP Investors or the Apollo Investors, as the case may
be;
(v) upon any increase in the authorized number of directors
on the Board, the apportionment of the right to designate additional
directors to the JPMP Investors and the Apollo Investors, as
applicable, such that after giving effect to such increase there is no
change to either (a) the ratio of the number of directors to which the
JPMP Investors are entitled to designate to the total number of
directors (without regard to any vacancies) or (b) the ratio of the
number of directors to which the Apollo Investors are entitled to
designate to the total number of directors (without regard to any
vacancies); in each case from the ratio in effect immediately prior to
such increase; and
(vi) in the event of any reduction in the number of JPMP
Designees which the JPMP Investors are entitled to designate pursuant
to Section 1(a)(ii) or any reduction in the number of Apollo Designees
which the Apollo Investors are entitled to designate pursuant to
Section 1(a)(iii), the removal from the Board of one or more JPMP
Designees or Apollo Designees, as applicable, designated by the JPMP
Investors or the Apollo Investors, as the case may be, to the extent
that a sufficient number of JPMP Designees or Apollo Designees, as
applicable, have not resigned from the Board.
In addition, prior to the earliest to occur of (A) the five year anniversary of
the Effective Time, and (B) the Initial Public Offering, as to any matter or
action that requires a vote or written consent of the stockholders of the
Company, whether by law or pursuant to any agreement, and for so long as there
is at least one Principal Investor, each Investor (other than any Investor who
was or is a Principal Investor) agrees to vote its Shares, or to provide its
written consent, only as directed by both Principal Investors (and if both
Principal Investors do not agree as to any matter or action, each Investor
agrees not to vote its Shares or provide its written consent with respect to
such matter or action), or if there is only one Principal Investor, as directed
by the sole Principal Investor; PROVIDED, that no Investor shall be required to
vote in favor of, or provide its written consent to, any action that would
disproportionately affect such Investor relative to the other Investors in any
material and adverse manner. In the event that any Investor (other than any
Investor who was or is a Principal Investor) entitled to vote on or provide its
written consent with respect to a matter shall fail at any time to vote or act
by written consent with respect to any Shares held of record or beneficially
owned by such Investor or as to which such Investors has voting control, as
agreed by such Investor in this Agreement, such Investor hereby irrevocably
grants to and appoints each Principal Investor such Investor's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Investor, to vote or act by written consent with respect to
such Shares and to grant a consent, proxy or approval in respect of such Shares,
in each case in such manner as the Principal Investor(s) shall determine in its
(or their) sole and absolute discretion. Each Investor (other than the Principal
Investors) hereby affirms that the irrevocable proxy set forth in this Section
1(a) will be valid for the term of this Agreement and is given to secure the
performance of the obligations of such Investors under this Agreement. Each such
Investor hereby further affirms that each proxy hereby granted shall, for the
term of this Agreement, be irrevocable and shall be deemed coupled with an
interest.
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(b) COMMITTEES. The Board may, by duly adopted action of the Board,
designate one or more committees of one or more directors, including alternates
who may replace any absent or disqualified member at any meeting of the
committee; PROVIDED, that so long as there is at least one JPMP Designee and one
Apollo Designee, at least one JPMP Designee and one Apollo Designee shall be a
member of each committee of the Board. Any action by any committee will require
the approval of a majority of each of the JPMP Designee(s) and the Apollo
Designee(s). In addition, each Investor agrees to take all necessary and
desirable actions within its control to cause its designees to the Board to vote
or otherwise give such director's consent to the creation and maintenance of:
(i) a compensation committee of the Board, consisting of at
least one JPMP Designee and at least one Apollo Designee so long as
there is at least one JPMP Designee and one Apollo Designee, and any
additional directors as the Board may determine, which compensation
committee shall approve, by a majority vote (including a majority vote
of each of the JPMP Designee(s) and the Apollo Designee(s)), all
grants of stock options to employees of the Company, changes to
compensation of officers of the Company, all annual bonuses granted to
officers of the Company and all other employee benefits (including,
without limitation, vacation policy, benefit plans, company
automobiles and insurance) granted to officers of the Company; and
(ii) an audit committee of the Board, consisting of at least
one JPMP Designee and at least one Apollo Designee so long as there is
at least one JPMP Designee and one Apollo Designee, and any additional
directors as the Board may determine, which audit committee shall make
all decisions relating to the retention, dismissal and compensation of
the Company's independent auditor, and review and approve, by a
majority vote (including a majority vote of each of the JPMP
Designee(s) and the Apollo Designee(s)), the annual financial
statements of the Company as audited by the Company's independent
auditor.
(c) CERTAIN ACTIONS.
(i) Without obtaining the approval of the Board, the Company
shall not and shall not permit its Subsidiaries to:
(A) approve the Annual Budget of the Company or any
Major Subsidiary or any multi-year projections of the Company or
any Major Subsidiary;
(B) incur any indebtedness (other than ordinary course
borrowings under revolving credit facilities), assume, guarantee,
endorse or otherwise as an accommodation become responsible for
any obligations of another Person, make any loan, advance or
capital contribution to another Person, make any voluntary
prepayments of existing indebtedness (other than ordinary course
voluntary prepayments under revolving credit facilities), or make
any amendment to the maturity date, aggregate principal amount or
interest rate of existing indebtedness;
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(C) hire the Chief Financial Officer or Chief Operating
Officer of the Company or any Major Subsidiary, including setting
or materially amending the terms accompanying such positions, or
terminate the employment of the Chief Financial Officer or the
Chief Operating Officer of the Company or any Major Subsidiary;
(D) appoint the independent auditor of the Company or
terminate the engagement of any such independent auditor of the
Company; PROVIDED, that if the Board resolves to establish an
Audit Committee, such authority will accordingly be granted to
such Audit Committee;
(E) purchase, exchange or otherwise acquire (including
by way of merger, consolidation, business combination or similar
transaction involving the Company or any of its Subsidiaries) any
equity securities of any Person (other than a wholly-owned
Subsidiary of the Company) or all or substantially all or a
substantial portion of the business or assets of any Person in a
single transaction or a series of related transactions or by any
other manner;
(F) other than as contemplated in the Annual Budget or
in any multi-year projection and approved by the Board pursuant
to Section 1(c)(i)(A) herein, enter into any contract with a
value in excess of $5 million or requiring payments in excess of
$3 million per annum;
(G) settle any claim or litigation for an amount in
excess of $5 million;
(H) form any Subsidiary of the Company, other than a
wholly-owned Subsidiary thereof;
(I) enter into or become subject to any joint ventures,
partnerships, alliances or similar arrangements, other than in
the ordinary course of business of the Company; and
(J) without the approval of a majority of the
disinterested members of the board, enter into any Affiliate
Transaction, including the approval of the JPMP Designee(s) in
the case of an Affiliate Transaction involving the Apollo
Investors or any of their Affiliates and the approval of the
Apollo Designee(s) in the case of an Affiliate Transaction
involving the JPMP Investors or any of their Affiliates;
PROVIDED, that, in the case where such Affiliate Transaction (i)
has an aggregate value in excess of $5 million, (ii) is not a
permitted "affiliate transaction" pursuant to any of the
Financing Documents, and (iii) involves a Principal Investor or
any of its Affiliates, such Affiliate Transaction must be (a) on
terms that are no less favorable to the Company or its
Subsidiaries, as the case may be, than would be available at the
time of such Affiliate Transaction in a comparable transaction on
an arm's-length basis with any unaffiliated third party, or (b)
approved by at least one other Investor that is not a Principal
Investor.
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(ii) In addition to certain of the aforementioned actions,
without obtaining the approval of each Principal Investor if at such
time there exists at least one Principal Investor, and if at such time
there does not exist a Principal Investor, without obtaining the
approval of the Board, the Company shall not and shall not permit any
of its Subsidiaries to:
(A) enter into, agree to or cause or effectuate an AMC
Sale;
(B) purchase, exchange or otherwise acquire (including
by way of merger, consolidation, business combination or similar
transaction involving the Company or any of its Subsidiaries) (i)
any equity securities of any Person (other than a wholly-owned
Subsidiary of the Company) or (ii) all or substantially all or a
substantial portion of the business or assets of any Person in a
single transaction or a series of related transactions or by any
other manner, in the case of either (i) or (ii) above, with an
aggregate value in excess of $25 million;
(C) sell, transfer, lease, license or otherwise engage
in disposition transactions including assets or properties with a
value in excess of $25 million, individually or in the aggregate;
(D) cause or permit any capital expenditures not
specifically included in the Annual Budget approved pursuant to
Section 1(c)(i)(A) herein and with a value in excess of $10
million;
(E) other than as contemplated in the Annual Budget or
in any multi-year projection which in either instance is approved
by the Board pursuant to Section 1(c)(i)(A) herein, enter into
any contract with a value in excess of $25 million or requiring
payments in excess of $10 million per annum;
(F) settle any claim or litigation for an amount in
excess of $25 million;
(G) form any Subsidiary of the Company, other than a
wholly-owned Subsidiary thereof, in which the Company invests an
aggregate amount in excess of $5 million;
(H) enter into or become subject to any joint ventures,
partnerships, alliances or similar arrangements in which the
Company invests an aggregate amount in excess of $5 million;
(I) cause or effectuate an Initial Public Offering;
(J) hire the Chief Executive Officer of the Company or
any Major Subsidiary, including setting or materially amending
the terms accompanying such position, or terminate the employment
of the Chief Executive Officer of the Company or any Major
Subsidiary;
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(K) authorize, cause or effectuate any issuance or
creation of securities or capital stock of the Company or any of
its Subsidiaries (other than issuances made to wholly-owned
Subsidiaries of the Company), including, but not limited to, any
issuances of Shares;
(L) dissolve, liquidate, recapitalize or reorganize the
Company or any Subsidiary of the Company, other than in
connection with a combination of any wholly-owned Subsidiary of
the Company with any other wholly-owned Subsidiary of the
Company;
(M) purchase or redeem securities of the Company or any
Subsidiary of the Company, declare or make any payment of any
dividend or distribution in respect of the shares of Stock, or
permit any dividend or distribution to be declared or paid on the
securities of any Subsidiary of the Company, other than dividends
or other distributions by a wholly-owned Subsidiary of the
Company to the Company or a wholly-owned Subsidiary of the
Company;
(N) adopt, materially amend or terminate any equity
incentive or other material benefit program of the Company;
(O) incur any indebtedness (other than ordinary course
borrowings under revolving credit facilities), assume, guarantee,
endorse or otherwise as an accommodation become responsible for
any obligations of another Person, make any loan, advance or
capital contribution to another Person, make any voluntary
prepayments of existing indebtedness (other than ordinary course
voluntary prepayments under revolving credit facilities), or make
any amendment to the maturity date, aggregate principal amount or
interest rate of existing indebtedness, in each case, with a
value in excess of $50 million or with recourse to any Investor;
PROVIDED, that the incurrence of indebtedness with recourse to
any Investor shall also require the consent of such Investor;
(P) change material tax elections or accounting methods
of the Company or any Subsidiary of the Company;
(Q) waive or amend any provision of (A) the certificate
of incorporation or bylaws of the Company, or (B) the debt
financing documents relating to the acquisition of AMC, other
than amendments that would discriminate against a particular
Investor, in which case such amendment will require the consent
of such Investor;
(R) enter into any Affiliate Transaction with an
aggregate value in excess of $5 million or that is not negotiated
on an arm's length basis;
(S) engage in any line of business or expand into any
new business other than those related to the business conducted
by the Company and its Subsidiaries on the date of this
Agreement; and
9
(T) enter into any agreement, commitment or arrangement,
to effect any of the foregoing.
(d) SUBSIDIARY DIRECTORS. The Parties agree to take all necessary
action, either directly through the Company or otherwise, to cause the board of
directors of each Major Subsidiary to have at all times a board composition that
has the same proportion of Board designees of each of the JPMP Investors and the
Apollo Investors, as applicable, as the Company, unless otherwise determined by
holders of a majority of outstanding Stock, including each Principal Investor if
at such time there exists at least one Principal Investor, and the Parties
further agree that the other board and voting rights set forth in this Section 1
shall be granted, MUTATIS MUTANDIS, to each of the Investors in respect of each
Major Subsidiary's boards of directors.
(e) QUORUM. So long as there is at least one JPMP Designee and one
Apollo Designee, no action may be taken at a meeting of the Board unless a
quorum consisting of at least one JPMP Designee and at least one Apollo Designee
is present; PROVIDED, that each of the JPMP Designees and the Apollo Designees
shall not have the right to assert the foregoing quorum right with respect to
its group of designees in respect of a duly called meeting if all of the JPMP
Designees or the Apollo Designees (as the case may be) have failed to attend the
two immediately prior duly called Board meetings.
(f) CHAIRMAN. A chairman may be appointed by the directors from among
themselves. The Chairman, if appointed, will preside over meetings of the Board
but shall otherwise have no greater authority than any other director.
(g) PAYMENTS TO DIRECTORS; REIMBURSEMENTS. No director who is an
officer of the Company or otherwise employed by the Company shall be entitled to
remuneration from the Company for services rendered in his or her capacity as a
director (other than for reimbursement of reasonable out-of-pocket expenses of
such director in accordance with Company policy). All directors will be entitled
to reimbursement of their reasonable out-of-pocket expenses incurred in
connection with their attendance at Board meetings and such director fees as may
be authorized by the Board; PROVIDED, HOWEVER, that should the Board authorize
the payment of any director or similar fees, each director (other than any
director who is an officer of the Company or otherwise employed by the Company)
shall receive the same fee as each of the other directors.
(h) COMPETITIVE OPPORTUNITY. If any director acquires knowledge of a
potential transaction or matter which may be an investment or business
opportunity or prospective economic or competitive advantage in which the
Company could have an interest or expectancy (a "COMPETITIVE OPPORTUNITY") or
otherwise is then exploiting any Competitive Opportunity, the Company shall have
no interest in, and no expectation that, such Competitive Opportunity be offered
to it, any such interest or expectation being hereby renounced so that each
director (other than any such director who is an officer of the Company or
otherwise employed by the Company or is bound by any employment, consulting or
noncompetition agreements that prohibit such actions) shall (i) have no duty to
communicate or present such Competitive Opportunity to the Company and (ii) have
the right to hold any such Competitive Opportunity for such director's (and its
agents', partners' or affiliates') own account and benefit or to recommend,
assign or otherwise transfer or deal in such Competitive Opportunity to Persons
other than the Company or any Affiliate of the Company.
10
(i) NOTICE OF MEETINGS. Regular meetings of the Board may be held
without notice. Special meetings of the Board may be called by any JPMP Designee
or any Apollo Designee and may be held upon forty-eight hours' notice to each
director, either personally, by mail, by telegram or by facsimile, or such
shorter period as approved by the JPMP Designees and the Apollo Designees;
PROVIDED, that such notice requirement shall be deemed waived for any special
meeting if each director is present at such special meeting.
SECTION 2. TRANSFERS
(a) TRANSFER RESTRICTIONS. Each of the Investors agrees and
acknowledges that it will not, directly or indirectly (through one or more of
its Affiliates or otherwise), from the date hereof until the earlier to occur of
(a) five years from the Effective Time and (b) the IPO Date (such period, the
"BLOCKOUT PERIOD"), Transfer any economic or voting interest in any Shares,
unless such Transfer is a Permitted Transfer. Notwithstanding the foregoing, no
Investor shall be permitted, without the prior written consent of each Principal
Investor if at such time there exists at least one Principal Investor, to (i)
prior to the expiration of the Blockout Period, Transfer any economic or voting
interest in any Shares to any Person that competes in any material respect with
the business conducted by AMC at the time of such proposed Transfer, (ii)
pledge, hypothecate or grant any security interest in any Shares, or (iii)
Transfer any Shares in any manner that would violate, cause a default, or
constitute a "change of control" or similar event, under any of the Company's or
any of the Company's Subsidiaries' material debt agreements, indentures and
other agreements or instruments evidencing material indebtedness of the Company
or any of its Subsidiaries, as such agreements, indentures and instruments may
be amended or modified from time to time in accordance with their terms
(collectively, "FINANCING DOCUMENTS"); PROVIDED, that this clause (iii) shall
not apply with respect to an AMC Sale involving a sale of the entire Company or
all or substantially all of its assets or, if in connection with such Transfer
of Shares, the material indebtedness of the Company or any of its Subsidiaries
is amended, modified or refinanced such that there does not exist a violation,
default or "change of control" pursuant to such material indebtedness. For
purposes of determining whether a Transfer of Shares would constitute a "change
of control," Shares sold by any Investor pursuant to Tag-Along Rights provided
in Section 5 shall be included in such calculation. As a condition to any
Transfer of Shares prior to the IPO Date, the transferee of such Shares shall
become a party to this Agreement and shall be treated as an Investor hereunder
(but not as a Principal Investor unless (A) the transferor was a Principal
Investor, and (B) each Principal Investor consents in their respective sole
discretion) with the same rights and obligations of an Investor (but not as a
Principal Investor unless (A) the transferor was a Principal Investor, and (B)
each Principal Investor consents in their respective sole discretion) for all
purposes of this Agreement. No holder of Shares shall grant any proxy or become
party to any voting trust or other agreement which is inconsistent with,
conflicts with or violates any provision of this Agreement.
(b) TRANSFER NOTICE. Prior to any proposed Transfer of any Shares
(other than under the circumstances described in clause (i), (ii), (iii) or (v)
of the definition of Permitted Transfer), the Investor holding such Shares to be
Transferred shall give written notice to the Company of its intention to effect
such Transfer (the "TRANSFER NOTICE"). Such Transfer Notice shall set forth in
reasonable detail the terms and conditions of such proposed Transfer, including
(i) the percentage
11
of such Selling Investor's Shares that would be Transferred, (ii) the number of
Shares proposed to be Transferred (the "OFFERED SHARES"), (iii) the proposed
amount and form of consideration to be paid for the Offered Shares and (iv) all
other material terms of the proposed Transfer. In the event that the terms
and/or conditions set forth in the Transfer Notice are thereafter amended in any
material respect, the Transfer Notice shall be of no further force and effect
and the transferring Investor shall give a new Transfer Notice containing such
amended terms and conditions. Subject to Section 2, 3, 4 and 5 herein (including
any applicable time periods set forth in those Sections), and subject to Section
7(c) herein, the Investor holding such Shares to be Transferred shall have the
right, after receipt by the Company and the other Investors of the Transfer
Notice, to Transfer Shares in accordance with the terms set forth in such
Transfer Notice.
SECTION 3. RIGHT OF FIRST OFFER
(a) COMPANY RIGHT OF FIRST OFFER. Subject to Section 3(i), if, at any
time, an Investor (a "SELLING INVESTOR") proposes to Transfer any Shares to any
Person (the "OFFEROR"), such Selling Investor shall comply with the provisions
of this Section 3. Within five (5) Business Days of receipt of the Transfer
Notice (the "COMPANY ELECTION PERIOD"), the Company shall have the irrevocable
right to elect to purchase all, or a portion, of the Offered Shares at the price
and on the terms and conditions set forth in the Transfer Notice by delivery of
a written notice to the Selling Investor (the "COMPANY ELECTION NOTICE"). The
Company Election Notice will be binding on and enforceable against the Company
as concerns the purchase and sale of all of such Offered Shares at the price and
on the terms and conditions set forth in the Transfer Notice.
(b) INVESTOR RIGHT OF FIRST OFFER. If the Company elects not to
exercise its right to purchase all of the Offered Shares within the Company
Election Period or elects to purchase less than all of the Offered Shares, the
Company shall give each Investor notice of such election and deliver to each
Investor other than the Selling Investor (each, a "NON-SELLING INVESTOR") and
each Management Stockholder a copy of the Transfer Notice within two (2)
Business Days of the expiration of the Company Election Period, then, within
twelve (12) Business Days of the date the Company Election Period terminates
(the "INVESTOR ELECTION PERIOD"), each Non-Selling Investor shall have the right
to elect (which election shall be irrevocable) to purchase up to that portion
(pro rata based upon the relative number of Shares owned by such Non-Selling
Investor to the Shares owned by all other Non-Selling Investors at such time) of
the remaining Offered Shares at the price and on the terms and conditions set
forth in the Transfer Notice by delivery of a written notice to the Company (the
"INVESTOR ELECTION NOTICE"). The Investor Election Notice will be binding on and
enforceable against each Non-Selling Investor as concerns the purchase and sale
of all of such Offered Shares at the price and on the terms and conditions set
forth in the Transfer Notice.
(c) INVESTOR OVER-ALLOTMENT PERIOD. If the Company has elected not to
exercise its right to purchase all of the Offered Shares within the Company
Election Period or elected to purchase less than all of the Offered Shares and
the Non-Selling Investors have in the aggregate elected to purchase some but
less than all of the Offered Shares, the Company shall give those Non-Selling
Investors, if any, who elected to purchase all of Offered Shares (a "FULLY
SUBSCRIBED NON-SELLING INVESTOR") which were available to be purchased by them
pursuant to Section 3(b), a notice within two (2) Business Days of the expiry of
the Investor Election Period of the number of additional Offered Shares
available to be purchased (the "REMAINING OFFERED SHARES"). Each
12
Fully Subscribed Non-Selling Investor may elect (which election shall be
irrevocable) to purchase up to its pro rata share (based on the ratio of the
relative number of Shares owned by such Fully Subscribed Non-Selling Investor
to the number of Shares owned by all of the Fully Subscribed Non-Selling
Investors) of the Remaining Offered Shares by delivery to the Company of a
written notice (the "SECOND INVESTOR ELECTION NOTICE") within seven (7)
Business Days of the expiry of the Investor Election Period (the "SECOND
INVESTOR ELECTION PERIOD"). In anticipation of the contingency that not all
of the Remaining Offered Shares are elected to be purchased pursuant to the
preceding sentence (any such Remaining Offered Shares not elected to be
purchased, the "ADDITIONAL REMAINING OFFERED SHARES"), each Fully Subscribed
Non-Selling Investor may also elect prior to the expiry of the Second
Investor Election Period (which election shall be made concurrently and on
the same form as the election in the previous sentence, and in any event
shall be irrevocable) to purchase up to all of the Additional Remaining
Offered Shares; provided that the Investors shall, as much as reasonably
practicable, consult with each other and coordinate the exercise of rights
such that all Remaining Offered Shares and Additional Remaining Offered
Shares are elected to be purchased and each shall use all reasonable efforts
to inform the others of the actions it will take at least three (3) Business
Days in advance of the expiration of the Second Investor Election Period and
to inform each other as promptly as practicable of any change of intention
made thereafter, but prior to the expiration of the Second Election Period.
To the extent that there are Remaining Offered Shares and the Fully
Subscribed Non-Selling Investors have, in the aggregate, elected to purchase
more of the Remaining Offered Shares than are available, such Remaining
Offered Shares shall be apportioned pro rata amongst the Fully Subscribed
Non-Selling Investors who have elected to purchase Remaining Offered Shares
(determined based on the ratio of the number of Shares owned by each such
Fully Subscribed Non-Selling Investor who has elected to purchase more than
their pro rata portion of Remaining Offered Shares to the aggregate number of
Shares held by all such Fully Subscribed Non-Selling Investors who have
elected to purchase more than their pro rata portion of Remaining Offered
Shares).
(d) RESTRICTIONS. The right of each of the Company and the
Non-Selling Investor as provided for in this Section 3 will be void AB INITIO if
the Company Election Notice, all Investor Election Notices and all Second
Investor Election Notices, collectively constitute an offer to purchase less
than all of such Offered Shares.
(e) EXERCISE. Provided that the Company Election Notice, all Investor
Election Notices and all Second Investor Election Notices, collectively
constitute an offer to purchase all of such Offered Shares, then within ten (10)
days of receipt of the Company Election Notice, the Investor Election Notice,
and the Second Investor Election Notice, as the case may be, either the Company
or any Non-Selling Investor, or both (in each case, the "ELECTING PARTY"), shall
deliver to the Selling Investor (by certified check or wire transfer in
immediately available funds to an account specified by the Selling Investor) the
purchase price of such Offered Shares to be purchased by the Electing Party, and
the Selling Investor shall deliver stock certificates duly endorsed for Transfer
or with duly executed stock powers or similar instruments, or such other
instrument of Transfer of such Transferred Shares as may be reasonably requested
by the Electing Party with all stock transfer taxes paid and stamps affixed. If
any Governmental Approval is required in connection with any such purchase of
Offered Shares and such Governmental Approval has not been completed or obtained
on or prior to the date scheduled for closing, the closing of the purchase of
all Offered Shares shall take place on the third Business Day after such
13
Governmental Approval has been completed or obtained. The Selling Investor and
the Electing Party shall each use reasonable efforts to complete or obtain any
such required Governmental Approval; PROVIDED, HOWEVER, that neither the Selling
Investor nor the Electing Party shall be required to agree to any divestiture or
operational constraint or pay any material amount of money (other than the
filing fee payable in connection with any notification required under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended ("HSR"), or in
connection with any notification or filing under any foreign competition laws
which shall be paid by such Electing Party) as a condition of obtaining such
Governmental Approval. If each of the Parties has acted in good faith to
complete or obtain any such required Governmental Approval and such Governmental
Approval has not been completed or obtained on or before the date which is
ninety (90) days after receipt by the Selling Investor of the Company Election
Notice, the Investor Election Notice or the Second Investor Election Notice, as
the case may be, the proposed sale of Offered Shares subject to such required
Governmental Approval shall be cancelled with respect to such Electing Party
and, for all purposes, such Electing Party shall be deemed to have elected not
to purchase such Offered Shares pursuant to this Section 3, and the Selling
Investor shall be free to Transfer the Offered Shares to (i) any Non-Selling
Investors, if any remain, and the Company in accordance with this Section 3;
PROVIDED, that the right of each of the Company and such Non-Selling Investors
set forth in this Section 3 will be void AB INITIO if the Company and such
Non-Selling Investors, collectively, offer to purchase less than all of the
Offered Shares or (ii) in the absence of any remaining Non-Selling Investor, the
Offeror. Each Electing Party shall only be required to give customary
representations and warranties, including, but not limited to, legal authority
and capacity, and non-contravention of other agreements to which it is a party.
Each Electing Party shall be required to enter into any instrument, undertaking
or obligation necessary or reasonably requested and deliver all documents
necessary or reasonably requested in connection with such sale (as specified in
the Transfer Notice) as a condition to the exercise of such holder's rights to
Transfer Shares under this Section 3.
(f) ACCEPTANCE OF OFFER. Subject to Section 5, if the Company and the
Non-Selling Investors have not collectively elected to purchase all of the
Offered Shares prior to the expiry of the Investor Election Period or the Second
Investor Election Period, as the case may be, the Selling Investor shall have
the right to Transfer the Offered Shares specified in the Transfer Notice in
accordance with the terms of this Agreement, but only at a price and upon terms
and conditions in the aggregate no less favorable to the Selling Investor than
those stated in the Transfer Notice and only if the consummation of sale occurs
on a date within ninety (90) days from the end of the Investor Election Period
or the Second Investor Election Period, as the case may be.
(g) CONSIDERATION. For purposes of calculating the purchase price of
any such Transfer, if any portion of the consideration is paid other than in
cash, the Fair Market Value of any non-cash consideration shall be determined in
accordance with the definition of Fair Market Value herein and any Electing
Party may deliver an amount of cash equal to the Fair Market Value of such
non-cash consideration in consideration for the Shares to be purchased by such
Electing Party.
14
(h) CLOSING. The closing of the transactions contemplated by this
Section 3 shall occur at the principal place of business of the Company unless
otherwise agreed to in writing by the parties to such transaction.
(i) CERTAIN PROVISIONS APPLICABLE TO THE ROFO. Notwithstanding the
foregoing: (i) prior to any Transfer of Shares by a Selling Investor pursuant to
this Section 3, the Selling Investor shall, after complying with the provisions
of this Section 3, comply with the provisions of Section 5 hereof, if
applicable; (ii) neither the Company nor any Investor shall be entitled to the
right of first offer ("ROFO") under this Section 3 with respect to a Permitted
Transfer of any Shares within the meaning of clauses (ii), (iii) or (v) of the
definition of "Permitted Transfer" by any Investor; (iii) no Investor shall be
entitled to the ROFO under this Section 3 at any time that it and its Permitted
Transferees collectively own less than 25% of such Investor's Initial Investor
Shares; (iv) no Investor shall be entitled to the ROFO under this Section 3 in
connection with an AMC Sale that is a merger, consolidation, business
combination or similar transaction involving a sale of the entire Company; and
(v) no Investor shall be entitled to the ROFO under this Section 3 in connection
with a drag-along sale pursuant to Section 4.
(j) TIME LIMITATION. If at the end of the 90th day after the end of
the Investor Election Period or the Second Investor Election Period, as the case
may be, the Selling Investor has not completed the proposed Transfer, the
Transfer Notice shall be null and void, and it shall be necessary for a separate
Transfer Notice to be delivered, and the terms and provisions of this Section 3
separately complied with, in order to consummate such Transfer pursuant to this
Section 3.
SECTION 4. DRAG-ALONG RIGHTS
(a) DRAG-ALONG RIGHT. Subject to Section 4(d), if at any time (i)
during the Blockout Period, the Principal Investors acting together or a
Principal Investor if at such time there exists only one Principal Investor, or
(ii) following the Blockout Period, any Investors owning, in the aggregate, at
least 50% of the then outstanding Shares, (in the case of either (i) and (ii),
collectively, the "DRAG-ALONG SELLERS") propose a sale to any Independent Third
Party (a "DRAG-ALONG TRANSFEREE") in a bona fide arm's length transaction or
series of transactions (including pursuant to a purchase agreement, tender
offer, merger or other business combination transaction or otherwise) of all of
the Shares such Drag-Along Sellers own (an "EXIT SALE"), then the Drag-Along
Sellers may elect to require each other Investor to sell all, but not less than
all, of such other Investor's Shares, as a part of the Exit Sale to such
Drag-Along Transferee, at the purchase price and upon the terms and subject to
the conditions of the Exit Sale (all of which shall be set forth in the
Drag-Along Notice as hereinafter defined) and may also require each other
Investor to vote in favor of such Exit Sale or act by written consent approving
the same with respect to all Shares owned by such Investor, as necessary or
desirable to authorize, approve and adopt the Exit Sale. In the event that any
Investor shall fail to vote the Shares held by it in favor of the Exit Sale,
such Investor shall, upon such failure to so vote, be deemed immediately to have
granted the Drag-Along Sellers a proxy to vote such Investor's Shares in favor
of the Exit Sale. Such Investor acknowledges that each such proxy granted
hereby, including any successive proxy, if necessary, is being given to secure
the performance of an obligation hereunder, is coupled with an interest, and
shall be irrevocable until such obligation is performed. Without limiting the
foregoing, if an Exit Sale or an AMC Sale involving a sale of the entire Company
or all or
15
substantially all of its assets to an Independent Third Party requires the
approval of the Company's stockholders, each Investor shall waive any
dissenters' rights, appraisal rights or similar rights in connection with such
merger or consolidation. In the event that a sale is proposed pursuant to this
Section 4, all outstanding proposals to Transfer Shares shall immediately be
withdrawn and no Transfer of Shares shall be consummated until the expiration of
the time period provided for in Section 4(e).
(b) NOTICE. The rights set forth in Section 4(a) shall be exercised
by the Drag-Along Sellers giving written notice (the "DRAG-ALONG NOTICE") to
each other Investor and the Company, at least ten (10) Business Days prior to
the date on which the Drag-Along Sellers expect to consummate the Transfer
giving rise to such Drag-Along Right. In the event that the terms and/or
conditions set forth in the Drag-Along Notice are thereafter amended in any
material respect, the Drag-Along Sellers shall give written notice (an "AMENDED
DRAG-ALONG NOTICE") of the amended terms and conditions of the proposed Transfer
to each other Investor. Each Drag-Along Notice and Amended Drag-Along Notice
shall set forth: (i) the name of the Drag-Along Transferee and the amount of
Shares proposed to be purchased by such Drag-Along Transferee, (ii) the proposed
amount of consideration and material terms and conditions of payment offered by
the Drag-Along Transferee, and (iii) a summary of any other material terms
pertaining to the Transfer.
(c) EXERCISE. All Transfers of Shares to the Drag-Along Transferee
pursuant to this Section 4 shall be consummated simultaneously at the offices of
the Company, unless the Drag-Along Sellers elect otherwise, on the later of (i)
a Business Day not less than ten (10) or more than sixty (60) days after the
Drag-Along Notice is received by such other Investors and the Company or (ii)
the third Business Day following receipt of all material Governmental Approvals,
or at such other time and/or place as each of the parties to such Transfers may
agree. The delivery of stock certificates shall be made on such date, against
payment of the purchase price for such Shares, duly endorsed for Transfer or
with duly executed stock powers or similar instruments, or such other instrument
of Transfer of such Shares as may be reasonably requested by the Drag-Along
Sellers and the Company, with all stock transfer taxes paid and stamps affixed.
Each other Investor shall receive the same amount of consideration received by
the Drag-Along Sellers per Share. To the extent that the Parties (or any
successors thereto) are to provide any indemnification or otherwise assume any
other post-closing liabilities, the Drag-Along Sellers and all other Investors
selling Shares in a transaction under this Section 4 shall do so severally and
not jointly (and on a pro rata basis in accordance with the Shares being sold by
each) and their respective potential liability thereunder shall not exceed the
proceeds received. Furthermore, each other Investor shall only be required to
give customary representations and warranties, including, but not limited to,
title to Shares conveyed, legal authority and capacity, and non-contravention of
other agreements to which it is a party; PROVIDED, that in connection with such
transaction no Investor shall be required to enter into any non-competition
agreement. Each Investor shall be required to enter into any instrument,
undertaking or obligation necessary or reasonably requested and deliver all
documents necessary or reasonably requested in connection with such sale (as
specified in the Drag-Along Notice) in connection with this Section 4.
(d) CERTAIN RESTRICTIONS. Notwithstanding the foregoing, no
drag-along rights under this Section 4 shall apply with respect to any Permitted
Transfer within the meaning of clause (ii), (iii) or (v) of the definition of
"Permitted Transfer" herein.
16
(e) TIME LIMITATION. If at the end of the 90th day after the receipt
of the Drag-Along Notice the Drag-Along Sellers have not completed the proposed
Transfer, the Drag-Along Notice shall be null and void, and it shall be
necessary for a separate Drag-Along Notice to be delivered, and the terms and
provisions of this Section 4 separately complied with, in order to consummate
such Transfer pursuant to this Section 4; PROVIDED, that such 90 day time period
may be extended at the option of the Drag-Along Sellers for a reasonable period
of time not to exceed an additional 90 days to the extent that the failure to
complete the proposed Transfer is cause by the failure to obtain the necessary
Governmental Approvals.
SECTION 5. TAG-ALONG RIGHTS
(a) NOTICE. Subject to Section 5(d) and after complying with the
provisions of Section 3, if at any time a Selling Investor (referred to in this
Section 5 as the "TAG-ALONG SELLER") proposes to Transfer Shares held by such
Tag-Along Seller to any Person other than the Company (except where the
Tag-Along Seller is a Principal Investor and the transferee is the Company, in
which case the provisions of this Section 5 will apply) or the Non-Selling
Investors pursuant to Section 3, whether in one transaction or in a series of
related transactions, then such Tag-Along Seller shall comply with the
provisions of this Section 5. In addition to the information required to be
provided in the Transfer Notice pursuant to Section 2(b), the Tag-Along Seller
shall provide additional information with respect to the proposed sale as
reasonably requested by the other Investors to the Company. Following receipt of
such additional information, the Company shall promptly deliver such additional
information to the Management Stockholders and the Non-Selling Investors.
(b) TAG-ALONG RIGHT. If the Company and the Non-Selling Investors
have in the aggregate not elected to purchase all of the Offered Shares pursuant
to Section 3, the Company shall give the Non-Selling Investors and the
Management Stockholders, a notice within two (2) Business Days of the expiry of
the Investor Election Period or the Second Investor Election Period, as the case
may be, that all of the Offered Shares were not elected to be purchased and
informing such Non-Selling Investor of their opportunity to participate in a
tag-along sale pursuant to this Section 5 and informing the Management
Stockholders of their opportunity to participate in the tag-along sale pursuant
to the Management Stockholders Agreement. The other Investors and the Management
Stockholders shall have the right, exercisable upon written notice to the
Tag-Along Seller within seven (7) Business Days after the expiration of the
Investor Election Period or the Second Investor Election Period, as the case may
be (the "TAG-ALONG ELECTION PERIOD"), to participate in the proposed Transfer by
the Tag-Along Seller to any Person (the "TAG-ALONG TRANSFEREE") on the terms and
conditions set forth in such Transfer Notice (such participation rights being
hereinafter referred to as "TAG-ALONG RIGHTS"). Any other Investor and any
Management Stockholder that has not notified the Tag-Along Seller of its intent
to exercise Tag-Along Rights within the Tag-Along Election Period shall be
deemed to have elected not to exercise such Tag-Along Rights with respect to the
sale contemplated by such Transfer Notice. Each other Investor and Management
Stockholder may participate with respect to the Shares owned by such Investor or
with respect to the number of whole Restricted Shares (as defined in the
Management Stockholders Agreement), including any (a) Restricted Shares issuable
upon exercise of Vested Options (as defined in the Management Stockholders
Agreement) or (b) any Restricted Shares that will be issuable pursuant to
options that vest as a result of the
17
consummation of the Transfer to the Tag-Along Transferee (collectively,
"MANAGEMENT SHARES"), as the case may be, in an amount equal to the product
obtained by multiplying (i) in the case of an Investor, the aggregate number of
Shares owned by such other Investor on the date of the sale and, in the case of
a Management Stockholder, the aggregate number of Management Shares owned by
such other Management Stockholder on the date of the Sale by (ii) a fraction,
the numerator of which is equal to the number of Shares proposed to be sold by
the Tag-Along Seller and the denominator of which is the aggregate number of
Shares owned by the Tag-Along Seller (the "ELIGIBLE SHARES"). If one or more
other Investors and Management Stockholders elects not to include the maximum
number of Eligible Shares in a proposed sale, the Tag-Along Seller shall give
prompt notice to each other participating Investor (including the Tag-Along
Seller) and participating Management Stockholders and such other participating
Investor and participating Management Stockholders may sell in the proposed sale
a number of additional Shares or Management Shares, as the case may be, owned by
any of them equal to their pro rata portion (based upon the aggregate number of
Shares owned by such Investor or the aggregate number of Management Shares owned
by such Management Stockholder, as the case may be, relative to the aggregate
number of Shares and Management Shares owned by all Investors and Management
Stockholders) of the number of Shares and Management Shares eligible to be
included in the proposed sale. Such additional Shares and Management Shares
which any such Investor(s) or Management Stockholder(s) proposes to sell shall
not be included in the calculation of Eligible Shares of such Investor or
Management Stockholder. To the extent that the total number of Shares and
Management Shares proposed to be sold by the Tag-Along Seller and the number of
Eligible Shares proposed to be sold by all of the other Investors and Management
Stockholders collectively exceeds the number of Shares and Management Shares
that the Tag-Along Transferee is willing to purchase, the number of Shares and
Management Shares that the Tag-Along Seller and each other Investor and
Management Stockholder propose to sell will be reduced pro rata based upon the
relative number of Shares and Management Shares that the Tag-Along Seller and
each other Investor and Management Stockholder had proposed to sell.
(c) EXERCISE. At the closing of the sale to any Tag-Along Transferee
pursuant to this Section 5, the delivery of stock certificates shall be made on
such date by the Tag-Along Seller and such other Investors and Management
Stockholders exercising Tag-Along Rights, against payment of the purchase price
for such Shares and Management Shares, duly endorsed for Transfer or with duly
executed stock powers or similar instruments, or such other instrument of
Transfer of such Shares and Management Shares as may be reasonably requested by
the Tag-Along Transferee and the Company, with all stock transfer taxes paid and
stamps affixed. The consummation of such proposed Transfer shall be subject to
the sole discretion of the Tag-Along Seller, who shall have no liability or
obligation whatsoever to any other Investor or Management Stockholder
participating therein in connection with such Investor's or Management
Stockholder's Transfer of Shares or Management Shares. Each other Investor and
Management Stockholder shall receive the same amount and form of consideration
received by the Tag-Along Seller per each Share on the same terms and conditions
as the Tag-Along Seller. To the extent that the Parties (or any successors
thereto) are to provide any indemnification or otherwise assume any other
post-closing liabilities, the Tag-Along Seller and all other Investors and
Management Stockholders participating in a transaction under this Section 5
shall do so severally and not jointly (and on a pro rata basis in accordance
with the Shares being sold by each), and their respective potential liability
thereunder shall not exceed the proceeds received; PROVIDED,
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that in connection with such transaction no Investor or Management Stockholder
shall be required to enter into any non-competition agreement. If any
Governmental Approval is required in connection with any such Transfer of Shares
and such Governmental Approval has not been completed or obtained on or prior to
the date scheduled for closing, the closing of Transfer of Shares and Management
Shares shall take place on the third Business Day after such Governmental
Approval has been completed or obtained. Each participating Investor shall be
required to enter into any instrument, undertaking, obligation or make any
filing necessary or reasonably requested and deliver all documents necessary or
reasonably requested in connection with such sale (as specified in the Transfer
Notice) as a condition to the exercise of such holder's rights to Transfer
Shares under this Section 5.
(d) CERTAIN RESTRICTIONS. Notwithstanding the foregoing, no Tag-Along
Rights of any Investor or Management Stockholder shall apply hereunder with
respect to any sales pursuant to (i) any Permitted Transfer within the meaning
of clause (ii), (iii), (iv) or (v) of the definition of "Permitted Transfer"
herein, (ii) any drag-along sale pursuant to Section 4 or (iii), in the case of
Management Stockholders, pursuant to Transfers in which the Management
Stockholders do not have tag along rights pursuant to Section 4 of the
Management Stockholders Agreement.
(e) TIME LIMITATION. If at the end of the 90th day after the end of
the Investor Election Period or the Second Investor Election Period, as the case
may be, the Tag-Along Seller has not completed the proposed Transfer, the
Transfer Notice shall be null and void, and it shall be necessary for a separate
Transfer Notice to be delivered, and the terms and provisions of this Section 5
separately complied with, in order to consummate such Transfer pursuant to this
Section 5.
SECTION 6. PARTICIPATION RIGHTS
(a) PARTICIPATION RIGHTS. The Company shall not, and shall not permit
any Subsidiary (the Company and each Subsidiary, as "ISSUER") to, issue or sell
any Shares, shares of stock or other securities (including debt securities or
other evidences of indebtedness) which are directly or indirectly convertible
into or exchangeable or exercisable for any shares of stock or other equity
securities, in each case, to any Person or Persons, including by means of a
public offering (except as otherwise provided in Section 6(k)) (each an
"ISSUANCE" of "SUBJECT SECURITIES"), except in compliance with this provisions
of this Section 6. If required by each Principal Investor so long as there are
any Principal Investors, as a condition to any such Issuance to any Person who
is not an Investor prior to the IPO Date, such Person shall become a party to
this Agreement and shall be treated as an Investor (but not a Principal
Investor) hereunder with the same rights and obligations of an Investor (but not
a Principal Investor) for all purposes of this Agreement.
(b) OFFER. At least ten (10) Business Days prior to the consummation
of an Issuance, a notice (the "PARTICIPATION NOTICE") shall be delivered by the
Issuer and received by each Investor (the "PARTICIPATING OFFEREES"). The
Participation Notice shall include:
(i) the principal terms and conditions of the proposed
Issuance, including (A) the amount, type and terms of the Subject
Securities to be included in the Issuance, (B) the number of
Equivalent Shares represented by such Subject Securities, if
applicable, (C) each Participating Offeree's pro rata share of such
Subject Securities
19
based on such Participating Offeree's Percentage Interest in the
Company (the "PARTICIPATION PORTION"), (D) the price (including, if
applicable, the maximum and minimum price per Equivalent Share) per
unit of the Subject Securities, including a description of any
non-cash consideration that is sufficiently detailed to permit
valuation thereof, (E) the proposed manner of disposition, (F) the
name and address of the Person to whom the Subject Securities will be
issued (the "PROSPECTIVE SUBSCRIBER") and (G) if known, the proposed
Issuance date; and
(ii) an offer by the Issuer to issue, at the option of each
Participating Offeree, to such Participating Offeree such portion of
the Subject Securities to be included in the Issuance as may be
requested by such Participating Offeree (not to exceed such
Participating Offeree's Participation Portion), on the same terms and
conditions as each unit of Subject Securities issued to Prospective
Subscribers.
(c) EXERCISE. Each Participation Offeree desiring to accept the offer
contained in the Participation Notice shall accept such offer by delivering a
written notice of such acceptance to the Issuer within ten (10) Business Days
after the receipt of the Participation Notice specifying the amount of Subject
Securities (not to exceed such Participating Offeree's Participation Portion)
which such Participation Offeree desires to be issued (each a "PARTICIPATING
BUYER"). Each Participation Offeree who does not accept such offer in compliance
with the above requirements, including the applicable time periods, shall be
deemed to have waived all of such Investor's rights to participate in such
Issuance, and the Issuer shall thereafter be free to issue Subject Securities in
such Issuance to the Prospective Subscriber and any Participating Buyers, at a
price no less than the minimum price set forth in the Participation Notice and
on other principal terms in the aggregate not substantially more favorable to
the Prospective Subscriber than those set forth in the Participation Notice,
without any further obligation to such non-accepting Participating Offerees
pursuant to this Section 6. If, prior to consummation, the terms and conditions
of such proposed Issuance as set forth in the Participation Notice shall change
with the result that the price shall be less than the minimum price set forth in
the Participation Notice or the other principal terms shall be substantially
more favorable to the Prospective Subscriber than those set forth in the
Participation Notice, it shall be necessary for the Issuer to give written
notice (an "AMENDED PARTICIPATION NOTICE") in order to consummate such Issuance;
PROVIDED, HOWEVER, that if an Amended Participation Notice is issued, each
Participating Buyer shall have an additional five (5) Business Days to exercise
its right of participation as provided in this Section 6.
(d) IRREVOCABLE ACCEPTANCE. The acceptance of each Participating
Buyer shall be irrevocable except as hereinafter provided, and each such
Participating Buyer shall be bound and obligated to acquire in the Issuance on
the same terms and conditions, with respect to each unit of Subject Securities
issued, as the Prospective Subscriber, such amount of Subject Securities as such
Participating Buyer shall have specified in such Participating Buyer's written
commitment.
(e) TIME LIMITATION. If at the end of the 90th day after the receipt
of the Participation Notice the Issuer has not completed the Issuance, the
Participation Notice shall be null and void, and it shall be necessary for a
separate Participation Notice to be delivered, and the terms and provisions of
this Section 6 separately complied with, in order to consummate such Issuance
pursuant to this Section 6.
20
(f) OTHER SECURITIES. The Issuer may condition the participation of
the Participating Offerees in an Issuance upon the purchase by such
Participating Offerees of any securities (including debt securities) other than
Subject Securities ("OTHER SECURITIES") in the event that the participation of
the Prospective Subscriber(s) in such Issuance is so conditioned. In such case,
each Participating Buyer shall acquire in the Issuance, together with the
Subject Securities to be acquired by it, Other Securities in the same proportion
to the Subject Securities to be acquired by it as the proportion of Other
Securities to Subject Securities being acquired by the Prospective Subscriber(s)
in the Issuance, on the same terms and conditions as each unit of Subject
Securities and Other Securities being issued to the Prospective Subscriber(s).
(g) CERTAIN LEGAL REQUIREMENTS. In the event that the participation
in the Issuance by a Participation Offeree as a Participating Buyer would
require under applicable law (i) the registration or qualification of such
Subject Securities or of any Person as a broker or dealer or agent with respect
to such Subject Securities where such registration or qualification is not
otherwise required for the Issuance or (ii) the provision to any participant in
the Issuance of any specified information regarding the Company or any of its
Subsidiaries or the Subject Securities that is not otherwise required to be
provided for the Issuance, such Participation Offeree shall not have the right
to participate in the Issuance. Without limiting the generality of the
foregoing, it is understood and agreed that the Issuer shall not be under any
obligation to effect a registration of such Subject Securities under the
Securities Act or similar state statutes.
(h) FURTHER ASSURANCES. Each Participating Buyer shall take or cause
to be taken all such reasonable actions as may be necessary or reasonably
desirable in order to expeditiously consummate each Issuance pursuant to this
Section 6 and any related transactions, including executing, acknowledging and
delivering consents, assignments, waivers and other documents or instruments;
filing applications, reports, returns and other documents or instruments with
governmental authorities; and otherwise cooperating with the Issuer and the
Prospective Subscriber. Without limiting the generality of the foregoing, each
such Participating Buyer agrees to execute and deliver such subscription and
other agreements specified by the Issuer to which the Prospective Subscriber
will be party.
(i) EXPENSES. All costs and expenses incurred by the Issuer in
connection with any proposed Issuance of Subject Securities (whether or not
consummated), including all attorneys' fees and charges, all accounting fees and
charges and all finders, brokerage or investment banking fees, charges or
commissions, shall be paid by the Company. Each Participating Buyer may retain,
and the Company will pay the reasonable fees and expenses of, a single legal
counsel (and such local counsel as may be appropriate) in connection with such
proposed Issuance of Subject Securities (whether or not consummated). Any other
costs and expenses incurred by or on behalf of any Participating Buyer in
connection with such proposed Issuance of Subject Securities (whether or not
consummated) shall be borne by such Participating Buyer.
(j) CLOSING. The closing of an Issuance pursuant to Section 6 shall
take place (i) on the proposed date of Issuance, if any, set forth in the
Participation Notice (provided that consummation of any Issuance may be extended
beyond such date to the extent necessary to obtain any applicable governmental
approval or other required approval or to satisfy other conditions), (ii) if no
proposed Issuance date was required to be specified in the Participation Notice,
at such time as the Issuer shall specify by notice to each Participating Buyer,
PROVIDED
21
that such closing with respect to a Participating Buyer shall not (without the
consent of such Participating Buyer) be prior to the date that is ten (10)
Business Days after the Company issues the applicable Participation Notice and
(iii) at such place as the Issuer shall specify by notice to each Participating
Buyer. At the closing of any Issuance under this Section 6, each Participating
Buyer shall be delivered the notes, certificates or other instruments evidencing
the Subject Securities (and, if applicable, Other Securities) to be issued to
such Participating Buyer, registered in the name of such Participating Buyer or
any designated nominee, free and clear of any liens or encumbrances, with any
transfer tax stamps affixed, against delivery by such Participating Buyer of the
applicable consideration.
(k) EXCLUDED TRANSACTIONS. The provisions of this Section 6 shall not
apply to Issuances by the Company as follows:
(i) any Issuance of Stock upon the exchange, exercise or
conversion of any Options, Warrants or Convertible Securities
outstanding at the Effective Time or Issued after the date hereof in
compliance with the provisions of this Section 6;
(ii) any Issuance of any Shares, in each case to the extent
approved as set forth herein, to officers, employees, directors or
consultants of the Company or its Subsidiaries (other than, prior to
an Initial Public Offering, to directors or consultants who are also
employees of any Principal Investor or any entity that directs the
investment decisions or manages the investments of any Principal
Investor, which shall not be deemed excluded transactions pursuant to
this Section 6(k)) in connection with such Person's employment or
consulting arrangements with the Company or its Subsidiaries and
pursuant to any Board approved plan or other arrangement adopted by
the Company or its Subsidiaries pursuant to the terms of this
Agreement;
(iii) any Issuance of shares of Shares, in each case to the
extent approved as set forth herein (a) to stockholders and management
of a target entity in any business combination or acquisition
transaction involving the Company or any of its Subsidiaries or (b) in
connection with any joint venture or strategic partnership;
(iv) any Issuance of Stock pursuant an Initial Public
Offering;
(v) the Issuance of Shares to the Investors or other Persons
at the Effective Time;
(vi) any Issuance of shares of Stock in connection with any
stock split, stock dividend or similar recapitalization approved as
set forth herein;
(vii) any Issuance of shares of Stock in exchange for debt
securities; or
(viii) any Issuance by a Subsidiary to the Company or a
wholly-owned Subsidiary of the Company.
22
SECTION 7. REGISTRATION RIGHTS
(a) DEMAND REGISTRATIONS.
(i) RIGHT TO DEMAND REGISTRATION. Subject to the terms of any
holdback agreement as provided in Section 7(c) and the limitations
provided in this Section 7(a)(i) and Section 7(a)(ii), the Investors
shall each have the right at any time following the IPO Date to make a
written request of the Company for registration (including a Shelf
Registration) with the Securities and Exchange Commission (the
"COMMISSION"), under and in accordance with the provisions of the
Securities Act, of all or part of the Registrable Stock beneficially
owned and held of record by such Investor (each a "DEMAND
REGISTRATION" and such Investor, the "DEMANDING INVESTOR"); PROVIDED,
that the Company may defer such Demand Registration for a single
period not to exceed 90 days during any one year period if the Board
determines in the exercise of its reasonable judgment that to effect
such Demand Registration at such time would have a material adverse
effect on the Company, including interfering with any pending or
potential acquisition, disposition or securities offering of the
Company. Within ten (10) days after receipt of the request for a
Demand Registration in accordance with this Section 7(a)(i) or Section
7(a)(ii), the Company will send written notice (the "DEMAND NOTICE")
of such registration request and its intention to comply therewith to
all of the Investors and, subject to subsection (iii) below, the
Company will include in such registration all the Registrable Stock
with respect to which the Company has received written requests from
any Investor for inclusion therein within twenty (20) Business Days
after the date such Demand Notice is given. All requests made pursuant
to this subsection (i) will specify the aggregate quantity of
Registrable Stock requested to be registered and will also specify the
intended methods of disposition thereof. Upon receipt of a Demand
Notice, the Company shall use its commercially reasonable efforts to
effect registration of the Registrable Stock to be registered in
accordance with the intended method of distribution specified in
writing by the Demanding Investor as soon as practicable and to
maintain the effectiveness of such registration until the first to
occur of (A) the completion of such distribution or (B) ninety (90)
days (one-hundred eighty (180) days in the case of a Shelf
Registration). If available to the Company, the Company will effect
such registration on Form S-3 or any equivalent or successor form
under the Securities Act in which event it shall use its commercially
reasonable efforts to maintain the effectiveness of such registration
for a period of one-hundred eighty (180) days.
(ii) NUMBER OF DEMAND REGISTRATIONS. Subject to the
restrictions herein, each of the JPMP Investors as a group, on the one
hand, and the Apollo Investors as a group, on the other, shall have
the right to an unlimited number of Demand Registrations of their
respective Registrable Stock on Form S-3 or any equivalent or
successor form under the Securities Act but no more than two within
any 12 month period and the right to two Demand Registrations of their
respective Registrable Stock on Form S-1 or any equivalent or
successor form under the Securities Act. Subject to the restrictions
herein, the Investors that are not Principal Investors, as a group,
shall have the right to one Demand Registration on Form S-3 or any
equivalent or successor form under the Securities Act (the "COINVESTOR
DEMAND") and shall have no right to a Demand
23
Registration on Form S-1 or any equivalent or successor form under the
Securities Act; provided, however, the Company need not effect a
Demand Registration on behalf of any such Investor or group of
Investors that are not Principal Investors unless such Investor or
group of Investors that are not Principal Investors beneficially own
Registrable Stock with a value of at least $200 million. The Company
shall not be required to cause a registration pursuant to Section
7(a)(i) to be declared effective within a period of 90 days after the
date any other Company registration statement was declared effective
pursuant to a Demand Registration request or a filing for the
Company's own behalf. A demand registration may be withdrawn prior to
the filing of the registration statement with respect to such demand
registration by the Investor that made such demand registration
request and a registration statement may be withdrawn prior to the
effectiveness thereof by the holders of a majority of the Registrable
Stock included therein, and, in either such event, such withdrawal
shall not be treated as a demand registration for purposes of this
clause (ii). Investors that are not Principal Investors owning a
majority of Registrable Stock shall have the right to control all
decisions regarding the Coinvestor Demand (including whether to
effectuate or terminate such Coinvestor Demand).
(iii) PRIORITY ON DEMAND REGISTRATIONS. If in any Demand
Registration the managing underwriter or underwriters thereof if such
registration is underwritten, advise the Company in writing that in
its or their reasonable opinion the number of securities proposed to
be sold in such Demand Registration exceeds the number that can be
sold in such offering without having a material adverse effect on the
success of the offering (including, without limitation, an impact on
the selling price), the Company will include in such registration only
the number of securities that, in the reasonable opinion of such
underwriter or underwriters can be sold without having a material
adverse effect on the success of the offering, as follows: first, the
securities which the Investors, including the Demanding Investor(s)
(pro rata among all such Investors on the basis of the relative
percentage of Registrable Stock proposed to be sold in such offering
by all Investors who have requested that securities owned by them be
so included), propose to sell, second, the securities of any
additional holders of the Company's securities eligible to participate
in such offering, pro rata among all such Persons on the basis of the
relative percentage of such securities held by each of them, and
third, the securities proposed to be sold by the Company in such
offering, if any. In the event that the managing underwriter or
Demanding Investor determines that additional Registrable Stock may be
sold in any Demand Registration without having a material adverse
effect on the success of the offering, the Company may include
comparable securities to be issued and sold by the Company or
comparable securities held by Persons other than the Parties.
(iv) SELECTION OF UNDERWRITERS. If a Demand Registration is to
be an underwritten offering, the holders of a majority of the
Registrable Stock to be included in such Demand Registration will
select a managing underwriter or underwriters.
(b) PIGGYBACK REGISTRATIONS. If the Company at any time proposes to
register under the Securities Act any Stock or any security convertible into or
exchangeable or exercisable for Stock, whether or not for sale for its own
account and other than pursuant to a Demand Registration (it being understood
that an Investor may include its Registrable Stock in a
24
registration effected pursuant to a Demand Registration in accordance with
Section 7(a)), on a form and in a manner which would permit registration of the
Registrable Stock held by an Investor for sale to the public under the
Securities Act, the Company shall give written notice of the proposed
registration to each Investor not later than thirty (30) days prior to the
filing thereof. Each Investor shall have the right to request that all or any
part of its Registrable Stock be included in such registration. Each Investor
can make such a request by giving written notice to the Company within ten (10)
Business Days after the receipt of the Company's notice of the proposed
registration; PROVIDED, HOWEVER, that if the registration is an underwritten
registration and the managing underwriter(s) of such offering determine that the
aggregate amount of securities of the Company which the Company and all
Investors propose to include in such Registration Statement exceeds the maximum
amount of securities that may be sold without having a material adverse effect
on the success of the offering, including without limitation the selling price
and other terms of such offering, the Company will include in such registration,
first, the securities which the Company proposes to sell, second, the
Registrable Stock of such Investors, pro rata among all such Investors on the
basis of the relative percentage of Registrable Stock owned by all Investors who
have requested that securities owned by them be so included (it being further
agreed and understood, however, that such underwriters shall have the right to
eliminate entirely the participation of the Investors), and third, the
comparable securities of any additional holders of the Company's securities
(including any such securities held by current or former officers or employees
of or consultants to the Company), pro rata among all such holders on the basis
of the relative percentage of such securities proposed to be sold in such
offering by all such holders who have requested that securities owned by them be
so included. Registrable Stock proposed to be registered and sold pursuant to an
underwritten offering for the account of any Investor shall be sold to the
prospective underwriters, on the terms and subject to the conditions of one or
more underwriting agreements negotiated between the holders of Registrable Stock
to which such Registration Statement relates, the Company and the prospective
underwriters. Any Investor who holds Registrable Stock being registered in any
offering shall have the right to receive a copy of the form of underwriting
agreement and shall have an opportunity to hold discussions with the lead
underwriter of the terms of such underwriting agreement. The Company may
withdraw any Registration Statement at any time before it becomes effective, or
postpone or terminate the offering of securities, without obligation or
liability to any Investor.
(c) HOLDBACK AGREEMENTS. Notwithstanding any other provision of this
Section 7, each Investor agrees that (if so required by the underwriters in an
underwritten offering and provided that such condition is applicable equally to
all Investors) it will not (and it shall be a condition to the rights of each
Investor under this Section 7 that such Investor does not) offer for Public Sale
any Stock during a period not to exceed one-hundred eighty (180) days after the
effective date of any Registration Statement filed by the Company in connection
with an underwritten Initial Public Offering (except as part of such
underwritten registration or as otherwise permitted by such underwriters);
PROVIDED, HOWEVER, no Investor shall object to shortening such period if the
underwriter agrees that shortening such period would not materially and
adversely affect the success of the offering; PROVIDED FURTHER, that no Investor
shall be released from such restrictions as provided in this Section 7(c) unless
all Investors are similarly so released pro rata based upon the relative number
of Shares owned at such time.
25
(d) EXPENSES. Except as otherwise required by state securities or
blue sky laws or the rules and regulations promulgated thereunder, all expenses,
disbursements and fees incurred by the Company and the Investors in connection
with any registration under this Section 7 shall be borne by the Company, except
that the following expenses shall be borne by the Investors incurring the same:
(i) the costs and expenses of counsel to such Investor to the extent such
Investor retains counsel (except the costs of one counsel for all Investors to
the extent retained, which shall be borne by the Company); (ii) discounts,
commissions, fees or similar compensation owing to underwriters, selling
brokers, dealer managers or other industry professionals, to the extent relating
to the distribution or sale of such Investor's securities; and (iii) transfer
taxes with respect to the securities sold by such Investor.
(e) REGISTRATION PROCEDURES. In connection with any registration of
Registrable Stock under the Securities Act pursuant to this Agreement, the
Company will consult with each Investor whose equity interest is to be included
in any such registration concerning the form of underwriting agreement, shall
provide to such Investor the form of underwriting agreement prior to the
Company's execution thereof and shall provide to such Investor and its
representatives such other documents (including comments by the Commission on
the Registration Statement) as such Investor shall reasonably request in
connection with its participation in such registration. The Company will furnish
each Investor whose Registrable Stock are registered thereunder and each
underwriter, if any, with a copy of the Registration Statement and all
amendments thereto and will supply each such Investor and each underwriter, if
any, with copies of any prospectus included therein (including a preliminary
prospectus and all amendments and supplements thereto), in such quantities as
may be reasonably necessary for the purposes of the proposed sale or
distribution covered by such registration. The Company shall not, however, be
required to maintain the Registration Statement effective or to supply copies of
a prospectus for a period beyond ninety (90) days after the effective date of
such Registration Statement (one-hundred eighty (180) days in the case of a
Shelf Registration), or such longer period as is otherwise set forth herein or
agreed to by the Company, and, at the end of such period, the Company may
deregister any securities covered by such Registration Statement and not then
sold or distributed. In the event that the Company prepares and files with the
Commission a registration statement on any appropriate form under the Securities
Act (a "REGISTRATION STATEMENT") providing for the sale of Registrable Stock
held by any Investor pursuant to its obligations under this Section 7, the
Company will:
(i) upon filing a Registration Statement or any prospectus
related thereto (a "PROSPECTUS") or any amendments or supplements
thereto, furnish to the Investors whose Registrable Stock is covered
by such Registration Statement and the underwriters, if any, copies of
all such documents;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep such Registration Statement effective for the ninety
(90) day period (one-hundred eighty (180) days in the case of a Shelf
Registration) referenced in Section 7(e); cause the related Prospectus
to be supplemented by any required Prospectus supplement, and as so
supplemented, to be filed pursuant to Rule 424 under the Securities
Act; and, comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended
26
methods of disposition by the sellers thereof set forth in such
Registration Statement or supplement to such Prospectus;
(iii) promptly notify the Investors and the managing
underwriters, if any, and (if requested by any such Person or entity)
confirm such advice in writing, (A) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by
the Commission or any state securities commission for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information, (C) of the issuance by the Commission or any
state securities commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of
any of the Registrable Stock for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, and (E)
of the existence of any fact which results in a Registration
Statement, a Prospectus 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 the statements therein not misleading;
(iv) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement;
(v) if requested by the managing underwriters or an Investor,
promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters or the
Investors holding a majority of the Registrable Stock being sold by
Investors agree should be included therein relating to the sale of
such Registrable Stock, including without limitation information with
respect to the amount of Registrable Stock being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten
(or best efforts underwritten) offering of the Registrable Stock to be
sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(vi) furnish to such Investor and each managing underwriter at
least one signed copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all
exhibits (including those incorporated by reference);
(vii) deliver to such Investors and the underwriters, if any,
as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons or
entities may reasonably request;
(viii) prior to any Public Sale of Registrable Stock, register
or qualify or cause to be registered or qualified such Registrable
Stock for offer and sale under the securities or blue sky laws of such
jurisdictions within the United States as any Investor or
27
underwriter reasonably requests in writing and do any and all other
acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Stock covered by the applicable
Registration Statement; PROVIDED, HOWEVER, that the Company will not
be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would
subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject;
(ix) cooperate with the Investors and the managing
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Stock to be sold
pursuant to such Registration Statement and not bearing any
restrictive legends, and enable such Registrable Stock to be in such
denominations and registered in such names as the managing
underwriters may request at least two (2) Business Days prior to any
sale of Registrable Stock to the underwriters;
(x) if any fact described in clause (iii)(E) above
exists, prepare a supplement or post-effective amendment to the
applicable Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Stock being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(xi) cause all Registrable Stock covered by the
Registration Statement to be listed on each securities exchange on
which similar securities issued by the Company are then listed;
(xii) provide and cause to be maintained a transfer agent
and registrar for all such Registrable Stock covered by such
registration statement not later than the effective date of such
registration statement;
(xiii) obtain an opinion from the Company's counsel and a
"cold comfort" letter from the Company's independent auditors in
customary form and covering such matters as are customarily covered by
such opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be
reasonably satisfactory to the underwriter, if any, and to the
Investors owning a majority in interest of the Registrable Stock being
registered in such offering, and furnish to each Investor
participating in the offering and to each underwriter, if any, a copy
of such opinion and letter addressed to such Investor or underwriter;
(xiv) deliver promptly to each Investor participating in
the offering and each underwriter, if any, copies of all
correspondence between the Commission and the Company, its counsel or
auditors and all memoranda relating to discussions with the Commission
or its staff with respect to the Registration Statement, other than
those portions of any such correspondence and memoranda which contain
information subject to attorney-client privilege with respect to the
Company, and, upon receipt of such confidentiality agreements as the
Company may reasonably request, make reasonably available for
inspection by any seller of such Registrable Stock covered by such
Registration Statement, by any underwriter, if any, participating in
any disposition to be
28
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;
(xv) provide a CUSIP number for all Registrable Stock included
in such Registration Statement, not later than the effective date of
the applicable Registration Statement;
(xvi) enter into such agreements (including an underwriting
agreement in form reasonably satisfactory to the Company) and take all
such other reasonable actions in connection therewith in order to
expedite or facilitate the disposition of such Registrable Stock, and
to the extent required by the underwriter, participate in a road show
arranged by the underwriter with investors;
(xvii) make available for inspection by a representative of the
Investors the Registrable Stock being sold pursuant to such
Registration Statement, any underwriter participating in any
disposition pursuant to a Registration Statement, and any attorney or
accountant retained by such Investors or underwriter, all financial
and other records, any pertinent corporate documents and properties of
the Company reasonably requested by such representative, underwriter,
attorney or accountant in connection with such Registration Statement;
PROVIDED, HOWEVER, that any records, information or documents that are
designated by the Company in writing as confidential shall be kept
confidential by such Persons or entities unless disclosure of such
records, information or documents is required by court or
administrative order;
(xviii) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission and
relevant state securities commissions, and make generally available to
the Investors earning statements satisfying the provisions of Section
12(a) of the Securities Act no later than forty-five (45) days after
the end of any 12-month period (or one-hundred twenty (120) days, if
such period is a fiscal year) commencing at the end of any fiscal
quarter in which Registrable Stock of such Investor is sold to
underwriters in an underwritten offering, or, if not sold to
underwriters in such an offering, beginning with the first month of
the Company's first fiscal quarter commencing after the effective date
of a Registration Statement, which statements shall cover said
12-month periods; and
(xix) take all such other commercially reasonable actions as
are necessary or advisable in order to expedite or facilitate the
disposition of such Registrable Stock, including, but not limited to,
using commercially reasonable efforts to cause appropriate officers
and employees to be available, on a customary basis and upon
reasonable notice, to meet with prospective investors in
presentations, meetings, road shows and due diligence sessions.
29
(f) CONDITIONS TO INVESTOR RIGHTS; INDEMNIFICATION BY INVESTOR. It
shall be a condition to each Investor's rights hereunder to have Registrable
Stock owned by it registered that:
(i) such Investor shall cooperate with the Company in all
reasonable respects by supplying information and executing documents
relating to such Investor or the securities of the Company owned by
such Investor in connection with such registration which are
reasonably requested by the Company;
(ii) such Investor shall enter into such undertakings and take
such other action relating to the conduct of the proposed offering
which the Company or the underwriters may reasonably request as being
necessary to ensure compliance with federal and state securities laws
and the rules or other requirements of the NASD or otherwise to
effectuate the offering; and
(iii) such Investor shall execute and deliver an agreement to
indemnify and hold harmless the Company and each underwriter (as
defined in the Securities Act), and each Person or entity, if any, who
controls such underwriter within the meaning of the Securities Act,
against such losses, claims, damages or liabilities (including
reimbursement for legal and other expenses) to which such underwriter
or controlling Person or entity may become subject under the
Securities Act or otherwise, in such manner as is customary for
registrations of the type then proposed and, in any event, comparable
in scope to indemnities given by the Company in connection with such
registration, but only with respect to information furnished by such
Investor in writing and specifically for use in the Registration
Statement or Prospectus in connection with such registration and with
respect to such Investor's failure to deliver Prospectuses as required
under the Securities Act.
(g) INDEMNIFICATION AND CONTRIBUTION.
(i) In the event of any registration under the Securities Act
of any Registrable Stock of Investors pursuant to this Section 7, the
Company shall execute and deliver an agreement to indemnify and hold
harmless each Investor and their respective partners, directors,
officers and control persons (within the meaning of Section 15 of the
Securities Act) (collectively, "INDEMNIFIED PERSONS") disposing of
such Registrable Stock and any underwriter in connection with such
disposition against such losses, claims, damages or liabilities,
including reimbursement for legal and other expenses (collectively,
"LOSSES") to which such Indemnified Person or underwriter may become
subject under the Securities Act or otherwise, in such manner as is
customary in underwriting agreements for registrations of the type
then proposed.
(ii) In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in this
Section 7 is for any reason held to be unenforceable although
applicable in accordance with its terms in respect of any losses,
liabilities, claims, damages, judgments and expenses suffered by an
Indemnified Persons referred to therein, each applicable indemnifying
party, in lieu of indemnifying such Indemnified Person, shall
contribute to the amount paid or payable by such Indemnified Person as
a result of such losses, liabilities, claims, damages, judgments and
expenses in
30
such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and of the liable selling holders (including,
in each case, that of their respective officers, directors, employees
and agents) on the other in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages,
judgments or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and
of the liable selling holders (including, in each case, that of their
respective officers, directors, employees and agents) 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, on the one hand, or by or on behalf of the
selling holders, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, liabilities, claims, damages, judgments and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (iii) of this Section 7(g), any
legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
(iii) The Company and each holder of Registrable Securities
agree that it would not be just and equitable if contribution pursuant
to this paragraph (iii) were determined by pro rata allocation or by
any other method of allocation which does not take account of the
equitable considerations referred to in paragraph (ii) above.
Notwithstanding the provisions of this paragraph (iii), in the case of
distributions to the public, an indemnifying holder shall not be
required to contribute any amount in excess of the amount by which (A)
the total price at which the Registrable Securities sold by such
indemnifying holder and its Affiliated indemnifying holders and
distributed to the public were offered to the public exceeds (B) the
amount of any damages which such indemnifying 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.
(h) RULE 144. The Company covenants that it will use reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act, and the rules and regulations adopted by the Commission
thereunder. Upon the request of any Investor, the Company will deliver to such
Investor a written statement as to whether it has complied with such
requirements.
(i) TERMINATION OF DEMAND REGISTRATION RIGHTS. Each Investor's
entitlement to registration rights pursuant to this Section 7 shall expire as to
any share of Stock upon (A) such share of Stock ceasing to be subject to this
Agreement, (B) the sale of such share of Stock pursuant to an effective
registration statement, (C) the sale of such share of Stock pursuant to Rule
144, or (D) the date upon which such share of Stock has been Transferred and, in
connection therewith, an unlegended stock certificate for such share has been
issued, thereby permitting the sale of such share of Stock absent registration
under the Securities Act.
31
(j) DELAY OF REGISTRATION. Notwithstanding Section 14(b), no Investor
shall have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might arise
with respect to the interpretation or implementation of this Section 7.
SECTION 8. LEGEND ON CERTIFICATES
(a) LEGENDS. To the extent applicable, each certificate representing
Stock shall bear each of the following legends until such time as the Stock
represented thereby are no longer subject to the provisions hereof or at such
time as Rule 144 or any similar exemption under the Securities Act is available
for the sale of all such Investor's shares during a three-month period without
registration, without reference to Rule 144(k) under the Securities Act:
(i) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(ii) "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF OR EXCHANGED UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OR EXCHANGE COMPLIES WITH
THE PROVISIONS OF THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
DATED AS OF DECEMBER 23, 2004, AS AMENDED FROM TIME TO TIME, BETWEEN
THE COMPANY AND THE STOCKHOLDERS PARTY THERETO, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY."
(iii) Any legend required by the Blue Sky laws of any state to
the extent such laws are applicable to the shares represented by the
certificate so legended.
SECTION 9. DURATION OF AGREEMENT
This Agreement shall terminate and be of no further force or effect,
except with respect to the provisions set forth in Sections 13 and 14, upon the
earliest to occur of (i) the unanimous agreement of the Investors, (ii) an
Initial Public Offering, and (iii) the date on which the JPMP Investors and the
Apollo Investors, together with their respective Permitted Transferees,
collectively own 10% or less of the then outstanding voting Stock.
Notwithstanding the foregoing and except as may be otherwise specified herein:
(a) in the event that this Agreement is terminated pursuant to clause
(ii) of the preceding sentence, the provisions set forth in Sections
1, 2(a)(iii), 4, 6, 7, 8, 9, 10, 11 and 12 shall survive; and
32
(b) in the event that this Agreement is terminated pursuant to clause
(iii) of the preceding sentence, the provisions set forth in Sections
1, 6, 7, 8, 9, 10, 11 and 12 shall survive.
SECTION 10. INFORMATION RIGHTS
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION.
(i) The Company shall deliver to each Investor:
(A) as soon as is available and in any event within 30
days after the end of each month of each fiscal year of the
Company, consolidated balance sheets of the Company and any
Subsidiary of the Company as of the end of such period, and
consolidated statements of income and cash flows of the Company
and any Subsidiary of the Company for the period then ended,
prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis,
except as otherwise noted therein, and subject to the absence of
footnotes and to year-end adjustments;
(B) as soon as is available and in any event within 45
days after the end of each of the first three quarters of each
fiscal year of the Company, consolidated balance sheets of the
Company and any Subsidiary of the Company as of the end of such
period, and consolidated statements of income and cash flows of
the Company and any Subsidiary of the Company for the period then
ended, prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis,
except as otherwise noted therein, and subject to the absence of
footnotes and to year-end adjustments;
(C) as soon as is available and in any event within 90
days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and any Subsidiaries of
the Company as of the end of such year, and consolidated
statements of income and cash flows of the Company and any
Subsidiary of the Company for the year ended prepared in
conformity with generally accepted accounting principles in the
United States applied on a consistent basis, except as otherwise
noted therein, together with an auditor's report thereon of a
firm of established national reputation; and
(D) to the extent the Company is required by law or
pursuant to the terms of any outstanding indebtedness of the
Company to prepare such reports, any annual reports, quarterly
reports and other periodic reports pursuant to Section 13 or
15(d) of the Exchange Act, as amended, actually prepared by the
Company as soon as available.
(ii) The Company shall inform each Principal Investor in
advance with respect to any significant corporate actions, including,
without limitation, extraordinary dividends or distributions, mergers,
acquisitions or dispositions of assets, issuances of
33
significant amounts of debt or equity and material amendments to its
certificate of incorporation or bylaws.
(iii) From and after the date hereof, the Investors shall not
and, in each case, shall cause each of their respective Permitted
Transferees and other representatives not to, directly or indirectly,
disclose, reveal, divulge or communicate to any Person other than
authorized representatives of the Company or use or otherwise exploit
for its own benefit or for the benefit of anyone other than the
Company, any confidential information obtained pursuant to this
Section 10 of or relating to the business conducted by the Company,
unless (i) compelled to disclose by judicial or administrative process
or by other requirements of law or governmental authorities or (ii)
disclosed in an action brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder; PROVIDED,
HOWEVER, that in the event disclosure is required by applicable law,
the Investors shall, to the extent reasonably possible, provide the
Company with prompt notice of such requirement prior to making any
disclosure so that the Company may seek an appropriate protective
order. For purposes of this Section 10(a)(iii), "confidential
information" does not include, and there shall be no obligation
hereunder with respect to, information that (i) is generally available
to the public on the date of this Agreement or (ii) becomes generally
available to the public other than as a result of a disclosure not
otherwise permissible thereunder.
(b) OTHER INFORMATION. The Company and any Subsidiary of the Company
shall provide to each Principal Investor, and as applicable create and/or
generate, any information as a Principal Investor may reasonably request,
including true and correct copies of all documents, reports, financial data and
other information.
SECTION 11. REGULATORY MATTERS
(a) COOPERATION OF OTHER STOCKHOLDERS. Each Investor agrees to
cooperate with the Company in all reasonable respects in complying with the
terms and provisions of the letter agreement between the Company and the JPMP
Investors, a copy of which is attached hereto as EXHIBIT B, regarding regulatory
matters (the "AMENDED AND RESTATED REGULATORY SIDELETTER"), including without
limitation, voting to approve amending the Company's certificate of
incorporation, the Company's bylaws or this Agreement in a manner reasonably
acceptable to the Parties and the JPMP Investors entitled to make such request
pursuant to the Amended and Restated Regulatory Sideletter in order to remedy a
Regulatory Problem (as defined in the Amended and Restated Regulatory
Sideletter).
(b) COVENANT NOT TO AMEND. The Company and each Party agrees not to
amend or waive the voting or other provisions of the Company's certificate of
incorporation, the Company's bylaws or this Agreement if such amendment or
waiver would cause the JPMP Investors to have a Regulatory Problem. The JPMP
Investors agree to notify the Company as to whether or not it would have a
Regulatory Problem promptly after the JPMP Investors have notice of such
amendment or waiver.
(c) Exception. Anything contained in this Section 11 to the contrary
notwithstanding, no Investor shall be required under this Section 11 to take any
action or abstain from taking any
34
action that would adversely affect such Investor's investment in the Company or
reasonable expectations related to the transactions contemplated by such
investment.
SECTION 12. EFFECTIVENESS OF AGREEMENT
This Agreement shall become effective at the Effective Time. Prior to
the Effective Time, this Agreement shall have no force or effect, and no
Investor shall have any rights, obligations or claims against or with respect to
the Company or any other Investor, except as may be set forth in such Investor's
subscription agreement with the Company. At the Effective Time, the Company
shall, as applicable, (i) revise Schedule 1 attached hereto to reflect the
identity of any additional JPMP Investors designated by JPMP BHCA to the Company
in writing prior to the Effective Time and accept signature pages including the
signatures of such JPMP Investors; PROVIDED, that such additional JPMP Investors
are Affiliates of JPMP BHCA, (ii) revise Schedule 1 attached hereto to reflect
the ownership of Stock of each Investor at such time, (iii) with the consent of
each of the Principal Investors, amend this Agreement to reflect the addition of
any other Investors, and (iv) promptly thereafter, deliver a copy of this
Agreement to each Investor.
SECTION 13. DEFINITIONS
(a) As used in this Agreement, the following terms have the following
meanings:
"ADDITIONAL REMAINING OFFERED SHARES" has the meaning set forth in
Section 3(c).
"AFFILIATE" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise. Notwithstanding the foregoing,
CSFB Strategic Partners Holdings II, L.P., on the one hand, and CSFB Credit
Opportunities Fund (Employee), L.P. and CSFB Credit Opportunities Fund (Helios),
L.P., on the other hand, shall not be deemed to be Affiliates of each other.
"AFFILIATE TRANSACTION" means any transaction of the type that would
be required to be disclosed under Item 404 of Regulation S-K promulgated by the
Commission between the Company or any of its Subsidiaries, on the one hand, and
any (a) present or former officer or director of the Company or any Subsidiary
of the Company or any of their immediate family members (including their
spouses), (b) record or beneficial owner of more than 5% of any class of Shares,
or (c) Person known by the Company's executive officers or directors to be an
Affiliate of any such officer, director or beneficial owner, on the other hand.
"AGREEMENT AND PLAN OF MERGER" has the meaning set forth in the
recitals.
"AMC" has the meaning set forth in the recitals.
"AMC SALE" means any one of the following: (i) a change in the
ownership or control of the Company or AMC effected through a transaction or
series of transactions (including by way of merger, consolidation, business
combination or similar transaction involving the Company or
35
any of its Subsidiaries) whereby any "person" or related "group" of "persons"
(as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act)
(other than the Company, any of its Subsidiaries, an employee benefit plan
maintained by the Company or any of its Subsidiaries, or a "person" that, prior
to such transaction, directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act),
of more than 50% of the Stock then outstanding, or of securities of the Company
or AMC (or options, rights or warrants to purchase or securities convertible
into or exchangeable for such securities) possessing more than 50% of the total
combined voting power of the Company's or AMC's securities outstanding, in
either case immediately after such transaction or series of transactions; or
(ii) the sale, lease, transfer, conveyance or other disposition (other than by
way of a transaction that would not be deemed an AMC Sale pursuant to clause (i)
above), in one or a series of related transactions, of all or substantially all
of the assets of the Company or AMC, or the Company and its subsidiaries taken
as a whole, to any "person" (as defined above).
"AMENDED AND RESTATED REGULATORY SIDELETTER" has the meaning set forth
in Section 11(a).
"AMENDED DRAG-ALONG NOTICE" has the meaning set forth in Section 4(b).
"AMENDED PARTICIPATION NOTICE" had the meaning set forth in
Section 6(c).
"ANNUAL BUDGET" means the annual budget or annual plan of the Company
or any Subsidiary of the Company, including the annual expenditure budget of the
Company or any Subsidiary of the Company.
"APOLLO DESIGNEE" has the meaning set forth in Section 1(a)(ii)(B).
"APOLLO FUND V" has the meaning set forth in the preamble.
"APOLLO GERMAN PARTNERS" has the meaning set forth in the preamble.
"APOLLO INVESTORS" has the meaning set forth in the preamble.
"APOLLO NETHERLANDS V(A)" has the meaning set forth in the preamble.
"APOLLO NETHERLANDS V(B)" has the meaning set forth in the preamble.
"APOLLO OVERSEAS" has the meaning set forth in the preamble.
"BLOCKOUT PERIOD" has the meaning set forth in Section 2(a).
"BOARD" has the meaning set forth in Section 1(a)(i).
"BUSINESS DAY" means 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 New York,
New York.
"COINVESTOR DEMAND" has the meaning set forth in Section 7(a)(ii).
36
"COMMISSION" has the meaning set forth in Section 7(a)(i).
"COMMON STOCK" has the meaning set forth in the recitals.
"COMPANY" has the meaning set forth in the preamble.
"COMPANY ELECTION NOTICE" has the meaning set forth in Section 3(a).
"COMPANY ELECTION PERIOD" has the meaning set forth in Section 3(a).
"CONVERTIBLE SECURITIES" means any evidence of indebtedness, shares of
stock or other securities (other than Options or Warrants) which are directly or
indirectly convertible into or exchangeable or exercisable for shares of Stock.
"DEMAND NOTICE" has the meaning set forth in Section 7(a)(i)
"DEMAND REGISTRATION" has the meaning set forth in Section 7(a)(i)
"DEMANDING INVESTOR" has the meaning set forth in Section 7(a)(i)
"DRAG-ALONG NOTICE" has the meaning set forth in Section 4(b).
"DRAG-ALONG SELLERS" has the meaning set forth in Section 4(a).
"DRAG-ALONG TRANSFEREE" has the meaning set forth in Section 4(a).
"EFFECTIVE TIME" has the meaning ascribed to such term in the Merger
Agreement.
"ELECTING PARTY" has the meaning set forth in Section 3(e).
"ELIGIBLE SHARES" has the meaning set forth in Section 5(b).
"EQUIVALENT SHARES" means, at any date of determination, (a) as to any
outstanding shares of Stock, such number of shares of Stock, (b) as to any
outstanding Options, Warrants or Convertible Securities, the maximum number of
shares of Stock for which or into which such Options, Warrants or Convertible
Securities may at the time be exercised, converted or exchanged (or which will
become exercisable, convertible or exchangeable on or prior to, or by reason of,
the transaction or circumstances in connection with which the number of
Equivalent Shares is to be determined) and (c) in respect of any Subsidiary of
the Company, (i) as to any outstanding shares of stock of any Subsidiary of the
Company, such number of shares of stock or (ii) as to any outstanding options,
warrants or convertible securities, the maximum number of shares of stock of any
Subsidiary of the Company for which or into which such options, warrants or
convertible securities may at the time be exercised, converted or exchanged (or
which will become exercisable, convertible or exchangeable on or prior to, or by
reason of, the transaction or circumstances in connection with which the number
of Equivalent Shares is to be determined).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations in effect thereunder.
37
"EXIT SALE" has the meaning set forth in Section 4(a).
"FAIR MARKET VALUE" with respect to any non-cash consideration shall
be determined as follows:
(i) if such non-cash consideration is a security and is
listed on one or more national securities exchanges (within the
meaning of the Exchange Act), the Fair Market Value shall be the
average closing price of such security for the twenty (20) most recent
trading days prior to the delivery of the Transfer Notice on the
principal exchange on which such security is then trading;
(ii) if such non-cash consideration is a security and is not
traded on a national securities exchange but is quoted on NASDAQ or a
successor quotation system, the Fair Market Value shall be the average
last sales price for the twenty (20) most recent trading days prior to
the delivery of the Transfer Notice as reported by NASDAQ or such
successor quotation system; or
(iii) if such non-cash consideration is a security and is not
publicly traded on a national securities exchange and is not quoted on
NASDAQ or a successor quotation system, or if such non-cash
consideration is not a security, the Fair Market Value shall be
determined in good faith by the Board.
"FINANCING DOCUMENTS" has the meaning set forth in Section 2(a).
"FULLY SUBSCRIBED NON-SELLING INVESTOR" has the meaning set forth in
Section 3(c).
"GINGER" has the meaning set forth in the preamble.
"GOVERNMENTAL APPROVAL" means, with respect to any Transfer of Shares,
any consent or other action by, or filing with, any governmental authority
required in connection with such Transfer and the expiration or early
termination of any applicable statutory waiting period in connection with such
action or filing.
"HSR" has the meaning set forth in Section 3(e).
"INDEPENDENT THIRD PARTY" means any Person who, immediately prior to
the contemplated transaction, (i) does not own, either directly or through one
or more intermediaries, in excess of 3% of the Shares (any Person owning in
excess of 3% of the Shares being referred to herein as a "3% OWNER") and (ii) is
not an Affiliate of any such 3% Owner.
"INITIAL INVESTOR SHARES" means that number of Shares held by an
Investor immediately following the Effective Time, as the same may be adjusted
for stock splits, stock dividends, recapitalizations or similar events.
"INITIAL PUBLIC OFFERING" means the initial public offering of Stock
registered on Form S-1 (or any equivalent or successor form under the Securities
Act).
"INITIAL STOCKHOLDERS AGREEMENT" has the meaning set forth in the
preamble.
38
"INVESTOR" or "INVESTORS" means each of the JPMP Investors, the Apollo
Investors and the other entities listed on Schedule 1 attached hereto and, upon
the unanimous approval of each of the JPMP Investors and the Apollo Investors,
any other subsequent holder of Shares who agrees to be bound by the terms of
this Agreement.
"INVESTOR ELECTION NOTICE" has the meaning set forth in Section 3(b).
"INVESTOR ELECTION PERIOD" has the meaning set forth in Section 3(b).
"IPO DATE" means the date on which the Company consummates its Initial
Public Offering.
"ISSUANCE" has the meaning set forth in Section 6(a).
"ISSUER" has the meaning set forth in Section 6(a).
"JPMP BHCA" has the meaning set forth in the preamble.
"JPMP DESIGNEE" has the meaning set forth in Section 1(a)(ii)(A).
"JPMP CAYMAN" has the meaning set forth in the preamble.
"JPMP CAYMAN II" has the meaning set forth in the preamble.
"JPMP GLOBAL" has the meaning set forth in the preamble.
"JPMP INVESTORS" has the meaning set forth in the preamble.
"JPMP SELLDOWN" has the meaning set forth in the preamble.
"LITIGATION" has the meaning set forth in Section 14(d).
"LUKE" has the meaning set forth in the preamble.
"MAJOR SUBSIDIARY" means any Subsidiary of the Company that, together
with its Subsidiaries, (a) contributed more than 35% of the consolidated
revenues of the Company for the most recently completed fiscal year, (b)
contributed more than 35% of the consolidated income from operations, net of all
non-cash items, of the Company for the most recently completed fiscal year, or
(c) held more than 35% of the consolidated assets of the Company at the end of
the most recently completed fiscal year, in each case as reflected on the
consolidating financial statements of the Company and its Subsidiaries
underlying the audited consolidated financial statements of the Company and its
Subsidiaries, in each case, as of the end of or for such fiscal year and
available at the time such determination is made.
"MANAGEMENT DESIGNEE" has the meaning set forth in
Section 1(a)(ii)(C).
"MANAGEMENT STOCKHOLDER" has the meaning set forth in the Management
Stockholders Agreement.
39
"MANAGEMENT STOCKHOLDERS AGREEMENT" means that certain Management
Stockholders Agreement by and among the Company, the Principal Investors and
certain management stockholder parties thereto in substantially the form
attached hereto as EXHIBIT C.
"MERGER" has the meaning set forth in the recitals.
"MERGER AGREEMENT" has the meaning set forth in the recitals.
"NON-SELLING INVESTOR" has the meaning set forth in Section 3(a).
"OFFERED SHARES" has the meaning set forth in Section 2(b).
"OFFEROR" has the meaning set forth in Section 3(a).
"OPTIONS" means any options to subscribe for, purchase or otherwise
directly acquire Stock, other than any such option held by the Company or any
right to purchase shares pursuant to this Agreement.
"OTHER SECURITIES" has the meaning set forth in Section 6(f).
"PARTICIPATING BUYER" has the meaning set forth in Section 6(c).
"PARTICIPATION NOTICE" has the meaning set forth in Section 6(b).
"PARTICIPATION PORTION" has the meaning set forth in Section 6(b)(i).
"PARTICIPATING OFFEREES" has the meaning set forth in Section 6(b).
"PARTY" and "PARTIES" has the meaning set forth in the preamble.
"PERCENTAGE INTEREST" means the number of shares of Stock owned by an
Investor, divided by the aggregate outstanding shares of Stock of the Company,
expressed as a percentage.
"PERMITTED TRANSFEREE" means any Person who acquires Shares pursuant
to clauses (i), (ii) and (iii) of the definition of "Permitted Transfer".
"PERMITTED TRANSFER" means: (i) a Transfer approved by each Principal
Investor so long as there are any Principal Investors, (ii) a Transfer to an
Affiliate of such Investor; PROVIDED such transferee remains an Affiliate of
such transferor following the Transfer; (iii) following an Initial Public
Offering, a Transfer by an Investor made as part of a distribution by an
Investor to its respective general or limited partners or members in accordance
with such Investor's fund documents, as the case may be; (iv) a Transfer made by
a JPMP Investor pursuant to and in accordance with the Amended and Restated
Regulatory Sideletter; or (v) a Transfer made pursuant to the registration
rights as set forth in Section 7; PROVIDED that such transferee, in the case of
clauses (i), (ii), (iii) and (iv) above shall agree in writing with the Parties
to be bound by, and to comply with, all applicable provisions of and to be
deemed to be an Investor for purposes of this Agreement. For the avoidance of
doubt, (A) any Permitted Transfer made pursuant to clause (i) of this definition
is subject to the provisions of Section 5, and (B) a transferee of Shares
40
subsequent to the IPO Date may, but shall not be required to, agree in writing
with the Parties to be bound by, and to comply with, all applicable provisions
of and to be deemed to be an Investor for purposes of this Agreement.
"PERSON" includes any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"PRINCIPAL INVESTOR" means (i) the JPMP Investors, so long as the JPMP
Investors, together with their Permitted Transferees, collectively own Shares
representing at least 33% of the Initial Investor Shares owned by the JPMP
Investors; PROVIDED, that the JPMP Investors shall not be deemed to be a
Principal Investor at any time that they do not, together with their Permitted
Transferees, collectively own Shares representing at least 33% of the Initial
Investor Shares owned by the JPMP Investors, and (ii) the Apollo Investors, so
long as the Apollo Investors, together with their Permitted Transferees,
collectively own Shares representing at least 33% of the Initial Investor Shares
owned by the Apollo Investors; PROVIDED, that the Apollo Investors shall not be
deemed to be a Principal Investor at any time that they do not, together with
their Permitted Transferees, collectively own Shares representing at least 33%
of the Initial Investor Shares owned by the Apollo Investors (in each case, as
may be adjusted for stock splits, stock dividends, recapitalizations or similar
events). For the avoidance of doubt, so long as there are two Principal
Investors, references in this Agreement to "Principal Investors" shall mean both
Principal Investors, and if at any time there is only one Principal Investor,
references in this Agreement to "the Principal Investors" or "each Principal
Investor" shall mean that sole Principal Investor then remaining.
"PROSPECTIVE SUBSCRIBER" has the meaning set forth in Section 6(b)(i).
"PROSPECTUS" has the meaning set forth in Section 7(e)(i).
"PUBLIC SALE" means a Transfer pursuant to a bona fide underwritten
public offering pursuant to an effective registration statement filed under the
Securities Act or pursuant to Rule 144 under the Securities Act (other than in a
privately negotiated sale).
"REGISTRABLE STOCK" means with respect to any Investor, all Stock held
by such Investor, including any Stock received, directly or indirectly, with
respect to or in exchange of, or substitution for or conversion of such Stock,
including by way of dividend or distribution, recapitalization, merger,
consolidation or other reorganization, other than Stock (i) sold by an Investor
in a transaction in which such Investor's rights under this Agreement are not
assigned, (ii) sold pursuant to an effective registration statement under the
Securities Act or (iii) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act (including transactions
under Rule 144, or a successor thereto, promulgated under the Securities Act) so
that all transfer restrictions and restrictive legends with respect thereto, if
any, are removed upon the consummation of such sale.
"REGISTRATION STATEMENT" has the meaning set forth in Section 7(e).
"REMAINING OFFERED SHARES" has the meaning set forth in Section 3(c).
41
"SCARLETT" has the meaning set forth in the preamble.
"SECOND INVESTOR ELECTION NOTICE" has the meaning set forth in
Section 3(c).
"SECOND INVESTOR ELECTION PERIOD" has the meaning set forth in
Section 3(c).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations in effect thereunder.
"SELLING INVESTOR" has the meaning set forth in Sections 3(a).
"SHARES" means (a) all shares of Stock, whenever issued, including all
shares of Stock issued upon the exercise, conversion or exchange of any Options,
Warrants or Convertible Securities and (b) all Options, Warrants and Convertible
Securities (treating such Options, Warrants and Convertible Securities as a
number of Shares equal to the number of Equivalent Shares represented by such
Options, Warrants and Convertible Securities for all purposes of this Agreement
except as otherwise specifically set forth herein).
"SHELF REGISTRATION" shall mean a registration which covers the
Registrable Stock requested to be included therein pursuant to the provisions of
Section 7(a)(i) on an appropriate form or any similar successor or replacement
form pursuant to Rule 415 of the Securities Act, and which form shall be
available for the sale of the Registrable Stock in accordance with the intended
method or methods of distribution thereof, and all amendments and supplements to
such registration statement, including post-effective amendments, in each case
including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"STOCK" means Common Stock, together with any other classes or series
of equity securities of the Company.
"SUBJECT SECURITIES" has the meaning set forth in Section 6(a).
"SUBSCRIPTION AGREEMENT" has the meaning set forth in the Recitals.
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means any corporation,
partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any other Person), owns, directly or
indirectly, 50% or more of the stock or other equity interests which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
"SUCCESSOR ENTITY" has the meaning set forth in Section 14(j).
"TAG-ALONG ELECTION PERIOD" has the meaning set forth in Section 5(b).
"TAG-ALONG RIGHTS" has the meaning set forth in Section 5(b).
"TAG-ALONG SELLER" has the meaning set forth in Section 5(a).
"TAG-ALONG TRANSFEREE" has the meaning set forth in Section 5(b).
42
"TRANSFER" means a transfer, sale, assignment, pledge, hypothecation
or other disposition or exchange, including any Transfer of a voting or economic
interest in securities or other property; and "Transferring" or "Transferred"
have correlative meanings.
"TRANSFER NOTICE" has the meaning set forth in Section 2(b).
"WARRANTS" means any warrants to subscribe for, purchase or otherwise
directly acquire Stock or Convertible Securities.
(b) Unless the context of this Agreement otherwise requires, (i)
words of any gender include each other gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively; (iii)
the terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Agreement; (iv) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement; (v) the word "including" shall
mean "including, without limitation", and (vi) the word "or" shall be
disjunctive but not exclusive.
(c) References to agreements and other documents shall be deemed to
include all subsequent amendments and other modifications thereto.
(d) References to statutes shall include all regulations promulgated
thereunder and references to statutes or regulations shall be construed as
including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation.
SECTION 14. MISCELLANEOUS
(a) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective legal
representatives, heirs, legatees, successors, and assigns and any other
transferee of Shares and shall also apply to any Shares acquired by Investors
after the date hereof. Prior to the IPO Date, in the event that any Investor
Transfers all or any portion of its Shares to any other Person, as permitted
herein, such transferee shall execute a counterpart of this agreement in the
form attached as EXHIBIT A hereto and agree to be bound by the terms hereof for
all purposes hereunder. Any such Transfer by an Investor will be void AB INITIO
unless such Transfer is effectuated in accordance with this Agreement. Any
Affiliate of the JPMP Investors or the Apollo Investors that receives Shares
hereunder shall be considered one of JPMP Investors or the Apollo Investors, as
applicable, for all purposes hereunder.
(b) SPECIFIC PERFORMANCE. Each Party, in addition to being entitled
to exercise all rights provided herein or granted by law, including recovery of
damages, shall be entitled to specific performance of each other Party's
obligations under this Agreement, and each Party agrees to waive any requirement
for the security or posting of any bond in connection with such remedy. The
Parties agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by any of them of the provisions of this
Agreement and each hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
43
(c) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws, and not the law of conflicts which would
result in the application of the laws of another jurisdiction, of the State of
Delaware.
(d) SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. Each of the
Parties hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the Court of Chancery of the State of Delaware and of
the United States of America sitting in 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 agrees not to commence any
Litigation relating thereto except in such court), and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
its respective notice address, as provided for in this Agreement, shall be
effective service of process for any Litigation brought against it in any such
court. Each of the Parties 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 Court of Chancery of the State of
Delaware or the United States of America sitting in 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.
(e) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(f) NOTICES. All notices, requests or consents provided for or
permitted to be given under this Agreement shall be in writing and shall be
given either by depositing such writing in the United States mail, addressed to
the recipient, postage paid and certified with return receipt requested, or by
depositing such writing with a reputable overnight courier for next day
delivery, or by delivering such writing to the recipient in person, by courier
or by facsimile transmission. A notice, request or consent given under this
Agreement shall be deemed received when actually received if personally
delivered, when transmitted, if transmitted by facsimile with electronic
confirmation, the day after it is sent, if sent for next day delivery and upon
receipt, if sent by mail. All such notices, requests and consents shall be
delivered as follows:
(i) if to the Company, addressed to it at:
Marquee Holdings Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P.
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
44
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
and
Apollo Management, L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
(ii) if to the Principal Investors, addressed as follows:
▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P. and affiliated funds
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
or
Apollo Management, L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
45
Attn: ▇▇▇▇ ▇▇▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
(iii) if to any other Investor, in accordance with the address
of each such Investor on the signature pages attached hereto.
(g) RECAPITALIZATION, EXCHANGE, ETC. AFFECTING THE COMPANY'S SHARES.
The provisions of this Agreement shall apply, to the full extent set forth
herein, with respect to any and all Shares of the Company or any successor or
assign of the Company (whether by merger, consolidation, sale of assets,
conversion to a corporation or otherwise) that may be issued in respect of, in
exchange for, or in substitution of, the Shares and shall be appropriately
adjusted for any dividends, splits, reverse splits, combinations,
recapitalizations, and the like occurring after the date hereof.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement.
(i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby.
(j) AMENDMENT. This Agreement may be amended only by written
agreement approved by (i) each Principal Investor if at such time there exists
at least one Principal Investor, or (ii) if at such time there does not exist a
Principal Investor, then Investors owning, in the aggregate, at least a majority
of the then outstanding Shares owned by Investors; PROVIDED, that (x) the
written consent of each other Party or Parties shall be required, in addition to
the approval required in (i) or (ii) above, as the case may be, for any such
amendment that disproportionately affects in any material and adverse manner
such Party or Parties or their rights or obligations hereunder relative to the
other Parties, and (y) so long as there exists at least one Principal Investor,
the written consent of Investors that are not Principal Investors owning at
least a majority of then outstanding Shares owned by Investors that are not
Principal Investors shall also be required, in addition to the approval required
by (i) or (ii) above, as the case may be, for any such amendment that
disproportionately affects in any material and adverse manner such Investors
that are not Principal Investors, as a group, or their rights or obligations
hereunder relative to the Principal Investors. At any time hereafter, Persons
acquiring Shares may be made parties hereto by executing a signature page in the
form attached as EXHIBIT A hereto, which signature page shall be countersigned
by the Company and shall be attached to this Agreement
46
and become a part hereof without any further action of any other Party hereto.
Except as otherwise provided herein, in the event that (A) the Company or any
successor or assign consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity in such consolidation
or merger, (B) the Company or any successor or assign transfers all or
substantially all of its properties and assets to any Person, or (C) a sale of
the Company is consummated pursuant to Section 4 and the Investors receive
non-publicly traded equity securities in connection with such transaction, then
in the case of either (A) or (B), proper provision shall be made and all
Investors shall execute such documents and agreements as reasonably requested by
the Principal Investors so that this Agreement shall be given full force and
effect with respect to such surviving corporation or entity or such Person that
acquires all or substantially all of the properties and assets of the Company or
any successor or assign (any such surviving corporation, entity or Person, a
"SUCCESSOR ENTITY"), as the case may be, and the rights and obligations of each
Party hereto shall continue in full force and effect such that each Party shall
have the same rights and obligations with respect to the applicable Successor
Entity and its securities as it has with respect to the Company and the Shares,
and in the case of (C) proper provision shall be made and all Investors shall
execute such documents and agreement as reasonably requested by the Principal
Investors so that the provisions of Section 3, Section 4 and Section 5 shall
survive (as may be amended as reasonably determined by the Principal Investors)
with respect to such non-publicly traded equity securities.
(k) TAX WITHHOLDING. The Company shall be entitled to require payment
in cash or deduction from other compensation payable to any Investor of any sums
required by federal, state or local tax law to be withheld with respect to the
issuance, vesting, exercise, repurchase or cancellation of any Shares.
(l) INTEGRATION. This Agreement, the Amended and Restated Regulatory
Sideletter and any side letters by any Investor or group of Investors, on the
one hand, and the Company, on the other, regarding board observer rights,
constitute the entire agreement among the Parties hereto pertaining to the
subject matter hereof and supersede all prior agreements and understandings
pertaining thereto, the Subscription Agreement, by and among the Company, the
Apollo Investors and JPMP BHCA, dated as of July 22, 2004, and the Stockholders
Agreement Summary Term Sheet attached thereto.
(m) FURTHER ASSURANCES. In connection with this Agreement and the
transactions contemplated thereby, each Investor shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and such transactions.
(n) NO STRICT CONSTRUCTION. This Agreement shall be deemed to be
collectively prepared by the Parties, and no ambiguity herein shall be construed
for or against any Party based upon the identity of the author of this Agreement
or any provision hereof.
(o) NO THIRD PARTY BENEFICIARIES. Neither this Agreement, nor any
provision contained herein, shall create a third-party beneficiary relationship
or otherwise confer any right, entitlement or benefit upon any Person other than
the Parties to this Agreement and their permitted assigns.
47
(p) AMENDMENT AND RESTATEMENT.This Agreement amends and restates the
Initial Stockholders Agreement in its entirety.
48
IN WITNESS WHEREOF, the Parties have executed this Amended and
Restated Stockholders Agreement as of the date first above written.
MARQUEE HOLDINGS INC.
By:
--------------------------------------------
Name:
Title:
▇.▇.▇▇▇▇▇▇ PARTNERS (BHCA), L.P.
BY: JPMP MASTER FUND MANAGER, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
▇.▇.▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
▇.▇.▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(CAYMAN), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
50
▇.▇.▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(CAYMAN) II, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
▇.▇.▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(SELLDOWN), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
AMCE (GINGER), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
51
AMCE (LUKE), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
AMCE (SCARLETT), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
52
APOLLO INVESTMENT FUND V, L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
APOLLO OVERSEAS PARTNERS V, L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
APOLLO NETHERLANDS PARTNERS V(A), L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
APOLLO NETHERLANDS PARTNERS V(B), L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
53
APOLLO GERMAN PARTNERS V GMBH & CO KG
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
--------------------------------------------
Name:
Title:
54
SCHEDULE 1
SCHEDULE OF INVESTORS
NAME SHARES OF STOCK
-------------------------------------------------------------------------------------------------------------
JPMP INVESTORS
▇.▇. ▇▇▇▇▇▇ PARTNERS (BHCA), L.P. 192,632.94855
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS, L.P. 36,025.22570
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS (CAYMAN), L.P. 15,425.90891
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS (CAYMAN) II, L.P. 2,022.62118
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS (SELLDOWN), L.P. 5,763.31874
AMCE (GINGER), L.P. 5,535.40999
AMCE (LUKE), L.P. 2,660.38566
AMCE (SCARLETT), L.P. 6,434.18127
APOLLO INVESTORS
APOLLO INVESTMENT FUND V, L.P. 228,657.00000
APOLLO OVERSEAS PARTNERS V, L.P. 29,994.57500
APOLLO NETHERLANDS PARTNERS V(A), L.P. 3,144.70000
APOLLO NETHERLANDS PARTNERS V(B), L.P. 2,217.28000
APOLLO GERMAN PARTNERS V GMBH & CO KG 2,486.44500
OTHER INVESTORS
WESTON PRESIDIO CAPITAL IV, L.P. 49,220.87350
WPC ENTREPRENEUR FUND II, L.P. 779.12650
SSB CAPITAL PARTNERS (MASTER FUND) I, L.P. 25,000.00000
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC 40,000.00000
CO-INVESTMENT PARTNERS, L.P. 50,000.00000
CSFB STRATEGIC PARTNERS HOLDINGS II, L.P. 1,350.00000
CSFB STRATEGIC PARTNERS PARALLEL HOLDINGS II, L.P. 13,650.00000
CSFB CREDIT OPPORTUNITIES FUND (EMPLOYEE), L.P. 1,258.88500
CSFB CREDIT OPPORTUNITIES FUND (HELIOS), L.P. 3,741.11500
CREDIT SUISSE ANLAGESTIFTUNG 1,000.00000
PEARL HOLDINGS LIMITED 4,500.00000
PARTNERS GROUP PRIVATE EQUITY PERFORMANCE HOLDING LIMITED 3,000.00000
▇▇▇▇ INVEST (GUERNSEY) LIMITED 1,500.00000
ALPINVEST PARTNERS CS INVESTMENTS 2003 C.V. 31,760.43557
ALPINVEST PARTNERS LATER STAGE CO-INVESTMENTS CUSTODIAN II B.V. 2,851.38133
ALPINVEST PARTNERS LATER STAGE CO-INVESTMENTS CUSTODIAN IIA B.V. 388.18310
SCREEN INVESTORS 2004, LLC 1,950.00000
56
EXHIBIT A
SIGNATURE PAGE
TO THE
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By execution of this signature page, ____________________________________
hereby agrees to become a party to, be bound by the obligations of and receive
the benefits of that certain Amended and Restated Stockholders Agreement, dated
as of December [ ], 2004, as amended from time to time, by and among
Marquee
Holdings Inc., a Delaware corporation, ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P., ▇.▇.
▇▇▇▇▇▇ Partners Global Investors, L.P., ▇.▇. ▇▇▇▇▇▇ Partners Global Investors A,
L.P., ▇.▇. ▇▇▇▇▇▇ Partners Global Investors (Cayman), ▇.▇. ▇▇▇▇▇▇ Partners
Global Investors (Cayman) II, L.P., ▇.▇. ▇▇▇▇▇▇ Partners Global Investors
(Selldown), L.P., AMCE (Ginger), L.P., AMCE (Luke), L.P., AMCE (Scarlett), L.P.,
Apollo Investment Fund V, L.P., Apollo Overseas Partners V, L.P., Apollo
Netherlands Partners V(A), L.P., Apollo Netherlands Partners V(B), L.P., and
Apollo German Partners V GmbH & Co KG, as amended from time to time thereafter
and shall be deemed to be an "Investor" for all purposes thereunder.
--------------------------------------------------
By:
--------------------------------------------
Name:
Title:
Notice Address:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Accepted:
MARQUEE HOLDINGS INC.
By:
--------------------------------------------
Name:
Title:
58
EXHIBIT B
AMENDED AND RESTATED REGULATORY SIDELETTER
This Amended and Restated Regulatory Sideletter (this "AGREEMENT") is
entered into as of December 23, 2004, by and among
Marquee Holdings Inc., a
Delaware corporation (the "COMPANY"), and ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P., a
Delaware limited partnership ("JPMP BHCA"), ▇.▇. ▇▇▇▇▇▇ Partners Global
Investors, L.P., a Delaware limited partnership ("JPMP GLOBAL"), ▇.▇. ▇▇▇▇▇▇
Partners Global Investors (Cayman), L.P., a Cayman limited partnership ("JPMP
CAYMAN"), ▇.▇. ▇▇▇▇▇▇ Partners Global Investors (Cayman) II, L.P., a Cayman
limited partnership ("JPMP CAYMAN II"), ▇.▇. ▇▇▇▇▇▇ Partners Global Investors
(Selldown), L.P., a Delaware limited partnership ("JPMP SELLDOWN"), AMCE
(Ginger), L.P., a Delaware limited partnership ("GINGER"), AMCE (Luke), L.P., a
Delaware limited partnership ("LUKE") and AMCE (Scarlett), L.P., a Delaware
limited partnership ("SCARLETT" and together with JPMP BHCA, JPMP Global, JPMP
Cayman, JPMP Cayman II, JPMP Selldown, Ginger, Luke and any other affiliated
entities designated by JPMP BHCA to the Company in writing prior to the
Effective Time (as defined in the Agreement and Plan of Merger, by and among the
Company, Marquee Inc. and AMC Entertainment Inc., dated as of July 22, 2004),
the "INVESTORS", and each individually, an "INVESTOR") and amends that certain
Regulatory Sideletter, dated as of October 29, 2004 (the "REGULATORY
SIDELETTER"), by and among the Company and the other signatories thereto.
WHEREAS, Investor is a regulated entity and an indirect subsidiary of
▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and in connection therewith Investor is subject to
various regulations that may impose restrictions on the type and terms of
Investor's investment in the Company; and
WHEREAS, the parties hereto desire to amend and restate the Regulatory
Sideletter to include each of JPMP Selldown, Ginger, Luke and Scarlett as
parties hereto; and
WHEREAS, the parties now desire to enter into this Agreement to
reflect Investor's purchase of shares of stock of the Company pursuant to that
certain Subscription Agreement, by and among the Company, JPMP BHCA and certain
other parties set forth therein, dated as of July 22, 2004, and that certain
Subscription Assignment, by and among the Company and the Investor, dated as of
the date hereof (together, the "PURCHASE AGREEMENT"), it being understood that
the entering into this Agreement is a material inducement for Investor's
agreement to purchase shares of stock.
NOW THEREFORE, in connection with the foregoing, the parties hereby
agree as follows:
Section 1. REGULATORY COOPERATION.
(a) Notwithstanding anything to the contrary contained in the
Transaction Documents or other documents relating to the purchase and ownership
of the Company's securities, it is understood and hereby expressly stated that
Investor's obligations under the Transaction Documents or other documents
relating to Investor's purchase and ownership of the Company's securities are,
except as provided herein, subject to this Agreement. In the event that Investor
reasonably determines that it has a Regulatory Problem, the Company agrees to
take all
such actions as are reasonably requested by Investor in order (A) to
effectuate and facilitate any transfer by Investor of any securities of the
Company then held by Investor to any Person designated by Investor (subject to
all of the terms and conditions of the Stockholders Agreement), (B) to permit
Investor (or any of its Affiliates) to exchange all or any portion of the voting
securities then held by such Person on a share-for-share basis for shares of a
class of non-voting securities of the Company, which non-voting securities shall
be identical in all respects to such voting securities, except that such new
securities shall be non-voting and shall be convertible into voting securities
on such terms as are requested by Investor and reasonably acceptable to the
Company in light of regulatory considerations then prevailing, and (C) to grant
Investor or its designee the reasonable equivalent of any voting rights arising
out of Investor's ownership of voting securities and/or provided for in the
Transaction Documents that were diminished as a result of the transfers and
amendments referred to above. If Investor elects to transfer securities of the
Company in order to avoid a Regulatory Problem to an Affiliate subject to
limitations on its voting or total ownership interest in the Company, the
Company and such Affiliate shall enter into such mutually acceptable agreements
as such Affiliate may reasonably request in order to assist such Affiliate in
complying with Laws to which it is subject. Such agreements may include
restrictions on the redemption, repurchase or retirement of securities of the
Company that would result or be reasonably expected to result in such Affiliate
holding more voting securities or total securities (equity and debt) than it is
permitted to hold under such laws and regulations.
(b) In the event Investor has the right to acquire any of the
Company's securities from the Company or any other Person (as the result of a
preemptive offer, pro rata offer or otherwise), and Investor reasonably
determines that it has a Regulatory Problem, at Investor's request the Company
will offer to sell to Investor non-voting securities (or, if the Company is not
the proposed seller, will arrange for the exchange of any voting securities for
non-voting securities immediately prior to or simultaneous with such sale) on
the same terms as would have existed had Investor acquired the securities so
offered and immediately requested their exchange for non-voting securities
pursuant to subsection (a) above.
(c) In the event that any Affiliate of the Company ever offers to
issue any of its securities to Investor, then the Company will cause such
Affiliate to enter into an agreement with Investor substantially similar to this
Agreement.
Section 2. CROSS MARKETING ACTIVITIES.
The Company hereby represents and warrants that except as otherwise
disclosed, neither the Company nor any of its subsidiaries (i) offers or
markets, directly or through any arrangement, any product or service of any
depository institution owned by ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co., or (ii) permits any of
its products or services to be offered or marketed, directly or through any
arrangement, by or through any depository institution owned by ▇.▇. ▇▇▇▇▇▇ Chase
& Co.
Section 3. LENDING ACTIVITIES.
The Company hereby represents and warrants that except as otherwise
disclosed in Schedule 1 hereto, neither the Company nor any of its subsidiaries
currently has or is expected
2
to have a loan facility, credit facility, debt financing, line of credit or any
other extension of credit from any depository institution owned by ▇.▇. ▇▇▇▇▇▇
▇▇▇▇▇ & Co.
Section 4. COVENANTS.
(a) The Company shall give Investor thirty (30) days prior written
notice before taking any affirmative steps which would cause the representations
and warranties contained in Sections 2 or 3 to be untrue.
(b) The Company shall use its best efforts to notify Investor promptly
at any time in which the Company reasonably believes the representations
contained in Sections 2 or 3 to be untrue whether as a result of the Company's
affirmative action or otherwise.
Section 5. PARTICIPATION INTERESTS AND PLEDGE.
(a) Notwithstanding anything to the contrary contained in the
Transaction Documents or any other documents relating to the purchase and
ownership of the Company's securities, Investor shall be permitted to grant
participation interests in the Company's securities held by Investor to
Affiliates of Investor without prior disclosure or consent of the Company or any
other Person, so long as the participation agreement or other agreement or
document pursuant to which such participation interest is granted requires such
affiliate to comply with the Transaction Documents as if it were a record owner
of such securities and a direct party to the Transaction Documents.
(b) Notwithstanding anything to the contrary contained in the
Transaction Documents or any other documents relating to the purchase and
ownership of the Company's securities, any and all representations and
warranties relating to Investor's ownership of the Company's securities shall be
qualified by the fact that Investor has granted participation interests in a pro
rata portion of all of its investments, including its purchase of the Company's
securities, to Affiliates of Investor. Such participation interests, however, do
not affect Investor's status as being the sole record owner of the Company's
securities held by Investor.
Section 6. FEES AND EXPENSES. The Company agrees that, in the event
Investor or any Affiliate of Investor is at any time required to make any filing
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), in respect of the ownership by any such entity of securities of the
Company (including, without limitation, upon the conversion of any shares of
non-voting stock), the Company shall cooperate fully with Investor or such
Affiliate in the preparation of any necessary filings under the HSR Act by it,
any of its Affiliates or the Company.
Section 7. DEFINITIONS.
"AFFILIATE" means, with respect to any Person, (i) a director or
executive officer of such Person or any Person identified in clause (ii) below,
and (ii) any other Person that, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with such
Person. When such term is used in the context of a Regulatory Problem, it also
has the meaning ascribed to it in any Law.
3
"BANKING REGULATIONS" means all federal, state and foreign Laws
applicable to banks, bank holding companies and their Affiliates, including
without limitation, the Bank Holding Company Act and the Federal Reserve Act.
"CONTROL" means, with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"LAW," with respect to any Person, means (i) all provisions of all
laws, statutes, ordinances, rules, regulations, permits, certificates or orders
of any governmental authority applicable to such Person or any of its assets or
property or to which such Person or any of its assets or property is subject,
including, without limitation, Banking Regulations, and (ii) all judgments,
injunctions, orders and decrees of all courts and arbitrators in proceedings or
actions in which such Person is a party or by which it or any of its assets or
properties is or may be bound or subject.
"PERSON" shall be construed as broadly as possible and shall include
an individual or natural person, a partnership (including a limited liability
partnership), a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental authority.
"REGULATORY PROBLEM" means any set of facts or circumstances in which
the Investor's ownership of securities issued by the Company (i) gives rise to a
material violation of Law by Investor or any of its Affiliates, or gives rise to
a reasonable belief by Investor that such a violation is likely to occur or (ii)
gives rise to a limitation in Law that will impair materially the ability of
Investor or any Affiliate to conduct its business or gives rise to a reasonable
belief by Investor that such a limitation is likely to arise.
"STOCKHOLDERS AGREEMENT" means that certain Amended and Restated
Stockholders Agreement of even date herewith by and among the Company, Investor
and certain other holders of the Company's capital stock as may be amended from
time to time.
"TRANSACTION DOCUMENTS" means the Stockholders Agreement and Purchase
Agreement, collectively.
Section 8. AMENDMENTS; BENEFIT.
The terms and provisions of this Agreement may not be modified or
amended, unless pursuant to a written agreement executed by each of the parties
hereof. In furtherance and not in limitation of the preceding sentence, this
Agreement may not be modified or amended by the Company without the prior
written consent of the holders of a majority of the Company's equity securities
held by persons other than Investor. This Agreement shall be for the benefit of
Investor and its Affiliates and shall apply to each acquisition of securities
issued by the Company to Investor or its Affiliates.
Section 9. COUNTERPARTS, FACSIMILE SIGNATURES.
4
This Agreement may be executed in any number of counterparts,
including by means of facsimile, and each counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together shall constitute
but one agreement.
Section 10. NOTICES. All notices, claims, certificates, requests, demands
and other communications to be given to Investor hereunder or relating to
Investor's investment in the Company shall be addressed as follows:
▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P. and affiliated funds
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
COPY TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(Signature page follows)
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MARQUEE HOLDINGS INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
▇.▇. ▇▇▇▇▇▇ PARTNERS (BHCA), L.P.
BY: JPMP MASTER FUND MANAGER, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(CAYMAN), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(CAYMAN) II, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(SELLDOWN), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
7
AMCE (GINGER), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
AMCE (LUKE), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
AMCE (SCARLETT), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
Title:
8
SCHEDULE 1
1. The Company sold $169,917,760 in principal amount ($304,000,000 in
aggregate principal amount at maturity) of its 12% Senior Discount Notes
due 2014. ▇. ▇. ▇▇▇▇▇▇ Securities Inc. was an initial purchaser in this
offering. ▇.▇. ▇▇▇▇▇▇ Securities Inc. purchased $129,200,000 in aggregate
principal amount of these notes.
2. Marquee Inc. sold $250,000,000 in aggregate principal amount of its 8 5/8%
Senior Notes due 2012. ▇. ▇. ▇▇▇▇▇▇ Securities Inc. was an initial
purchaser in this offering. ▇.▇. ▇▇▇▇▇▇ Securities Inc. purchased
$106,250,000 in aggregate principal amount of these notes.
3. Marquee Inc. sold $250,000,000 in aggregate principal amount of its Senior
Floating Rate Notes due 2010. ▇. ▇. ▇▇▇▇▇▇ Securities Inc. was an initial
purchaser in this offering. ▇.▇. ▇▇▇▇▇▇ Securities Inc. purchased
$87,125,000 in aggregate principal amount of these notes.
4. Marquee Inc. has obtained financings commitments for up to $220.0 million
from ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank and other lenders to finance any repurchase that
will be required under Marquee Inc.'s 9 1/2% senior subordinated notes due
2011 ("2011 Notes") in connection with the merger pursuant to which Marquee
Inc. will merge with and into AMC Entertainment Inc., with AMC
Entertainment Inc. remaining as the surviving entity, under a merger
agreement, dated July 22, 2004, among the Company, Marquee Inc. and AMC
Entertainment Inc. The merger will constitute a "change of control" under
the 2011 Notes and will allow the holders of those notes to require Marquee
Inc. to repurchase their notes.
5. Marquee Inc. has obtained financings commitments for up to $40,000,000
under an amendment and restatement of Marquee Inc.'s existing revolving
credit facility from ▇▇ ▇▇▇▇▇▇ Chase Bank and other lenders.
EXHIBIT C
EXECUTION COPY
MANAGEMENT STOCKHOLDERS AGREEMENT
OF
MARQUEE HOLDINGS INC.
This Management Stockholders Agreement ("AGREEMENT") is entered into as of
December 23, 2004, and effective as of the Effective Time, by and among Marquee
Holdings Inc., a Delaware corporation (the "COMPANY"), ▇.▇. ▇▇▇▇▇▇ Partners
(BHCA), L.P., a Delaware limited partnership ("JPMP BHCA"), ▇.▇. ▇▇▇▇▇▇ Partners
Global Investors, L.P., a Delaware limited partnership ("JPMP GLOBAL"), ▇.▇.
▇▇▇▇▇▇ Partners Global Investors (Cayman), L.P., a Cayman limited partnership
("JPMP CAYMAN"), ▇.▇. ▇▇▇▇▇▇ Partners Global Investors (Cayman) II, L.P., a
Cayman limited partnership ("JPMP CAYMAN II" and together with JPMP BHCA, JPMP
Global, JPMP Cayman, and any other affiliated entities designated by JPMP BHCA
to the Company in writing prior to the Effective Time, the "JPMP INVESTORS"),
Apollo Investment Fund V, L.P., a Delaware limited partnership, ("APOLLO FUND
V"), Apollo Overseas Partners V, L.P., a Cayman Island exempted limited
partnership, ("APOLLO OVERSEAS"), Apollo Netherlands Partners V(A), L.P., a
Cayman Island exempted limited partnership, ("APOLLO NETHERLANDS V(A)"), Apollo
Netherlands Partners V(B), L.P., a Cayman Island exempted limited partnership,
("APOLLO NETHERLANDS V(B)"), Apollo German Partners V GmbH & Co KG, a German
limited partnership ("APOLLO GERMAN PARTNERS" and, together with Apollo Fund V,
Apollo Overseas, Apollo Netherlands V(A) and Apollo Netherlands V(B), the
"APOLLO INVESTORS") and each of the individual purchasers who becomes a party
hereto from time to time in accordance with the terms hereof (each individually,
a "MANAGEMENT STOCKHOLDER," and collectively, the "MANAGEMENT STOCKHOLDERS").
These parties are sometimes referred to herein individually by name or as a
"PARTY" and collectively as the "PARTIES." The definitions of certain
capitalized terms used herein are set forth in Section 8.
RECITALS:
WHEREAS, each of the Management Stockholders is an employee, executive officer,
or director of the Company or one or more subsidiaries of the Company;
WHEREAS, pursuant to those certain Contribution and Subscription Agreements,
dated as of December 21, 2004 (the "SUBSCRIPTION AGREEMENTS"), between the
Company and certain of the Management Stockholders, the Company has issued to
such Management Stockholders the number of shares of the Company's common stock,
par value $0.01 per share ("COMMON STOCK"), designated therein, on the terms and
conditions set forth in the Subscription Agreements;
WHEREAS, as a condition to and as an inducement to the Company's, the JPMP
Investors' and the Apollo Investors' willingness to enter into the Subscription
Agreement, the Management Stockholders are entering into this Agreement;
WHEREAS, the Company may hereafter issue to each Management Stockholder Common
Stock, as a result of the exercise by such Management Stockholder of vested
options to purchase Common Stock ("VESTED OPTIONS"), which options were issued
(or may hereafter be issued) to
such Management Stockholder pursuant to the 2004 Stock Option Plan of Marquee
Holdings Inc. (the "OPTION PLAN") or any other employee benefit plan hereafter
adopted by the board of directors of the Company (collectively, "EMPLOYEE
OPTIONS"); and
WHEREAS, the Parties hereto now desire to enter into this Agreement to provide
for certain matters with respect to the ownership and transfer by the Management
Stockholders of all shares of Common Stock now or hereafter issued to or
acquired by the Management Stockholders as a result of the exercise of Vested
Options, the acquisition of Common Stock pursuant to the Subscription Agreement
or otherwise (collectively, the "RESTRICTED SHARES").
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set
forth herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. RESTRICTIONS ON TRANSFER.
(a) Each Management Stockholder hereby agrees and acknowledges
that prior to the IPO Date he or she shall not, directly or indirectly, sell,
assign, transfer, convey, pledge or otherwise dispose of (each, a "TRANSFER")
any Restricted Shares without the prior written consent of the Company, which
consent shall have been authorized by a majority of the members of the board of
Directors of the Company (the "BOARD") and which consent may be (i) withheld in
the sole discretion of the Board, or (ii) given subject to reasonable terms and
conditions determined by the Board in its sole discretion. Each Management
Stockholder further agrees that in connection with any Transfer of Restricted
Shares consented to by the Company, the Management Stockholder shall, if
requested by the Company, deliver to the Company an opinion of counsel in form
and substance reasonably satisfactory to the Company and counsel for the
Company, to the effect that the Transfer is not in violation of this Agreement,
the Securities Act, or the securities laws of any state. Any purported Transfer
in violation of the provisions of this Section 1 shall be null and void and
shall have no force or effect.
(b) Notwithstanding the foregoing, nothing in this Section 1
shall prevent the Transfer of any Restricted Shares by any Management
Stockholder (i) to the Company; (ii) pursuant to Sections 3 or 4 of the
Agreement; (iii) to any trusts, corporations or partnerships established for
estate planning purposes and for the benefit of any member of a Management
Stockholder's immediate family, provided the Management Stockholder retains the
sole and exclusive right to vote or dispose of any Restricted Shares transferred
to the trust, corporation or partnership; and (iv) upon a Management
Stockholder's death, to the Management Stockholder's executors, administrators,
testamentary trustees, legatees and beneficiaries.
(c) Each Management Stockholder agrees that, as a condition
precedent to any Transfer described in this Section 1, each transferee described
in this Section 1 (other than the Company) shall deliver to the Company a copy
of this Agreement signed by such transferee.
(d) Prior to any proposed Transfer of any Restricted Shares
(other than pursuant to Section 1(b)(iv)), the Management Stockholder (or his or
her transferee) holding such Restricted Shares to be Transferred shall give
written notice to the Company of his or her
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intention to effect such Transfer, which shall set forth in reasonable detail
the terms and conditions of such proposed Transfer, including the proposed
amount and form of consideration, terms and conditions of payment and a summary
of any other material terms pertaining to the Transfer.
SECTION 2. COMPANY CALL RIGHT AND INVOLUNTARY TRANSFERS.
(a) Prior to the IPO Date the Company shall have the right but
not the obligation to repurchase Restricted Shares and/or cancel outstanding
Employee Options held by the Management Stockholder or his or her successor in
interest thereunder (the "CALL RIGHT") as set forth in this Section 2. The Call
Right shall be exercised by written notice (the "CALL NOTICE") to the Management
Stockholder given in accordance with Section 9(h) of this Agreement on or prior
to the last date on which the Call Right may be exercised by the Company.
(b) Upon the Management Stockholder's Termination of Service for
any reason, and for a period of six months thereafter, the Company shall have a
Call Right to repurchase Restricted Shares in exchange for the Repurchase Price
and to cancel Vested Options in exchange for the Cancellation Payment. The Call
Right pursuant to this Section 2(b) may be exercised only once but may be
exercised with respect to all or less than all of the Restricted Shares or
Vested Options outstanding on the date of the Call Notice.
(c) In addition, the Company shall have a Call Right effective
immediately prior to a Change of Control occurring after January 31, 2005 to
repurchase Restricted Shares in exchange for the Repurchase Price and to cancel
Employee Options in exchange for the Cancellation Payment. The Call Right
pursuant to this Section 2(c) may be exercised only once but may be exercised
with respect to all or less than all of the Restricted Shares or Vested Options
outstanding on the date of the Call Notice.
(d) The Repurchase Price under Section 2(b) shall be determined
as follows: (i) in the event the Management Stockholder's Termination of Service
is by reason of his or her death, disability, Good Reason or involuntary
termination by the Company without Cause, the Repurchase Price shall be the Fair
Market Value of the Restricted Shares on the date of the Call Notice; and (ii)
in the event the Management Stockholders' Termination of Service is for any
other reason, the Repurchase Price shall be the lesser of (A) the Fair Market
Value of the Restricted Shares on the date of the Call Notice and (B) the
purchase price paid for the Restricted Shares (and if shares of AMC were
contributed under the Subscription Agreement, for purposes of determining the
purchase price paid for Restricted Shares, the value of each contributed AMC
share shall equal $19.50). The Repurchase Price under Section 2(c) shall be the
Fair Market Value of the Restricted Shares on the date of the Call Notice. The
Cancellation Payment for Vested Options upon exercise of the Call Right shall be
equal to the excess of the applicable Repurchase Price over the exercise price
of such Vested Options; and the Cancellation Payment for all other Employee
Options upon exercise of the Call Right shall be zero and such Employee Options
will be canceled without payment therefor.
(e) Subject to Section 2(g) below, the repurchase of Restricted
Shares and cancellation of Vested Options pursuant to the exercise of a Call
Right shall take place on a date specified by the Company, but in no event
following the later of the 60th day following the date
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of the Call Notice or the 10th day following the receipt by the Company of all
necessary Governmental Approvals. On such date, the Management Stockholder shall
transfer the Restricted Shares subject to the Call Notice to the Company, free
and clear of all liens and encumbrances, by delivering to the Company the
certificates representing the Restricted Shares to be purchased, duly endorsed
for transfer to the Company or accompanied by a stock power duly executed in
blank, with such other documents and information as the Company may reasonably
request, the Company shall pay to the Management Stockholder the Repurchase
Price; and the Employee Options subject to the Call Notice shall be cancelled
and the Company shall pay the Management Stockholder the Cancellation Price
therefor. The Company and the Management Stockholder each shall use his, her or
its reasonable efforts to expedite all proceedings contemplated hereunder at the
earliest practicable date.
(f) (i) In the case of any transfer of title or beneficial
ownership of Restricted Shares upon default, foreclosure, forfeit, divorce,
court order or otherwise, other than by a voluntary decision on the part of a
Management Stockholder (each, an "INVOLUNTARY TRANSFER"), the Management
Stockholder shall promptly (but in no event later than two days after the
Involuntary Transfer) furnish written notice (the "INVOLUNTARY TRANSFER NOTICE")
to the Company indicating that the Involuntary Transfer has occurred, specifying
the name of the person to whom the shares were transferred (the "INVOLUNTARY
TRANSFEREE"), giving a detailed description of the circumstances giving rise to,
and stating the legal basis for, the Involuntary Transfer.
(ii) Upon the receipt of the Involuntary Transfer Notice,
and for a period of six months thereafter, the Company shall have the right to
repurchase, and the Involuntary Transferee shall have the obligation to sell,
all (but not less than all) of the Restricted Shares acquired by the Involuntary
Transferee for a repurchase price equal to the Fair Market Value of such
Restricted Shares as of the date of the Involuntary Transfer (the "INVOLUNTARY
TRANSFER REPURCHASE PRICE" and such right, the "INVOLUNTARY TRANSFER REPURCHASE
Right"). The Involuntary Transfer Repurchase Right shall be exercised by written
notice (the "INVOLUNTARY TRANSFER REPURCHASE NOTICE") to the Involuntary
Transferee given in accordance with Section 9(h) of this Agreement on or prior
to the last date on which the Involuntary Transfer Repurchase Right may be
exercised by the Company.
(iii) Subject to Section 2(g) below, the repurchase of
Restricted Shares pursuant to the exercise of the Involuntary Transfer
Repurchase Right shall take place on a date specified by the Company, but in no
event following the later of the 60th day following the date of the date of the
Involuntary Transfer Repurchase Notice or the 10th day following the receipt by
the Company of all necessary Governmental Approvals. On such date, the
Involuntary Transferee shall transfer the Restricted Shares subject to the
Involuntary Transfer Repurchase Notice to the Company, free and clear of all
liens and encumbrances, by delivering to the Company the certificates
representing the Restricted Shares to be purchased, duly endorsed for transfer
to the Company or accompanied by a stock power duly executed in blank, with such
other documents and information as the Company may reasonably request, and the
Company shall pay to the Involuntary Transferee the Involuntary Transfer
Repurchase Price. The Company and the Involuntary Transferee each shall use his,
her or its reasonable efforts to expedite all proceedings contemplated hereunder
at the earliest practicable date. If the Involuntary Transferee does not
transfer the Restricted Shares to the Company as required, such
4
Restricted Shares shall be deemed to be cancelled and the Company shall make
payment in respect of such Restricted Shares, without any interest accrued
thereon, upon delivery thereof.
(g) Notwithstanding anything to the contrary herein,
(i) The Company shall not be permitted to purchase any
Restricted Shares held by any Management Stockholder or Involuntary Transferee
upon exercise of the Call Right or the Involuntary Transfer Repurchase Right if
the Board determines that:
(A) The purchase of Restricted Shares would render
the Company or its subsidiaries unable to meet their obligations in the ordinary
course of business taking into account any pending or proposed transactions,
capital expenditures or other budgeted cash outlays by the Company, including,
without limitation, any proposed acquisition of any other entity by the Company
or any of its subsidiaries;
(B) The Company is prohibited from purchasing the
Restricted Shares by applicable law restricting the purchase by a corporation of
its own shares; or
(C) The purchase of Restricted Shares would
constitute a breach of, default, or event of default under, or is otherwise
prohibited or limited by, the terms of any loan agreement, indenture, or other
agreement or instrument to which the Company or any of its subsidiaries is a
party (the "FINANCING Documents") or the Company is not able to obtain the
requisite consent of any of its senior lenders to the purchase of the Restricted
Shares.
The events described in (A) through (C) above each constitute a "REPURCHASE
DISABILITY."
(ii) In the event of a Repurchase Disability, the Company
shall notify in writing the Management Stockholder or Involuntary Transferee
with respect to whom the Call Right or the Involuntary Transfer Repurchase Right
has been exercised (a "DISABILITY NOTICE"). The Disability Notice shall specify
the nature of the Repurchase Disability. The Company shall thereafter repurchase
the Restricted Shares (and/or cancel Employee Options) described in the Call
Notice or Involuntary Transfer Repurchase Notice as soon as reasonably
practicable after all Repurchase Disabilities cease to exist (or the Company may
elect, but shall have no obligation, to cause its nominee to repurchase the
Restricted Shares (and/or cancel Employee Options) while any Repurchase
Disabilities continue to exist). In the event the Company suspends its
obligations to repurchase the Restricted Shares (and/or cancel Employee Options)
pursuant to a Repurchase Disability, (A) the Company shall provide written
notice to each applicable Management Stockholder or Involuntary Transferee as
soon as practicable after all Repurchase Disabilities cease to exist (the
"REINSTATEMENT NOTICE"); (B) the Fair Market Value of the Restricted Shares
subject to the Call Notice or Involuntary Transfer Repurchase Notice shall be
determined as of the date the Reinstatement Notice is delivered to the
Management Stockholder or Involuntary Transferee, which Fair Market Value shall
be used to determine the Repurchase Price or Involuntary Transfer Repurchase
Price in the manner described above; and (C) the repurchase shall occur on a
date specified by the Company within 10 days following the determination of the
Fair Market Value of the Shares.
5
SECTION 3. EXIT SALE.
(a) If at any time (i) from the date hereof until the earlier to
occur of (A) five years from the Effective Time and (B) the IPO Date (such
period, the "BLOCKOUT PERIOD"), the Principal Investors acting together or a
Principal Investor if at such time there exists only one Principal Investor, or
(ii) following the Blockout Period, any Investors owning, in the aggregate, at
least 50% of the then outstanding Common Stock (in the case of either (i) or
(ii), collectively, the "EXIT SELLERS") propose a sale to any Independent Third
Party (an "EXIT SALE TRANSFEREE") in a bona fide arm's length transaction or
series of transactions (including pursuant to a purchase agreement, tender
offer, merger or other business combination transaction or otherwise) of all of
the Common Stock such Exit Sellers own (an "EXIT SALE"), then the Company upon
direction of the Exit Sellers may elect to require each Management Stockholder
to sell all, but not less than all, of such Management Stockholder's Restricted
Shares (including Restricted Shares issuable upon exercise of Vested Options
held by the Management Stockholder and including Restricted Shares issuable upon
exercise of Employee Options that vest as a result of the consummation of the
Exit Sale), as a part of the Exit Sale to such Exit Sale Transferee, at the
purchase price and upon the terms and subject to the conditions of the Exit Sale
(all of which shall be set forth in the Drag-Along Notice) and may also require
each Management Stockholder to vote in favor of such Exit Sale or act by written
consent approving the same with respect to all Restricted Shares owned by such
Management Stockholder, as necessary or desirable to authorize, approve and
adopt the Exit Sale. In the event that any Management Stockholder shall fail to
vote the Shares held by him or her in favor of the Exit Sale, such Management
Stockholder shall, upon such failure to so vote, be deemed immediately to have
granted the Exit Sellers a proxy to vote such Management Stockholder's Shares in
favor of the Exit Sale. Each Management Stockholder acknowledges that each such
proxy granted hereby, including any successive proxy, if necessary, is being
given to secure the performance of an obligation hereunder, is coupled with an
interest, and shall be irrevocable until such obligation is performed. Without
limiting the foregoing, if an Exit Sale or an AMC Sale involving a sale of the
entire Company or all or substantially all of its assets to an Independent Third
Party requires the approval of the Company's stockholders, each Management
Stockholder shall waive any dissenters' rights, appraisal rights or similar
rights in connection with such merger or consolidation. In the event that a sale
is proposed pursuant to this Section 3(a), all outstanding proposals to Transfer
Restricted Shares shall immediately be withdrawn and no Transfer of Restricted
Shares shall be consummated until the expiration of the time period provided for
in Section 3(e).
(b) The rights set forth in Section 3(a) shall be exercised by
the Exit Sellers giving written notice (the "DRAG-ALONG NOTICE") to the Company,
at least ten (10) Business Days prior to the date on which the Exit Sellers
expect to consummate the Exit Sale. In the event that the terms and/or
conditions set forth in the Drag-Along Notice are thereafter amended in any
material respect, the Exit Sellers shall give written notice (an "AMENDED
DRAG-ALONG NOTICE") of the amended terms and conditions of the proposed Transfer
to the Company. Each Drag-Along Notice and Amended Drag-Along Notice shall set
forth: (i) the name of the Exit Sale Transferee and the number of shares of
Common Stock proposed to be purchased by such Exit Sale Transferee, (ii) the
proposed amount of consideration and material terms and conditions of payment
offered by the Exit Sale Transferee and (iii) a summary of any other material
terms pertaining to the Transfer (the "THIRD PARTY TERMS"). Upon receipt of any
Drag-Along Notice or
6
Amended Drag-Along Notice, the Company shall deliver a copy of same to each
Management Stockholder at least five (5) Business Days prior to the proposed
date of such Transfer.
(c) All Transfers of Shares to the Exit Sale Transferee pursuant
to this Section 3 shall be consummated simultaneously at the offices of the
Company, unless the Exit Sellers, elect otherwise, on the later of (i) a
Business Day not less than ten (10) or more than sixty (60) days after the
Drag-Along Notice is received by the Company or (ii) the third Business Day
following receipt of all material Governmental Approvals, or at such other time
and/or place as each of the parties to such Transfers may agree. The delivery of
stock certificates shall be made on such date, against payment of the purchase
price for such Shares MINUS the aggregate exercise price of any Vested Options
being Transferred by the Management Stockholder, duly endorsed for Transfer or
with duly executed stock powers or similar instruments, or such other instrument
of Transfer of such Shares as may be reasonably requested by the Exit Sellers
and acceptable to the Company, with all stock transfer taxes paid and stamps
affixed, and in the case of Vested Options subject to a Drag-Along Notice, an
instrument acceptable to the Company evidencing the cancellation of Vested
Options. Each Management Stockholder shall receive the same amount of
consideration received by the Exit Sellers per Share (minus the exercise price
of Vested Options subject to the Drag-Along Notice). To the extent that the
parties (or any successors thereto) to a sale pursuant to this Section 3 are to
provide any indemnification or otherwise assume any other post-closing
liabilities, Exit Sellers and all Management Stockholders and other Investors
selling Shares in a transaction under this Section 3 shall do so severally and
not jointly (and on a pro rata basis in accordance with the Shares (including
Shares subject to Employee Options) being sold by each) and their respective
potential liability thereunder shall not exceed the proceeds received.
Furthermore, each Management Stockholder shall only be required to give
customary representations and warranties, including, but not limited to, title
to Shares (including Shares subject to Employee Options) conveyed, legal
authority and capacity, and non-contravention of other agreements to which he or
she is a party; PROVIDED, that in connection with such transaction no Management
Stockholder shall be required to enter into any non-competition agreement. Each
Management Stockholder shall be required to enter into any instrument,
undertaking or obligation necessary or reasonably requested and deliver all
documents necessary or reasonably requested in connection with such sale (as
specified in the Drag-Along Notice) in connection with this Section 3.
(d) Notwithstanding the foregoing, no Drag-Along Rights under
this Section 3 shall apply with respect to any Permitted Transfer within the
meaning of clause (ii), (iii) or (v) of the definition of "Permitted Transfer"
herein.
(e) If at the end of the 90th day after the Company's receipt of
the Drag-Along Notice, the Exit Sellers have not completed the proposed
Transfer, the Drag-Along Notice shall be null and void, and it shall be
necessary for a separate Drag-Along Notice to be delivered, and the terms and
provisions of this Section 3 separately complied with, in order to consummate
such Transfer pursuant to this Section 3; PROVIDED, that such 90 day time period
may be extended at the option of the Exit Sellers for a reasonable period of
time not to exceed an additional 90 days to the extent that the failure to
complete the proposed Transfer is cause by the failure to obtain the necessary
Governmental Approvals.
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SECTION 4. TAG-ALONG RIGHTS.
(a) Subject to the prior exercise of the Company's Call Right
pursuant to Section 2 and subject to Section 4(c), if at any time an Investor
(referred to in this Section 4 as the "TAG-ALONG SELLER") proposes to transfer
shares of Common Stock held by such Tag-Along Seller to any Person other than
the Company or another Investor, whether in one transaction or in a series of
related transactions, then the Company shall give the Management Stockholders
notice (the "TAG-ALONG NOTICE") of their opportunity to participate in a
tag-along sale pursuant to this Section 4 (a "TAG-ALONG SALE"). Notwithstanding
the foregoing, the provisions of this Section 4 shall also apply where the
Tag-Along Seller is a Principal Investor and the transferee is the Company. The
Tag-Along Notice shall be delivered within two (2) Business Days of the
expiration of the Investor Election Period or the Second Investor Election
Period, as the case may be, each as defined in the Investor Stockholders
Agreement. Each Management Stockholder shall have the right, exercisable upon
written notice to the Tag-Along Seller within seven (7) Business Days after the
expiration of the Investor Election Period or the Second Investor Election
Period, as the case may be (the "TAG-ALONG ELECTION PERIOD"), to participate in
the Tag-Along Sale to any Person (the "TAG-ALONG TRANSFEREE") on the terms and
conditions applicable to such Transfer and as set forth in the Tag-Along Notice
(such participation rights being hereinafter referred to as "TAG-ALONG RIGHTS").
Any Management Stockholder that has not notified the Tag-Along Seller of his,
her or its intent to exercise Tag-Along Rights within the Tag-Along Election
Period shall be deemed to have elected not to exercise such Tag-Along Rights
with respect to such Tag-Along Sale. Each Management Stockholder may sell in the
Tag-Along Sale up to the number of whole Restricted Shares, including any (A)
Restricted Shares issuable upon exercise of Vested Options or (B) any Restricted
Shares that will be issuable pursuant to Employee Options that vest as a result
of the consummation of the Transfer to the Tag-Along Transferee (collectively,
the "Management Shares") in an amount equal to the product of (i) the aggregate
number of Management Shares owned by the Management Stockholder on the date of
the Tag-Along Sale and (ii) a fraction, the numerator of which is equal to the
number of shares of Common Stock proposed to be sold by the Tag-Along Seller and
the denominator of which is the aggregate number of shares of Common Stock owned
by the Tag-Along Seller (the "ELIGIBLE SHARES"). If one or more other Investors
and Management Stockholders elects not to include the maximum number of his, her
or its eligible Shares in a proposed sale, the Tag-Along Seller shall (as
required by the Investor Stockholders Agreement) give prompt notice to each
other participating Management Stockholder and each participating Management
Stockholder may sell in the proposed sale a number of additional Management
Shares equal to his, her or its pro rata portion (based upon the aggregate
number of Management Shares owned by such Management Stockholder relative to the
aggregate number of shares of Common Stock and Management Shares owned by all
Management Stockholders and Investors) of the number of Shares and Management
Shares held by Management Stockholders and other Investors eligible to be
included in the proposed sale. Such additional Management Shares which any such
Management Stockholder(s) proposes to sell shall not be included in the
calculation of Eligible Shares. To the extent that the total number of Shares
proposed to be sold by the Tag-Along Seller and the number of Shares and
Management Shares proposed to be sold by all of the other Investors and
Management Stockholders collectively exceeds the number of Shares and Management
Shares that the Tag-Along Transferee is willing to purchase, the number of
Shares and Management Shares that the Tag-Along Seller and each other Investor
and Management Stockholder propose to sell will be reduced pro rata based upon
the relative number
8
of Shares and Management Shares that the Tag-Along Seller and each other
Investor and Management Stockholder had proposed to sell.
(b) At the closing of the Tag-Along Sale, the delivery of stock
certificates shall be made on such date by each Management Stockholder
exercising Tag-Along Rights, against payment of the purchase price for such
Shares MINUS the aggregate exercise price of any Vested Options being
Transferred by the Management Stockholder, duly endorsed for transfer or with
duly executed stock powers or similar instruments, or such other instrument of
transfer of such Shares (including Shares issuable upon exercise of Employee
Options) as may be reasonably requested by the Tag-Along Transferee and the
Company, with all stock transfer taxes paid and stamps affixed and/or against
delivery of an instrument evidencing the cancellation of the Vested Options
subject to the Tag-Along Right reasonably acceptable to the Company. The
consummation of such proposed Tag-Along Sale shall be subject to the sole
discretion of the Tag-Along Seller, who shall have no liability or obligation
whatsoever to any Management Stockholder participating therein in connection
with such Management Stockholder's transfer of Restricted Shares or Vested
Options. Each Management Stockholder shall receive the same amount and form of
consideration received by the Tag-Along Seller per each share of Common Stock on
the same terms and conditions as the Tag-Along Seller (minus the aggregate
exercise price of any Vested Options subject to such Tag-Along Sale). To the
extent that the parties (or any successors thereto) to the Tag-Along Sale are to
provide any indemnification or otherwise assume any other post-closing
liabilities, the Tag-Along Seller and all other Investors and Management
Stockholders participating in a transaction under this Section 4 shall do so
severally and not jointly (and on a pro rata basis in accordance with the Shares
(including Shares issuable upon exercise of Vested Options) being sold by each),
and their respective potential liability thereunder shall not exceed the
proceeds received; PROVIDED, that in connection with such transaction no
Management Stockholder shall be required to enter into any non-competition
agreement. If any Governmental Approval is required in connection with any such
Tag-Along Sale and such Governmental Approval has not been completed or obtained
on or prior to the date scheduled for closing, the closing of the Tag-Along Sale
shall take place on the third Business Day after such Governmental Approval has
been completed or obtained. Each participating Management Stockholder shall be
required to enter into any instrument, undertaking, obligation or make any
filing necessary or reasonably requested and deliver all documents necessary or
reasonably requested in connection with such sale (as specified in the Tag-Along
Notice) as a condition to the exercise of such holder's rights to Transfer
Restricted Shares (including Shares subject to Employee Options) under this
Section 4.
(c) Notwithstanding the foregoing, no Tag-Along Rights of any
Management Stockholder shall apply hereunder with respect to any sales pursuant
to (i) any Permitted Transfer within the meaning of clause (ii), (iii), (iv) or
(v) of the definition of "Permitted Transfer" herein, (ii) any sale pursuant to
Section 3 of this Agreement or Section 4 of the Investor Stockholders Agreement.
(d) If at the end of the 90th day after the end of the Investor
Election Period or the Second Investor Election Period, as the case may be, the
Tag-Along Seller has not completed the proposed Tag-Along Sale, the Tag-Along
Notice shall be null and void, and it shall be necessary for a separate
Tag-Along Notice to be delivered, and the terms and provisions of this Section 4
separately complied with, in order to consummate a Transfer pursuant to this
Section 4.
9
SECTION 5. COOPERATION.
(a) If the Company or the holders of the Company's securities
enter into any transaction for which Rule 506 (or any similar rule then in
effect) promulgated under the Securities Act, may be available with respect to
the transaction (including a merger, consolidation, or other reorganization),
each Management Stockholder shall, if requested by the Company, appoint a
purchaser representative (as defined in Rule 501 of the Securities Act)
reasonably acceptable to the Company. If the purchaser representative is
designated by the Company, the Company shall pay the fees of the purchaser
representative, but if any Management Stockholder appoints another purchaser
representative, the Management Stockholder shall be responsible for the fees of
the purchaser representative so appointed.
(b) Each Management Stockholder shall bear his, her or its
pro-rata share of the costs of any transaction in which he or she sells
Restricted Shares or Vested Options (based upon the number of Restricted Shares
and Vested Options held by the Management Stockholder that are sold in such
transaction) to the extent such costs are incurred for the benefit of all
holders of Common Stock and Vested Options and are not otherwise paid by the
Company or the acquiring party.
SECTION 6. REGISTRATION RIGHTS.
(a) PIGGYBACK REGISTRATIONS. If the Company at any time proposes
to register under the Securities Act any Common Stock or any security
convertible into or exchangeable or exercisable for Common Stock, whether or not
for sale for its own account and other than pursuant to a "Demand Registration"
as defined in and pursuant to the Investor Stockholders Agreement, on a form and
in a manner which would permit registration of the Common Stock held by the
Management Stockholders for sale to the public under the Securities Act, the
Company shall give written notice of the proposed registration to each
Management Stockholder not later than thirty (30) days prior to the filing
thereof. Each Management Stockholder shall have the right to request that all or
any part of his, her or its Restricted Shares be included in such registration.
Each Management Stockholder can make such a request by giving written notice to
the Company within ten (10) Business Days after the receipt of the Company's
notice of the proposed registration; PROVIDED, HOWEVER, that if the registration
is an underwritten registration and the managing underwriters of such offering
determine that the aggregate amount of securities of the Company which the
Company, the Investors and all Management Stockholders propose to include in
such registration statement exceeds the maximum amount of securities that may be
sold without having a material adverse effect on the success of the offering,
including without limitation the selling price and other terms of such offering,
the Company will include in such registration, first, the securities which the
Company proposes to sell, second, the Common Stock of such Investors, and third
the Common Stock of the Management Stockholders pro rata among all such
Management Stockholders on the basis of the relative percentage of Common Stock
owned by all Management Stockholders who have requested that securities owned by
them be so included (it being further agreed and understood, however, that such
underwriters shall have the right to reduce or eliminate entirely the
participation of the Management Stockholders). Common Stock proposed to be
registered and sold pursuant to an underwritten offering for the account of any
Management Stockholders shall be sold to the prospective underwriters, selected
by the holders of a majority of Common Stock
10
to which such registration statement relates and approved by the Company, on the
terms and subject to the conditions of one or more underwriting agreements
negotiated between the holders of Common Stock to which such registration
statement relates, the Company and the prospective underwriters. The Company may
withdraw any registration statement at any time before it becomes effective, or
postpone or terminate the offering of securities, without obligation or
liability to any Management Stockholder.
(b) HOLDBACK AGREEMENTS. Notwithstanding any other provisions of
this Agreement, each Management Stockholder agrees that (if so required by the
underwriters in an underwritten offering and provided that such condition is
applicable to all Management Stockholders) he or she will not (and it shall be a
condition to the rights of each Management Stockholder under this Agreement that
such Management Stockholder does not) offer for Public Sale any Common Stock
during a period not to exceed sixty (60) days prior to and one-hundred and
eighty (180) days after the effective date of any registration statement filed
by the Company in connection with an underwritten Initial Public Offering and
any subsequent underwritten offerings (except as part of such underwritten
registration or as otherwise permitted by such underwriters); PROVIDED, HOWEVER,
no Management Stockholder shall object to shortening such period if the
underwriter agrees that shortening such period would not materially and
adversely effect the success of the offering.
(c) EXPENSES. Except as otherwise required by state securities or
blue sky laws or the rules and regulations promulgated thereunder, all expenses,
disbursements and fees incurred by the Company and the Management Stockholders
in connection with any registration under this Section 6 shall be borne by the
Company, except that the following expenses shall be borne by the Management
Stockholder incurring the same: (i) the costs and expenses of counsel to such
Management Stockholder to the extent such Management Stockholder retains
counsel; (ii) discounts, commissions, fees or similar compensation owing to
underwriters, selling brokers, dealer managers or other industry professionals,
to the extent relating to the distribution or sale of such Management
Stockholder's securities; and (iii) transfer taxes with respect to the
securities sold by such Management Stockholder.
SECTION 7. TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time by a resolution of the Board terminating this Agreement; provided, however,
that such termination is approved in writing by (i) each Principal Investor if
at such time there exists at least one Principal Investor and (ii) Management
Stockholders holding in the aggregate a majority of the then outstanding
Restricted Shares.
SECTION 8. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"AFFILIATE" means, with respect to a specified Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"AMC" means AMC Entertainment Inc., a Delaware corporation.
11
"AMC SALE" means any one of the following: (i) a change in the ownership or
control of the Company or AMC effected through a transaction or series of
transactions (including by way of merger, consolidation, business combination or
similar transaction involving the Company or any of its Subsidiaries) whereby
any "person" or related "group" of "persons" (as such terms are used in Sections
13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its
Subsidiaries, an employee benefit plan maintained by the Company or any of its
Subsidiaries, or a "person" that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act), of more than 50% of the Stock
then outstanding, or of securities of the Company or AMC (or options, rights or
warrants to purchase or securities convertible into or exchangeable for such
securities) possessing more than 50% of the total combined voting power of the
Company's or AMC's securities outstanding, in either case immediately after such
transaction or series of transactions; or (ii) the sale, lease, transfer,
conveyance or other disposition (other than by way of a transaction that would
not be deemed an AMC Sale pursuant to clause (i) above), in one or a series of
related transactions, of all or substantially all of the assets of the Company
or AMC, or the Company and its subsidiaries taken as a whole, to any "person"
(as defined above).
"AMENDED DRAG-ALONG NOTICE" has the meaning set forth in Section 3(b).
"APOLLO" means Apollo Management V, L.P., a Delaware limited partnership.
"APOLLO AFFILIATE" means, with respect to Apollo, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with Apollo; or any other Person that owns, directly or indirectly, 10%
or more of Apollo's Capital Stock or Apollo's partnership or membership
interests or any officer or director of Apollo or such other Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"APOLLO GROUP" means (i) Apollo; (ii) the Apollo Holders; and (iii) any Apollo
Affiliate (including the Apollo Holders).
"APOLLO HOLDERS" means the Apollo Investors and any other partnership or entity
affiliated with and managed by Apollo or any Apollo Affiliates to which any
Apollo Investor assigns any of its respective interest in the Company.
"BLOCKOUT PERIOD" has the meaning set forth in Section 3(a).
"BOARD" has the meaning set forth in Section 1(a).
"BUSINESS DAY" means 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 New York, New
York.
"CANCELLATION PAYMENT" has the meaning set forth in Section 2(d).
12
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock, including preferred stock, any rights (other than debt securities
convertible into capital stock), warrants or options to acquire such capital
stock, whether outstanding as of the Effective Time or issued thereafter.
"CAUSE" with respect to a Management Stockholder's Termination of Service shall
have the meaning specified in the written service agreement between the Company
(or a subsidiary) and such Management Stockholder, if any, and in the event
there is no such service agreement then in effect, shall mean the Management
Stockholder's (i) willful failure to substantially perform his or her duties
with the Company (or any subsidiary) (other than any such failure resulting from
resulting from his or her incapacity due to physical or mental illness) which is
not remedied within 30 days after receipt of written notice from the Company
specifying such failure; (ii) willful failure to carry out, or comply with, in
any material respect any lawful and reasonable directive of the Company (or any
subsidiary) not inconsistent with the terms of any service agreement, which is
not remedied within 30 days after receipt of written notice from the Company
specifying such failure; (iii) commission at any time of any act or omission
that results in, or that may reasonably be expected to result in, a conviction,
plea of no contest or imposition of unadjudicated probation for any felony or
crime involving moral turpitude; (iv) unlawful use (including being under the
influence) or possession of illegal drugs on the Company's (or any subsidiary's)
premises or while performing any duties or responsibilities with the Company (or
any subsidiary); or (v) commission at any time of any act of fraud,
embezzlement, misappropriation, material misconduct, or breach of fiduciary duty
against the Company (or any subsidiary) (or any predecessor thereto or successor
thereof).
"CHANGE OF CONTROL" means the occurrence of, after the Effective Date, any of
the following events:
(a) any "person" or "group" as such terms are used in Sections
13(d) and 14(d) of the Exchange Act other than one or more Permitted Holders is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that such person or group shall be deemed to have
"beneficial ownership" of all shares that any such person or group has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, by way of merger, consolidation or
other business combination or purchase of 50% or more of the total voting power
of the Voting Stock of the Company or of AMC (for purposes of calculating the
total voting power of the Voting Stock held by a group solely in the context of
a merger, consolidation or other business combination with a Person engaged in a
line of business similar to that of the Company or of AMC and its Subsidiaries
on August 18, 2004, the voting power beneficially owned by the Permitted Holders
or by Permitted Co-Investors, to the extent such voting power of the Voting
Stock was acquired by such Permitted Co-Investors on or before January 31, 2005
in transactions that satisfy the definition of Permitted Co-Investor, shall be
excluded in an amount equal to the lesser of the total voting power of the
Voting Stock beneficially owned by such Permitted Co-Investors on (x) January
31, 2005 or (y) the date of such merger, consolidation or other business
combination);
(b) the adoption of a plan relating to the liquidation or
dissolution of the Company or AMC;
13
(c) the sale, lease, transfer or other conveyance, in one or a
series of related transactions, of all or substantially all of the assets of the
Company or of AMC and its Subsidiaries, taken as a whole, to any Person other
than one or more Permitted Holders; or
(d) a change of control under the indentures relating to the
9 1/2% Senior Subordinated Notes due 2011 (the "2011 Notes"), the 9 7/8% Senior
Subordinated Notes due 2012 or the 8% Senior Subordinated Notes due 2014 issued
by AMC (other than a change of control under the indenture relating to the 2011
Notes resulting from the Transactions);
PROVIDED, HOWEVER, that the closing of the Merger of Marquee Inc. with and into
AMC as of the Effective Date shall not constitute and shall not be deemed to
cause or result in a Change of Control hereunder.
"COMPANY" has the meaning set forth in the preamble.
"CONVERTIBLE SECURITIES" means any evidence of indebtedness, shares of stock or
other securities (other than Options or Warrants) which are directly or
indirectly convertible into or exchangeable or exercisable for shares of Stock.
"DRAG-ALONG NOTICE" has the meaning set forth in Section 3(b).
"EFFECTIVE DATE" means the later to occur of (i) the date of the closing of the
merger of Marquee Inc. with and into AMC pursuant to the Agreement and Plan of
Merger by and among Holdings, Marquee Inc. and AMC, dated as of July 22, 2004
and (ii) the date on which occurs the Effective Time.
"EFFECTIVE TIME" has the meaning ascribed to such term in the Merger Agreement.
"ELIGIBLE SHARES" has the meaning set forth in Section 4(a).
"EQUIVALENT SHARES" means, at any date of determination, (a) as to any
outstanding shares of Stock, such number of shares of Stock, (b) as to any
outstanding Options, Warrants or Convertible Securities, the maximum number of
shares of Stock for which or into which such Options, Warrants or Convertible
Securities may at the time be exercised, converted or exchanged (or which will
become exercisable, convertible or exchangeable on or prior to, or by reason of,
the transaction or circumstances in connection with which the number of
Equivalent Shares is to be determined) and (c) in respect of any Subsidiary of
the Company, (i) as to any outstanding shares of stock of any Subsidiary of the
Company, such number of shares of stock or (ii) as to any outstanding options,
warrants or convertible securities, the maximum number of shares of stock of any
Subsidiary of the Company for which or into which such options, warrants or
convertible securities may at the time be exercised, converted or exchanged (or
which will become exercisable, convertible or exchangeable on or prior to, or by
reason of, the transaction or circumstances in connection with which the number
of Equivalent Shares is to be determined).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations in effect thereunder.
"EXIT SALE" has the meaning set forth in Section 3(a).
14
"FAIR MARKET VALUE" of a share of Common Stock as of a given date shall be:
(a) The closing price of a share of Common Stock on the principal
exchange on which such shares are then trading, if any (or as
reported on any composite index which includes such principal
exchange), on the most recent trading day prior to such
determination date; or
(b) If Common Stock is not traded on an exchange, the mean between the
closing representative bid and asked prices for a share of Common
Stock on the most recent trading day prior to such determination
date as reported by Nasdaq or, if Nasdaq is not then in existence,
by its successor quotation system; or
(c) If Common Stock is not publicly traded on an exchange and not
quoted on Nasdaq or a successor quotation system, the fair market
value of a share of Common Stock as determined in good faith by the
Board or the committee appointed to administer the Option Plan.
"FINANCING DOCUMENTS" has the meaning set forth in Section 2(g).
"GOOD REASON" with respect to a Management Stockholder's Termination of Service
shall have the meaning specified in the written service agreement, if any,
between the Company (or a subsidiary) and such Management Stockholder, and in
the event there is no such service agreement then in effect, the term "with Good
Reason" shall have no meaning or effect under this Agreement.
"GOVERNMENTAL APPROVAL" means, with respect to any Transfer of Shares, any
consent or other action by, or filing with, any governmental authority required
in connection with such Transfer and the expiration or early termination of any
applicable statutory waiting period in connection with such action or filing.
"INDEPENDENT THIRD PARTY" means any Person who, immediately prior to the
contemplated transaction, (i) does not own, either directly or through one or
more intermediaries, in excess of 3% of the Shares (any Person owning in excess
of 3% of the Shares being referred to herein as a "3% Owner") and (ii) is not an
Affiliate of any such 3% Owner.
"INITIAL INVESTOR SHARES" means that number of Shares held by an Investor
immediately following the Effective Time, as the same may be adjusted for stock
splits, stock dividends, recapitalizations or similar events.
"INITIAL PUBLIC OFFERING" means the initial public offering of Stock registered
on Form S-1 (or any equivalent or successor form under the Securities Act).
"INVESTOR" or "INVESTORS" means each of the JPMP Investors, the Apollo Investors
and the other entities listed on Schedule 1 attached to the Investor
Stockholders Agreement and, upon the unanimous approval of each of the JPMP
Investors and the Apollo Investors, any other subsequent holder of Shares who
agrees to be bound by the terms of the Investor Stockholders Agreement.
15
"INVESTOR STOCKHOLDERS AGREEMENT" means that certain Stockholders Agreement by
and among the Company, the JPMP Investors, the Apollo Investors and certain
other stockholder parties thereto dated as of October 29, 2004, as amended.
"IPO DATE" means the date on which the Company consummates its Initial Public
Offering.
"JPMP AFFILIATE" means, with respect to ▇.▇. ▇▇▇▇▇▇ Partners, LLC, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with ▇.▇. ▇▇▇▇▇▇ Partners, LLC; or any other Person that
owns, directly or indirectly, 10% or more of ▇.▇. ▇▇▇▇▇▇ Partners, LLC's Capital
Stock or ▇.▇. ▇▇▇▇▇▇ Partners, LLC's partnership or membership interests or any
officer or director of ▇.▇. ▇▇▇▇▇▇ Partners, LLC or such other Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"JPMP GROUP" means (i) ▇.▇. ▇▇▇▇▇▇ Partners, LLC and (ii) any JPMP Affiliate.
"MERGER" means the merger of Marquee Inc. with and into AMC pursuant to the
Merger Agreement.
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger, dated as of
July 22, 2004, by and among the Company, Marquee Inc., a wholly-owned subsidiary
of the Company, and AMC Entertainment Inc., pursuant to which Marquee will be
merged with and into AMC, with AMC remaining as the surviving entity and a
wholly-owned subsidiary of the Company.
"OPTIONS" means any options to subscribe for, purchase or otherwise directly
acquire Stock, other than any such option held by Holdings or any right to
purchase shares pursuant to the Investor Stockholders Agreement.
"PERMITTED CO-INVESTOR" means an Investor (other than the Principal Investors)
as of the Effective Time and any one or more institutional investors and their
respective Affiliates to which any Permitted Holder transfers in the aggregate
up to, but no more than, 35% of (a) its equity commitments to the Transactions
or (b) its equity securities of the Company or AMC, in each case on or before
January 31, 2005 (all transfers to any Affiliates of such institutional investor
shall be included in such percentage calculation). For purposes of this
definition, "Affiliate" means, with respect to any specified Person:
(A) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person; or
(B) any other Person that owns, directly or indirectly, 10%
or more of such Person's Capital Stock or any officer or director
of any such Person or other Person or with respect to any natural
Person, any person having a relationship with such Person by
blood, marriage or adoption not more remote than first cousin.
16
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"PERMITTED HOLDER" means:
(i) any member of the Apollo Group;
(ii) any member of the JPMP Group; and
(iii) any subsidiary, any employee stock purchase plan, stock option
plan or other stock incentive plan or program, retirement plan or automatic
reinvestment plan or any substantially similar plan of the Company or AMC or any
subsidiary of the Company or any Person holding securities of AMC or the Company
for or pursuant to the terms of any such employee benefit plan; provided that if
any lender or other Person shall foreclose on or otherwise realize upon or
exercise any remedy with respect to any security interest in or lien on any
securities of AMC or the Company held by any Person listed in this clause (iii),
then such securities shall no longer be deemed to be held by a Permitted Holder.
"PERMITTED TRANSFER" means: (i) a Transfer approved by each Principal Investor
so long as there are any Principal Investors, (ii) a Transfer to an Affiliate of
such Investor; PROVIDED such transferee remains an Affiliate of such transferor
following the Transfer; (iii) following an Initial Public Offering, a Transfer
by an Investor made as part of a distribution by an Investor to its respective
general or limited partners or members in accordance with such Investor's fund
documents, as the case may be; (iv) a Transfer made by a JPMP Investor pursuant
to and in accordance with the Regulatory Sideletter as defined in the Investor
Stockholders Agreement; or (v) a Transfer made pursuant to the registration
rights as set forth in Section 7 of the Investor Stockholders Agreement.
"PERMITTED TRANSFEREE" means any Person who acquires Shares pursuant to clauses
(i), (ii) and (iii) of the definition of "Permitted Transfer".
"PERSON" includes any individual, corporation, association, partnership (general
or limited), joint venture, trust, estate, limited liability company, or other
legal entity or organization.
"PRINCIPAL INVESTORS" means (i) the JPMP Investors, so long as the JPMP
Investors, together with their Permitted Transferees, collectively own Shares
representing at least 33% of the Initial Investor Shares owned by the JPMP
Investors; PROVIDED, that the JPMP Investors shall not be deemed to be a
Principal Investor at any time that they do not, together with their Permitted
Transferees, collectively own Shares representing at least 33% of the Initial
Investor Shares owned by the JPMP Investors, and (ii) the Apollo Investors, so
long as the Apollo Investors, together with their Permitted Transferees,
collectively own Shares representing at least 33% of the Initial Investor Shares
owned by the Apollo Investors; PROVIDED, that the Apollo Investors shall not be
deemed to be a Principal Investor at any time that they do not, together with
their Permitted Transferees, collectively own Shares representing at least 33%
of the Initial Investor Shares owned by the Apollo Investors (in each case, as
may be adjusted for stock splits, stock dividends, recapitalizations or similar
events). For the avoidance of doubt, so long as there are
17
two Principal Investors, references in this Agreement to "Principal Investors"
shall mean both Principal Investors, and if at any time there is only one
Principal Investor, references in this Agreement to "the Principal Investors" or
"each Principal Investor" shall mean that sole Principal Investor then
remaining.
"PUBLIC SALE" means a Transfer pursuant to a bona fide underwritten public
offering pursuant to an effective registration statement filed under the
Securities Act or pursuant to Rule 144 under the Securities Act (other than in a
privately negotiated sale).
"REPURCHASE PRICE" has the respective meanings set forth in Section 2(d).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and
regulations in effect thereunder.
"SHARES" means (a) all shares of Stock, whenever issued, including all shares of
Stock issued upon the exercise, conversion or exchange of any Options, Warrants
or Convertible Securities and (b) all Options, Warrants and Convertible
Securities (treating such Options, Warrants and Convertible Securities as a
number of Shares equal to the number of Equivalent Shares represented by such
Options, Warrants and Convertible Securities for all purposes of this Agreement
except as otherwise specifically set forth herein).
"STOCK" means common stock of the Company, par value $0.01 per share, together
with any other classes or series of equity securities of the Company.
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means any corporation, partnership,
joint venture or other legal entity of which such Person (either alone or
through or together with any other Person), owns, directly or indirectly, 50% or
more of the stock or other equity interests which are generally entitled to vote
for the election of the board of directors or other governing body of such
corporation or other legal entity.
"TAG-ALONG ELECTION PERIOD" has the meaning set forth in Section 4(a).
"TAG-ALONG RIGHTS" has the meaning set forth in Section 4(a).
"TAG-ALONG SELLER" has the meaning set forth in Section 4(a).
"TAG-ALONG TRANSFEREE" has the meaning set forth in Section 4(a).
"TERMINATION OF SERVICE" means the time when the service relationship between a
Management Stockholder and the Company or one of its subsidiaries is terminated
for any reason, with or without Cause, including, but not by way of limitation,
a termination by resignation, discharge, death or retirement, but excluding a
termination where there is a simultaneous engagement (or continuation) by the
Company or one of its subsidiaries of the services of the Management Stockholder
as an employee, consultant or director. The committee appointed to administer
the Option Plan or the Board shall determine the effect of all matters and
questions relating to Termination of Service, including, but not by way of
limitation, all questions of whether a particular leave of absence constitutes a
Termination of Service.
18
"TRANSACTIONS" means the transactions set forth in the Agreement and Plan of
Merger by and among the Company, Marquee Inc. and AMC, dated as of July 22, 2004
and the transactions related thereto.
"TRANSFER" means a transfer, sale, assignment, pledge, hypothecation or other
disposition or exchange, including any Transfer of a voting or economic interest
in securities or other property; and "Transferring" or "Transferred" have
correlative meanings.
"VOTING STOCK" of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof.
"WARRANTS" means any warrants to subscribe for, purchase or otherwise directly
acquire Stock or Convertible Securities.
SECTION 9. MISCELLANEOUS.
(a) LEGENDS. Each certificate representing the Restricted Shares
shall bear the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF OR EXCHANGED UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OR EXCHANGE COMPLIES
WITH THE PROVISIONS OF THE MANAGEMENT STOCKHOLDERS AGREEMENT
DATED AS OF DECEMBER 23, 2004 BETWEEN THE COMPANY AND THE
STOCKHOLDERS PARTY THERETO, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY."
(b) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
legal representatives, heirs, legatees, successors and assigns and shall also
apply to any Restricted Shares and Employee Options acquired by any Management
Stockholder after the date hereof.
19
(c) SPECIFIC PERFORMANCE, ETC. Each Party, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, shall be entitled to specific performance of each other
Party's obligations under this Agreement. Each Party agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by any of them of the provisions of this Agreement and each Party hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(d) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws, and not the law of conflicts, of
the state of Delaware.
(e) VOTING AGREEMENT. Prior to the earliest to occur of (i) the
five year anniversary of the Effective Time, and (ii) the Initial Public
Offering, as to any matter or action that requires a vote or written consent of
the stockholders of the Company, whether by law or pursuant to any agreement,
and for so long as there is at least one Principal Investor, each Management
Stockholder agrees to vote his, her or its Restricted Shares, or to provide his,
her or its written consent, only as directed by both Principal Investors (and if
both Principal Investors do not agree as to any matter or action, each
Management Stockholder agrees not to vote his, her or its Restricted Shares or
provide his, her or its written consent with respect to such matter or action),
or if there is only one Principal Investor, as directed by the sole Principal
Investor; PROVIDED, that no Management Stockholder shall be required to vote in
favor of, or provide his, her or its written consent to, any action that would
disproportionately affect such Management Stockholder relative to the other
holders of Common Stock in any material and adverse manner. In the event that
any Management Stockholder entitled to vote on or provide his, her or its
written consent with respect to a matter shall fail at any time to vote or act
by written consent with respect to any Restricted Shares held of record or
beneficially owned by such Management Stockholder or as to which such Management
Stockholder has voting control, as agreed by such Management Stockholder in this
Agreement, such Management Stockholder hereby irrevocably grants to and appoints
each Principal Investor such Management Stockholder's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of such
Management Stockholder, to vote or act by written consent with respect to such
Restricted Shares and to grant a consent, proxy or approval in respect of such
Restricted Shares, in each case in such manner as the Principal Investor(s)
shall determine in its (or their) sole and absolute discretion. Each Management
Stockholder hereby affirms that the irrevocable proxy set forth in this Section
9(e) will be valid for the term of this Agreement and is given to secure the
performance of the obligations of such Management Stockholder under this
Agreement. Each such Management Stockholder hereby further affirms that each
proxy hereby granted shall, for the term of this Agreement, be irrevocable and
shall be deemed coupled with an interest.
(f) INTERPRETATION. The headings of the Sections contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not affect the meaning or interpretation of
this Agreement.
(g) NOTICES. All notices, requests or consents provided for or
permitted to be given under this Agreement shall be in writing and shall be
given either by depositing such writing in the United States mail, addressed to
the recipient, postage paid and certified with return receipt requested, or by
depositing such writing with a reputable overnight courier for next
20
day delivery, or by delivering such writing to the recipient in person, by
courier or by facsimile transmission. A notice, request or consent given under
this Agreement shall be deemed received when actually received if personally
delivered, when transmitted, if transmitted by facsimile with electronic
confirmation, the day after it is sent, if sent for next day delivery and upon
receipt, if sent by mail. All such notices, requests and consents shall be
delivered as follows:
(i) if to the Company, addressed to it at:
Marquee Holdings Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P.
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
and
Apollo Management V, L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
(ii) If to an Apollo Investor, to Apollo Management V,
L.P. and Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇ at the addresses set forth above;
(iii) If to a JPMP Investor, to ▇.▇. ▇▇▇▇▇▇ Partners
(BHCA), L.P. and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ at the addresses set forth above; and
21
(iv) If to a Management Stockholder, to the address set
forth on such Management Stockholder's signature page hereto.
(h) RECAPITALIZATION, EXCHANGE, ETC. AFFECTING THE COMPANY'S
COMMON STOCK. The provisions of this Agreement shall apply, to the full extent
set forth herein, with respect to any and all shares of Common Stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets, conversion to a corporation or otherwise) that
may be issued in respect of, in exchange for, or in substitution of, the Common
Stock and shall be appropriately adjusted for any dividends, splits, reverse
splits, combinations, recapitalizations, and the like occurring after the date
hereof.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality, and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby.
(k) AMENDMENT. This Agreement may be amended by resolution of the
Board approved by (i) each Principal Investor if at such time there exists at
least one Principal Investor and (ii) the Management Stockholders holding in the
aggregate a majority of the then outstanding Restricted Shares. At any time
hereafter, additional Management Stockholders may be made parties hereto by
executing a signature page in the form attached as Exhibit A hereto, which
signature page shall be countersigned by the Company and shall be attached to
this Agreement and become a part hereof without any further action of any other
Party hereto. Except as otherwise provided herein, in the event that (A) the
Company or any successor or assign consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity in
such consolidation or merger, (B) the Company or any successor or assign
transfers all or substantially all of its properties and assets to any Person,
or (C) a sale of the Company is consummated pursuant to Section 3 and the
Management Stockholders receive non-publicly traded equity securities in
connection with such transaction, then in the case of either (A) or (B), proper
provision shall be made and all Management Stockholders shall execute such
documents and agreements as reasonably requested by the Principal Investors so
that this Agreement shall be given full force and effect with respect to such
surviving corporation or entity or such Person that acquires all or
substantially all of the properties and assets of the Company or any successor
or assign (any such surviving corporation, entity or Person, a "SUCCESSOR
ENTITY"), as the case may be, and the rights and obligations of each Party
hereto shall continue in full force and effect such that each Party shall have
the same rights and obligations with respect to the applicable Successor Entity
and its securities as it has with respect to the Company and the Shares, and in
the case of (C) proper provision shall be made and all Management Stockholders
shall execute such documents and agreements as reasonably requested by the
Principal Investors so that the provisions of Section 2, Section 3 and Section 4
shall survive (as may be amended as reasonably determined by the Principal
Investors) with respect to such non-publicly traded equity securities.
22
(l) TAX WITHHOLDING. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to any Management
Stockholder of any sums required by federal, state, or local tax law to be
withheld with respect to the issuance, vesting, exercise, repurchase, or
cancellation of any Restricted Share or any Employee Option.
(m) NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement (i)
obligates the Company or any affiliate of the Company to employ any Management
Stockholder in any capacity whatsoever; or (ii) prohibits or restricts the
Company or any affiliate of the Company from terminating the employment, if any,
of any Management Stockholder at any time or for any reason whatsoever and each
Management Stockholder hereby acknowledges and agrees that, except as may
otherwise be set forth in any written agreement between the Company and such
Management Stockholder, neither the Company nor any other person has made any
representations or promises whatsoever to such Management Stockholder concerning
his or her employment or continued employment by the Company or any Affiliate of
the Company.
(n) OFFSETS. The Company shall be permitted to offset and reduce
from any amounts payable to a Management Stockholder the amount of any
indebtedness or other obligation or payment owing to the Company by the
Management Stockholder.
(o) INTEGRATION. This Agreement constitutes the entire agreement
among the Parties hereto pertaining to the subject matter hereof and supersede
all prior agreements and understandings pertaining thereto.
(p) FURTHER ASSURANCES. In connection with this Agreement and the
transactions contemplated thereby, each Management Stockholder shall execute and
deliver any additional documents and instruments and perform any additional acts
that may be necessary or appropriate to effectuate and perform the provisions of
this Agreement and such transactions.
(q) NO STRICT CONSTRUCTION. This Agreement shall be deemed to be
collectively prepared by the Parties, and no ambiguity herein shall be construed
for or against any Party based upon the identity of the author of this Agreement
or any provision hereof.
(r) INTENDED THIRD PARTY BENEFICIARIES. The provisions of Section
3(a) of this Agreement are intended to benefit the Investors and each Investor
shall have all rights thereunder as if such Investor were a party to this
Agreement.
[signature pages follow]
23
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
first written above.
MARQUEE HOLDINGS INC.
By:
------------------------------
Its:
------------------------------
▇.▇. ▇▇▇▇▇▇ PARTNERS (BHCA), L.P.
BY: JPMP MASTER FUND MANAGER, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(CAYMAN), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ PARTNERS GLOBAL INVESTORS
(CAYMAN) II, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
APOLLO INVESTMENT FUND V, L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
APOLLO OVERSEAS PARTNERS V, L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
APOLLO NETHERLANDS PARTNERS V(A), L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
APOLLO NETHERLANDS PARTNERS V(B), L.P.
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
APOLLO GERMAN PARTNERS V GMBH & CO KG
BY: APOLLO ADVISORS V, L.P.,
ITS GENERAL PARTNER
BY: APOLLO CAPITAL MANAGEMENT V, INC.
ITS GENERAL PARTNER
By:
------------------------------
Name:
Title:
Each Management Stockholder has agreed to be bound by the terms of this
Agreement by execution and delivery of the signature page set forth as Exhibit A
hereto.
EXHIBIT A
SIGNATURE PAGE
TO THE
MANAGEMENT STOCKHOLDERS AGREEMENT
OF
MARQUEE HOLDINGS INC.
By execution of this signature page, [Name] hereby agrees to become a party to,
be bound by the obligations of, and receive the benefits of, that certain
Management Stockholders Agreement of Marquee Holdings Inc. dated as of December
23, 2004 by and among Marquee Holdings Inc., and certain other parties named
therein, as amended from time to time thereafter.
-------------------------------------
[Name]
Residence Address:
--------------------------------------
--------------------------------------
