Exhibit 4.2
SHAREHOLDER AGREEMENT
AGREEMENT dated as of June 12, 2000, by and among Synetics Solutions
Inc., an Oregon corporation ("Synetics"), YASKAWA ELECTRIC CORPORATION, a
Japanese corporation ("Yaskawa"), and HUNTAIR INC., an Oregon corporation
("HUNTAIR").
RECITALS
A. HUNTAIR, Synetics, and Yaskawa are parties to an Agreement for
the Purchase and Sale of Assets dated as of May 19, 2000 (the "Purchase
Agreement").
B. Synetics was formed for the purpose of participating in the
transaction provided for in the Purchase Agreement. Immediately prior to the
Closing (as defined in the Purchase Agreement), Yaskawa purchased 4,400,000
shares of Synetics's common stock ("Common Stock") and HUNTAIR purchased 100,000
shares of Common Stock.
C. At the Closing, Synetics is acquiring from HUNTAIR the assets of
HUNTAIR's Isolation Technology Division and, in part payment of the purchase
price, is issuing to HUNTAIR an additional 200,000 shares of Common Stock.
D. The 300,000 shares of Common Stock acquired by HUNTAIR are
referred to herein as the "HUNTAIR Shares."
E. The execution and delivery of this Agreement is a condition to
the Closing under the Purchase Agreement.
AGREEMENTS
In consideration of the mutual promises and covenants hereinafter
set forth, the parties agree as follows:
1. TRANSFER OF HUNTAIR SHARES
1.1 RESTRICTIONS
The HUNTAIR Shares shall not be (i) pledged, hypothecated or
otherwise used to secure an obligation of the holder or (ii) sold or transferred
except upon the conditions specified in this Agreement. In the event a transfer
of HUNTAIR Shares is made pursuant to the terms of this Agreement, the
transferee shall take and hold such shares subject to the provisions and upon
the conditions specified in this Agreement, which shall be evidenced by such
holder's execution of a counterpart of this Agreement. In the event that there
is an initial public offering of shares of Common Stock (the "IPO"), the
restrictions set forth in this Section 1 shall terminate and be of no further
force and effect from and after the effective date of the IPO.
1
1.2 PERMITTED TRANSFER
In the event HUNTAIR hereafter sells its remaining business assets
and dissolves, it may transfer the HUNTAIR Shares to a liquidating trust or
similar entity, the beneficiaries of which shall be the HUNTAIR's shareholders.
Thereafter, the entity shall remain the sole owner of the HUNTAIR Shares until
the restrictions on transfer set forth herein expire or the HUNTAIR Shares are
sold.
1.3 NOTICE OF PROPOSED TRANSFERS
Prior to any transfer of HUNTAIR Shares (unless the proposed
transfer is subject to a registration statement in effect under the Securities
Acts of 1933, as amended (the "Securities Act")) HUNTAIR shall give written
notice to Yaskawa and Synetics of its intention to effect the transfer in
sufficient detail to demonstrate to the reasonable satisfaction of Yaskawa and
Synetics that the proposed transfer is permitted hereunder and may be effected
without registration under the Securities Act, whereupon HUNTAIR shall be
entitled to transfer such shares in accordance with the terms of the notice
delivered to Yaskawa and Synetics.
2. REPURCHASE OF HUNTAIR SHARES
Beginning July 1, 2000, Synetics may repurchase part of or all the
HUNTAIR Shares at the option (the "Call") of Synetics, during the periods, at
the prices, and on the terms and conditions set forth below.
2.1 PRICE
The repurchase price per HUNTAIR Share during the periods set forth
below shall be the price shown in the following table, adjusted as set forth in
Section 2.2 below (the "Call Repurchase Price"):
PERIOD CALL REPURCHASE PRICE PER SHARE
------ -------------------------------
July 1, 2000 to September 30, 2000 $10.00
October 1, 2000 to December 31, 2000 10.36
January 1, 2001 to March 31, 2001 10.72
April 1, 2001 to June 30, 2001 11.11
July 1, 2001 to September 30, 2001 11.50
October 1, 2001 to December 31, 2001 11.91
January 1, 2002 to March 31, 2002 12.33
April 1, 2002 to June 30, 2002 12.77
July 1, 2002 to September 30, 2002 13.23
October 1, 2002 to December 31, 2002 13.70
January 1, 2003 to March 31, 2003 14.18
April 1, 2003 to the third anniversary of 14.69
the date of this Agreement
2
2.2 ADJUSTMENTS
If Synetics shall, at any time after the issuance of the HUNTAIR
Shares, pay any dividend on the Common Stock payable in shares of Common Stock
or effect a split or combination of the Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the Call Repurchase Prices set forth above shall be equitably
adjusted to reflect such change.
2.3 NOTICE OF CALL
Synetics may exercise its right to repurchase the HUNTAIR Shares by
written notice (the "Call Notification") to the holder of the HUNTAIR Shares
given not more than 30 or less than 10 days prior to the date of repurchase
("Call Repurchase Date").
2.4 TERMINATION OF CALL RIGHT
Synetics shall have no further right to Call the HUNTAIR Shares
after the first to occur of the following events:
(a) The consummation of the IPO; or
(b) The third anniversary of the date of this Agreement.
2.5 REPURCHASE
On the Call Repurchase Date specified in the Call Notification,
Synetics shall pay the aggregate Call Repurchase Price. Upon payment of the Call
Repurchase Price, the Called HUNTAIR Shares shall be deemed to be cancelled and
no longer outstanding for any purpose and all rights of the holder with respect
to such HUNTAIR Shares shall be deemed to have terminated and such holder shall
promptly return the stock certificate for the Called HUNTAIR Shares to Synetics
for cancellation.
2.6 IPO ADJUSTMENT
In the event that the IPO occurs on or before the 180th day
following the Call Repurchase Date, Synetics shall pay to the holder of the
HUNTAIR Shares which were Called the difference between the Call Repurchase
Price and the IPO price multiplied by the number of HUNTAIR Shares repurchased
from such holder.
3. REGISTRATION OF SYNETICS SHARES
3.1 INITIAL PUBLIC OFFERING
Upon the occurrence of the IPO the HUNTAIR Shares shall be included
in the IPO on a basis proportionate to the participation of Yaskawa in the IPO.
3.2 REGISTRATION REQUEST
At any time after the first anniversary of the IPO, the holder or
holders of 25 percent or more of the HUNTAIR Shares may request that Synetics
register their HUNTAIR Shares. In such event Synetics will, as soon as
practicable, (i) notify in writing all other holders
3
of the HUNTAIR Shares and (ii) use its best efforts to effect the registration
of all the HUNTAIR Shares held by parties making the registration request and
all other HUNTAIR Shares held by other holders from whom Synetics receives a
request for registration within twenty (20) days of receipt of written notice
from Synetics. Notwithstanding the foregoing, Synetics may defer its obligation
to register HUNTAIR Shares for a period not to exceed 120 days if Synetics shall
furnish to the holders of the HUNTAIR Shares requesting registration a
certificate signed by the Chief Executive Officer of Synetics stating that
Synetics intends to file a registration statement relating to a public offering
of its equity securities within 90 days after the date of such certificate.
Subject to the exception in the foregoing sentence, Synetics shall file a
registration statement covering the HUNTAIR Shares so requested to be registered
as soon as practicable after receipt of any request.
3.3 PIGGYBACK REGISTRATION
If at any time or from time to time after completion of the IPO,
Synetics shall determine to register additional Common Stock, either for its own
account or the account of a third party, other than (x) a registration relating
solely to employee benefit plan securities or (y) a registration relating solely
to a Rule 145 transaction, Synetics will (but not more than two (2) times
pursuant to this Section 3.3):
(a) promptly give to the holder of the HUNTAIR Shares written notice
thereof, and
(b) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the HUNTAIR Shares specified in a written request made within
twenty (20) days after receipt of such written notice from Synetics by the
holder of such shares.
3.4 UNDERWRITING
If a registration of Common Stock involves an underwriting, the
right of the holder of HUNTAIR Shares to participate in such registration shall
be conditioned upon such holder's participation in the underwriting, to the
extent requested. The holder of HUNTAIR Shares shall (together with Synetics and
the other holders distributing their securities through such underwriting) enter
into an underwriting agreement in the customary form with the managing
underwriter selected for such underwriting by Synetics. Notwithstanding any
other provision of this Section 3.4, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of HUNTAIR Shares to
be included in the registration and underwriting, on a pro rata basis, provided
that all other holders of shares subject to registration other than Synetics are
similarly limited. If the holder of the HUNTAIR Shares disapproves of the terms
of any such underwriting, it may elect to withdraw therefrom by written notice
to Synetics and the managing underwriter. Synetics shall have the right to
terminate or withdraw any registration initiated by it under this Section 3.4
prior to the effectiveness of such registration, whether or not the holder of
the HUNTAIR Shares has elected to include securities in such registration. Any
withdrawn registration shall not count against the limit of two registrations
provided in Section 3.3.
4
3.5 REGISTRATION AND EXPENSES
Any registration made pursuant to Section 3.2 or 3.3 shall be
effected by Synetics in accordance with customary and usual practices and
procedures. The expenses of any such registration shall be borne by Synetics.
Participants in any such registration shall provide to each other customary
indemnities. HUNTAIR shall furnish to Synetics such information as Synetics may
reasonably request in connection with any such registration.
3.6 RULE 144 SALES
After such time as a public market exists for the Common Stock,
Synetics shall use its best efforts to take such action as may be necessary or
appropriate to make available to the holder of the HUNTAIR Shares the benefits
of Rule 144 under the Securities Act or any successor to that rule.
3.7 REGISTERED SHARES
HUNTAIR Shares registered pursuant to Section 3.2 or 3.3, or
eligible for sale under Section 3.6 may be sold by the holder thereof free of
the restrictions of this Agreement.
3.8 TERMINATION OF RIGHTS
The rights of the holder of the HUNTAIR Shares under Section 3.2 and
3.3 shall terminate on the earlier of (i) the third anniversary of the effective
date of the IPO or (ii) at any time that Rule 144 or another similar exemption
under the Securities Act is available for the sale of all such holders'
securities during a one-month period without registration.
3.9 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS
From and after the date of this Agreement, Synetics shall not,
without the prior written consent of the holder of at the HUNTAIR Shares, enter
into any agreement with any holder or prospective holder of any securities of
Synetics which would provide senior or superior registration rights to such
holder or prospective holder.
4. AFFIRMATIVE COVENANTS OF SYNETICS
Synetics hereby covenants and agrees as follows:
4.1 FINANCIAL INFORMATION
Synetics will furnish to the holder of the HUNTAIR Shares the
following reports:
(a) As soon as available after the end of the each fiscal year,
audited or reviewed consolidate balance sheets and statements of shareholders'
equity of Synetics and its subsidiaries, if any, as of the end of such fiscal
year, and a consolidated statement of income for such fiscal year, prepared in
accordance with generally accepted accounting principles;
(b) As soon as practicable, but in any event within forty-five (45)
days after the end of each of the first three quarters of each fiscal year of
Synetics, unaudited balance sheets of Synetics and its subsidiaries, if any, as
of the end of each such quarter, and a consolidated
5
statement of income of Synetics and its subsidiaries, if any, for each such
quarter, all prepared in accordance with generally accepted accounting
principles.
4.2 CO-SALE RIGHTS
In the event that Yaskawa proposes to sell, assign, transfer or
otherwise convey any shares of Common Stock to an entity not affiliated with
Yaskawa, the holder of the HUNTAIR Shares shall be entitled to participate in
such sale on the same terms and conditions available to Yaskawa and in
proportion to the total number of shares to be sold by Yaskawa.
4.3 PREEMPTIVE RIGHTS
In the event Yaskawa elects to purchase additional shares of Common
Stock, the holder of the HUNTAIR Shares shall be permitted to acquire, at the
same price and upon the same terms, such number of shares of Common Stock as
will result in such holder preserving its percentage ownership of Common Stock
taking into account the shares to be issued and sold to Yaskawa. HUNTAIR
acknowledges that, to the extent that it does not exercise such preemptive
rights, its percentage ownership of Common Stock shall be reduced.
4.4 TERMINATION OF COVENANTS
The covenants set forth in Sections 4.1 through 4.3 shall terminate
on, and be of no further force or effect after, the IPO.
5. PUT OF INVESTOR HUNTAIR SHARES
During the 30-day period beginning on the third anniversary of the
date hereof (the "Put Period"), the holder of the HUNTAIR Shares shall have the
option (the "Put") to require Yaskawa to purchase all but not less than all of
the HUNTAIR Shares it then holds at a price of $11.91 per HUNTAIR Share (the
"Put Purchase Price") and on the terms and conditions set forth below.
5.1 TERMINATION OF PUT RIGHT
The Put shall terminate after the effective date of the IPO, or
after the expiration of the Put Period, whichever occurs first.
5.2 ADJUSTMENTS
If Synetics shall take any action similar to that described in
Section 2.2 above, the Put Purchase Price shall be adjusted in the manner set
forth in Section 2.2 above.
5.3 NOTICE OF PUT
The holder of the HUNTAIR Shares shall give notice to Yaskawa of its
exercise of the Put (the "Put Notice") prior to the end of the Put Period. The
Put Notice shall be accompanied by the certificate or certificates representing
such shares.
6
5.4 PAYMENT
Yaskawa shall pay the Put Purchase Price within 90 days after
receipt of the Put Notice. Upon payment of the Put Purchase Price, the HUNTAIR
Shares so purchased shall be deemed to be cancelled and no longer outstanding
for any purpose. If the certificate(s) delivered with the Put Notice covered
more shares than those purchased pursuant to this Section 5, Synetics shall
deliver to the holder a certificate for the balance of the shares.
6. ACKNOWLEDGEMENT AND WAIVER
HUNTAIR acknowledges that accountants, attorneys, and other
consultants for Yaskawa may act as accountants, attorneys, and consultants for
Synetics and HUNTAIR expressly waives any conflicts of interest that may result
from such joint representation. HUNTAIR acknowledges and agrees that from time
to time following the date hereof, Synetics may enter into transactions with
Yaskawa or other subsidiaries of Yaskawa as either a purchaser or a seller.
HUNTAIR consents to such transactions, provided that no such transactions are
made at prices or on terms that are materially disadvantageous to Synetics when
compared to normal arms-length transactions with unrelated third parties.
Members of the board of directors of Synetics who also serve as employees or
directors of Yaskawa or other subsidiaries of Yaskawa shall not be barred from
voting to approve transactions between Synetics and Yaskawa or other
subsidiaries of Yaskawa by reason of potential conflicts of interest.
7. MISCELLANEOUS
7.1 LEGEND
Until the HUNTAIR Shares are registered as provided in Section 3
hereof or are eligible for sale under Rule 144 as provided in Section 3.2
hereof, each certificate representing HUNTAIR Shares shall bear the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE BEING (i) ACQUIRED
FOR INVESTMENT ONLY AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE,
AND THEY MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
ANY APPLICABLE STATE SECURITIES LAWS OR IN A TRANSACTION WHICH, IN
THE OPINION OF COUNSEL FOR THE CORPORATION, IS EXEMPT FROM
REGISTRATION UNDER SAID SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS AND (ii) SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDER AGREEMENT DATED AS OF JUNE 12, 2000, TO WHICH THE
CORPORATION AND THE HOLDER OF THIS CERTIFICATE ARE PARTIES.
7
7.2 ASSIGNMENT
Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto.
7.3 AMENDMENT
This Agreement may be amended only by a written instrument signed by
Synetics, Yaskawa, and the holder of the HUNTAIR Shares.
7.4 THIRD PARTIES
Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto, and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
7.5 GOVERNING LAW
This Agreement shall be governed by and construed under the laws of
the State of Oregon without regard to its conflict or choice of law provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
SYNETICS SOLUTIONS INC. HUNTAIR INC.
By: XXXX XXXXXXXX By: XXXXX X. XXXXXX
------------------------------------ ---------------------
Xxxx Xxxxxxxx Xxxxx X. Xxxxxx
Its: Chairman and Chief Executive Officer Its: President
YASKAWA ELECTRIC CORPORATION
By: XXXXX XXXXX
-----------------------------------
Xxxxx Xxxxx
Its: Executive Managing Director,
Technology and Development
8
