EXECUTION COPY
STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of June 18, 1997, by and among
Xxxxx Xxxxx Holding Corp., a Delaware corporation (the "Company"), the Persons
listed on Schedule A attached hereto (the "DLJ Stockholders") and BCIP
Associates, BCIP Trust Associates, L.P., Tyler Capital Fund, L.P., Tyler
International, L.P.-II, Tyler Massachusetts, L.P., Bankers Trust New York
Corporation, Conac & Co., Muico & Co., Roton & Co., USL Capital Corporation,
Xxxxx Xxxxx, Xxxxxxx X. Xxxxxx, Xxxx Xxxx, Xxxxxxxx Family Partners, Xxxxxx
Xxxxxxxx and The Xxxxxx Trust (collectively, the "Continuing Stockholders").
The DLJ Stockholders and the Continuing Stockholders are collectively referred
to herein as the "Stockholders" and individually as a "Stockholder." Unless
otherwise provided in this Agreement, capitalized terms used herein are defined
in paragraph 8 hereof.
The Recapitalization Agreement dated as of May 30, 1997 (the
"Recapitalization Agreement") among (i) the Company, (ii) DLJ Merchant Banking
(as defined herein) and (iii) the Continuing Stockholders sets forth the terms
and conditions under which DLJ Merchant Banking will purchase certain shares of
the various classes of the Company's currently outstanding common stock (the
"Outstanding Common") from the Continuing Stockholders (other than Xxxxx Xxxxx,
who will retain all of his Outstanding Common). In addition, pursuant to the
Recapitalization Agreement, among other things, (i) the Continuing Stockholders
will retain certain of their shares of Outstanding Common (the "Retained
Common") (it being understood that Xxxxx Xxxxx shall retain all of his
Outstanding Common) and (ii) all of the outstanding shares of Outstanding
Common, including without limitation the Retained Common, will be reclassified
into shares of Class B Common Stock, $.01 par value per share, of the Company
(the "Common Stock").
The Company and the Stockholders desire to enter into this
Agreement to, among other things: (i) establish the composition of the
Company's Board of Directors (the "Board"), (ii) assure continuity in the
management and ownership of the Company, (iii) terminate the Stockholder
Agreement dated September 25, 1992 by and between Xxxxx Xxxxx Holding Corp. and
certain other parties set forth therein (the "1992 Stockholders Agreement),
(iv) terminate the Registration Agreement dated September 25, 1992 by and
between Xxxxx Xxxxx Holding Corp. and certain other parties set forth therein
(the "1992 Registration Agreement"), (v) limit the manner and terms by which
the Stockholders' Common Stock may be transferred and (vi) provide the
registration rights set forth herein.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties to this Agreement hereby agree as follows:
1. Board of Directors.
(a) From and after the Closing (as defined in the
Recapitalization Agreement) and until the provisions of this paragraph 1 cease
to be effective, each Stockholder shall vote all of its Stockholder Shares (as
defined in paragraph 8 hereof) and any other voting securities of the Company
over which such Stockholder has voting control and shall take all other
necessary or desirable actions within such Stockholder's control (whether in
such Stockholder's capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum, execution of written consents in lieu of meetings and
approval of amendments and/or restatements of the Company's Certificate of
Incorporation or bylaws), and the Company shall take all necessary and
desirable actions within its control (including, without limitation, calling
special board, stockholder meetings and approval of amendments and/or
restatements of the Company's Certificate of Incorporation or bylaws), so that:
(i) the authorized number of directors on the Board
shall be established by the DLJ Representative;
(ii) all representatives designated by the DLJ
Representative shall be elected to the Board;
(iii) the composition of the board of directors of each
of the Company's subsidiaries (a "Sub Board") shall be the same as
that of the Board;
(iv) any committees of the Board or a Sub Board shall
be created only upon the approval of all members of the Board and the
composition of each such committee (if any) shall be proportionately
equivalent to that of the Board;
(v) the removal from the Board or a Sub Board (with or
without cause) of any representative designated hereunder by the DLJ
Representative (including under (ii) above) shall be at the DLJ
Representative's written request, but only upon such written request
and under no other circumstances; and
(vi) in the event that any representative designated
hereunder by the DLJ Representative (including, without limitation,
under (ii) above) for any reason ceases to serve as a member of the
Board or a Sub Board during his or her term of office, the resulting
vacancy on the Board or the Sub Board shall be filled by a
representative designated by the DLJ Representative, as provided
hereunder.
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(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the meetings of
the Board, any Sub Board and any committee thereof.
(c) If the DLJ Representative fails to designate a
representative to fill a directorship pursuant to the terms of this paragraph
1, the election of a person to such directorship shall be accomplished in
accordance with the Company's bylaws and applicable law.
2. Irrevocable Proxy: Conflicting Agreements.
(a) In order to secure each Stockholder's obligation to vote
its Stockholder Shares and other voting securities of the Company in accordance
with the provisions of paragraph 1 hereof, each Stockholder hereby appoints the
DLJ Representative as its true and lawful proxy and attorney-in-fact, with full
power of substitution, to vote all of such Stockholder's Stockholder Shares and
other voting securities of the Company for the election and/or removal of
directors and all such other matters as expressly provided for in paragraph 1.
The DLJ Representative may exercise the irrevocable proxy granted to it
hereunder at any time any Stockholder fails to comply with the provisions of
this Agreement. The proxies and powers granted by each Stockholder pursuant to
this paragraph 2 are coupled with an interest and are given to secure the
performance of the Stockholders' obligations under this Agreement. Such proxies
and powers will be irrevocable until the termination of this Agreement and will
survive the death, incompetency and disability of each Stockholder and the
holders of each of its respective Stockholder Shares.
(b) Each Stockholder represents that such Stockholder has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
holder of Stockholder Shares shall grant any proxy or become party to any
voting trust or other agreement which is inconsistent with or conflicts with
the provisions of this Agreement.
2A. Each Stockholder hereby agrees and consents that upon the
execution of this Agreement, each of the 1992 Stockholder Agreement and the
1992 Registration Rights Agreement is hereby terminated and of no further force
and effect.
3. Restrictions on Transfer of Stockholder Shares.
(a) Transfer of Stockholder Shares. No Stockholder shall
sell, transfer, assign, pledge or otherwise dispose of (a "Transfer") any
interest in any Stockholder Shares, except as set forth below in this Section
3. Notwithstanding the foregoing, no Continuing Stockholder shall sell,
transfer, assign, pledge or otherwise dispose of any interest in any
Stockholder Shares to a
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Competitor without the prior written consent of the DLJ Stockholders.
(b) Intentionally omitted.
(c) First Offer Rights. With respect to any Transfer of
Stockholder Shares by any holders of Stockholder Shares other than the DLJ
Stockholders: if any Stockholder (the "Offering Stockholder") proposes to
transfer any of the Stockholder Shares owned by such Stockholder, then the
Offering Stockholder shall deliver a notice (the "Offer Notice") to the
Company, the DLJ Stockholders and the other Continuing Stockholders setting
forth in reasonable detail the number and class of such Stockholder Shares such
Offering Stockholder proposes to transfer (the "Offered Shares") and the
proposed terms and conditions of the Transfer, which shall be in the form of a
sale of Offered Shares solely for cash (payable at closing or in specified
installments). The Company may elect to purchase any or all of the Stockholder
Shares owned by Offering Stockholder specified in the Offer Notice, at the
price and on the terms specified therein, by delivering written notice of such
election to the Offering Stockholder, the DLJ Stockholders and the Continuing
Stockholders as soon as practicable but in any event within 15 days after the
delivery of the Offer Notice. If the Company does not elect to purchase all of
the Offered Shares within such 15- day period, the DLJ Stockholders may elect
to purchase any or all of the remaining Offered Shares at the price and on the
terms specified in the Offer Notice by delivering written notice of such
election to the Company, the Offering Stockholder and the other Continuing
Stockholders as soon as practicable but in any event within 25 days after
delivery of the Offer Notice. If neither the Company nor the DLJ Stockholders
elect to purchase in the aggregate all of the Offered Shares within such 25-day
period, each Continuing Stockholder may elect to purchase its Pro Rata Share
(as defined below) of the remaining Offered Shares at the price and on the
terms specified in the Offer Notice by delivering written notice of such
election to the Company, the Offering Stockholder, the DLJ Stockholders and the
other Continuing Stockholders as soon as practicable but in any event within 35
days after delivery of the Sale Notice. Any Offered Shares not elected to be
purchased by the end of such 35-day period shall be re-offered for a five day
period by the Offering Stockholder on a pro rata basis to the Continuing
Stockholders who have elected to purchase their Pro Rata Share. If the Company,
the DLJ Stockholders and/or any Continuing Stockholder have elected to purchase
all of the Offered Shares from Offering Stockholder, the transfer of such
shares shall be consummated as soon as practicable after the delivery of the
election notices, but in any event within 50 days after the delivery of the
Offer Notice. To the extent that the Company, the DLJ Stockholders and the
Continuing Stockholders have not elected to purchase all of the Offered Shares
within 40 days after delivery of the Offer Notice, the Offering Stockholder
will not be required to sell any of the Offered Shares to the Company, the DLJ
Stockholders or the
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Continuing Stockholders. In such event, the Offering Stockholder may, within 60
days after the delivery of the Offer Notice, transfer the Offered Shares to any
third party or parties at a price equal to the price per share specified in the
Offer Notice and on other terms no more favorable to the transferee than
offered to the Company, the DLJ Stockholders and the Continuing Stockholders in
the Offer Notice. "Pro Rata Share" with respect to any Continuing Stockholder
shall be an amount equal to the ratio of the number of Stockholder Shares owned
by such Person of the same class of stock as the Offered Shares to the total
number of Stockholder Shares owned by all the Continuing Stockholders of the
same class of stock as the Offered Shares; provided that the provisions of this
Section 3(c) shall not apply to Exempt Transfers (as defined below).
(d) Participation Rights. Each Continuing Stockholder may
elect to participate in a contemplated Transfer of Offered Shares by DLJ
Stockholders by delivering written notice to the DLJ Stockholders within 20
days after delivery of the Sale Notice. If any Continuing Stockholder has
elected to participate in such Transfer, such Continuing Stockholder shall be
entitled to sell in the contemplated Transfer a number of Stockholder Shares
owned by such Continuing Stockholder equal to the product of (i) the quotient
determined by dividing the percentage of all Stockholder Shares owned by such
Continuing Stockholder by the aggregate percentage of all Stockholder Shares
owned by the DLJ Stockholders and the Continuing Stockholders electing to
participate in such sale and (ii) the number of Offered Shares. The sale by all
Continuing Stockholders electing to participate in such sale will be on the
same terms as the sale by the DLJ Stockholders and at sale prices equal the
same price per share as paid to the DLJ Stockholders for the Offered Shares
sold by the DLJ Stockholders.
For example, if the Sale Notice contemplated a sale of 100 Offered
Shares by the DLJ Stockholders, and if the DLJ Stockholders at such
time owns 30% of all Stockholder Shares and if one other Continuing
Stockholder elects to participate and owns 20% of all Stockholder
Shares, the DLJ Stockholders would be entitled to sell 60 shares ((30%
/ 50%) X 100 shares) and such Continuing Stockholder would be entitled
to sell 40 shares ((20% / 50%) x 100 shares).
The DLJ Stockholders shall use reasonable best efforts to obtain the agreement
of the prospective transferee(s) to the participation of the Continuing
Stockholders in any contemplated Transfer, and the DLJ Stockholders shall not
Transfer any of its Stockholder Shares to the prospective transferee(s) if the
prospective transferee(s) declines to allow the participation of the Continuing
Stockholders.
(e) Permitted Transfers. The restrictions contained in this
paragraph 3 shall not apply with respect to (i) any
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Transfer of Stockholder Shares by any Stockholder pursuant to applicable laws
of descent and distribution or among such Stockholder's immediate family, (ii)
a Transfer of Stockholder Shares by any Stockholder among its Affiliates, (iii)
a Public Sale, (iv) a Transfer of Stockholder Shares by the DLJ Stockholders to
a Permitted DLJ Transferee and (v) any Transfer in connection with the sale of
Stockholder Shares to any employee of the Company or any of its Subsidiaries.
In addition, the restrictions contained in this paragraph 3 (other than
subparagraph 3(d)) shall not apply with respect to an Approved Sale pursuant to
paragraph 4 below. Any transfer permitted by this Section 3(e) is referred to
herein as an "Exempt Transfer."
(f) Termination of Restrictions. The restrictions set forth
in this paragraph 3 shall continue with respect to each Stockholder Share until
the earlier of (i) the date on which such Stockholder Share has been
transferred in a Public Sale or (ii) the consummation of a Sale of the Company.
(g) Acknowledgement. The parties hereto acknowledge that this
paragraph 3 is not intended as a prohibition on sale of Stockholder Shares but
instead only dictates the manner upon which a sale of Stockholder Shares may be
made.
4. Sale of the Company.
(a) If the Board and the holders of a majority of the
Stockholder Shares held by the DLJ Stockholders approve a Sale of the Company
(an "Approved Sale"), each Stockholder shall vote for, consent to and raise no
objections against such Approved Sale. If the Approved Sale is structured as a
(i) merger or consolidation, each Stockholder shall waive any dissenters
rights, appraisal rights or similar rights in connection with such merger or
consolidation or (ii) sale of stock, each Stockholder shall agree to sell all
of his Stockholder Shares and rights to acquire shares of Common Stock on the
terms and conditions approved by the Board and the holders of a majority of
Stockholder Shares held by the DLJ Stockholders. Each Stockholder shall take
all necessary or desirable actions in connection with the consummation of the
Approved Sale and the distribution of the aggregate consideration from such
Approved Sale as requested by the Company.
(b) The obligations of the Stockholders with respect to the
Approved Sale are subject to the satisfaction of the following conditions: (i)
upon the consummation of the Approved Sale, each Stockholder shall receive in
exchange for the shares of Common Stock held by such Stockholder the same
portion of the aggregate consideration from such Approved Sale that such
Stockholder would have received if such aggregate consideration had been
distributed by the Company in complete liquidation pursuant to the rights and
preferences set forth in the Certificate of Incorporation as in effect
immediately prior to such Approved Sale; (ii) if any holders of a class of
Common
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Stock are given an option as to the form and amount of consideration to be
received, each holder of such class of Common Stock shall be given the same
option; (iii) each holder of then currently exercisable rights to acquire
shares of a class of Common Stock shall be given an opportunity to either (A)
exercise such rights or options prior to the consultation of the Approved Sale
and participate in such sale as holders of such class of Common Stock or (B)
upon the consummation of the Approved Sale, receive in exchange for such rights
or options consideration equal to the amount determined by multiplying (1) the
same amount of consideration per share of a class of Common Stock received by
holders of such class of Common Stock in connection with the Approved Sale less
the exercise price per share of such class of Common Stock of such rights or
options to acquire such class of Common Stock by (2) the number of shares of
such class of Common Stock represented by such rights or options; and (iv)
neither the Company nor any Stockholder shall receive any consideration in any
form other than as purchase price for the assets or stock being sold pursuant
to such Approved Sale.
5. Public Offering. In the event that the Board and the
holders of a majority of the Stockholder Shares held by the DLJ Stockholders
approve an initial public offering and sale of Common Stock (a "Public
Offering") pursuant to a registration statement filed under the Securities Act,
the Stockholders shall take all necessary or desirable actions in connection
with the consummation of the Public Offering. In the event that such Public
Offering is an underwritten offering and the managing underwriters advise the
Company in writing that in their opinion the Common Stock structure shall
adversely affect the marketability of the offering, each Stockholder shall
consent to and vote for a recapitalization, reorganization and/or exchange of
the Common Stock into securities that the managing underwriters, the Board and
holders of a majority of the Stockholder Shares held by the DLJ Stockholders
find acceptable and shall take all necessary or desirable actions in connection
with the consummation of the recapitalization, reorganization and/or exchange;
provided that (a) the resulting securities reflect and are consistent with the
rights and preferences set forth in the Certificate of Incorporation as in
effect immediately prior to such Public Offering, (b) such recapitalization,
reorganization and/or exchange does not adversely effect a Stockholder or group
of Stockholders in a manner different than the other Stockholders and (c) at
the request of a holder, the Company shall offer such holder non-voting
securities in lieu of voting securities.
6. Legend. In addition to any legend that may be required
under applicable securities laws or otherwise, each certificate evidencing
Stockholder Shares and each certificate issued in exchange for or upon the
transfer of any Stockholder Shares (if such shares remain Stockholder Shares as
defined herein after such transfer) shall be stamped or otherwise imprinted
with a legend in substantially the following form:
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"The securities represented by this certificate are subject
to a Stockholders and Registration Rights Agreement dated as
of_________, 1997, among the issuer of such securities (the
"Company") and certain of the Company's stockholders. A copy
of such Stockholders and Registration Rights Agreement will
be furnished without charge by the Company to the holder
hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above shall
be removed from the certificates evidencing any shares which cease to be
Stockholder Shares.
7. Transfer. Prior to transferring any Stockholder Shares
(other than in a Public Sale) to any person or entity, the Transferring
Stockholder shall cause the prospective transferee to execute and deliver to
the Company and the other Stockholders a counterpart of this Agreement;
provided that employees of the Company or any of its Subsidiaries who purchase
any Stockholder Shares from the DLJ Stockholders shall not be obligated to
execute and deliver to the Company and the other Stockholders a counterpart to
this Agreement.
7A. Financial Information. The Company agrees that it will
deliver to each Stockholder annual financial statements and quarterly financial
information to the extent that the Company does not otherwise deliver such
financial statements and information to such Stockholder pursuant to the
indenture relating to the Company's 15% Senior Subordinated Zero Coupon Notes
due 2004.
8. Definitions.
"Affiliate" means any Person directly or indirectly,
controlling or controlled by or under direct or indirect common control with
such specified Person. For this purpose, "control" shall mean 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.
"Xxxx Group" means BCIP Associates, BCIP Trust Associates,
L.P., Tyler Capital Fund, L.P., Tyler International, L.P.-II, Tyler
Massachusetts, L.P., Xxxxxxx X. Xxxxxx, Xxxx Xxxx, Xxxxxxxx Family Partners,
Xxxxxx Xxxxxxxx and The Xxxxxx Trust.
"Business Day" means any day excluding Saturday, Sunday and
any day which shall be in the City of New York a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close.
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"Certificate of Incorporation" means the Company's
certificate of incorporation in effect at the time as of which any
determination is being made.
"Common Stock" means the Class B Common Stock, par value $.01
per share of the Company.
"Competitor" means any Person engaged, directly or
indirectly, in any business or any line of business similar to the business or
lines of business of the Company or any of its Subsidiaries as now conducted or
as presently proposed to be conducted; provided that no Permitted DLJ
Transferree shall be deemed to be a Competitor for any purpose under this
Agreement.
"Continuing Registrable Securities" means (i) any shares of
Common Stock retained by the Continuing Stockholders pursuant to the
Recapitalization Agreement, including, without limitation, any shares of Common
Stock received upon the reclassification of the Company's Outstanding Common in
accordance with the terms of the Recapitalization Agreement, (ii) any equity
securities issued or issuable directly or indirectly with respect to the
securities referred to in clause (i) by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, reclassification,
merger, consolidation or other reorganization and (iii) any other shares of
Common Stock held by Persons holding securities described in clauses (i) or
(ii) above. As to any particular shares constituting Continuing Registrable
Securities, such shares will cease to be Continuing Registrable Securities when
they have been (x) effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them, or (y) sold to
the public through a broker dealer or market maker pursuant to Rule 144 under
the Securities Act. For purposes of this Agreement, a Person will be deemed to
be a holder of Continuing Registrable Securities whenever such Person has the
right to acquire directly or indirectly such Continuing Registrable Securities
(upon conversion, exchange or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected.
"DLJ " means the DLJ Representative, DLJMB Partners XX-X,
X.X., XXXXX Xxxxxxx XX, Xxx., XXX Diversified Partners, L.P., DLJ Diversified
Partners-A, L.P., DLJ First ESC L.L.C., DLJ Offshore Partners II, C.V., DLJ EAB
Partners, L.P., UK Investment Plan 1997 Partners and DLJ Millennium Partners,
L.P.
"DLJ Registrable Securities" means (i) any shares of Common
Stock acquired by or issued to the DLJ Stockholders pursuant to the
Recapitalization Agreement, (ii) any equity securities issued or issuable
directly or indirectly with respect to the securities referred to in clause(i)
by way of stock dividend or stock split or in connection with a combination of
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shares, recapitalization, reclassification, merger, consolidation or other
reorganization and (iii) any other shares of Common Stock held by Persons
holding securities described in clause (i) or (ii) above. As to any particular
shares constituting DLJ Registrable Securities, such shares will cease to be
DLJ Registrable Securities when they have been (x) effectively registered under
the Securities Act and disposed of in accordance with the registration
statement covering them, or (y) sold to the public through a broker, dealer or
market maker pursuant to Rule 144 under the Securities Act. For purposes of
this Agreement, a Person will be deemed to be a holder of DLJ Registrable
Securities whenever such Person has the right to acquire directly or indirectly
such DLJ Registrable Securities (upon conversion, exchange or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected.
"DLJ Representative" means DLJ Merchant Banking
Partners II, L.P.
"Independent Third Party" means any person who, immediately
prior to the contemplated transaction is not an Affiliate.
"Permitted DLJ Transferree" means with respect to any DLJ
Stockholder, (i) any general or limited partner of such DLJ Stockholder (a "DLJ
Partner"), (ii) any corporation, partnership or other entity which is an
Affiliate of such DLJ Stockholder or of any DLJ Partner (collectively, the "DLJ
Affiliates"), (iii) any managing director, general partner, director, limited
partner, officer or employee of (a) such DLJ Stockholder, (b) such DLJ Partner
or (c) any DLJ Affiliate of such DLJ Partner or a DLJ Affiliate, or the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries of
any of the foregoing Persons referred to in this clause (iii) (collectively,
"DLJ Associates"), (iv) any trust, the beneficiaries of which, or a
corporation, limited liability company or partnership, the stockholders,
members or general or limited partners of which, include only such DLJ
Stockholder, DLJ Affiliates, DLJ Associates, their spouses or their lineal
descendants and (v) a voting trustee for one or more DLJ Stockholders, DLJ
Affiliates or DLJ Associates.
"Person" means an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Public Sale" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of
Rule 144 adopted under the Securities Act.
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"Qualified Public Offering" means the sale or sales in an
underwritten public offering or offerings registered under the Securities Act
of shares of the Company's Common Stock where the Company has received net
proceeds of at least $40 million (measured as of any date of issuance).
"Registrable Securities" means collectively the DLJ
Registrable Securities and the Continuing Registrable Securities.
"Rule 144" means Rule 144 promulgated under the Securities
Act, as amended from time to time, or any similar rule then in effect.
"Sale of the Company" means the sale of the Company to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power under normal circumstances to elect a majority of the Company's
board of directors (whether by merger, consolidation or sale or transfer of the
Company's capital stock or otherwise) or (ii) all or substantially all of the
Company's assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any similar federal law then in force.
"Securities and Exchange Commission" includes any
governmental body or agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, or any similar federal law then in
force.
"Stockholder Shares" means (i) any Common Stock purchased or
otherwise acquired by any Stockholder, including, without limitation, any
Common Stock received by any Stockholder in connection with any
reclassification or conversion of such Common Stock, and (ii) any equity
securities issued or issuable directly or indirectly with respect to the Common
Stock referred to in clause (i) above by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization,
reclassification, merger, consolidation or other reorganization. As to any
particular shares constituting Stockholder Shares, such shares will cease to be
Stockholder Shares when they have been (x) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them or (y) sold to the public through a broker, dealer or market
maker pursuant to Rule 144 under the Securities Act.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which (i) if
a corporation, at least a majority of the total voting power of shares of stock
entitled (without regard to the
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occurrence of any contingency) to vote in the election of directors is at the
time owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof, or (ii) if a
partnership, association or other business entity, at least a majority of the
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have at least a majority ownership interest in a
partnership, association or other business entity if such Person or Persons
shall be allocated at least a majority of partnership, association or other
business entity gains or losses or shall be or control the managing director or
general partner of such partnership, association or other business entity.
9. Demand Registrations.
(a) Requests for Registration. At any time after the one year
anniversary date of the date on which the Company registered and sold any of
its common equity securities pursuant to a registration statement filed and
declared effective under the Securities Act (an "Initial Public Offering"),
subject to 9(b) and 9(c) below:
(i) the holders of a majority of the Continuing
Registrable Securities may request registration
under the Securities Act of all or part of their
Registrable Securities (a "Continuing Demand
Registration"). The holders of a majority of the
Continuing Registrable Securities may request one
Continuing Demand Registration; and
(ii) the holders of a majority of the DLJ Registrable
Securities will be entitled to request a unlimited
number of Demand Registrations (each, a "DLJ Demand
Registration," and together with the "Continuing
Demand Registration," a "Demand
Registration").
A request for a Demand Registration pursuant to this Section
9(a) shall specify the approximate number of Registrable Securities requested
to be registered, the anticipated per share price range for such offering and
the intended method of distribution thereof. Within ten days after receipt of
any such request, the Company will give written notice of such requested
registration to all other holders of Registrable Securities and will include in
such registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company's notice. A Demand Registration pursuant to this Section
9(a) will not count as a Demand Registration until it has become effective
under the Securities Act (unless such Demand
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Registration has not become effective due to the fault of the holders
requesting such registration) and has remained effective for a period of at
least 90 days (or such shorter time in which the Registrable Securities
requested to be included in such registration are registered and sold).
(b) Priority on Demand Registration. (i) If a Continuing
Demand Registration is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Registrable
Securities and, if permitted hereunder, other securities requested to be
included in such offering exceeds the number of Registrable Securities and
other securities, if any, which can be sold therein without adversely affecting
the marketability of the offering, then the Company will include in such
registration (1) first, the Continuing Registrable Securities requested to be
included in such registration, (2) second, the DLJ Registrable Securities
requested to be included in such registration and any equity securities offered
by the Company, pro rata among the holders of DLJ Registrable Securities and
the Company, on the basis of the number of shares owned by each such holder of
DLJ Registrable Securities, and, in the case of the Company, on the basis to
the number of shares proposed to be offered by the Company, and (3) third,
other securities requested to be included in such registration and (ii) if a
DLJ Demand Registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the number of
Registrable Securities and, if permitted hereunder, other securities requested
to be included in such offering exceeds the number of Registrable Securities
and other securities, if any, which can be sold therein without adversely
affecting the marketability of the offering then (A) if the holders of the
Continuing Registrable Securities were offered the opportunity to include all
such Continuing Registrable Securities in an Initial Public Offering
(including, without limitation, any offer to include such Continuing
Registrable Securities pursuant to Section 10A), then the Company will include
in such registration (1) first, any DLJ Registrable Securities that DLJ
Merchant Banking proposes to sell, (2) second, the other Registrable Securities
requested to be included in such registration and any equity securities offered
by the Company, pro rata among the holders of such Registrable Securities and
the Company, on the basis of the number of shares owned by each such holder,
and, in the case of the Company, on the basis to the number of shares proposed
to be offered by the Company, and (3) third, other securities requested to be
included in such registration and (B) if the holders of the Continuing
Registrable Securities were not offered the opportunity to include all such
Continuing Registrable Securities in an Initial Public Offering, then the
Company will include in such registration (1) first, any Continuing Registrable
Securities requested to be included in such registration by the Continuing
Stockholders, (2) second, any other Registrable Securities requested to be
included in such registration and any equity securities offered by the Company,
13
pro rata among the holders of such Registrable Securities and the Company, on
the basis of the number of shares owned by each such holder, and, in the case
of the Company, on the basis to the number of shares proposed to be offered by
the Company, and (iii) third, other securities requested to be included in such
registration .
(c) Restrictions on Demand Registrations. The Company may
postpone for up to six months the filing or the effectiveness of a registration
statement for a Demand Registration if the Company determines that such Demand
Registration would reasonably be expected to have an adverse effect on any
proposal or plan by the Company or any of its Subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction; provided that in
such event, the holders of Registrable Securities initially requesting such
Demand Registration will be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration will not count as the one
permitted Demand Registration hereunder.
(d) Selection of Underwriters. The Company shall select
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ") as the investment
banker and manager to administer any underwritten offering pursuant to this
Section 9, or in the event that DLJ declines to serve the investment banker and
manager in connection with such underwritten offering, the Company shall have
the right to select another investment banker(s) and manager(s) (the
"Alternative Selection"), which Alternative Selection shall be subject to the
approval of the holders of a majority of the Registrable Securities owned by
the Xxxx Group, which approval shall not be unreasonably withheld.
10. Piggyback Registrations.
(a) Right to Piggyback. At any time after the consummation of
an Initial Public Offering, whenever the Company proposes to register any of
its equity securities under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the
Company will give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and, subject to
clause (b) below, will include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within 15 days after the receipt of the Company's notice.
Notwithstanding anything contained elsewhere herein, the provisions of this
Section 10 shall not be applicable to any Demand Registration pursuant to
Section 9 hereof.
(b) Priority on Piggyback Registrations. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and the
managing underwriters advise the Company
14
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, then
(i) if the holders of the Continuing Registrable Securities were offered the
opportunity to include all such Continuing Registrable Securities in an Initial
Public Offering (including, without limitation, any offer to include such
Continuing Registrable Securities pursuant to Section 10A), then the Company
will include in such registration (A) first, any securities the Company
proposes to sell, (B) second, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such Registrable
Securities on the basis of the number of shares owned by each such holder, and
(C) third, other securities requested to be included in such registration and
(ii) if the holders of the Continuing Registrable Securities were not offered
the opportunity to include all such Continuing Registrable Securities in an
Initial Public Offering, then the Company will include in such registration (A)
first, any securities the Company proposes to sell, (B) second, all Continuing
Registrable Securities requested to be included in such registration, (C)
third, all DLJ Registrable Securities requested to be included in such
registration, and (D) fourth, all other securities requested to be included in
such registration.
(c) Selection of Underwriters. The Company shall select
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ") as the investment
banker and manager to administer any underwritten offering pursuant to this
Section 10, or in the event that DLJ declines to serve the investment banker
and manager in connection with such underwritten offering, the Company shall
have the right to select another investment banker(s) and manager(s) (the
"Alternative Selection"), which Alternative Selection shall be subject to the
approval of the holders of a majority of the Registrable Securities owned by
the Xxxx Group, which approval shall not be unreasonably withheld.
10A. Participation in Initial Public Offering.
(d) In the event that the Company proposes to register any
DLJ Registrable Securities, any shares of Common Stock owned by the management
of the Company (the "Management Shares") or any other Stockholder Shares in
connection with an Initial Public Offering (the "IPO Registration") and the
registration form to be used may be used for the registration of Registrable
Securities, the Company will give prompt written notice to all holders of
Continuing Registrable Securities of its intention to effect such a
registration and, subject to the next sentence, will include in such
registration all Continuing Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice; provided that if the IPO
Registration is an underwritten registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their
15
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, then the Company will include in
such registration (i) first, any securities the Company proposes to sell, (ii)
second, the Continuing Registrable Securities, the DLJ Registrable Securities
and any Management Shares requested to be included in such registration, pro
rata among the holders of such Continuing Registrable Securities, DLJ
Registrable Securities and Management Shares on the basis of the number of
shares owned by each such holder of Continuing Registrable Securities, DLJ
Registrable Securities, and Management Shares, respectively and (iii) third,
all other securities requested to be included in such registration; provided
further that, in the event that any agreement (a "Management Agreement") with
respect to the number of Management Shares that may be registered in an Initial
Public Offering may be construed to conflict with the provisions of this
Section 10A(d), the terms of the Management Agreement shall govern.
11. Holdback Agreement
Each holder of Registrable Securities agrees not to effect
any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company and not to effect any such public sale or
distribution of any securities convertible into or exchangeable or exercisable
for such securities, in each case, during the period which begins seven days
prior to the Effective Date (as defined below) and continuing through the
180-day period beginning on the effective date (the "Effective Date") (such
period, the "Holdback Period") of any registration statement under the
Securities Act (except as part of such registration) with respect to the sale
of common equity securities, unless the underwriters managing the registered
public offering otherwise agree; provided that upon any public sale or
distribution that occurs after the consummation of a Qualified Public Offering,
the Holdback Period shall extend from the period which begins seven days prior
to the Effective Date and continues through the 90-day period beginning on the
Effective Date (each such period, a "90-day Holdback Period"); provided,
further that during each such 90-day Holdback Period, each holder of
Registrable Securities that owns less than 5% of the total amount of common
equity securities then outstanding shall be permitted to sell an amount of
Registrable Securities that is no greater than the greater of (i) one percent
of the shares of common equity securities outstanding as shown by the most
recent report or statement published by the Company and (ii) the average weekly
reported volume of trading in such common equity securities on all national
securities exchanges and/or reported through the automated quotation system of
a registered securities association during the four calendar weeks immediately
preceding the proposed date of sale of such common equity securities.
16
12. Registration Procedures. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its reasonable best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof (including the
registration of Registrable Securities held by a holder of Registrable
Securities requesting registration as to which the Company has received
reasonable assurances that only Registrable Securities will be distributed to
the public), and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement on any form for which the Company then
qualifies and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method
of distribution thereof, with respect to such Registrable Securities and use
its reasonable best efforts to cause such registration statement to become
effective;
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) notify each holder of Registrable Securities being so
registered and counsel for such holders promptly and, if requested by such
holder or such holder's counsel, confirm such advice in writing promptly (i)
when a registration statement has become effective with respect to such
Registrable Securities and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the Securities and Exchange
Commission or any state securities authority for post-effective amendments and
supplements to any such registration statement and prospectus or for additional
information after the registration statement has become effective, (iii) of the
issuance by the Securities and Exchange Commission or any state securities
authority of any stop order suspending the effectiveness of any such
registration statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of any such registration statement and the
closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to such offering cease to be true and correct in all material
respects, (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any such Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event or the discovery of any facts
during the period such registration statement is effective which
17
makes any statement made in such registration statement or the related
prospectus untrue in any material respect or which requires the making of any
changes in such registration statement or prospectus in order to make the
statements therein not misleading and (vii) of any determination by the Company
that a post-effective amendment to a registration statement would be
appropriate;
(d) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(e) use its reasonable best efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such seller (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(f) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed and, if not so listed,
to be listed on the NASD automated quotation system;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the underwriters reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any
18
such seller, underwriter, attorney, accountant or agent in connection with
such registration statement;
(j) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve months beginning
with the first day of the Company's first full calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(k) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(l) use its reasonable best efforts to obtain a cold comfort
letter from the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by cold comfort letters
as the holders of a majority of the Registrable Securities being sold
reasonably request (provided that such Registrable Securities constitute at
least 10% of the securities covered by such registration statement);
(m) upon the occurrence of any event or the discovery of any
facts, each as contemplated by Section 12(c)(vi) hereof, use its best efforts
to prepare a supplement or post-effective amendment to a 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 Securities, such prospectus will not contain at
the time of such delivery any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Company
agrees to notify each holder of Registrable Securities covered by such
registration statement to suspend use of the prospectus as promptly as
practicable after the occurrence of such an event, and each such holder hereby
agrees to suspend use of the prospectus until the Company has amended or
supplemented the prospectus to correct such misstatement or omission. At such
time as such public disclosure is otherwise made or the Company determines that
such disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, the Company agrees
promptly to notify each such holder of such determination and to furnish each
such holder such numbers of copies of the prospectus, as amended or
supplemented, as such holder may reasonably request; and
19
(n) each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event or the
discovery of any facts, each of the kind described in Section 12(c)(ii)-(vi)
hereof, each holder of Registrable Securities covered by such registration
statement will forthwith discontinue disposition of Registrable Securities
pursuant to such registration statement until such holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 12(m)
hereof.
13. Registration Expenses.
All expenses of the Company incident to performance of or
compliance with this Agreement, including without limitation: (i) all
Securities and Exchange Commission and National Association of Securities
Dealers, Inc. registration and filing fees, if any (including, without
limitation, the fees and expenses of any "qualified independent underwriter"),
(ii) all fees and expenses incurred in connection with compliance with state
securities, blue sky or other securities laws (including reasonable fees and
disbursements of counsel for any underwriters or Stockholders in connection
with state securities, blue sky or other securities qualification of any of the
Registrable Securities), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
registration statement, any prospectus, any amendments or supplements thereto,
certificates representing the Registrable Securities and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, if any, (v) the fees and disbursements of counsel for the
Company and including the fees and expenses of preparing and distributing any
underwriting or securities sales agreement, (vi) in connection with each Demand
Registration, the Company will reimburse the holders of Registrable Securities
covered by such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
initially requesting such registration, (vii) all application and filing fees
in connection with listing the Registrable Securities on a national securities
exchange or an automated quotation system, if any, (viii) the reasonable fees
and expenses of the independent public accountants of the Company, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, and (ix) the reasonable fees and
expenses of an escrow agent or custodian, if any, but excluding underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Stockholder, shall be borne by the
Company.
14. Indemnification.
(a) The Company agrees to indemnify and hold harmless (i) each holder
of Registrable Securities and (ii) each person, if
20
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) any such holder of Registrable Securities (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any such holder of Registrable Securities or any
controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Holder"), to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Holder) directly or indirectly
caused by, related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement, preliminary prospectus or prospectus (or any
amendment or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by an untrue statement or omission
or alleged untrue statement or omission of a material fact that is made in
reliance upon and in conformity with information relating to any of the holders
of Registrable Securities furnished in writing to the Company by any of such
holders of Registrable Securities expressly for use therein. The Company also
agrees to reimburse each Indemnified Person for any and all fees and expenses
(including, without limitation, the fees and expenses of counsel) as they are
incurred in connection with enforcing such Indemnified Person's rights under
this Agreement.
In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought or asserted against
any of the Indemnified Holders with respect to which indemnity may be sought
against the Company, such Indemnified Holder (or the Indemnified Holder
controlled by such controlling person) shall promptly notify the Company in
writing (provided, that the failure to give such notice shall not relieve the
Company of its obligations pursuant to this Agreement unless such failure
materially prejudices the Company). Such Indemnified Holder shall have the
right to employ its own counsel in any such action and the fees and expenses of
such counsel shall be paid, as incurred, by the Company (regardless of whether
it is ultimately determined that an Indemnified Holder is not entitled to
indemnification hereunder). The Company shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any
21
local counsel) at any time for such Indemnified Holders, which firm shall be
designated by the holders of Registrable Securities. The Company shall be
liable for any settlement of any such action or proceeding effected with the
Company's prior written consent, which consent shall not be withheld
unreasonably, and the Company agrees to indemnify and hold harmless each
Indemnified Holder from and against any loss, claim, damage, liability or
expense by reason of any settlement of any action effected with the written
consent of the Company. The Company shall not, without the prior written
consent of each Indemnified Holder, settle or compromise or consent to the
entry of judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Holder is
a party thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from all liability
arising out of such action, claim, litigation or proceeding.
(b) Each holder of Registrable Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and its directors,
officers, and any person controlling (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Company, and its officers,
directors, partners, employees, representatives and agents of each such person,
to the same extent as the foregoing indemnity from the Company to each of the
Indemnified Holders, but only with respect to claims and actions based on
information relating to such holder of Registrable Securities furnished in
writing by such holder of Registrable Securities expressly for use in any
registration statement. In case any action or proceeding shall be brought
against the Company or its directors or officers or any such controlling person
in respect of which indemnity may be sought against a holder of Registrable
Securities, such holder of Registrable Securities shall have the rights and
duties given the Company, and the Company, such directors or officers or such
controlling person shall have the rights and duties given to each holder of
Registrable Securities by the preceding paragraph. In no event shall any holder
of Registrable Securities be liable or responsible for any amount in excess of
the amount by which the total received by such holder with respect to its sale
of Registrable Securities pursuant to a registration statement exceeds the sum
of (i) the amount paid by such holder for such Registrable Securities plus (ii)
the amount of any damages which such holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission of a material fact.
(c) If the indemnification provided for in this Section 14 is
unavailable to an indemnified party under Section 14(a) or Section 14(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each
22
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the holders of Registrable Securities, on the
other hand, from their sale of Registrable Securities or if such allocation is
not permitted by applicable law, the relative fault of the Company, on the one
hand, and of the Indemnified Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Indemnified Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Indemnified Holder 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, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 14(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each holder of Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this
Section 14(c) were determined by pro rata allocation (even if the holders of
Registrable Securities were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 14, no holder of Registrable
Securities or its related Indemnified Holders shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the total
received by such holder with respect to the sale of its Registrable Securities
pursuant to a registration statement exceeds the sum of (A) the amount paid by
such holder for such Registrable Securities plus (B) the amount of any damages
which such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission of a material fact.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations
23
of the holders of Registrable Securities to contribute pursuant to this Section
14(c) are several in proportion to the respective principal amount of
Securities held by each of such holders hereunder and not joint.
15. Participation in Underwritten Registrations. No Person
may participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
16. Transferee. Upon request of any holder of Registrable
Securities, the Company shall promptly supply to such holder or its prospective
transferee all information required to be delivered in connection with a
transfer pursuant to Rule 144A of the Securities Act.
17. Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be void, and the Company shall not record such Transfer on
its books or treat any purported transferee of such Stockholder Shares as the
owner of such shares for any purpose.
18. Termination. Notwithstanding any provisions to the
contrary contained herein, upon the consummation of a Qualified Public
Offering, Sections 1, 2, 3, 4, 5, 7 and 17 of this Agreement will terminate and
be of no further force and
effect.
19. Amendment and Waiver. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company and the
holders of at least all of the Stockholder Shares owned by each of (a) the DLJ
Stockholders and (b) Xxxx Group; provided that this Agreement may be amended or
modified to clarify any ambiguity or error upon the written consent of the
holders of a majority of the Stockholder Shares; provided further that with
respect to any modification, amendment or waiver affecting the rights of any
class of stock held by any Stockholder, such modification, amendment or waiver
shall affect all of the shares held by all of the holders of such class of
stock in the same manner. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms;
provided that no modification, amendment or waiver of this Agreement shall be
effective against
24
the Company or any Stockholder if such modification, amendment or waiver of any
provision of this Agreement would cause the Company or any such Stockholder, as
the case may be, to be in violation of any federal or state law or regulation.
20. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
21. Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
22. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and the Stockholders
and any subsequent holders of Stockholder Shares and the respective successors
and assigns of each of them, so long as they hold Stockholder Shares.
23. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
24. Remedies. The Company and the Stockholders shall be
entitled to enforce their rights under this Agreement specifically to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that the Company and any Stockholder may
in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
25. Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered or when received by
confirmed telecopy or mailed first class mail (postage prepaid) or sent by
reputable overnight
25
courier service (charges prepaid) to the Company at the address set forth below
and to any other recipient at the address indicated on the schedules hereto and
to any subsequent holder of Stockholder Shares subject to this Agreement at
such address as indicated by the Company's records, or at such address or to
the attention of such other person as the recipient party has specified by
prior written notice to the sending party. Notices will be deemed to have been
given hereunder when delivered personally, when received by confirmed telecopy,
three days after deposit in the U.S. mail and one day after deposit with a
reputable overnight courier service. The Company's address is:
Xxxxx Xxxxx Holding Corp.
c/o DLJ Merchant Banking Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
26. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by and construed in accordance with the domestic laws
of the State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
27. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
* * * * *
26
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
XXXXX XXXXX HOLDING CORP.
By /s/ Xxxxxxx Xxxx
------------------------------
Name:
Title:
DLJMB FUNDING II, INC.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
DLJ MERCHANT BANKING PARTNERS II,
L.P.
By: DLJ Merchant Banking II,
Inc.
Managing General Partner
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners,
Inc.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
Additional Signature Page to Stockholders and
Registration Rights Agreement
DLJ FIRST ESC L.L.C.
By: DLJ LBO Plans
Management Corporation
As Manager
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
DLJ OFFSHORE PARTNERS, II, C.V.
By: DLJ Merchant Banking
II, Inc.
Managing General
Partner
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
DLJ EAB PARTNERS, L.P.
By: DLJ Merchant Banking
II, Inc.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
UK INVESTMENT PLAN 1997 PARTNERS
By: Xxxxxxxxx, Lufkin &
Xxxxxxxx, Inc.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
Additional Signature Page to Stockholders and
Registration Rights Agreement
DLJ MERCHANT BANKING PARTNERS II-A,
L.P.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
DLJ DIVERSIFIED PARTNERS-A, L.P.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
DLJ MILLENIUM PARTNERS, L.P.
By /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Person
Additional Signature Page to Stockholders and Registration Rights Agreement
BANKERS TRUST NEW YORK CORPORATION
By /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
Title: Sr. Managing Director
CONAC & CO.
As registered holder for
Continental Assurance Company on
behalf of its separate account,
Continental Assurance Company
Pension Investment Fund
Conac & Co.
Signature Guaranteed
By The First National Bank of Chicago
-----------------------------------
By: Xxxxxxx
--------------------------------
Authorized Signature
MUICO & CO.
As registered holder for Xxxxxx
High Yield Trust
By /s/ Xxxx X. X'Xxxx
-----------------------------------
Name: Xxxx X. X'Xxxx
Title: Vice President
PAINEWEBBER MANAGED INVESTMENT TRUST ON
BEHALF OF PAINEWEBBER HIGH INCOME FUND(1)
By /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
-------------------
(1) Limitation of Trustee, Officer and Shareholder Liability. PaineWebber High
Income Fund is a series of a Massachusetts business trust (the "Trust"). The
parties to this Stockholders and Registration Rights Agreement hereby
acknowledge that this Agreement and the agreements, documents and instruments
executed in connection herewith (collectively, the "Documents") relate solely
to the undersigned and not to any other series of the Trust. The parties hereto
hereby agree that, in seeking to enforce any of its rights under any of the
Documents, they will look solely to the undersigned, and not to any other
series of the Trust, and that all such other series shall have no liabilities
or obligations under the Documents. Additionally, notice is hereby given that
the Documents are executed on behalf of the trustees of the Trust as trustees
and not individually and that the obligations of the Documents are not binding
upon any of the trustees, officers or shareholders of the Trust individually,
but are binding only upon the assets and property of the undersigned.
Additional Signature Page to Stockholders and Registration Rights Agreement
USL CAPITAL CORPORATION
By /s/ Xxxxx Xxxxxx, Xx.
------------------------------
Name: Xxxxx Xxxxxx, Xx.
Title: Vice President, General
Counsel & Secretary
Additional Signature Page to Stockholders and Registration Rights Agreement
XXXXXXXX FAMILY PARTNERS
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name:
Its: GENERAL PARTNER
By: /s/ Xxxx X. Xxxx
-----------------------------------
XXXX X. XXXX
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
XXXXXXX X. XXXXXX
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
XXXXXX XXXXXXXX
THE XXXXXX TRUST
By: /s/ Xxxxxxxx X. Xxxxxxxxx, AVP
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Its: Assistant Vice President
Additional Signature Page to Stockholders and Registration Rights Agreement
/s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx
BCIP ASSOCIATES
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: General Partner
BCIP TRUST ASSOCIATES. L.P.
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: General Partner
TYLER CAPITAL FUND L.P.
By: Xxxx Venture Capital,
a California limited partnership
Its General Partner
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: General Partner
TYLER INTERNATIONAL, L.P.-II
By: Xxxx Venture Capital,
a California limited partnership
Its General Partner
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: General Partner
TYLER MASSACHUSETTS, L.P.
By: Xxxx Venture Capital,
a California limited partnership
Its General Partner
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: General Partner
SCHEDULE A
DLJ Merchant Banking Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DLJ Offshore Partners II, C.V.
c/o DLJ Offshore Management N.V.
Xxxx X. Xxxxxxxxxx 00
Xxxxxxxxxx, Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxx
XXX Diversified Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DLJMB Funding II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
UK Investment Plan 1997 Partners
2121 Avenue of the Stars
Xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
DLJ Merchant Banking Partners II-A, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DLJ Diversified Partners-A, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DLJ Millenium Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DLJ First ESC LLC
c/o DLJ LBO Plans Management Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DLJ EAB Partners, L.P.
c/o DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
