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SHAREHOLDERS AGREEMENT
By and Among
MASCOTECH, INC.
MASCO CORPORATION
XXXXXXX XXXXXXXXX
XXXXXXX AND XXXX XXXXXXXXX FOUNDATION
THE HEARTLAND ENTITIES LISTED ON THE
SIGNATURE PAGES HERETO
THE HIP CO-INVESTORS LISTED ON THE SIGNATURE PAGES HERETO
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Dated as of November 28, 2000
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions.............................................1
SECTION 1.02. Rules of Construction..................................10
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Authority; Enforceability..............................10
SECTION 2.02. No Breach..............................................11
SECTION 2.03. Consents...............................................11
SECTION 2.04. Share Ownership........................................11
ARTICLE III
SHARE TRANSFERS
SECTION 3.01. Restrictions on Transfer...............................12
SECTION 3.02. Exceptions to Restrictions.............................12
SECTION 3.03. Improper Transfer......................................13
SECTION 3.04. Restrictive Legend.....................................13
ARTICLE IV
RIGHTS OF CERTAIN SHAREHOLDERS
SECTION 4.01. Rights of First Offer..................................14
SECTION 4.02. Tag-Along Rights.......................................15
SECTION 4.03. Drag-Along Rights......................................17
SECTION 4.04. Information............................................18
SECTION 4.05. Preemptive Rights......................................20
SECTION 4.06. Board of Directors.....................................23
SECTION 4.07. Right to Observer......................................25
SECTION 4.08. Consultation Right.....................................25
SECTION 4.09. Approval Rights........................................26
SECTION 4.10. Transactions with Affiliates...........................26
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ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Company Registration....................................27
SECTION 5.02. Demand Registration Rights..............................29
SECTION 5.03. Registration Procedures.................................32
SECTION 5.04. Registration Expenses...................................37
SECTION 5.05. Indemnification.........................................38
SECTION 5.06. 1934 Act Reports........................................40
SECTION 5.07. Holdback Agreements.....................................41
SECTION 5.08. Participation in Registrations..........................42
SECTION 5.09. Remedies................................................42
SECTION 5.10. Other Registration Rights...............................42
SECTION 5.11. Rule 144................................................42
ARTICLE VI
RIGHTS OF HOLDERS OF CLASS A PREFERRED STOCK
SECTION 6.01. Series A Preferred Stock................................43
SECTION 6.02. Management Fee..........................................43
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices.................................................43
SECTION 7.02. Binding Effect; Benefits; Entire Agreement..............44
SECTION 7.03. Waiver..................................................44
SECTION 7.04. Amendment...............................................44
SECTION 7.05. Assignability...........................................45
SECTION 7.06. Applicable Law..........................................45
SECTION 7.07. Specific Performance....................................45
SECTION 7.08. Severability............................................45
SECTION 7.09. Additional Securities Subject to Agreement..............45
SECTION 7.10. Name Change.............................................46
SECTION 7.11. Section and Other Headings..............................46
SECTION 7.12. Counterparts............................................46
SECTION 7.13. Termination of Certain Provisions.......................46
SECTION 7.14. ERISA Matters...........................................46
SECTION 7.15. Regulatory Cooperation..................................47
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SECTION 7.16. Publicity...............................................47
SECTION 7.17. Expenses................................................47
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SHAREHOLDERS AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of November 28, 2000, by and
among MASCOTECH, INC. a Delaware corporation (the "Company"), Xxxxxxx Xxxxxxxxx
("IS"), the Xxxxxxx and Xxxx Xxxxxxxxx Foundation ("Foundation Shareholder" and,
together with IS, "RM"), MASCO CORPORATION, a Delaware corporation (together
with RM, the "Rollover Investors"), the HEARTLAND ENTITIES (as defined herein),
LONG POINT CAPITAL FUND, L.P. and LONG POINT CAPITAL PARTNERS L.L.C.
(collectively "Long Point"), CRM 1999 ENTERPRISE FUND, LLC ("Xxxxxx" and with
Long Point collectively the "Masco Transferees" or individually as a "Masco
Transferee") and the entities identified as HIP CO-INVESTORS on the signature
pages hereof (the HIP Co-Investors (including, without limitation, the Masco
Transferees), the Rollover Investors, Sponsor and each Person executing a
Joinder Agreement are collectively referred to herein as the "Shareholders" and
individually as a "Shareholder").
WHEREAS, the Company and Riverside Acquisition Corporation (formerly
Riverside Company LLC), a Delaware corporation ("Riverside") and an affiliate
of Sponsor, have entered into a Recapitalization Agreement, dated as of August
1, 2000, as amended by Amendment No. 1 thereto, dated as of October 23, 2000,
and Amendment No. 2 thereto, dated as of November 28, 2000 (the
"Recapitalization Agreement"), which provides for, among other things, the
merger of Riverside with and into the Company (the "Recapitalization Merger").
WHEREAS, as a result of and in connection with the Recapitalization Merger,
each Shareholder will own the number of shares of common stock of the Company,
$1.00 par value (the "Common Stock"), set forth on Schedule 2.04 hereto and
Company Shareholder will own 361,001 shares of class A preferred stock of the
Company, $1.00 par value (the "Class A Preferred Stock").
WHEREAS, the parties hereto desire to enter into this agreement to provide
for certain rights and restrictions with respect to the Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties mutually agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
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"Adjustments" means adjustments to the number of shares of Common Stock
outstanding as a result of a stock split, stock dividend, reclassification,
subdivision or reorganization, recapitalization or similar event.
"Advice" see Section 5.03(p).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" see the recitals to this Agreement.
"Assignee" see Section 4.01(c).
"business day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any Person, except as otherwise
provided in Section 4.05, any and all shares, interests, participations, rights
in or other equivalents (however designated) of such Person's capital stock, and
any rights (other than debt securities convertible into capital stock), warrants
or options exchangeable for or convertible into such capital stock.
"Class A Preferred Stock" see the recitals to this Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" see the recitals to this Agreement.
"Company" see the recitals to this Agreement.
"Company Option Period" see Section 4.01(b).
"Company Shareholder" means Masco Corporation, a Delaware corporation,
provided that upon the transfer of all of Masco Corporation's shares of Common
Stock to Masco Capital Corporation, a wholly-owned subsidiary of Masco
Corporation, Masco Capital Corporation shall also be deemed Company Shareholder
for all purposes of this Agreement; provided that Masco Capital Corporation
executes a Joinder Agreement.
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"CSFB" means, collectively, the CSFB Plan Partner and the CSFB Funds, or
the CSFB Plan Partner acting on behalf of such other Persons.
"CSFB Director" see Section 4.06(a)(ii)(c).
"CSFB Funds" means, collectively, Credit Suisse First Boston Equity
Partners (Bermuda), L.P., Credit Suisse First Boston U.S. Executive Advisors,
L.P., EMA Partners Fund 2000, L.P. and EMA Private Equity Fund 2000, L.P.
"CSFB Plan Partner" means Credit Suisse First Boston Equity Partners, L.P.
"Demand Holders" means any of Company Shareholder (on behalf of itself and
its Direct Permitted Transferees), RM (on behalf of himself, itself and his or
its Direct Permitted Transferees), a QI Demand Holder (on behalf of itself and
its Direct Permitted Transferees), CSFB (on behalf of itself and its Direct
Permitted Transferees and other Transferees to the extent permitted by Section
5.02(g)) or Sponsor (on behalf of itself and its Direct Permitted Transferees).
"Demand Registration" see Section 5.02(a).
"Direct Permitted Transferee" means:
(i) with respect to any Shareholder who is a natural person, (1) the
spouse or any lineal descendant (including by adoption and stepchildren) of
such Shareholder, (2) any trust of which such Shareholder is the trustee
and which is established solely for the benefit of any of the foregoing
individuals or (3) any partnership, all of the general partner(s) and
limited partner(s) (if any) of which are one or more Persons identified in
this clause (i);
(ii) with respect to Sponsor, any Affiliate of Sponsor;
(iii) with respect to Company Shareholder, any controlled Affiliate of
Company Shareholder (including any wholly-owned subsidiary of Company
Shareholder);
(iv) with respect to any Institutional Shareholder, any Affiliate of
such Institutional Shareholder;
(v) with respect to Foundation Shareholder, any Affiliate of
Foundation Shareholder;
(vi) with respect to MetLife, (a) any Affiliates of MetLife or (b)
Portfolio Advisors, LLC or any controlled Affiliate of Portfolio Advisors,
LLC; and
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(vii) with respect to any Shareholder, any institutional lender to
which such Shareholder pledges or grants a security interest in shares of
Common Stock in a bona fide transaction effected in good faith, provided
that (x) such pledgee executes a Joinder Agreement and (y) prior to any
subsequent foreclosure or sale of such shares or any Transfer resulting
from such foreclosure is effected, the provisions of Section 4.01 must be
satisfied.
"Eligible Offering" see Section 4.05(a).
"First Option" see Section 4.01(b).
"First Union Capital Partners" means First Union Capital Partners, LLC.
"Foundation Shareholder" see the recitals to this Agreement.
"GAAP" means United States generally accepted accounting principles
consistently applied throughout the specified period.
"Heartland Entities" means Heartland Industrial Partners, L.P., Heartland
Industrial Partners (FF), L.P., Heartland Industrial Partners (E1), L.P.,
Heartland Industrial Partners (K1), L.P., Heartland Industrial Partners (C1),
L.P. and Direct Permitted Transferees of any of the foregoing.
"HIP Co-Investor" means (i) each Shareholder that is a limited partner, or
an Affiliate of a limited partner, in Sponsor or in any other fund or investment
vehicle established or managed by Sponsor or an Affiliate of Sponsor, (ii) CSFB,
(iii) each Masco Transferee and (iv) MetLife; provided that, upon the Transfer
by MetLife of all of its shares of Common Stock to Portfolio Advisors, LLC or
any controlled Affiliate of Portfolio Advisors, LLC in accordance with Section
3.02(a) of this Agreement, Portfolio Advisors, LLC or such controlled Affiliate
of Portfolio Advisors, LLC shall be deemed to be a HIP Co-Investor under this
Agreement.
"Holder" means any Demand Holder or Incidental Demand Holder.
"Incidental Demand Holder" see Section 5.02.
"Initial Public Offering" means either (x) an underwritten initial public
offering of the Company pursuant to an effective registration statement filed
under the 1933 Act (excluding registration statements filed on Form S-8, or any
similar successor form or another form used for a purpose similar to the
intended use for such forms) or (y) the listing of the Common Stock on a
national securities exchange or authorization for quotation on the Nasdaq
National Market System.
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"Institutional Shareholder" means any Shareholder that is not a natural
person (other than Company Shareholder, Foundation Shareholder or Sponsor).
"Investors" see Section 4.01(a).
"Investor's Notice" see Section 4.01(a).
"IS" see the recitals to this Agreement.
"Joinder Agreement" means a joinder agreement, a form of which is attached
hereto as Exhibit A.
"Masco Transferees" see the recitals to this Agreement.
"Material Event" see Section 4.09(a).
"MetLife" means Metropolitan Life Insurance Company.
"1933 Act" means the Securities Act of 1933.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Observer" see Section 4.07.
"Offered Shares" see Section 4.01(a).
"Permitted Transferee" means:
(i) with respect to any Shareholder who is a natural person, (1) the
spouse or any lineal descendant (including by adoption and stepchildren) of
such Shareholder, (2) any trust of which such Shareholder is the trustee
and which is established solely for the benefit of any of the foregoing
individuals, (3) any charitable foundation selected by such Shareholder, or
(4) any partnership, all of the general partner(s) and limited partner(s)
(if any) of which are one or more Persons identified in this clause (i),
provided that, in the case of clauses (1), (2), (3) or (4), such Person
executes a Joinder Agreement;
(ii) with respect to Sponsor, (a) any investor in Sponsor or an
Affiliate of such investor in Sponsor or an investor in any fund or other
investment vehicle established or managed by Sponsor or any of its
controlled Affiliates or any other Person which is an Affiliate of Sponsor
on the date hereof, (b) any of the Shareholders and any of their respective
Affiliates, (c) any controlled Affiliate of Sponsor, and (d) any investor
in Sponsor that is an investment fund in connection with a pro rata
distribu-
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tion of shares of Common Stock to all investors in Sponsor at the time of
the expiration or termination of the fund, provided that, in the case of
clauses (a), (b), (c) or (d), any such investor executes a Joinder
Agreement; and provided, further, that, in the case of these clauses (a),
(b) or (c) Transfers to such Persons would not cause Sponsor to own,
together with its Affiliates, a number of shares equal to less than thirty
percent (30%) of the outstanding shares of Common Stock of the Company as
of the date of any such Transfer;
(iii) with respect to Company Shareholder, any controlled Affiliate of
Company Shareholder (including any wholly-owned subsidiary of Company
Shareholder), provided that such Affiliate or wholly-owned subsidiary
executes a Joinder Agreement;
(iv) with respect to any Institutional Shareholder (other than
MetLife), (a) any Affiliate of such Institutional Shareholder, (b) any
investor of such Institutional Shareholder that is an investment fund in
connection with a pro rata distribution of shares of Common Stock to all
investors (a "Shareholder Investor" or collectively "Shareholder
Investors") in such Institutional Shareholder at the time of the expiration
or termination of the fund, or (c) any Person acquiring all or
substantially all of the investment portfolio of such Institutional Holder;
and provided, further, that, in the case of clause (a), (b) or (c), all
such investors execute a Joinder Agreement;
(v) with respect to Foundation Shareholder, any Affiliate of
Foundation Shareholder, provided such Affiliate executes a Joinder
Agreement;
(vi) with respect to MetLife, (a) any Affiliate of MetLife, (b)
Portfolio Advisors, LLC or any controlled Affiliate of Portfolio Advisors,
LLC or (c) any Shareholder Investor of such Institutional Shareholder that
is an investment fund in connection with a pro rata distribution to all
Shareholder Investors of such Institutional Shareholder at the time of the
expiration or termination of the fund; provided, further, that, in the case
of clause (a), (b) or (c), such investors execute a Joinder Agreement; and
(vii) with respect to any Shareholder, any institutional lender to
which such Shareholder pledges or grants a security interest in shares of
Common Stock in a bona fide transaction effected in good faith, provided
that (x) such pledgee executes a Joinder Agreement and (y) prior to any
subsequent foreclosure or sale of such shares or any Transfer resulting
from such foreclosure is effected, the provisions of Section 4.01 must be
satisfied.
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"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government, a political
subdivision or an agency or instrumentality thereof.
"Piggyback Holder" see Section 5.01(a).
"Piggyback Registration" see Section 5.01(a).
"Proportionate Percentage" see Section 4.05(a).
"Pro Rata Portion" means, with respect to shares of Common Stock held by a
Shareholder at any date of determination such number of shares of Common Stock
owned by such Shareholder as would result in such Shareholder selling the same
percentage of the total number of shares of Common Stock held by such
Shareholder in the Transfer subject to the applicable Transfer Notice (the
"Subject Sale") as the Sponsor Transferor sells in the Subject Sale (assuming,
with respect to the Transfer Notice, that all Shareholders have exercised their
Tag-Along Right).
"Public Offering" see Section 4.05(a)(i).
"Purchaser" see Section 4.02(a).
"QI Demand Holder" means any Qualified Investor other than CSFB.
"Qualified Investor" means a HIP Co-Investor who (x), together with its
Affiliates, at or prior to any date of determination, has made an aggregate cash
investment in Common Stock of the Company equal to at least $40.0 million (based
upon the original cost of such investment) or (y) owns, together with its Direct
Permitted Transferees, at least 10% or more of the outstanding shares of Common
Stock of the Company at the date of determination. For purposes of this
definition and any other definitions containing thresholds for the dollar amount
of cash invested in Common Stock of the Company or the percentage ownership of
Common Stock of the Company, the cash investments and the beneficial ownership
of the CSFB Funds and the CSFB Plan Partner will be deemed to be aggregated.
"Qualifying Public Equity Offering" means either (x) one or more
underwritten public offerings of common equity securities of the Company
pursuant to an effective registration statement filed under the 1933 Act
(excluding registration statements filed on Form S-8, or any similar successor
form) resulting in aggregate gross proceeds to the Company of $100,000,000 or
more or (y) the listing of the Common Stock on a national securities exchange or
authorization for quotation on the Nasdaq National Market System for which there
is a public float of least $100,000,000 held by non-Affiliates of the Company.
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"Recapitalization Agreement" see the recitals to this Agreement.
"Recapitalization Merger" see the recitals to this Agreement.
"Registrable Securities" shall mean any of (i) the shares of Common Stock
owned by any Shareholder at the time of determination and (ii) any other
securities issued or issuable with respect to the Common Stock by way of a stock
split, stock dividend, reclassification, subdivision or reorganization,
recapitalization or similar event. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the offering of such securities by the holder thereof
shall have been declared effective under the 1933 Act and such securities shall
have been disposed of by such holder pursuant to such registration statement,
(b) such securities have been sold to the public pursuant to Rule 144 (or any
similar provision then in force) promulgated under the 1933 Act, (c) except for
purposes of Section 5.02, such securities shall have been otherwise transferred
and new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company or its transfer agent
and subsequent disposition of such securities shall not require registration or
qualification under the 1933 Act or any similar state law then in force or (d)
such securities shall have ceased to be outstanding.
"Registration" see Section 5.03.
"Representatives" means the officers, employees, directors and agents of
such Shareholder, including, representatives of its legal, accounting and
financial advisors.
"Request Notice" see Section 5.02(a).
"Requisite Investors" means (i) Company Shareholder for so long as Company
Shareholder either (a) has outstanding commitments or loans under the
Subordinated Loan Agreement, (b) owns, together with its Permitted Transferees,
$10.0 million or more in liquidation preference of Class A Preferred Stock, or
(c) owns, together with its Direct Permitted Transferees, at least 1,571,569
shares (as adjusted for Adjustments) of Common Stock, (ii) RM, (iii) CSFB (on
behalf of itself and its Direct Permitted Transferees) and (iv) HIP Co-Investors
(other than CSFB) (on behalf of the HIP Co-Investors and their Direct Permitted
Transferees) owning a majority of the number of shares of Common Stock owned by
all HIP Co-Investors (other than CSFB) and their Direct Permitted Transferees as
a group at the applicable date of determination.
"Riverside" see the recitals to this Agreement.
"RM" see the recitals to this Agreement.
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"Rollover Demand Holders" means Company Shareholder, RM and their
respective Direct Permitted Transferees.
"Rollover Investors" see the recitals to this Agreement.
"Second Option" see Section 4.01(c).
"Senior Credit Facilities" means the Credit Agreement, dated as of the date
hereof, among The Chase Manhattan Bank, Chase Securities Inc., the Company and
certain of its subsidiaries and the other lenders and financial institutions
party thereto from time to time, as the same may be amended, modified, waived,
refinanced or replaced from time to time (whether under a new credit agreement
or otherwise).
"Shareholders" see the recitals to this Agreement.
"Significant Subsidiary" means any subsidiary of the Company that would be
a "significant subsidiary" as such term is defined in Rule 1.02 of Regulation
S-X under the 1933 Act.
"Sponsor" means collectively the Heartland Entities or Heartland Industrial
Partners, L.P. acting on behalf of the other Heartland Entities.
"Sponsor Option Period" see Section 4.01(c).
"Subordinated Loan Agreement" means the subordinated loan agreement dated
the date hereof between Company Shareholder and the Company.
"Substantial Change of Control" means the sale, lease or transfer in one or
a series of related transactions of at least a majority of the consolidated
assets of the Company and its subsidiaries or a majority of the Capital Stock of
the Company representing the right to vote for directors to any Person or
"group" of Persons (other than Sponsor and its Affiliates) whether direct or
indirect or by way of any merger, consolidation or other business combination or
purchase of beneficial ownership or otherwise.
"Transactions" means (i) the Recapitalization Merger and (ii) all of the
other transactions contemplated by the Recapitalization Agreement, including the
transactions contemplated by the subscription agreements to be entered into in
connection with the Recapitalization Merger.
"Transfer" means the direct or indirect offer, sale, donation, assignment
(as collateral or otherwise), pledge, hypothecation, encumbrance, transfer or
disposition of any security.
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"Transfer Notice" see Section 4.02(a).
"Transferee" means any Person who acquires shares of Common Stock from a
Shareholder and who is not a Permitted Transferee.
"Triggering Event" means:
(i) with respect to a Rollover Demand Holder or CSFB, after the
earlier of (1) the fifth anniversary of the date hereof if an Initial
Public Offering has not been consummated by the fifth anniversary of the
date hereof and (2) 180 days after an Initial Public Offering;
(ii) with respect to a QI Demand Holder, 180 days after an Initial
Public Offering; and
(iii) with respect to Sponsor, at any time.
SECTION 1.02. Rules of Construction. For purposes of this Agreement
whenever a threshold for the dollar amount of cash invested in Common Stock of
the Company or the percentage of ownership of Common Stock is to be determined
as to a Shareholder, the cash investments and the beneficial ownership of Direct
Permitted Transferees of such Shareholder shall be aggregated with the cash
investments and beneficial ownership of such Shareholder and the cash
investments and the beneficial ownership of the Heartland Entities will be
deemed to be aggregated.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each of the parties hereby severally represents and warrants to each of the
other parties as follows:
SECTION 2.01. Authority; Enforceability. Such party has the legal capacity
or corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder. Such party (in the case of parties that are not
natural persons) is duly organized and validly existing under the laws of its
jurisdiction of organization, and the execution of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary action. No other act or proceeding, corporate or otherwise, on
its part is necessary to authorize the execution of this Agreement or the
consummation of any of the transactions contemplated hereby. This Agreement has
been duly executed by such party and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with the terms of this
Agreement,
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subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and to the exercise of
judicial discretion in accordance with general principles of equity (whether
applied by a court of law or of equity).
SECTION 2.02. No Breach. Neither the execution of this Agreement nor the
performance by such party of its obligations hereunder nor the consummation of
the transactions contemplated hereby or by the Transactions does or will:
(a) in the case of parties that are not natural persons, conflict with
or violate its certificate of incorporation, bylaws or other organizational
documents;
(b) violate, conflict with or result in the breach or termination of,
or otherwise give any other person the right to accelerate, renegotiate or
terminate or receive any payment or constitute a default or an event of
default (or an event which with notice, lapse of time, or both, would
constitute a default or event of default) under the terms of, any contract
or agreement to which it is a party or by which it or any of its assets or
operations are bound or affected, including, in the case of the Company,
the Senior Credit Facilities or Subordinated Loan Agreement; or
(c) constitute a violation by such party of any laws, rules or
regulations of any governmental, administrative or regulatory authority or
any judgments, orders, rulings or awards of any court, arbitrator or other
judicial authority or any governmental, administrative or regulatory
authority.
SECTION 2.03. Consents. No consent, waiver, approval, authorization,
exemption, registration, license or declaration is required to be made or
obtained by such party, other than those which have been made or obtained, in
connection with (i) the execution or enforceability of this Agreement or (ii)
the consummation of any of the transactions contemplated hereby or by the
Transactions.
SECTION 2.04. Share Ownership. (a) The Company represents and warrants that
in the case of a Shareholder, such party will own, immediately following the
consummation of the transactions contemplated by the Recapitalization Agreement,
the number of shares of Capital Stock of the Company set forth opposite such
party's name in Schedule 2.04 attached hereto, free and clear of any and all
liens, claims and encumbrances, other than those created by this Agreement.
(b) The Company represents and warrants that, as of the date hereof after
giving effect to the Transactions, the authorized capital stock of the Company
consists of (A) 250,000,000 shares of Common Stock, of which 30,177,943 shares
of Common Stock are issued and outstanding (without giving effect to the
restricted stock awards, whether or not
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vested, or shares of Common Stock issuable to the former stockholders of K-Tech
Mfg., Inc. pursuant to documentation in existence prior to the Transactions),
and (B) 25,000,000 shares of preferred stock, of which 361,001 shares of Class A
Preferred Stock are issued and outstanding. Without giving effect to any cash
elections or any accretion in respect of restricted stock awards after the date
of the Transactions and assuming full vesting of restricted stock awards granted
as of the date of the Transactions, there are approximately 3,741,325 shares of
Common Stock subject to restricted stock awards on the date hereof after giving
effect to the Transactions. The maximum number of shares of Common Stock
issuable to the former K-Tech Mfg., Inc. stockholders is not presently
determinable, but is estimated at up to approximately 550,000 shares of Common
Stock. Except (i) as provided for in this Agreement, (ii) for accretion in
respect of restricted stock awards after the date hereof, (iii) for Common Stock
to be issued to former stockholders of K-Tech Mfg., Inc. arising out of
obligations existing prior to the Transactions, as of the date of the
Transactions, no subscription, warrant, option, convertible or exchangeable
security or other right to purchase or acquire any shares of Capital Stock of
the Company is authorized or outstanding and the Company has no obligation to
issue any subscription, warrant, option, convertible or exchangeable security or
other such right.
(c) The Company represents and warrants that the shares of Common Stock
issued to each Shareholder in connection with the Recapitalization Merger were
duly and validly authorized, and when issued to each Shareholder in connection
with the Recapitalization Merger will be duly and validly issued, fully paid and
non-assessable and such shares are not subject to preemptive or similar rights
except as provided by this Agreement.
(d) Each Shareholder hereby consents to and approves of the contribution by
the Company in connection with the Transactions of all of its assets to Metalync
Company LLC, its wholly-owned subsidiary, as required by the Senior Credit
Facilities.
ARTICLE III
SHARE TRANSFERS
SECTION 3.01. Restrictions on Transfer. During the term of this Agreement,
each Shareholder agrees that it will not Transfer any Common Stock, except as
permitted by or in accordance with this Agreement.
SECTION 3.02. Exceptions to Restrictions. Subject to all applicable laws,
the restrictions on Transfer set forth in Section 3.01 hereof shall not apply to
any of the following:
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(a) a Transfer by a Shareholder of Common Stock to one of its
Permitted Transferees; provided that such Permitted Transferee shall agree
to execute a Joinder Agreement in the form annexed hereto as Exhibit A (the
"Joinder Agreement");
(b) a Transfer of Common Stock by a Shareholder in accordance with
Sections 4.02 and 4.03 of this Agreement;
(c) a Transfer by a Shareholder after such Shareholder has complied
with Section 4.01; provided that the Transferee shall agree to execute a
Joinder Agreement; and
(d) a Transfer of Common Stock by a Shareholder pursuant to an
effective registration statement under the 1933 Act or a Transfer pursuant
to Rule 144 under the 1933 Act.
SECTION 3.03. Improper Transfer. Any attempt to Transfer any shares of
Common Stock not in accordance with this Agreement shall be null and void and
the Company will not give nor permit the Company's transfer agent to give any
effect to such attempted Transfer in its stock records.
SECTION 3.04. Restrictive Legend. Each certificate representing shares of
Common Stock and held by a Shareholder will bear a legend substantially similar
to the following (with such additions thereto or changes therein as the Company
may be advised by counsel are required by law or necessary to give full effect
to this Agreement):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE UNITED STATES SECURITIES ACT OF 1933 OR (ii) AN APPLICABLE
EXEMPTION FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT TO CLAUSE
(ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE
TERMS AND CONDITIONS, INCLUDING WITH RESPECT TO THE DIRECT OR INDIRECT
TRANSFER THEREOF, OF A SHAREHOLDERS AGREEMENT DATED AS OF NOVEMBER 28,
2000. THE SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER THINGS,
SIGNIFICANT RESTRICTIONS ON TRANSFER OF THE SE-
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CURITIES OF THE COMPANY. A COPY OF THE SHAREHOLDERS AGREEMENT IS
AVAILABLE UPON REQUEST FROM THE COMPANY."
ARTICLE IV
RIGHTS OF CERTAIN SHAREHOLDERS
SECTION 4.01. Rights of First Offer. (a) At any time or from time to time
prior to a Qualifying Public Equity Offering, in the event that (x) at any time
following the first anniversary of the date hereof (provided, however, that,
prior to the second anniversary of the date hereof, such Rollover Investor does
not in the good faith judgment of the Company jeopardize the "recapitalization"
accounting treatment afforded the Company in the Recapitalization Merger), a
Rollover Investor desires to Transfer, or (y) at any time following the date
hereof, a HIP Co-Investor desires to Transfer, all or part of its Common Stock
("Offered Shares"), other than pursuant to Section 3.02(a), 3.02(d), 4.02 or
4.03 of this Agreement, such Rollover Investor or HIP Co-Investor (individually,
an "Investor") shall give prompt written notice (an "Investor's Notice") of its
desire to sell the Offered Shares to the Company and Sponsor. The Investor's
Notice shall identify (i) the number of Offered Shares and (ii) all other
material terms and conditions of the proposed Transfer including the purchase
price and the form of the consideration.
(b) The Company shall have the right, but not the obligation, to purchase
all, but not less than all, the Offered Shares (the "First Option") on the same
terms and conditions as set forth in the Investor's Notice, which option shall
be exercised by delivering to such Investor irrevocable written notice of its
commitment to purchase the Offered Shares within fifteen (15) business days
after receipt of the Investor's Notice (the "Company Option Period"). Failure by
the Company to give such notice within such fifteen (15) business day period
shall be deemed an election by the Company not to purchase the Offered Shares.
(c) In the event that the Company decides not to purchase the Offered
Shares pursuant to Section 4.01(b), then Sponsor shall have the right, but not
the obligation, to purchase all, but not less than all, the Offered Shares (the
"Second Option") on the same terms and conditions as set forth in the Investor's
Notice, which option shall be exercised by delivering to such Investor
irrevocable written notice of its commitment to purchase the Offered Shares
within ten (10) business days after the termination of the Company Option Period
(the "Sponsor Option Period"); provided that Sponsor may, at its sole option,
assign its rights to purchase an Investor's Offered Shares pursuant to this
Section 4.01 to another Shareholder or a Permitted Transferee of Sponsor (such
person an "Assignee"); provided that if the Assignee is a HIP Co-Investor, each
HIP Co-Investor will be able to participate in such assignment on
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a pro rata basis. Failure by Sponsor or its Assignee to give such notice within
such ten (10) business day period shall be deemed an election by Sponsor or its
Assignee not to purchase the Offered Shares.
(d) Delivery of written notice by the Company, Sponsor or its Assignee
accepting the First Option or the Second Option, as the case may be, shall
constitute a contract between the Company, Sponsor or its Assignee, on the one
hand, and such Investor on the other hand, for the purchase and sale of the
Offered Shares on the terms and conditions set forth in the Investor's Notice.
The purchase of any shares pursuant to the exercise of the First Option or the
Second Option, as the case may be, shall be completed not later than forty-five
(45) days following receipt of the Investor's Notice with respect to the Offered
Shares, subject to receipt of any required material third-party or governmental
approvals, compliance with applicable laws and the absence of any injunction or
similar legal order preventing such transaction (collectively, the "Conditions")
in which case the purchase of the Offered Shares shall be delayed pending the
satisfaction of the Conditions up to an additional thirty (30) days. As a
condition to entering into the contract referred to above, the Company, Sponsor
and its Assignee will agree to use commercially reasonable efforts to satisfy
the Conditions as soon as possible. In the event that neither the First Option
nor the Second Option is exercised, the Investor shall have the right for a
period of seventy-five (75) days after the termination of the Sponsor Option
Period to Transfer (the "Investor Sale") the Offered Shares at a price not less
than ninety percent (90%) of the price contained in, and otherwise on terms and
conditions no less favorable to such Investor than those set forth in, the
Investor's Notice, except that the purchase of the Offered Shares may be delayed
up to an additional thirty (30) days pending satisfaction of the Conditions;
provided that the Transferee agrees to execute a Joinder Agreement. If the
Investor Sale is not consummated pursuant to the terms of the immediately
preceding sentence, the Investor will not effect Transfer of any of the Offered
Shares without commencing de novo the procedures set forth in this Section 4.01.
SECTION 4.02. Tag-Along Rights. (a) If, at any time or from time to time
prior to a Qualifying Public Equity Offering, Sponsor or any of its Affiliates
(the "Sponsor Transferor") proposes to Transfer any shares of Common Stock to a
Person (the "Purchaser"), other than pursuant to Section 3.02(a), 3.02(d), 5.01
or 5.02 or in a circumstance where all of the shares owned by all of the
Shareholders are being purchased pursuant to Section 4.03, the Sponsor
Transferor shall give written notice (a "Transfer Notice") of such proposed
Transfer to the Shareholders at least fifteen (15) days prior to the
consummation of such proposed Transfer, setting forth (A) the total number of
shares of Common Stock offered to be Transferred to Purchaser, (B) the
consideration to be received for such shares of Common Stock by the Sponsor
Transferor, (C) the identity of the Purchaser(s), (D) any other material terms
and conditions of the proposed Transfer, (E) the expected date of the proposed
Transfer and (F) that each such Shareholder shall have the right (the "Tag-Along
Right") to elect to sell up to its Pro Rata Portion of such
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shares of Common Stock to be Transferred to Purchaser. If any portion of the
consideration contained in the Transfer Notice includes consideration other than
cash, the Sponsor Transferor shall provide the Shareholders with a summary of a
valuation study, if any, that the Sponsor Transferor has prepared concerning
such consideration, but the Sponsor Transferor shall have no liability to any
Shareholder with respect to any such summary or study and no obligation to
undertake any such valuation. Notwithstanding the first sentence of this Section
4.02(a), a Shareholder will have a Tag-Along Right in connection with Transfers
of shares of Common Stock by the Sponsor Transferor to a Permitted Transferee
(other than an Affiliate of the Sponsor Transferor) when the Sponsor Transferor
Transfers shares of Common Stock to such Person at a price per share (as
adjusted for Adjustments) that is greater than the price per share (as adjusted
for Adjustments) paid for such shares by the Sponsor Transferor.
(b) Upon delivery of a Transfer Notice, each Shareholder has the option,
but not the obligation, to sell up to the Pro Rata Portion of its shares of
Common Stock at the same price per share of Common Stock and pursuant to the
same terms and conditions with respect to payment for the shares of Common Stock
as agreed to by the Sponsor Transferor, by sending written notice to the Sponsor
Transferor within ten (10) days of the date of the Transfer Notice, indicating
its election to sell up to the Pro Rata Portion of its shares of Common Stock in
the same transaction. To the extent that elections pursuant to this Section
4.02(b) are not made with respect to any shares of Common Stock included in a
Transfer Notice within such 10-day period, then the Sponsor Transferor shall
re-offer to Shareholders who have elected to sell their Pro Rata Portion (the
"Tag-Along Shareholders") for one additional three day period, the right to sell
such additional number of shares as will result in the Tag-Along Shareholders
being able to sell their pro rata share of such remaining shares of Common
Stock, based upon all the shares of Common Stock being sold by all the Tag Along
Shareholders (not including the remaining shares). For a sixty (60) day period
following such ten (10) day period (which period may be extended an additional
thirty (30) days in order to satisfy the Conditions), each Tag-Along Shareholder
shall be permitted to sell to the Purchaser(s) on the terms and conditions set
forth in the Transfer Notice that amount of its shares of Common Stock as to
which it has made its election and the Sponsor Transferor shall be permitted to
concurrently sell the balance of the shares of Common Stock that are the subject
of the Transfer Notice that are not sold by the Tag-Along Shareholders.
(c) The provisions of Section 4.02(a) and (b) shall not apply to any
Transfer or series of Transfers by Sponsor of shares of Common Stock to one or
more Persons other than Permitted Transferees which in the aggregate do not
exceed ten percent (10%) of such shares of Common Stock owned by Sponsor
immediately following the Transactions.
(d) Each Tag-Along Shareholder shall not be required to make
representations and warranties in connection with such sale other than customary
representations and
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warranties with respect to (i) such Shareholder's due organization, power and
authority, (ii) such Shareholder's ownership of the shares of Common Stock and
ability to freely convey such shares of Common Stock without liens or
encumbrances, (iii) customary representations regarding non-contravention of
such Shareholder's charter, bylaws or other organizational documents or material
agreements of such Tag-Along Shareholder and (iv) the enforceable nature of such
Tag-Along Shareholder's obligations under the documents for such sale to which
it is a party (collectively, the "Shareholder Representations"). No Tag-Along
Shareholder shall be liable in respect of any indemnification provided in
connection with a Tag-Along Sale (with respect to such Shareholder's Shareholder
Representations) in excess of the consideration received by such Tag-Along
Shareholder in such Tag-Along Sale and no Tag-Along Shareholder shall be
required to participate in any escrow relating to such Tag-Along Sale in excess
of such Tag-Along Shareholder's participation in the Tag-Along Sale.
(e) In the event that no Shareholder elects to sell shares of Common Stock
pursuant to this Section 4.02, Sponsor and/or its Affiliates (as the case may
be) shall have the right for a period of seventy-five (75) days (which period
may be extended by an additional thirty (30) days to satisfy the Conditions)
after the expiration of the 10-day period referred to in Section 4.02(b) to
Transfer the Shares subject to the Transfer Notice to the Purchaser at a price
not greater than the price contained in, and otherwise on terms and conditions
no more favorable to Sponsor and/or such Affiliates than those set forth in, the
Transfer Notice; it being agreed that, after the end of the 75-day period
referred to in this Section 4.02(e) (including any permitted extension thereof),
Sponsor and/or such Affiliates will not effect any transaction in any shares of
Common Stock that are the subject of the Transfer Notice without commencing de
novo the procedures set forth in this Section 4.02.
SECTION 4.03. Drag-Along Rights. If at any time prior to a Qualifying
Public Equity Offering, Sponsor and its Affiliates intend to effect a
Substantial Change of Control, Sponsor shall have the right to require the other
Shareholders (the "Drag-Along Shareholders") to sell the same percentage of
Common Stock held by them relative to such Shareholder's ownership of Common
Stock as Sponsor and its Affiliates are selling in such transaction in
connection with such Substantial Change of Control; to vote such Common Stock,
whether by proxy, voting agreement or otherwise in favor of the transactions
constituting a Substantial Change of Control; to waive their appraisal or
dissenters' rights with respect to such transaction; or otherwise, participate
in such Substantial Change of Control and each other Shareholder agrees to take
any and all reasonably necessary action in furtherance of the foregoing;
provided that (a) the consideration to be received by the other Shareholders
shall be for the same type and amount per share of consideration received by
Sponsor, and (b) after giving effect to such transaction, Sponsor and its Direct
Permitted Transferees shall have sold the same percentage of their holdings of
Common Stock of the Company as sold by the Drag-Along Shareholders; provided,
however, that CSFB will not be obligated to participate in such transaction if
the consideration per share in
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such transaction is less than $16.90 per share (as adjusted for Adjustments) of
the Common Stock of the Company paid by CSFB in connection with the Transactions
and provided, further, that if Sponsor and its Affiliates are selling all of
their shares of Common Stock in connection with such Substantial Change of
Control, the Drag-Along Shareholders will be required to sell all of their
shares pursuant to this Section 4.03. In connection with the sale of their
shares of Common Stock pursuant to this Section 4.03, the Drag-Along
Shareholders shall not be required to make any representations and warranties
other than the Shareholder Representations. In addition, no Drag-Along
Shareholder shall be liable in respect of any indemnification in connection with
a transaction effected pursuant to this Section 4.03 (a "Drag-Along
Transaction") (with respect to such Shareholder's Shareholder Representations)
in excess of the consideration received by such Drag-Along Shareholder in such
Drag-Along Transaction and no such Drag-Along Shareholder shall be required to
participate in any escrow relating to such Drag-Along Transaction in excess of
such Drag-Along Shareholder's Pro Rata Portion.
SECTION 4.04. Information. (a) Prior to the occurrence of an Initial Public
Offering, the Company shall deliver to each Shareholder:
(1) as soon as available, but in any event within forty-five (45) days
after the end of each quarter, copies of:
(i) consolidated balance sheets of the Company and its
subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, stockholders' equity and
cash flows of the Company and its subsidiaries, for such quarter and
for the portion of the fiscal year ending with such quarter,
in each case prepared in accordance with GAAP applicable to periodic
financial statements generally, fairly presenting, in all material
respects, the financial position of the Persons being reported on and their
results of operations and cash flows, subject to changes resulting from
normal year-end adjustments;
(2) as soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Company, copies of:
(i) consolidated balance sheets of the Company and its
subsidiaries as at the end of such year, and
(ii) consolidated statements of income, stockholders' equity and
cash flows of the Company and its subsidiaries for such year,
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in each case prepared in accordance with GAAP, fairly presenting, in all
material respects, the financial position of the Persons being reported on
and their results of operations and cash flows, and accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall state that such financial statements
present fairly, in all material respects, the financial position of the
Persons being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP;
(b) In the case of any Shareholder (other than CSFB) prior to the
occurrence of a Qualifying Public Equity Offering, and for so long as such
Shareholder owns twenty-five percent (25%) or more of the number of shares of
Common Stock (as adjusted for Adjustments) owned by such Shareholder immediately
following the Transactions, or in the case of CSFB, for so long as CSFB retains
a number of shares of Common Stock equal to at least twenty-five (25%) of the
number of shares of Common Stock (as adjusted for Adjustments) owned by CSFB
immediately following the Transactions, the Company shall deliver to each such
Shareholder and CSFB:
(1) the information and reports provided pursuant to Sections
4.04(a)(1) and (2);
(2) monthly "flash reports" utilized by the Company in its own
management containing summarized, abbreviated data with respect to income
statement amounts, balance sheet data and cash flows; and
(3) such other information concerning the condition or operations,
financial or otherwise, of the Company and its Subsidiaries as a
Shareholder may, from time to time, reasonably request.
(c) The rights to receive the information set forth in subsections (1) and
(2) of paragraph (a) shall be assignable to Transferees of Common Stock. The
rights to receive the information set forth in subsections (2) and (3) of
paragraph (b) shall be assignable to a Transferee that acquires from CSFB at
least 25% of the shares of Common Stock owned by CSFB as of the date hereof (as
adjusted for Adjustments).
(d) Prior to the occurrence of a Qualifying Public Equity Offering, and for
so long as a Shareholder owns twenty-five percent (25%) or more of the number of
shares of Common Stock owned by such Shareholder immediately following the
Transactions (as adjusted for Adjustments), Representatives of such Shareholder
shall be provided with a reasonable opportunity to discuss the business and
affairs of the Company with the Company's senior managers, directors, officers
and senior employees upon reasonable advance notice during normal business
hours; provided that such Company representatives shall be available (A) to such
Shareholder for an annual meeting with senior management at which the following
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year's budget is presented and (B) to Qualified Investors, RM and Company
Shareholder for quarterly meetings at which the most recent quarterly results
are discussed.
(e) Each Shareholder hereby agrees that neither it nor its Representatives
will disclose to any third party any information provided to it or its
Representatives by the Company hereunder which is not generally available to the
public, except with the prior express approval of the Company or as may be
required by applicable law; it being understood that nothing in this Section
4.04(e) will restrict the ability of Sponsor or a HIP Co-Investor to disclose
certain information to its investors in accordance with the governing documents
of their partnership arrangement; provided that such investors agree to be bound
by the confidentiality provisions of this Agreement.
(f) Notwithstanding the above, access to highly confidential proprietary
information and facilities need not be provided by the Company, nor shall the
Company be required to provide information to any Shareholder that is a
competitor or reasonably likely to become a competitor of the Company or any of
its subsidiaries; it being understood that the Shareholders existing as of the
date hereof are not competitors.
(g) Notwithstanding the foregoing, (x) MetLife in addition to Portfolio
Advisors, LLC or any controlled Affiliate of Portfolio Advisors, LLC shall have
the rights provided by this Section 4.04 notwithstanding the fact it has
transferred all of its shares of Common Stock to Portfolio Advisors, LLC or any
controlled Affiliate of Portfolio Advisors, LLC, provided such Person would have
such rights as a Shareholder (it being agreed that, solely for purposes of
paragraphs (b) and (d) of this Section 4.04, such Person shall be deemed to have
held its shares of Common Stock since the consummation of the Transactions) and
(y) Company Shareholder shall be entitled to receive the information provided by
this Section 4.04 so long as Company Shareholder owns any Class A Preferred
Stock or has outstanding commitments or loans under the Subordinated Loan
Agreement.
SECTION 4.05. Preemptive Rights. (a) Prior to the occurrence of an Initial
Public Offering, the Company hereby grants and hereby agrees to cause each
Significant Subsidiary of the Company to grant to each HIP Co-Investor and its
Direct Permitted Transferees and Sponsor and its Direct Permitted Transferees
the right to purchase up to such Shareholder's Proportionate Percentage (as
hereinafter defined) of any future Eligible Offering (as hereinafter defined)
and in the case such Eligible Offering is in whole or in part to Sponsor or any
of its Affiliates, then the Company shall also grant Company Shareholder and RM
the right to purchase up to their Proportionate Percentage. For purposes of this
Section 4.05, the following terms shall have the meanings set forth below.
"Proportionate Percentage" means, with respect to any Shareholder as of any
given date with respect to an Eligible Offering, the lower of (i) twenty percent
(20%)
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of such Eligible Offering or (ii) the number (expressed as a percentage)
obtained by dividing (A) the number of shares of Common Stock owned by such
Shareholder as of such date by (B) the total number of shares of Common Stock
outstanding as of such date, in each case, assuming all shares of Capital Stock
of the Company convertible into or exercisable for Common Stock have been so
converted; provided that CSFB should not be limited by the foregoing clause (i)
in the event that the Eligible Offering consists of Capital Stock of the Company
for a consideration per share of Capital Stock which is less than the purchase
price per share of Common Stock paid by CSFB in connection with the Transactions
(as such price is adjusted by the Adjustments).
"Eligible Offering" means an offer by the Company or a Significant
Subsidiary of the Company to sell to any Person or Persons (including any of the
Shareholders) for cash, any Capital Stock of the Company or any Significant
Subsidiary, other than an offering by the Company or a Significant Subsidiary of
the Company:
(i) of Common Stock in an underwritten public offering (a "Public
Offering") registered under the 1933 Act or pursuant to a Rule 144A
offering under the 1933 Act;
(ii) of Common Stock of the Company issued upon the exercise of
options, warrants or convertible securities outstanding as of the date
hereof;
(iii) of Common Stock of the Company or options to purchase shares of
Common Stock in connection with or pursuant to any stock option, stock
purchase plan or agreement or other benefit plans approved by the Board of
Directors of the Company to full-time employees, officers, directors,
consultants and/or advisors to the Company or its subsidiaries;(excluding
employees of Sponsor);
(iv) of Common Stock of the Company issued in connection with
restricted stock awards pursuant to and in accordance with the
Recapitalization Agreement;
(v) of Common Stock of the Company having a value of up to $5.2
million in order to comply with Section 5.15 of the Senior Credit
Facilities;
(vi) of Capital Stock of the Company issued as consideration to any
seller in connection with the acquisition by the Company or any subsidiary
of the Company of the assets of any Person in any transaction approved by
the Board of Directors of the Company;
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(vii) of Capital Stock of the Company issued as an inducement in
connection with any debt financing of the Company, subject to terms and
conditions approved by the Board of Directors of the Company;
(viii) of Capital Stock of a Significant Subsidiary of the Company in
connection with any sale of control of such Significant Subsidiary to, or
any joint venture between such Significant Subsidiary and, a third party
that is not a financial sponsor or investor, which sale or joint venture is
approved by the Board of the Directors of the Company;
(ix) of director qualifying or similar shares of a Significant
Subsidiary;
(x) of Capital Stock of the Company issued as consideration in
connection with the acquisition by the Company or any subsidiary of the
Company of Xxxxxxx Industries, Inc. or Global Metal Technologies, Inc. (or
any parent company thereof); and
(xi) of Capital Stock of the Company issued to former stockholders of
K-Tech Mfg., Inc. arising out of obligations existing prior to the
Transactions.
For purposes of this Section 4.05 only, "Capital Stock" means any and all
shares of common stock or options, warrants or similar instruments or any other
securities convertible or exchangeable therefor (collectively, "Equity
Interests") or any equity security linked to or offered or sold in connection
with any Equity Interests of such Person or any of its Significant Subsidiaries,
as the case may be.
(b) The Company shall, before any securities are issued pursuant to an
Eligible Offering, give written notice (a "Preemptive Notice") thereof to each
Shareholder that is entitled to preemptive rights hereunder. Such notice shall
specify the security or securities proposed to be issued, the proposed date of
issuance, the consideration that the Company or such Significant Subsidiary, as
the case may be, intends to receive therefor and all other material terms and
conditions of such proposed issuance. For a period of ten (10) business days
following the date of such notice, each such Shareholder shall be entitled, by
written notice to the Company, to elect to purchase all or part of such
Shareholder's Proportionate Percentage of the securities being sold in the
Eligible Offering. To the extent that elections pursuant to this Section 4.05(b)
shall not be made with respect to any shares of Common Stock included in a
Preemptive Notice within such 10-day period, then the Company shall re-offer to
Shareholders who have elected to purchase their Proportionate Percentage (the
"Preemptive Shareholders") for one additional three-day period, the right to
purchase any part of the shares of Common Stock not purchased by other
Shareholders (the "Section 4.05 Remaining Shares")
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pursuant to this Section 4.05 which is equal to the product obtained by
multiplying (i) the number of Section 4.05 Remaining Shares by (ii) a fraction,
the numerator of which is the number of shares of Common Stock then owned by any
such Preemptive Shareholder and the denominator of which is the aggregate number
of shares owned by all Preemptive Shareholders. To the extent that elections
pursuant to this Section 4.05(b) shall not be made with respect to any
securities included in an Eligible Offering within such ten (10) business day
period, then the Company or such Significant Subsidiary, as the case may be,
shall not be obligated to issue to such Shareholder such securities for which
such Shareholder has elected not to purchase. To the extent that there are
securities that have not been purchased pursuant to this Section 4.05, then the
Company or such Significant Subsidiary, as the case may be, may issue such
securities, but only for consideration not less than, and otherwise on no less
favorable terms to the Company or such Significant Subsidiary, as the case may
be, than, those set forth in the Company's notice and only within thirty (30)
days after the end of such ten (10) business day period. In the event that any
such offer is accepted by any such Shareholder or Shareholders, the Company or
such Significant Subsidiary, as the case may be, shall sell to such Shareholder
or Shareholders, and such Shareholder or Shareholders shall purchase from the
Company or such Significant Subsidiary, as the case may be, for the
consideration and on the terms set forth in the notice as aforesaid, the
securities that such Shareholder or Shareholders shall have elected to purchase
within ten (10) business days of such Shareholder's election to purchase such
Proportionate Percentage (subject to delay for an additional thirty days for
satisfaction of the Conditions).
(c) Each of the Shareholders granted rights pursuant to this Section 4.05
acknowledges that it has been given the opportunity to purchase their
Proportionate Percentage of Common Stock in connection with the acquisition of
Xxxxxxx Industries, Inc. and accordingly this Section 4.05 shall not apply to
the acquisition of Xxxxxxx Industries, Inc.
(d) The Company may comply with any applicable securities laws before
issuing any shares of Common Stock pursuant to this Section 4.05 and shall not
be in violation of the provisions hereof by reason of such compliance; provided
it is using commercially reasonable efforts to so comply.
SECTION 4.06. Board of Directors. (a) At each annual or special
stockholders meeting called for the election of directors, and whenever the
Shareholders of the Company act by written consent with respect to the election
of directors, each Shareholder agrees to vote or otherwise give such
Shareholder's consent in respect of all shares of the Capital Stock of the
Company (whether now owned or hereafter acquired) owned by such Shareholder, and
take all other appropriate action and the Company shall take all necessary and
desirable actions within its control in order to cause:
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(i) an amendment to the Bylaws of the Company to provide that the
authorized number of directors on the Board of Directors of the Company
shall be as recommended by the Sponsor in its sole discretion.
(ii) the election to the Board of Directors of:
(a) such number of directors as shall constitute a majority of
the Board of Directors as designated by Heartland Industrial Partners,
L.P.;
(b) one director designated by the Company Shareholder; provided,
however, that except as set forth in the immediately following
sentence of this subpart (b) upon Company Shareholder and its Direct
Permitted Transferees ceasing to own at least 1,571,569 shares of
Common Stock or, upon a Qualifying Public Equity Offering, Company
Shareholder shall no longer have the right to designate one director
to the Board. Notwithstanding the foregoing, Company Shareholder shall
maintain the right to designate one director to the Board of Directors
for so long as Company Shareholder or its Affiliates, own (x) $10.0
million or more of liquidation preference of the Class A Preferred
Stock or (y) have outstanding loans or unfunded commitments under the
Subordinated Loan Agreement; and
(c) one director designated by the CSFB Plan Partner (the "CSFB
Director") after consultation with Sponsor; provided, however, that
upon CSFB and its Direct Permitted Transferees ceasing to own a number
of shares of Common Stock which would equal at least a majority of the
shares of Common Stock owned by CSFB immediately following the
Transactions (as adjusted for Adjustments), CSFB shall no longer have
the right to designate one director to the Board of Directors;
all of which persons shall hold office subject to their earlier removal in
accordance with clause (iii) below, the Bylaws of the Company and
applicable corporate law, until their respective successors shall have been
elected and shall have qualified;
(iii) the removal from the Board of Directors (with or without cause)
of any director elected in accordance with subpart (a), (b) or (c) of
clause (ii) above upon the written request of the Shareholders that
designated such director; and
(iv) upon any vacancy in the Board of Directors as a result of any
individual designated as provided in clause (ii) above ceasing to be a
member of the Board of Directors whether by resignation or otherwise, the
election to the Board of Directors as promptly as possible of an individual
designated by the Shareholders that designated
-25-
such individual; provided that the CSFB Plan Partner will consult with
Sponsor prior to designating a replacement to serve as the CSFB Director.
(b) The ability of a Shareholder to designate a director to the Board of
Directors shall not be assignable to any Person.
(c) The parties hereto agree to cause the Board of Directors to appoint the
CSFB Director to each decision making committee of the Board and to cause such
CSFB Director to be nominated to the Board of each subsidiary of the Company to
the extent the composition of such boards is substantially identical to the
composition of the Board.
(d) The Company agrees to provide customary directors' liability insurance.
SECTION 4.07 Right to Observer. In the case of a Qualified Investor (other
than CSFB), for so long as such Qualified Investor retains a number of shares of
Common Stock equal to at least a majority of, or, in the case of the CSFB Plan
Partner, for so long as it retains a number of shares of Common Stock equal to
at least twenty-five percent (25%) of, the shares of Common Stock owned by such
Person immediately following the Transactions (as adjusted for the Adjustments),
such Person will have right to send one Representative on its behalf (the
"Observer") to attend all meetings of the Board, including all committees
thereof, solely in a non-voting observer capacity. The Company will furnish to
the Observer copies of all notices, minutes, consents and other materials that
it generally makes available to its directors. The Observer may participate in
discussions of matters under consideration by the Board of the Company and any
matters brought before any committee thereof but will not be entitled to vote on
any matter presented to the Board of Directors. Any Qualified Investor and the
CSFB Plan Partner will have the right to remove and replace its Observer in its
sole discretion and to designate a substitute representative if its Observer is
unable or unwilling to attend any of the Board's meetings, including any
committees thereof. The right of Qualified Investors (other than CSFB) to
appoint an Observer as set forth in this Section 4.07 will terminate upon the
occurrence of a Qualifying Public Equity Offering.
SECTION 4.08. Consultation Right. (a) The Company hereby agrees to consult
(a "Consultation") with the Representatives of the CSFB Plan Partner set forth
on Exhibit B hereto with respect (x) to any issues, events or transactions
pertaining to the Company which in the good faith judgment of the Board of
Directors of the Company are material to the consolidated business, operations
and financial condition of the Company and (y) to the preparation of the annual
business plan of the Company. In connection with any Consultation, the Company
will provide such Representatives with all material information regarding any
action under consideration and reasonable notice so that the consultation period
shall constitute sufficient time for the CSFB Plan
-26-
Partner to participate meaningfully in any decision-making process regarding the
action to be taken.
(b) The provision of Section 4.08(a) shall terminate upon a Qualifying
Public Equity Offering.
SECTION 4.09. Approval Rights. (a) The Company hereby agrees not to enter
into or adopt any Material Event (as defined below) without the prior written
approval of the majority of the Representatives of the CSFB Plan Partner set
forth on Exhibit B hereto, which approval with respect to clauses (i) and (ii)
of the definition of "Material Event" will not be unreasonably withheld. For the
purpose of this Section 4.09, "Material Event" means (i) any agreement to
acquire a business with a total enterprise value of $250.0 million or more
individually or any agreement to acquire a business if there have been one or
more agreements during the immediately preceding twelve (12) month period for
acquisitions(s) with a total enterprise value of $500.0 million or more (it
being hereby agreed by the parties that the acquisition of Global Metal
Technologies, Inc. shall be counted toward such $500.0 million threshold and
that the acquisition of Xxxxxxx Industries, Inc. shall not be counted toward
such threshold); (ii) the selection of a chief executive officer of the Company;
(iii) any restructuring of debt or other similar transaction pursuant to which
debt holders of the Company would hold twenty-five percent (25%) or more of the
outstanding Capital Stock of the Company; and (iv) any liquidation, dissolution,
winding-up of the affairs of the Company, whether voluntary or involuntary, or
the filing of a voluntary petition in bankruptcy or the filing of a plan of
reorganization. The Company hereby agrees to promptly give notice to the CSFB
Plan Partner if the Company is contemplating any Material Event. The CSFB Plan
Partner hereby agrees to notify the Company within ten (10) business days of the
receipt of such notice as to whether it approves of the Material Event. Failure
of the CSFB Plan Partner to notify the Company in writing within such ten (10)
business day period of its approval or disapproval of the Material Event shall
be deemed an approval by the CSFB Plan Partner of such Material Event.
(b) The provisions of Section 4.09(a) shall terminate upon a Qualifying
Public Equity Offering.
SECTION 4.10. Transactions with Affiliates. Without the consent of the
Requisite Investors, for so long as Sponsor directly or indirectly beneficially
owns twenty percent (20%) or more of the outstanding shares of Common Stock of
the Company, the Company and its subsidiaries will not enter into, or suffer to
exist, any transaction with Sponsor or any of its Affiliates involving payments
or other consideration in excess of $1.0 million. The foregoing restrictions
will not apply to: (a) the payment of annual monitoring fees to Sponsor in an
amount not to exceed (x) $4.0 million plus reimbursement of out-of-pocket
expenses incurred by Sponsor in connection with the advisory services provided
to the Company for the first
-27-
year after the date hereof and (y) not to exceed 0.25% of the consolidated
assets of the Company in subsequent years; provided that such amount will not be
less than $4.0 million plus reimbursement of out-of-pocket expenses incurred by
Sponsor in connection with the advisory services provided to the Company; (b)
the payment to Sponsor of advisory fees and out-of-pocket expense reimbursement
in connection with an acquisition, divestiture or financing by the Company or
any of its subsidiaries (but excluding sales and purchases of personal property
in the ordinary course of business) provided that such fees shall be in an
amount equal to 1% of the aggregate value of such transaction; (c) fees payable
to Sponsor in connection with the Transactions and reimbursement of
out-of-pocket expenses incurred by Sponsor in connection with the Transactions;
(d) transactions involving the sale, purchase or lease of goods or services in
the ordinary course of business and on an arm's-length basis between or among
the Company or any of its subsidiaries and portfolio companies of Sponsor; (e)
transactions between or among the Company or any of its subsidiaries; (f)
issuances of Capital Stock to Sponsor and its Affiliates pursuant to, and in
compliance with, Section 4.05; and (g) issuances of Common Stock to Sponsor and
other Shareholders, as applicable (valued at $16.90 or more per share of Common
Stock, unless otherwise determined by the Board of Directors of the Company) for
cash, or in exchange for common stock, to provide for the acquisition by the
Company or one of its subsidiaries of all of the outstanding Capital Stock of
Xxxxxxx Industries, Inc. or Global Metal Technologies, Inc. (or any parent
company thereof) either initially or within one (1) year after the acquisition
thereof by Sponsor or one of its Affiliates (based on the cash equity provided
by Sponsor and its Affiliates at the closing of any such acquisition).
Notwithstanding the foregoing, the benefits of this Section 4.10 in favor of a
class of Requisite Investors (other than Company Shareholder) shall terminate as
to it individually when such class (including their respective Direct Permitted
Transferees) ceases to own a number of shares of Common Stock that would equal
at least a majority of the number of shares of Common Stock (appropriately
adjusted for Adjustments) owned by such class immediately following the
Transactions. The benefits of this Section 4.10 in favor of Company Shareholder
will terminate as to Company Shareholder when Company Shareholder (i) ceases to
have outstanding commitments or loans under the Subordinated Loan Agreement,
(ii) owns, together with its Direct Permitted Transferees, less than $10.0
million of liquidation preference of Class A Preferred Stock and (iii) ceases to
own, together with its Direct Permitted Transferees, at least 1,571,569 shares
of Common Stock.
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Company Registration.
(a) Right to Piggyback on Registration of Stock. Subject to Section
5.01(c), if at any time or from time to time the Company proposes to register
the Common
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Stock under the 1933 Act in connection with a public offering (other than an
Initial Public Offering consisting solely of primary Common Stock or in
connection with the registration of shares of Common Stock issued to former
shareholders of K-Tech Mfg., Inc. arising out of, or in lieu of, obligations
existing prior to the Transactions) of such Common Stock on any form other than
Form S-4 or Form S-8 or any similar successor forms or another form used for a
purpose similar to the intended use for such forms (a "Piggyback Registration"),
whether for its own account or for the account of one or more shareholders of
the Company, the Company shall each such time promptly give each Shareholder
written notice of such determination (in any event within 10 business days after
its receipt of notice of any exercise of demand registration rights); provided,
however, that such notice of a Piggyback Registration shall be given at least
thirty (30) days prior to the anticipated filing date of such Piggyback
Registration. Upon the written request of any Shareholder (the "Piggyback
Holder") given within ten (10) business days after the providing of any such
notice by the Company, the Company shall use its best efforts to cause to be
registered under the 1933 Act all of the Registrable Securities held by such
Shareholder that the Shareholder has requested to be registered; provided,
however, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Piggyback Holder and (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation of
the Company to pay the registration expenses in connection therewith); and (ii)
in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities. No registration effected under this Section
5.01 shall relieve the Company of its obligation to effect any registration upon
demand under Section 5.02. The registration rights contained in Section 5.01 may
be assigned to any Transferee or Permitted Transferee.
(b) Selection of Underwriters. If any Piggyback Registration involves an
underwritten primary offering, the Company shall have sole discretion in the
selection of any underwriter or underwriters to manage such Piggyback
Registration.
(c) Priority on Piggyback Registrations. In the event that the Piggyback
Registration includes an underwritten offering, the Company shall so advise the
Shareholders as part of the written notice given pursuant to Section 5.01(a) and
the registration rights provided in Section 5.01(a) shall be subject to the
condition that if the managing underwriter or underwriters of a Piggyback
Registration advise the Company in writing (a copy of which shall be provided to
the applicable Shareholders) that in its opinion the number of Registrable
Securities proposed to be sold in such Piggyback Registration exceeds the number
which can be sold, and would materially adversely affect the price at which the
Registrable Securities are to be sold, in such offering, the Company (or the
Shareholders, as the case may be) will in-
-29-
clude in such registration only the number of Registrable Securities which, in
the opinion of such underwriter or underwriters can be sold in such offering
without such material adverse effect. The Registrable Securities so included in
such Piggyback Registration shall be apportioned (i) first, either (x) in the
case of a primary registration on behalf of the Company, to any shares of Common
Stock that the Company proposes to sell, or (y) in the case of a secondary
registration on behalf of a Shareholder, pro rata among the Holders on the basis
of the number of Registrable Securities requested to be registered pursuant to
such Demand Registration, (ii) second, pro rata among the Company Shareholder,
RM and the HIP Co-Investors (and their respective Permitted Transferees), but
only to the extent of shares of Common Stock of the Company held by them as of
the date hereof (as adjusted by the Adjustments), and (iii) third, pro rata
among other shares included in such Piggyback Registration, in each case
according to the total number of shares of the Common Stock requested for
inclusion by said selling stockholders, or in such other proportions as shall
mutually be agreed to among such selling stockholders.
SECTION 5.02. Demand Registration Rights.
(a) Right to Demand. At any time after a Triggering Event, the Demand
Holders may (subject in the case of Sponsor to Section 6.01), individually or
collectively, make a written request, which request will specify the aggregate
number of Registrable Securities to be registered and will also specify the
intended methods of disposition thereof (the "Request Notice") to the Company
for registration with the Commission under and in accordance with the provisions
of the 1933 Act of all or part of the Registrable Securities then owned by
Demand Holders (a "Demand Registration"); provided that the Company may, if the
Board of Directors so determines in the exercise of its reasonable, good faith
judgment that due to a pending or contemplated acquisition or disposition or
public offering or other material event involving the Company it would be
inadvisable to effect such Demand Registration at such time (but in no event
after such registration statement has become effective), the Company may, upon
providing the Demand Holders written notice (the "Delay Notice"), defer such
Demand Registration for a single period with respect to such Demand Registration
not to exceed one hundred thirty five (135) days. Upon receipt by the Company of
a request (a "Demand Request") to effect a Demand Registration the Company will
within 10 business days after the receipt of such notice, notify each other
Demand Holder of such request and such other Demand Holder shall have the option
to include its Registrable Securities in such Demand Registration pursuant to
this Section 5.02. Subject to Section 5.02(f), the Company will register all
other Registrable Securities which the Company has been requested to register by
such other Demand Holders (each an "Incidental Demand Holder") pursuant to this
Section 5.02 by written request given to the Company by such holders within 10
business days after the giving of such written notice by the Company to such
other Demand Holders. The Company shall not be obligated to maintain a
registration statement pursuant to a Demand Regis-
-30-
tration effective for more than (x) ninety (90) days or (y) such shorter period
when all of the Registrable Securities covered by such registration statement
have been sold pursuant thereto (the "Effectiveness Period"). Notwithstanding
the foregoing, the Company shall not be obligated to effect more than one Demand
Registration in any 90-day period or such longer period not to exceed 180 days
as requested by an underwriter pursuant to Section 5.07. Upon any such request
for a Demand Registration, the Company will deliver any notices required by
Section 5.01 and 5.02 and thereupon the Company will, subject to Section 5.01(c)
and 5.02(f) hereof use its best efforts to effect the prompt registration under
the 1933 Act of:
(i) the Registrable Securities which the Company has been so requested
to register by Demand Holders as contained in the Request Notice, and
(ii) all other Registrable Securities which the Company has been
requested to register by the Piggyback Holders and Incidental Demand
Holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or methods
of disposition of each seller of such Registrable Securities.
(b) Number of Demand Registrations. The Company shall not be required to
prepare and file a registration statement pursuant to this Section 5.02 if (i) a
Rollover Demand Holder and its Direct Permitted Transferees cease to own at the
time of making the Request Notice twenty-five percent (25%) or more of the
shares of Common Stock of the Company owned as of the date hereof (as adjusted
for Adjustments) and (ii) the Request Notice relates to less than twenty-five
percent (25%) of the shares of Common Stock held by such Demand Holder. In
addition, the Company will not be required to effect more than (i) two
registrations pursuant to this Section 5.02 on behalf of Company Shareholder,
(ii) one registration on behalf of RM pursuant to this Section 5.02, (iii) two
registrations on behalf of CSFB pursuant to this Section 5.02; provided that
CSFB will be afforded one additional Demand Registration in the event that CSFB
has not been able to dispose of all of the Registrable Securities requested to
be registered by CSFB with its initial two Demand Registrations; provided that
the Company shall not be obligated to attend or participate in any "road shows"
if such third and final Demand Registration is for less than 10% of the shares
of Common Stock of the Company owned by CSFB immediately following the
Transactions (as adjusted for Adjustments and (iv) one demand on behalf of the
QI Demand Holders as a group (other than CSFB) pursuant to this Section 5.02.
Sponsor and its Affiliates will be entitled to an unlimited number of Demand
Registrations. It being understood that if two or more Demand Holders make a
collective Demand Registration, such Demand Registration will count pursuant to
this Section 5.02(b) as a Demand Registration for each such Demand Holder. It is
hereby acknowledged and agreed by the parties that any Registrable Securities
included in a registration statement on behalf of an Incidental Demand Holder
will not count as a Demand Registration
-31-
for such Incidental Demand Holder. In connection with a Demand Registration by
more than one Demand Holder or by a Demand Holder and Incidental Demand Holders,
such Demand Holders and Incidental Demand Holders shall elect one such Holder to
act as representative (the "DH Representative") in connection with such Demand
Registration and the Company shall only be obligated to communicate with such DH
Representative in connection with such Demand Registration. The Holders shall
give the Representative any and all necessary powers of attorneys needed for the
DH Representative to act on their behalf.
(c) Revocation. Holders of a majority in number of the Registrable
Securities to be included in a registration statement pursuant to this Section
5.02 may, at any time prior to the effective date of the registration statement
relating to such Demand Registration, acting through their DH Representative
revoke such request by providing a written notice thereof to the Company. The
Holders of Registrable Securities who revoke such request shall reimburse the
Company for all its expenses incurred in the preparation, filing and processing
of the Registration Statement. If pursuant to the terms of this Section 5.02(c),
the Holders reimburse the Company for its reasonable expenses incurred in the
preparation, filing and processing of any registration statement requested and
subsequently revoked by such Holders, the attempted registration by such
requested and subsequently revoked registration statement shall not be deemed to
be a Demand Registration. Notwithstanding the foregoing, the Holders of a
majority in number of the Registrable Securities to be included in a
registration statement pursuant to this Section 5.02 may, at any time within
five days after receipt of any Delay Notice acting through their DH
Representative revoke such request by providing written notice thereof to the
Company and the attempted Demand Registration shall not be deemed to be a Demand
Registration, notwithstanding that such Holders shall not reimburse the Company
for any expenses incurred in the preparation, filing and processing of any
Registration Statement.
(d) Effective Registration. A registration will not count as a Demand
Registration: (i) if a Holder determines in its good faith judgment to withdraw
the proposed registration of any Registrable Securities requested to be
registered by a Demand Holder (x) due to marketing or regulatory reasons subject
to such Holder reimbursing the Company for its expenses in accordance with
Section 5.02(c) above, or (y) due to a material adverse change in the Company
(other than as a result of any action by the Holder); (ii) if such registration
is interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason (other
than as a result of any action by the Holder) and the Company fails to promptly
have such stop order, injunction or other order or requirement removed,
withdrawn or resolved to the Holder's satisfaction; or (iii) the conditions to
closing specified in the underwriting agreement or purchase agreement entered
into in connection with the registration relating to any such demand are not
satisfied (other than as a result of a default or breach thereunder by the
relevant Holder).
-32-
(e) Selection of Underwriters. If any of the Registrable Securities covered
by a Demand Registration are to be sold in an underwritten offering, the
relevant Holder, or Holders, will have the right to select the managing
underwriter(s) to administer the offering subject to the approval of the
Company, which will not be unreasonably withheld.
(f) Priority on Demand Registrations. If the managing underwriter or
underwriters of a Demand Registration advise the Company in writing that in its
or their opinion the number of Registrable Securities proposed to be sold in
such Demand Registration exceeds the number which can be sold, or adversely
affects the price at which the Registrable Securities are to be sold, in such
offering, the Company will include in such registration only the number of
Registrable Securities which, in the opinion of such underwriter or
underwriters, can be sold in such offering without such material adverse effect.
To the extent such Demand Registration includes Registrable Securities of more
than one Holder, the Registrable Securities so included in such Demand
Registration shall be apportioned (i) first, pro rata among such Holders based
upon the number of shares of Common Stock owned by each Holder at the date of
determination and (ii) second, pro rata among other shares of Common Stock
included in such Demand Registration; provided that if such Demand Registration
is effected pursuant to a Demand Request by either Company Shareholder or RM
such number of Registrable Securities (as adjusted for Adjustments) of either
Company Shareholder or RM that are owned by Company Shareholder and RM
immediately following the Transactions will be included first without regard to
the pro rata treatment described in clause (i) of this sentence.
(g) Assignability of Demand Registration Rights. The rights offered a
Shareholder pursuant to Section 5.02 are only assignable to a Direct Permitted
Transferee. Notwithstanding the foregoing, CSFB will be able to assign its
rights under this Article V to a Transferee that acquires from CSFB at least 25%
of the shares of Common Stock owned by CSFB as of the date hereof (as adjusted
for Adjustments). Any such assignment permitted hereunder shall be effected
hereunder only by giving written notice thereof from both the transferee and the
transferee to the Company.
SECTION 5.03. Registration Procedures. It shall be a condition precedent to
the obligations of the Company and any underwriter or underwriters to take any
action pursuant to this Article V that the Shareholders requesting inclusion in
any Piggyback Registration or Demand Registration (a "Registration") shall
furnish to the Company such information regarding them, the Registrable
Securities held by them, the intended method of disposition of such Registrable
Securities, and such agreements regarding indemnification, disposition of such
securities and other matters referred to in this Article V as the Company shall
reasonably request and as shall be required in connection with the action to be
taken by the Company. With respect to
-33-
any Registration which includes Registrable Securities held by a Shareholder,
the Company will, subject to Sections 5.01 and 5.02 promptly:
(a) Prepare and file with the Commission a registration statement on
the appropriate form prescribed by the Commission and use its best efforts
to cause such registration statement to become effective as soon as
practicable thereafter; provided that the Company shall not be obligated to
maintain such registration effective for a period longer than the
Effectiveness Period; provided further that before filing a registration
statement or prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the
registration statement, the Company will furnish to the holders of the
Registrable Securities covered by such registration statement and the
underwriter or underwriters, if any, copies of or drafts of all such
documents proposed to be filed, including documents incorporated by
reference in the Prospectus and, if required by such holders, the exhibits
incorporated by reference, at least three (3) business days prior thereto,
which documents will be subject to the reasonable review of such holders
and underwriters. Holders will have the opportunity to object to any
information pertaining to such holders that is contained therein and the
Company will make the corrections reasonably requested by such holders with
respect to such information prior to filing any registration statement or
amendment thereto or any prospectus or any supplement thereto; provided,
however, that the Company will not file any registration statement or
amendment thereto or any prospectus or any supplement thereto or any
documents required to be incorporated by reference therein to which holders
of a majority of the Registrable Securities covered by such registration
statement or the underwriters, if any, shall reasonably object;
(b) Prepare and file with the Commission such amendments and
post-effective amendments to such registration statement and any documents
required to be incorporated by reference therein as may be necessary to
keep the registration statement effective for a period of not less than the
Effectiveness Period (but not prior to the expiration of the time period
referred to in Section 4(3) of the 1933 Act and Rule 174 thereunder, if
applicable); cause the prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the 1933 Act; and comply with the provisions of the 1933 Act
applicable to it with respect to the disposition of all Registrable
Securities covered by such registration statement during the applicable
period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement or supplement to
the prospectus;
(c) Furnish to such Shareholder, without charge, such number of
conformed copies of the registration statement and any post-effective
amendment thereto,
-34-
as such Shareholder may reasonably request, and such number of copies of
the prospectus (including each preliminary prospectus) and any amendments
or supplements thereto, and any documents incorporated by reference therein
as the Shareholder or underwriter or underwriters, if any, may request in
order to facilitate the disposition of the securities being sold by the
Shareholder (it being understood that the Company consents to the use of
the prospectus and any amendment or supplement thereto by the Shareholder
covered by the registration statement and the underwriter or underwriters,
if any, in connection with the offering and sale of the securities covered
by the prospectus or any amendments or supplements thereto);
(d) Notify such Shareholder, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, when the Company
becomes aware of the happening of any event as a result of which the
prospectus included in such registration statement (as then in effect)
contains any untrue statement of material fact or omits to state a material
fact necessary to make the statements therein (in the case of the
prospectus or any preliminary prospectus, in light of the circumstances
under which they were made) not misleading and, as promptly as practicable
thereafter, prepare and file with the Commission and furnish a supplement
or amendment to such prospectus so that, as thereafter delivered to the
investors of such securities, such prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading;
(e) In the case of an underwritten offering, enter into such customary
agreements (including underwriting agreements in customary form) and make
members of senior management of the Company available on a basis reasonably
requested by the underwriters to participate in, "road show" and other
customary marketing activities (including one-on-one meetings with
prospective purchasers of the Registrable Securities) and cause to be
delivered to the underwriters reasonable opinions of counsel to the Company
in customary form, covering such matters as are customarily covered by
opinions for an underwritten public offering as the underwriters may
reasonably request and addressed to the underwriters;
(f) Make available, for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to a
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 such
seller, underwriter, attorney, accountant or agent that are necessary to be
reviewed by such person in connection with the preparation of such
registration statement;
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(g) If requested, cause to be delivered, immediately prior to the
effectiveness of the registration statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto), letters from the Company's independent
certified public accountants addressed to each selling Shareholder (unless
such selling Shareholder does not provide to such accountants the
appropriate representation letter required by rules governing the
accounting profession) and each underwriter, if any, stating that such
accountants are independent public accountants within the meaning of the
1933 Act and the applicable rules and regulations adopted by the Commission
thereunder, and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with primary or
secondary underwritten public offerings, as the case may be;
(h) Provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of the registration statement;
(i) Use its best efforts to cause all securities included in such
registration statement to be listed, by the date of the first sale of
securities pursuant to such registration statement, on any national
securities exchange, quotation system or other market on which the Common
Stock is then listed or proposed to be listed by the Company, if any;
(j) Make generally available to its security holders an earnings
statement, which need not be audited, satisfying the provisions of Section
11(a) of the 1933 Act as soon as reasonably practicable after the end of
the twelve (12)-month period beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
registration statement, which statement shall cover said twelve (12)-month
period;
(k) After the filing of a registration statement, (i) promptly notify
each Shareholder holding Registrable Securities covered by such
registration statement of any stop order issued or, to the Company's
knowledge, threatened by the Commission and of the receipt by the Company
of any notification with respect to the suspension of the qualification of
any Registrable Securities for sale under the applicable securities or blue
sky laws of any jurisdiction and (ii) take all reasonable actions to obtain
the withdrawal of any order suspending the effectiveness of the
registration statement or the qualification of any Registrable Securities
at the earliest possible moment;
(l) Subject to the time limitations specified in paragraph (b) above,
if requested by the managing underwriter or underwriters or such
Shareholder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters or the Shareholder reasonably requests to
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be included therein, including, without limitation, with respect to the
number of shares being sold by the Shareholder to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and with respect to any term of the underwritten offering of
the securities to be sold in such offering; and make all required filings
of such prospectus supplement or post-effective amendment as soon as
practicable after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(m) As promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to such Shareholder;
(n) On or prior to the date on which the registration statement is
declared effective, use its best efforts to register or qualify, and
cooperate with such Shareholder, the underwriter or underwriters, if any,
and their counsel in connection with the registration or qualification of,
the securities covered by the registration statement for offer and sale
under the securities or blue sky laws of each state and other jurisdiction
of the United States as the Shareholder or managing underwriter or
underwriters, if any, requests in writing, to use its best efforts to keep
each such registration or qualification effective, including through new
filings, or amendments or renewals, during the Effectiveness Period do any
and all other acts or things necessary or advisable to enable the
disposition in all such jurisdictions of the Registrable Securities covered
by the applicable registration statement; provided that the Company will
not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject
it to general service of process in any such jurisdiction where it is not
then so subject;
(o) Cooperate with such Shareholder and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing securities
to be sold under the registration statement, and enable such securities to
be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, may request; and
(p) Use its best efforts to cause the securities covered by the
registration statement to be registered with or approved by such other
governmental agencies, authorities or self-regulatory bodies within the
United States as may be necessary to enable the seller or sellers thereof
or the underwriter or underwriters, if any, to consummate the disposition
of such Registrable Securities.
At all times after an Initial Public Offering, the Company shall file all
reports required to be filed by it under the 1933 Act and the 1934 Act and the
rules and regulations adopted by the Commission thereunder, and take such
further action as any Shareholders may
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reasonably request, all to the extent required to enable such Shareholders to be
eligible to sell Registrable Securities pursuant to Rule 144 (or any similar
rule then in effect).
The Shareholders, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection (d) of this Section
5.03, will forthwith discontinue disposition of the securities until the
Shareholders' receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (d) of this Section 5.03 or until it is advised in
writing (the "Advice") by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus, and, if so directed by the
Company, each Shareholder will, or will request the managing underwriter or
underwriters, if any, to, deliver, to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Shareholder's possession,
of the prospectus covering such securities current at the time of receipt of
such notice. In the event the Company shall give any such notice, the time
periods mentioned in subsections (a), (b) and (n) of this Section 5.03 shall be
extended by the number of days during the period from and including any date of
the giving of such notice to and including the date when each seller of
securities covered by such registration statement shall have received the copies
of the supplemented or amended prospectus contemplated by subsection (d) of this
Section 5.03 hereof or the Advice.
SECTION 5.04. Registration Expenses. (a) Subject to Section 5.02(c), in the
case of any Registration, the Company shall bear all expenses incident to the
Company's performance of or compliance with Sections 5.01, 5.02 and 5.03 of this
Agreement, including, without limitation, all Commission and stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees
and expenses, fees and expenses of compliance with securities or blue sky laws
(including, without limitation, reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), rating
agency fees, printing expenses, messenger, telephone and delivery expenses, fees
and disbursements of counsel for the Company and all independent certified
public accountants and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities (but not including any underwriting
discounts or commissions, or transfer taxes, if any, attributable to the sale of
Registrable Securities by a Piggyback Holder or Holder or fees and expenses of
more than one counsel representing the Shareholders selling Registrable
Securities under such Registration).
(b) In connection with each registration initiated hereunder (whether a
Demand Registration or a Piggyback Registration), the Company shall reimburse
the holders covered by such registration or sale for the reasonable fees and
disbursements of one law firm chosen by the holders of a majority of the number
of shares of Registrable Securities included in such registration.
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(c) The obligation of the Company to bear the expenses described in Section
5.04(b) and to reimburse the holders for the expenses described in Section
5.04(b) shall apply irrespective of whether a registration, once properly
demanded, if applicable, becomes effective, is withdrawn or suspended, or is
converted to another form of registration and irrespective of when any of the
foregoing shall occur; provided, however, that the expenses for any registration
statement withdrawn pursuant to 5.02(c) prior to its effectiveness at the
request of a Holder (unless withdrawn following and due to a Delay Notice), any
registration statement withdrawn solely at the request of a Holder, or any
supplements or amendments to a registration statement or prospectus resulting
from a misstatement furnished to the Company by a Holder, shall be borne by such
Holder.
SECTION 5.05. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Shareholder, its officers, directors, Affiliates and agents
and each Person who controls (within the meaning of the 1933 Act or the 0000
Xxx) the Shareholder, including, without limitation any general partner or
manager of any thereof, against all losses, claims, damages, liabilities and
expenses (including reasonable counsel fees and disbursements) arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any registration statement, prospectus or preliminary prospectus, or any
amendment thereof or supplement thereto, in which such Shareholder participates
in an offering of Registrable Securities or in any document incorporated by
reference therein or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the prospectus or any preliminary prospectus, in light
of the circumstances under which they were made) not misleading, except insofar
as the same are made in reliance on and in conformity with any information with
respect to such Shareholder furnished in writing to the Company by such
Shareholder expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Shareholder from whom the Person asserting such loss,
claim, damage or liability purchased the securities if it is determined that
such loss, claim, damage or liability was caused by such Shareholder's failure
to deliver to such Shareholder's immediate purchaser a current copy of the
prospectus (if the current copy of the prospectus was required by applicable law
to be so delivered) after the Company has furnished such Shareholder with a
sufficient number of copies of such prospectus. The Company will also indemnify
underwriters (as such term is defined in the 1933 Act), their officers and
directors and each Person who controls such underwriters (within the meaning of
the 0000 Xxx) to the same extent as provided above with respect to the
indemnification of the Shareholders.
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(b) Indemnification by the Shareholders. In connection with any
registration statement in which a Shareholder is participating, each such
Shareholder will furnish to the Company in writing such information and
affidavits with respect to such Shareholder as the Company reasonably requests
for use in connection with any registration statement or prospectus covering the
Registrable Securities of such Shareholder and to the extent permitted by law
agrees to indemnify and hold harmless the Company, its directors, officers and
agents and each Person who controls (within the meaning of the 1933 Act or the
0000 Xxx) the Company, against any losses, claims, damages, liabilities and
expenses arising out of or based upon any untrue statement of a material fact or
any omission to state a material fact required to be stated therein or necessary
to make the statements in the registration statement or prospectus or
preliminary prospectus (in the case of the prospectus or preliminary prospectus,
in light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission is made
in reliance on and in conformity with the information or affidavit with respect
to such Shareholder so furnished in writing by such Shareholder expressly for
use in the registration statement or prospectus; provided, however, that the
obligation to indemnify shall be several, not joint and several, among such
Shareholders and the liability of each such Shareholder shall be in proportion
to and limited to the net amount received by such Shareholder from the sale of
Registrable Securities pursuant to a registration statement in accordance with
the terms of this Agreement. The indemnity agreement contained in this Section
5.05 shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, action or proceeding if such settlement is effected without
the consent of such seller (which consent shall not be unreasonably withheld or
delayed). The Company and the holders of the Registrable Securities hereby
acknowledge and agree that, unless otherwise expressly agreed to in writing by
such holders, the only information furnished or to be furnished to the Company
for use in any registration statement or prospectus relating to the Registrable
Securities or in any amendment, supplement or preliminary materials associated
therewith are statements specifically relating to (a) transactions or the
relationship between such holder and its Affiliates, on the one hand, and the
Company, on the other hand, (b) the beneficial ownership of shares of Common
Stock by such holder and its Affiliates, (c) the name and address of such holder
and (d) any additional information about such holder or the plan of distribution
(other than for an underwritten offering) required by law or regulation to be
disclosed in any such document.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) unless in such indemnified party's reasonable judgment a conflict of
interest may exist between such indemnified and indemnifying parties with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party. The
failure to so notify the indemnifying party shall not relieve the indemnifying
party from any liability hereunder with respect to the action, except to the
extent that such indemnifying party
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is materially prejudiced by the failure to give such notice; provided, however,
that any such failure shall not relieve the indemnifying party from any other
liability which it may have to any other party. No indemnifying party in the
defense of any such claim or litigation, shall, except with the consent of such
indemnified party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any indemnified
party there may be one or more legal or equitable defenses available to such
indemnified party which are in addition to or may conflict with those available
to any other of such indemnified parties with respect to such claim, in which
event the indemnifying party shall be obligated to pay the reasonable fees and
expenses of such additional counsel or counsels; provided, however, that such
number of additional counsel must be reasonably acceptable to the indemnifying
party.
(d) Contribution. If for any reason the indemnification provided for in the
preceding paragraphs (a) and (b) of this Section 5.05 is unavailable to an
indemnified party as contemplated by the preceding paragraphs (a) and (b) of
this Section 5.05, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations. In no event shall the
liability of any selling Shareholder be greater in amount than the amount of net
proceeds received by such Shareholder upon such sale or the amount for which
such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided in paragraph (b) of this Section
5.05 had been available.
SECTION 5.06. 1934 Act Reports. The Company agrees that at all times after
it has filed a registration statement pursuant to the requirements of the 1933
Act relating to any class of equity securities of the Company, it will use its
best efforts to file in a timely manner all reports required to be filed by it
pursuant to the 1934 Act to the extent the Company is required to file such
reports. Notwithstanding the foregoing, the Company may deregister any class of
its equity securities under Section 12 of the 1934 Act or suspend its duty to
file reports with respect to any class of its securities pursuant to Section
15(d) of the 1934 Act if it is then permitted to do so pursuant to the 1934 Act
and rules and regulations thereunder.
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SECTION 5.07. Holdback Agreements. (a) Whenever the Company proposes to
register any of its equity securities under the 1933 Act for its own account
(other than on Form S-4 or S-8 or any similar successor form or another form
used for a purpose similar to the intended use of such forms) or is required to
use its best efforts to effect the registration of any Registrable Securities
under the 1933 Act pursuant to Section 5.01 or 5.02, each holder of Registrable
Securities agrees by acquisition of such Registrable Securities not to effect
any sale or distribution, including any sale pursuant to Rule 144 under the 1933
Act, or to request registration under Section 5.02 of any Registrable Securities
within 10 days prior to and 90 days (unless advised by the managing underwriter
that a longer period, not to exceed 180 days, is required, or such shorter
period as the managing underwriter for any underwritten offering may agree)
after the effective date of the registration statement relating to such
registration, except as part of such registration or unless in the case of a
private sale or distribution, the transferee agrees in writing to be subject to
this Section 5.07. If requested by such managing underwriter, each holder of
Registrable Securities agrees to execute a holdback agreement, in customary
form, consistent with the terms of this Section 5.07(a). Notwithstanding the
foregoing, no Shareholder will be restricted from selling any Registrable
Securities if such Shareholder was not able to sell all of its Registrable
Securities pursuant to such registration statement or such Shareholder and its
Affiliates beneficially own a number of shares of Common Stock as of such date
of determination equal to less than three percent (3%) of the outstanding Common
Stock of the Company.
(b) The Company agrees not to effect any sale or distribution of any of its
equity securities or securities convertible into or exchangeable or exercisable
for any of such securities within the 10 days prior to and during the 90 days
(unless advised by the managing underwriter that a longer period, not to exceed
180 days, is required, or such shorter period as the managing underwriter for
any underwritten offering may agree) beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or S-4 or any successor forms thereto), except that such restriction
shall not prohibit (i) grants of employee stock options or other issuances of
Capital Stock pursuant to the terms of a Company employee benefit plan,
issuances by the Company of Capital Stock pursuant to the exercise of such
options or the exercise of any other employee stock options outstanding on the
date hereof, (ii) the Company from issuing shares of Capital Stock in private
placements pursuant to Section 4(2) of the 1933 Act or in connection with a
strategic alliance, or (iii) the Company from publicly announcing its intention
to issue, or actually issuing, shares of Capital Stock to shareholders of
another entity as consideration for the Company's acquisition of, or merger
with, such entity. In addition, upon the request of the managing underwriter,
the Company shall use its best efforts to cause each holder of its equity
securities or any securities convertible into or exchangeable or exercisable for
any of such securities whether outstanding on the date of this Agreement or
issued at any time after the date of this Agreement (other
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than any such securities acquired in a public offering), to agree not to effect
any such public sale or distribution of such securities during such period,
except as part of any such registration if permitted, and to cause each such
holder to enter into a similar agreement to such effect with the Company.
SECTION 5.08. Participation in Registrations. No Shareholder may
participate in any Registration hereunder which is underwritten unless such
Shareholder (a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, underwriting agreements and other documents customarily required under
the terms of such underwriting arrangements.
SECTION 5.09. Remedies. Each Shareholder shall have the right and remedy to
have the provisions of Sections 5.01 and 5.02 specifically enforced by any court
having jurisdiction in the event that the Company materially breaches such
provisions, and the Company shall reimburse such Shareholder for the reasonable
costs of and expenses for counsel for such Shareholder incurred in connection
with such proceeding.
SECTION 5.10. Other Registration Rights. The Company will not grant any
Person any demand or piggyback registration rights with respect to the Capital
Stock of the Company other than registration rights that would not be in
conflict or inconsistent with the rights of the Shareholders as set forth in
this Article V.
SECTION 5.11. Rule 144. The Company shall file any reports required to be
filed by it under the 1933 Act and the 1934 Act and the rules and regulations
adopted by the Commission thereunder, and it will take such further action as
any holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the 1933 Act, to the extent required to enable
such holder to sell Registrable Securities without registration under the 1933
Act within the limitation of the exemptions provided by (i) Rule 144 under the
1933 Act, as such Rule may be amended from time to time, or (ii) any similar
rule or regulation hereafter adopted by the Commission. Notwithstanding the
foregoing, nothing in this Section 5.11 shall be deemed to require the Company
to register any of its securities pursuant to the 1934 Act.
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ARTICLE VI
RIGHTS OF HOLDERS OF CLASS A PREFERRED STOCK
SECTION 6.01. Series A Preferred Stock. For so long as Company Shareholder
or one of its Affiliates is the direct or indirect beneficial owner of at least
$10.0 million in liquidation preference of Class A Preferred Stock, the Company
will not (1) register for sale in any underwritten public offering any shares of
Common Stock beneficially owned by Sponsor and its Affiliates or (2) redeem or
repurchase any shares of Common Stock beneficially owned by Sponsor and its
Affiliates out of the proceeds of any underwritten public offering by the
Company, in any such case, without optionally redeeming or repurchasing all of
the shares of Class A Preferred Stock owned by Company Shareholder and its
Affiliates; provided, however, that if the Company has no such right to
optionally redeem or repurchase all of the shares of Class A Preferred Stock,
then the Company, at its option, may offer to purchase for cash all of the Class
A Preferred Stock held by Company Shareholder and its Affiliates at a price
equal to the liquidation preference of the Class A Preferred Stock, together
with cumulated and unpaid dividends. The provisions of this Section 6.01 will no
longer be operative once the Company has made such offer regardless of whether
or not the Company Shareholder sells any shares of Class A Preferred Stock
pursuant to such offer unless such offer is not effected because the Company
does not purchase the shares of Class A Common Stock which Company Shareholder
has requested be purchased.
SECTION 6.02. Management Fee. For so long as Company Shareholder or any of
its Affiliates is the direct or indirect beneficial owner of any Class A
Preferred Stock, Sponsor agrees that any management fee due and owning to
Sponsor by the Company will accrue but not be payable if at any time there are
cumulated and unpaid dividends in respect of the Class A Preferred Stock.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other communications to
any party, hereunder shall be in writing (including bank wire, telex, facsimile
or similar writing) and shall be given to such party at its address or telex or
facsimile number set forth on the signature pages hereof or in the relevant
Joinder Agreement or such other address or telex or facsimile number as such
party may hereafter specify in writing to the Secretary of the Company for the
purpose by notice to the party sending such communication. Each such notice,
request or other communication shall be effective (i) if given by telex or
facsimile, when such message is transmitted to the number
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specified on the signature pages to this Agreement or any Joinder Agreement,
(ii) if given by mail, three (3) business days after such communication is
deposited in the mails registered or certified, return receipt requested, with
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered at the address specified on the signature pages to this Agreement
or any Joinder Agreement.
SECTION 7.02. Binding Effect; Benefits; Entire Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended or shall be construed to give any
person other than the parties to this Agreement or their respective successors
or assigns any legal or equitable right, remedy or claim under or in respect of
any agreement or any provision contained herein. This Agreement constitutes the
entire agreement and understanding, and supersedes all prior agreements and
understandings, both oral and written, between the parties hereto relating to
the subject matter hereof.
SECTION 7.03. Waiver. Any party hereto may by written notice to the other
(a) extend the time for the performance of any of the obligations or other
actions of any other party under this Agreement; (b) waive compliance with any
of the conditions or covenants of any other party contained in this Agreement;
and (c) waive or modify performance of any of the obligations of any other party
under this Agreement. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by
any party to exercise any right or privilege hereunder shall be deemed a waiver
of such party's rights or privileges hereunder or shall be deemed a waiver of
such party's rights to exercise the same at any subsequent time or times
hereunder.
SECTION 7.04. Amendment. Other than as a result of the execution and
delivery of a Joinder Agreement, this Agreement may not be amended, modified or
supplemented in any respect except by a written instrument executed by each
Shareholder and the Company; provided that this Agreement may be amended and
restated or amended without consent of Shareholders for the addition of new
shareholders after the date hereof if such addition does not adversely affect
the rights of the Shareholders (it being agreed that the provision of demand
registration rights and piggyback registration rights and tag-along rights on an
equal basis with HIP Co-Investors will not constitute an adverse affect).
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SECTION 7.05. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or any Shareholder except as otherwise
expressly stated hereunder or with the prior written consent of each other
party. A Direct Permitted Transferee who executes a Joinder Agreement in
accordance with the provisions hereof may be assigned any rights available
hereunder (other than Section 4.06). All of the rights offered a Shareholder
under this Agreement who executes a Joinder Agreement are assignable to a
Transferee, except for the rights set forth in Sections 4.05, 4.06, 4.07, 4.08,
4.09, 4.10 and 5.02 (other than certain rights granted to CSFB pursuant to
Section 5.02). The rights set forth in Sections 4.04 and 5.02 are assignable to
a Transferee who executes a Joinder Agreement to the extent provided in Section
4.04 and 5.02(g), respectively.
SECTION 7.06. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law that would require the application of the laws of another jurisdiction, and
the parties irrevocably submit to (and waive immunity from) the jurisdiction of
the federal and state courts located in the County of New York in the State of
New York.
SECTION 7.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
state or federal court of New York (this being in addition to any other remedy
to which they are entitled at law or in equity), and each party hereto agrees to
waive in any action for such enforcement the defense that a remedy at law would
be adequate.
SECTION 7.08. Severability. If any provision of this Agreement is declared
by any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of the Agreement will not be affected and will remain in full
force and effect.
SECTION 7.09. Additional Securities Subject to Agreement. Each Shareholder
agrees that any other shares of Common Stock of the Company which it hereafter
acquires by means of a stock split, stock dividend, distribution, exercise of
options or warrants or otherwise (other than pursuant to a public offering)
whether by merger, consolidation or otherwise (including shares of a surviving
corporation into which the shares of Common Stock of the Company are exchanged
in such transaction) will be subject to the provisions of this Agree-
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ment to the same extent as if held on the date hereof, including for purposes of
constituting Registrable Securities hereunder.
SECTION 7.10. Name Change. For the benefit of Company Shareholder, the
Company agrees to change its corporate name (but not the trade names used by its
businesses) to exclude "Masco" or a derivation thereof from its corporate name
prior to consummating an Initial Public Offering of its Common Stock.
SECTION 7.11. Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
SECTION 7.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. A facsimile,
telecopy or other reproduction of this Agreement may be executed by one or more
parties hereto, and an executed copy of this Agreement may be delivered by one
or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto, all
parties hereto agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
SECTION 7.13. Termination of Certain Provisions. The provisions of this
Agreement set forth in Sections 3.01, 3.02, 4.01, 4.02, 4.03, 4.04(b) (except as
it relates to CSFB and Company Shareholder), 4.04(d) (except as it relates to
CSFB and Company Shareholder) and 4.09 will terminate and be of no force and
effect upon the occurrence of a Qualifying Public Equity Offering. The
provisions of this Agreement set forth in Sections 4.04(a) (except as it relates
to CSFB and Company Shareholder) and 4.05 will terminate and be of no force and
effect upon the occurrence of an Initial Public Offering. The provisions of this
Agreement set forth in Sections 4.04 (insofar as it relates to CSFB and Company
Shareholder), 4.06, 4.07, 4.08 and 4.10 will terminate as to a particular
Shareholder as set forth in such section.
SECTION 7.14. ERISA Matters. The Company agrees to give Sponsor the rights
set forth in Sections 4.07 and 4.08 to the extent Sponsor does not have the
ability to designate a Person to the Board of Directors of the Company and
failure to have the rights set forth in Section 4.07 or 4.08 would cause Sponsor
to have an ERISA Problem. For purposes of this Section 7.14, "ERISA Problem"
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means that the assets of Sponsor and its Affiliates would be considered "Plan
Assets" within the meaning of 29 CFR 2510.3-101 due to the fact that Sponsor and
its Affiliates do not have the rights specified in Section 4.07 or 4.08.
SECTION 7.15. Regulatory Cooperation. If any Shareholder reasonably
determines that, by reason of any existing or future federal or state rule,
regulation, guideline, order, request or directive (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful)
(collectively, a "Regulatory Requirement"), it is effectively restricted or
prohibited from holding any of the shares of Common Stock (including any shares
of Capital Stock or other securities distributable in any merger,
reorganization, readjustment or other reclassification of such shares), the
Company and the other Shareholders shall take such action as may be reasonably
necessary to permit such Shareholder to comply with such Regulatory Requirement;
provided, that no such action pursuant to this Section 7.15 shall adversely
affect the Company, the rights of the other Shareholders hereunder or the
rights, preferences, qualifications and limitations of any Capital Stock of the
Company held by the other Shareholders; provided, further that neither the
Company nor any Shareholder shall be required to purchase any of such shares of
Common Stock as a result of such Regulatory Requirement. Such reasonable action
to be taken may include the Company's authorization of one or more new classes
of non-voting common stock that is otherwise substantially identical to the
Common Stock then owned by such Shareholder and the amendment of the Company's
certificate of incorporation or any other documents or instruments executed in
connection with the shares held by such Shareholder. Such Shareholder shall give
written notice to the Company and the other Shareholders of any such
determination and the actions necessary to comply with such Regulatory
Requirement, and the Company and such other Shareholders shall take all
reasonably necessary steps to comply with such determination as expeditiously as
possible.
SECTION 7.16. Publicity. None of the parties hereto shall issue any press
release or make any public disclosure regarding the transactions contemplated
hereby unless such press release or public disclosure shall be approved by those
parties mentioned in such press release or public disclosure in advance.
Notwithstanding the foregoing, each of the parties hereto may, in documents
required to be filed by it with the Commission or other regulatory bodies, make
such statements with respect to the transactions contemplated hereby as each may
be advised by counsel is legally necessary or advisable, and may make such
disclosure as it is advised by its counsel is required by law.
SECTION 7.17. Expenses. The Company agrees, if the Transactions are
consummated, to reimburse each Qualified Investor for all reasonable
out-of-pocket expenses arising in connection with the Transactions promptly
(including, without limitation, and, in any event, within 30 days after any
invoice or
-48-
other statement or notice), including all reasonable documented fees and
expenses of counsel to such Qualified Investor incurred in connection with this
Agreement and the transactions contemplated hereby and all reasonable
out-of-pocket expenses incurred by such Qualified Investor for so long as such
Person is a Qualified Investor in connection with the monitoring of its equity
investment in the Company.
[Signature Pages Follow]
IN WITNESS WHEREOF, the Company and each Shareholder have executed this
Agreement as of the day and year first above written.
MASCOTECH, INC.
By: /s/ Xxxxx X. Liner
--------------------------------------
Name: Xxxxx X. Liner
Title: Vice President
Notices:
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chairman of the Board and
General Counsel
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
MASCO CORPORATION
By: Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
Notices:
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chairman of the Board and
General Counsel
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
XXXXXXX X. XXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Notices:
Xxxxxxx X. Xxxxxxxxx
c/o Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
XXXXXXX AND XXXX XXXXXXXXX FOUNDATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Notices:
Xxxxxxx and Xxxx Xxxxxxxxx Foundation
c/o Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Xx., Esq.
c/o Masco Corp.
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
Notices:
Heartland Industrial Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
and
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (FF), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
Notices:
Heartland Industrial Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
and
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (E1), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member:
Notices:
Heartland Industrial Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
and
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (K1), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
Notices:
Heartland Industrial Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
and
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (C1), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member:
Notices:
Heartland Industrial Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
and
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
LONG POINT CAPITAL FUND, L.P.
By: /s/ Xxx Xxxxx
---------------------------------------
Name: Xxx Xxxxx
Title: Managing Director
Notices:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
LONG POINT CAPITAL PARTNERS, L.L.C.
By: /s/ Xxx Xxxxx
---------------------------------------
Name: Xxx Xxxxx
Title: Managing Director
Notices:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
CRM 1999 ENTERPRISE FUND, LLC
By: /s/ Xxx Xxxxxxxx
---------------------------------------
Name: Xxx Xxxxxxxx
Title: Exec. VP of Managing Member
Notices:
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
KLEINWORT XXXXXX HOLDINGS, INC.
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Authorized Person
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Authorized Person
Notices:
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxx
Xxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
With a copy to
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
00 XXXX XXXXXX ASSOCIATES, LLC
By: Kleinwort Xxxxxx (USA), Inc.
Its: Attorney-in-Fact
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Authorized Person
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Authorized Person
Notices:
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxx
Xxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
With a copy to
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
METROPOLITAN LIFE INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
Notices:
Metropolitan Life Insurance Company
Corporate Equities
000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Metropolitan Life Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
(Law, Area 6H)
Facsimile: (000) 000-0000
and
Metropolitan Life Insurance Company
0000 Xxx Xxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx XxXxxxx - Securities
Accounting
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
FIRST UNION CAPITAL PARTNERS, LLC
By: /s/ A. Xxxxxxxx Xxxxx
---------------------------------------
Name: A. Xxxxxxxx Xxxxx
Title: Principal
Notices:
First Union Capital Partners
One First Union Center, 12th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: A. Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: SVP
Notices:
GE Capital Equity Investments, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
CREDIT SUISSE FIRST BOSTON
U.S. EXECUTIVE ADVISORS, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-Fact
Notices:
Credit Suisse First Boston
U.S. Executive Advisors, L.P.
c/o Credit Suisse First Boston Advisory
Partners, LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
CREDIT SUISSE FIRST BOSTON EQUITY
PARTNERS (BERMUDA), L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-Fact
Notices:
Credit Suisse First Boston Equity Partners
(Bermuda), L.P.
c/o Credit Suisse First Boston Advisory
Partners, LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
CREDIT SUISSE FIRST BOSTON
EQUITY PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-Fact
Notices:
Credit Suisse First Boston Equity
Partners, L.P.
c/o Credit Suisse First Boston Advisory
Partners, LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
EMA PARTNERS FUND 2000, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-Fact
Notices:
EMA Partners Fund 2000, L.P.
c/o Credit Suisse First Boston Advisory
Partners, LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
EMA PRIVATE EQUITY FUND 2000, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Attorney-in-Fact
EMA Private Equity Fund 2000, L.P.
c/o Credit Suisse First Boston Advisory
Partners, LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
MERCHANT CAPITAL, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Merchant Capital, Inc.
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
HIP CO-INVESTOR:
BANCBOSTON CAPITAL INC.
By: /s/ Xxxx X. XxXxxxx
---------------------------------------
Name: Xxxx X. XxXxxxx
Title: Managing Director
Notices:
BancBoston Capital Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
PRIVATE EQUITY PORTFOLIO FUND II, LLC
By: Fleet Bank, NA, its Manager
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
Notices:
BancBoston Capital Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
EXHIBIT A
JOINDER AGREEMENT
WHEREAS, the undersigned is acquiring simultaneously with the execution of
this Agreement common stock (the "Common Stock"), par value $1.00 per share of
MascoTech, Inc. (the "Company"); and
WHEREAS, as a condition to the acquisition of the Common Stock, the
undersigned has agreed to join in a certain Stockholders Agreement (the
"Stockholders Agreement") dated as of November 28, 2000 among MascoTech, Inc.
and the Shareholders (as such term is defined in the Stockholders Agreement);
and
WHEREAS, the undersigned understands that execution of this Agreement is a
condition precedent to the acquisition of the Common Stock;
NOW, THEREFORE, as an inducement to both the transferor of the Common Stock
and the other Shareholders (as such term is defined in the Stockholders
Agreement), to Transfer (as such term is defined in the Stockholders Agreement)
and to allow the Transfer of the Common Stock to the undersigned, the
undersigned agrees as follows:
1. The undersigned hereby joins in the Stockholders Agreement and agrees to
be bound by the terms and provisions of the Stockholders Agreement as provided
by the Stockholders Agreement.
2. The undersigned hereby consents that the certificate or certificates to
be issued to the undersigned representing the Common Stock shall be legended as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, OR (ii) AN APPLICABLE EXEMPTION
FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT TO CLAUSE (ii) OF THE
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH EXEMPTION FROM
REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE
TERMS AND CONDITIONS, INCLUDING WITH RESPECT TO THE DIRECT OR INDIRECT
TRANSFER THEREOF, OF A SHAREHOLDERS AGREEMENT DATED AS OF NOVEMBER 28,
2000. THE SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER
-2-
THINGS, SIGNIFICANT RESTRICTIONS ON TRANSFER OF THE SECURITIES OF THE
COMPANY. A COPY OF THE SHAREHOLDERS AGREEMENT IS AVAILABLE UPON REQUEST
FROM THE COMPANY."
IN WITNESS WHEREOF, the undersigned has executed this Agreement this ____
day of _______________, 20__.
----------------------------------------
Name:
Title:
Address:
EXHIBIT B
Representatives of CSFB
Xxxxxxx X. Xxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
Xxx Xxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
Xxx Xxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
SCHEDULE 2.04
Shareholder Common Shares
Heartland Entities 12,261,251
Xxxxxxx Xxxxxxxxx 621,170*
Xxxxxxx and Xxxx Xxxxxxxxx Foundation 661,260
Masco Corporation 2,492,248
Kleinwort Xxxxxx Holdings, Inc. 591,716
00 Xxxx Xxxxxx Associates LLC 295,858
Metropolitan Life Insurance Company 591,716
First Union Capital Partners LLC 1,479,290
GE Capital Equity Investments Inc. 591,716
Credit Suisse First Boston Equity Partners, L.P. 6,247,530
Credit Suisse First Boston Equity Partners, (Bermuda) L.P. 1,746,345
Credit Suisse First Boston U.S. Executive Advisors, L.P. 5,558
EMA Partners Fund 2000, L.P. 533,168
EMA Private Equity Fund 2000, L.P. 343,139
Merchant Capital, Inc. 177,515
BancBoston Capital Inc. 769,231
Private Equity Portfolio Fund II, LLC 118,343
___________
* Exclusive of 49,215 shares of restricted stock that will vest on the
closing date of the Transactions (assuming no cash elections) and 147,645
shares of unvested restricted stock.
-2-
Shareholder Common Shares
Long Point Capital Fund L.P. 581,025
Long Point Capital Partners LLC. 10,692
CRM Enterprises Fund, LLC 59,172
