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EXHIBIT 10.11
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of January 31,
2003, is entered into by and among Viasystems Group, Inc., a Delaware
corporation (the "Company"), the other parties who are a signatory of the
Agreement on the signature pages hereto and all parties that, from time to time,
hereafter became a party hereto in accordance with the terms hereof
(collectively, "Stockholders").
Pursuant to, and in consideration of the obligations of the Company and
Stockholders under, the Plan and the Plan Documents (as hereinafter defined),
the premises, mutual covenants and agreements hereinafter contained and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
"9% Preference Shares" means the shares of 9% Class B Senior Convertible
Preferred Stock of the Company, par value $0.01 per share.
"9% Preference Shares Authorization" means the Certificate of Designation,
Preferences and Relative, Participating, Optional and Other Special Rights, and
Qualifications, Limitations and Restrictions of the 9% Preference Shares.
"Accredited Investor" means an "accredited investor," as defined in
Regulation D promulgated under the Securities Act.
"Actual Liquidation" shall mean an actual liquidation or other winding-up
of the Company yielding a dissolution thereof of the nature effected under
Section 275 of the Delaware General Corporation Law; provided, however, that an
Actual Liquidation shall not be deemed to result solely from (i) any merger,
consolidation, business combination, reorganization, recapitalization or similar
action with respect to the Company or (ii) any sale, lease or other disposition
of the assets of the Company.
"Advice" shall have the meaning provided in Section 2.6 hereof.
"Affiliate" means, with respect to any Person, any Person who, directly or
indirectly, controls, is controlled by or is under common control with that
Person.
"Agreed Designees" shall have the meaning provided in Section 4.1.l(c)
hereof.
"Agreement" means this Stockholders Agreement, as such from time to time
may be amended.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in
title 11 of the United States Code, 11 U.S.C. Sections ~ l01 et. seq., as now in
effect or hereafter amended.
"Board" means the board of directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York City, New
York or Dallas, Texas are not required to be opened.
"Capitalized Lease Obligations" means, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Common Demand Holders" means Holders effecting a Common Demand Request
pursuant to Section 2.1.1(a) hereof.
"Common Demand Registration" shall have the meaning provided in Section
2.1.1(a)(i) hereof.
"Common Demand Request" means (i) a request for registration pursuant to
Sections 2.1.1(a)(i) or (ii) hereof or (ii) a request for an underwritten
takedown pursuant to Section 2.1.1(a)(ii) hereof, as applicable.
"Common Demand Shelf Registration" shall have the meaning provided in
Section 2.1.1(a)(ii) hereof.
"Common Registrable Amount" means 30%, 15% or 10%, as applicable, of
Original Common Shares as necessary to effect a Common Demand Registration, a
Common Demand Shelf Registration or an underwritten takedown under a Common
Demand Shelf Registration pursuant to Section 2.1 hereof.
"Common Registrable Shares" means, at any time, all of the Common Stock
owned by Holders, whether owned on the date hereof or acquired hereafter,
including without limitation shares issuable upon the conversion of 9%
Preference Shares held by the Holders thereof, as part of any Additional
Securities and upon the conversion, exchange or exercise of any Additional
Securities, or otherwise, and any other securities issued or issuable with
respect to such shares of Common Stock by way of a stock dividend, a stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation, reorganization or spin off; provided, however, that Common
Registrable Shares shall not include any shares of Common Stock (i) (A) the sale
of which has been registered pursuant to the Securities Act and which shares
have been sold pursuant to such registration, (B) that have been sold on any
U.S. national securities exchange on which the Common Stock (or American
Depositary Receipts for Common Stock) are then listed, pursuant to Rule 144
promulgated under the Securities Act or otherwise or (C) that have been sold,
transferred, or disposed of by a Holder to a Person that is not (x) an Affiliate
of such Holder, (y) another Holder or (z) an Affiliate of another Holder, and
such Person may immediately thereafter freely transfer such Common Registrable
Shares without restriction under the applicable securities laws of the United
States, (ii) held by a Holder if (A) the total number of shares of Common Stock
(including all shares of Common Stock issuable upon conversion of 9% Preference
Shares) distributed to such Holder pursuant to the Plan and purchased by such
Holder pursuant to the Rights Offering, together with the total number of shares
of Common Stock (including all shares of Common Stock issuable upon conversion
of 9% Preference Shares) held by any other Holder whose shares would be
aggregated with such Holder pursuant to Rule 144 promulgated under the
Securities Act, is less than 1% of the outstanding shares of Common
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Stock, (B) Rule 144 promulgated under the Securities Act is available to exempt
sales of securities of the Company by such Holder from the registration
requirements of Section 5 of the Securities Act and (C) the applicable Holder is
not otherwise deemed to be an underwriter under Section 1145(b) of the
Bankruptcy Code or (iii) transferred by any Holder to any transferee who is not
entitled to the benefits of this Agreement as contemplated by Section 7.5
hereof.
"Common Requesting Group" shall have the meaning provided in Section
2.1.1(d) hereof.
"Common Requesting Holders" means Holders submitting a Common Demand
Request and all Holders requesting inclusion in such registration or
underwritten takedown, as applicable, pursuant to Section 2.1.1 hereof.
"Common Shelf Demand Holders" shall have the meaning provided in Section
2.1.1(a)(ii) hereof.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company, and any shares or capital stock for or into which such common stock
hereafter is exchanged, converted, reclassified or recapitalized by the Company
or pursuant to an agreement to which the Company is a party.
"Common Stock Equivalents" means, without duplication with any other
Common Stock or Common Stock Equivalents, any rights, warrants, options,
convertible securities or indebtedness, exchangeable securities or indebtedness,
or other rights, exercisable for or convertible or exchangeable into, directly
or indirectly, Common Stock of the Company and securities convertible or
exchangeable into Common Stock of the Company, whether at the time of issuance
or upon the passage of time or the occurrence of some future event.
"Company" shall have the meaning set forth in the introductory paragraph
hereof.
"Company Conversion" shall have the meaning provided in Section 2.1.6
hereof.
"Credit Agreement" means the Credit Agreement dated January 31, 2003,
among the Company, Viasystems, Inc., the several banks and other financial
institutions from time to time parties thereto and JPMorgan Chase Bank, as
administrative agent, as the same may be amended or replaced through refinancing
from time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuations in currency values.
"Current Market Price," when used with reference to shares of Common Stock
or other securities on any date, shall mean the average of the daily market
prices for the 30 consecutive Trading Days preceding such date (subject to
equitable adjustment in the event of any stock dividends, splits, reverse
splits, combinations, reclassifications and similar actions). The daily market
price for each such Trading Day shall be: (i) the last sale price on such day on
the principal stock exchange or the NASDAQ National Market on which such Common
Stock is then listed or admitted to trading; or (ii) if no sale takes place on
such day on any such exchange or market; or (iii) if the Common Stock is not
listed or admitted to trading on a principal stock exchange or the NASDAQ
National Market, the average of the bid and asked prices for the Common Stock as
furnished for such day by NASDAQ, or, if not furnished by NASDAQ, by any
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New York Stock Exchange, Inc. member firm regularly making a market in the
Common Stock and selected for such purpose by the Board. If the Common Stock or
other securities are not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder, the Current
Market Price shall be deemed to be the Fair Market Value of such Common Stock or
other security.
"Demand Holder" means a Common Demand Holder and/or a Preference Demand
Holder, as applicable.
"Demand Registration" means a Common Demand Registration, a Common Demand
Shelf Registration and/or a Preference Demand Shelf Registration, as applicable.
"Demand Request" means a Common Demand Request and/or a Preference Demand
Request, as applicable.
"Distribution Date" means as of any date of determination (i) with respect
to Xxxxx Muse, the most recent date on which HM Plan Voting Securities were
distributed to Xxxxx Muse pursuant to the Plan and (ii) with respect to the NHM
Subordinated Noteholders, the most recent date on which NHMSN Plan Voting
Securities were distributed to the NHM Subordinated Noteholders.
"DTI Guaranty Claim" shall have the meaning ascribed to such term in the
Plan.
"Effective Date" shall have the meaning ascribed to such term in the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Excluded Registration" means a registration under the Securities Act of
(i) securities registered on Form S-8 or any similar successor form and (ii)
securities registered on Form S-4 or any similar successor form.
"Exempt Issuances" shall have the meaning provided in Section 3.1.2
hereof.
"Fair Market Value" shall mean, with respect to any security or asset, the
amount that a willing buyer would pay an unaffiliated willing seller in an
arm's-length transaction to acquire ownership of such asset, with neither being
under any compulsion to buy or sell, and both having reasonable knowledge of all
relevant facts and taking into account all relevant circumstances and
information, including market treatment of similar businesses, historical
operating results and projections for future periods, as determined in good
faith by the Board.
"Fully-Diluted Common Stock" means, at any time, the then outstanding
Common Stock plus (without duplication) all shares of Common Stock issuable,
whether at such time or upon the passage of time or the occurrence of future
events, upon the exercise, conversion, or exchange of all then outstanding
Common Stock Equivalents; provided, however, that shares of Common Stock
issuable upon exercise of the New Warrants shall not be included in any
determination of "Fully-Diluted Common Stock" if, as of the date of such
determination, the Current Market Price of the Common Stock is less than 90% of
the exercise price of the New Warrants as of such date.
"GAAP" shall mean United States generally accepted accounting principles,
applied on a consistent basis for the periods involved.
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"Xxxxx Muse" means collectively, Hicks, Muse, Xxxx & Xxxxx Equity Fund
III, L.P., HM3 Coinvestors, L.P., HMTF Equity Fund IV (1999), L.P., HMTF Private
Equity Fund IV (1999), L.P., Xxxxx Muse PG-IV (1999), C.V., HM 4-SBS (1999)
Coinvestors, L.P., HM 4-EQ (1999) Coinvestors, L.P., Pearl Street, L.P., and
Pearl Street II, L.P., and HMTF.
"HM Designees" shall have the meaning provided in Section 4.1.1(c) hereof.
"HM Plan Voting Securities" means shares of Common Stock and 9% Preference
Shares distributed to Xxxxx Muse pursuant to the Plan or purchased by Xxxxx Muse
pursuant to the Rights Offering.
"HMTF" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a Texas corporation.
"Holder" shall mean a Stockholder and shall include all direct or indirect
transferees of such Stockholder who shall become a party to this Agreement, and
each subsequent transferee of any such Holder who shall become a party to or
otherwise agree to be bound by this Agreement. "Holders" shall mean all Holders
collectively. At all times that there is more than one Holder, except as
otherwise specifically set forth in this Agreement, any notices, designations,
consents, or similar actions to be taken by the Holders hereunder shall be taken
as provided in Section 4.5.
"Immediate Family" means the spouse of an individual and the grandparents,
parents, siblings and children (and children and spouses of any of the
foregoing) of the individual or his or her spouse. An adopted child will be
treated as the child of his or her adoptive parent or parents if (but only if)
he or she was adopted before he or she reached 21 years of age.
"Incentive Option Plan" shall have the meaning ascribed to such term in
the Plan.
"Indebtedness" shall mean with respect to any Person, without duplication,
any liability of such Person (i) for borrowed money, (ii) incurred or assumed as
the deferred purchase price of property or services (but excluding trade
accounts payable arising in the ordinary course of business), (iii) evidenced by
notes, bonds, debentures or other similar instruments, (iv) pursuant to
conditional sale obligations and title retention agreements (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession of such property), (v) constituting
Capitalized Lease Obligations, (vi) for the reimbursement of any obligor on any
banker's acceptance, letter of credit or similar credit transaction, (vii) the
liquidation value of all mandatorily redeemable preferred Capital Stock of such
Person (excluding the 9% Preference Shares and the Junior Preferred Stock),
(viii) for Indebtedness of others guaranteed by such Person, (ix) for Interest
Swap Obligations and Currency Agreements and (x) for Indebtedness of any other
Person of the type referred to in clauses (i) through (ix) which is secured by
any Lien on any property or asset of such first referred to Person, the amount
of such Indebtedness being deemed to be the lesser of the value of such property
or asset or the amount of the Indebtedness so secured. The amount of
Indebtedness of any Person at any date shall be (A) the outstanding principal
amount of all unconditional obligations described above, as such amount would be
reflected on a balance sheet prepared in accordance with GAAP, and (B) with
respect to all contingent obligations described above, the maximum liability as
of such date of such Person for any guarantees of Indebtedness for borrowed
money of any other Person and the amount required under GAAP to be accrued with
respect to any other contingent obligation. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.
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"Initial Public Offering" shall mean the initial underwritten public
offering of Common Stock by the Company pursuant to a registration statement
effective under the Securities Act after the Effective Date.
"Inspectors" shall have the meaning provided in Section 2.5(i) hereof
"Interest Swan Obligations" shall mean the obligations of any Person under
any interest rate protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other interest rate hedge or
arrangement.
"Issue Date" shall have the meaning ascribed to such term under the 9%
Preference Shares Authorization.
"Junior Preference Shares" means shares of Class A Junior Preferred Stock
of the Company, par value $0.01 per share.
"Junior Preference Shares Authorization" means the Certificate of
Designation, Preferences and Relative, Participating, Optional and Other Special
Rights, and Qualifications, Limitations and Restrictions of the Junior
Preference Shares.
"Junior Shares" means shares of "Junior Stock," as such term is defined in
the 9% Preference Shares Authorization.
"Liens" shall mean liens, pledges, claims, security interests,
restrictions, mortgages, tenancies and other possessing interests, conditional
sale or other title retention agreements, assessments, easements, rights of way,
covenants, restrictions, rights of first refusal, defects in title,
encroachments and other burdens, options or encumbrances of any kind.
"Majority Interest" shall have the meaning provided in Section 4.5(a)
hereof.
"Material Adverse Effect" shall have the meaning provided in Section 2.1.4
hereof.
"NASD" shall have the meaning provided in Section 2.5(n) hereof.
"NASDAQ" shall have the meaning provided in Section 2.5(1) hereof.
"New Warrants" shall have the meaning ascribed to such term in the Plan.
"NHM Subordinated Noteholders" means holders of Subordinated Notes (other
than Xxxxx Muse) that are a party to this Agreement.
"NHMSN Plan Voting Securities" means shares of Common Stock and 9%
Preference Shares distributed to the NHM Subordinated Noteholders pursuant to
the Plan or purchased by the NHM Subordinated Noteholders pursuant to the Rights
Offering.
"NYSE" means the New York Stock Exchange.
"Original Common Shares" means the number of Common Shares (including
shares of Common Stock issuable upon conversion of the 9% Preference Shares)
distributable pursuant to the Plan (including pursuant to the Rights Offering).
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"Original Preference Shares" means the number of Junior Preference Shares
distributable pursuant to the Plan.
"Parity Shares" means shares of "Parity Stock," as such term is defined in
the 9% Preference Shares Authorization.
"Parity Dividend Shares" means shares of "Parity Dividend Stock," as such
term is defined in the 9% Preference Shares Authorization.
"Parity Liquidation Shares" means shares of "Parity Liquidation Stock," as
such term is defined in the 9% Preference Shares Authorization.
"Permitted Indebtedness" shall mean, without duplication, (i) Indebtedness
of the Company or a Subsidiary incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $510.5 million;
(ii) any Indebtedness outstanding on the date of this Agreement; (iii) Interest
Swap Obligations; provided, that such Interest Swap Obligations are entered into
to protect the Company from fluctuations in interest rates of its Indebtedness;
(iv) obligations under Currency Agreements; provided, that such Currency
Agreements are entered into to protect the Company from fluctuations in currency
values, respectively; (v) Refinancing Indebtedness; (vi) Indebtedness owed by
the Company to any wholly owned Subsidiary of the Company or by any Subsidiary
of the Company to the Company or any wholly owned Subsidiary of the Company;
(vii) Indebtedness in respect of performance bonds, letters of credit, bankers'
acceptances and surety or appeal bonds provided by the Company or any of its
Subsidiaries to their customers in the ordinary course of their business; and
(viii) any additional Indebtedness, including, without limitation, Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, in each case incurred for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of property
used in a related business or incurred to refinance any such purchase price or
cost of construction or improvement, in each case incurred no later than 365
days after the date of such acquisition or the date of completion of such
construction or improvement; provided, however, that the principal amount of any
additional Indebtedness incurred pursuant to this clause (ix) shall not exceed
$75 million at any time outstanding.
"Person" or "person" shall mean any individual, firm, partnership, company
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
"Piggyback Registration" shall have the meaning provided in Section 2.3.1
hereof.
"Plan" means the Prepackaged Joint Plan of Reorganization under chapter 11
of the Bankruptcy Code of the Company and Viasystems, Inc., a Delaware
Corporation, Case Nos. 02-14867 and 02-14868.
"Plan Documents" shall mean (i) that certain Lockup Agreement, dated as of
August 29, 2002, by and among the Company, Viasystems, Inc., and the holders of
claims against the Company and/or Viasystems, Inc. signatory thereto; (ii) that
certain Subscription and Conversion Commitment Agreement, dated as of August 29,
2002, by and among the Company, Viasystems, Inc., Pearl Street, L.P. and Pearl
Street II, L.P.; (iii) that certain Subscription and Standby Commitment
Agreement by and among TCW, the Company and Viasystems, Inc., dated as of August
29, 2002; and (iv) that certain Subscription and Standby Commitment Agreement by
and among GSC, the Company and Viasystems, Inc., dated as of August 29, 2002.
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"Preemptive Rights Offer" shall have the meaning provided in Section 3.1.1
hereof.
"Preemptive Rights Offer Notice" shall have the meaning provided in
Section 3.1.1 hereof.
"Preemptive Rights Transaction" shall have the meaning provided in Section
3.1.1 hereof.
"Preference Demand Holders" shall mean Holders effecting a Preference
Demand Request pursuant to Section 2.2.1(a) hereof.
"Preference Demand Request" shall mean (i) a request for registration
pursuant to Sections 2.2.1(a)(i) or (ii) or (ii) a request for a takedown
pursuant to Section 2.2.1(a)(iii), as applicable, hereof.
"Preference Demand Shelf Registration" shall have the meaning provided in
Section 2.2.1(a)(i) hereof.
"Preference Registrable Amount" shall mean 20% or 10%, as applicable, of
Original Preference Shares as necessary to effect a Preference Demand Shelf
Registration pursuant to Sections 2.2.1(a)(i) or (ii) hereof.
"Preference Registrable Shares" means, at any time, the Junior Preference
Shares owned by Holders, whether owned on the date hereof or acquired hereafter,
and any other securities issued or issuable with respect to such Junior
Preference Shares by way of a stock dividend, a stock split or in connection
with a combination of shares, recapitalization, merger, consolidation,
reorganization or spin off; provided, however, that Preference Registrable
Shares shall not include any Junior Preference Shares (i) (A) the sale of which
has been registered pursuant to the Securities Act and which shares have been
sold pursuant to such registration, (B) that have been sold on any U.S. national
securities exchange on which the Junior Preference Shares (or American
Depositary Receipts for Junior Preference Shares) are then listed, pursuant to
Rule 144 promulgated under the Securities Act or otherwise or (C) that have been
sold, transferred, or disposed of by a Holder to a Person that is not (x) an
Affiliate of such Holder, (y) another Holder or (z) an Affiliate of another
Holder, and such Person may immediately thereafter freely transfer such
Preference Registrable Shares without restriction under the applicable
securities laws of the United States or (ii) transferred by any Holder to any
transferee who is not entitled to the benefits of this Agreement as contemplated
by Section 7.5 hereof.
"Preference Requesting Holders" shall mean all Holders submitting a
Preference Demand Request and all Holders requesting inclusion in such
registration pursuant to Section 2.2.1 hereof.
"Preferred Stock" of any Person shall mean any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Proportionate Percentage" means, with respect to any Holder as of any
date, the result (expressed as a percentage) obtained by dividing (i) the number
of shares of Fully-Diluted Common Stock owned by such Holder as of such date by
(ii) the total number of shares of Fully-Diluted Common Stock outstanding as of
such date, excluding for each of (i) and (ii), shares of
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Common Stock issuable upon exercise of Common Stock Equivalents granted pursuant
to the Incentive Option Plan.
"Pro Rata Basis" means a pro rata allocation based on the number of Common
Registrable Shares or Preference Registrable Shares, as applicable, requested to
be included in a registered offering pursuant to this Agreement.
"Qualified Public Offering" means an underwritten public offering of
Common Stock by the Company pursuant to a registration statement effective under
the Securities Act after the Effective Date in which the gross proceeds to the
Company (before deducting expenses and underwriters discounts and commissions)
are equal to or greater than $414 million (or such lower amount as HMTF and a
Majority Interest of the NHM Subordinated Noteholders shall approve).
"Records" shall have the meaning provided in Section 2.5(j) hereof.
"Refinancing Indebtedness" shall mean any refinancing by the Company of
Indebtedness of the Company or any of its Subsidiaries that does not (i) result
in an increase in the aggregate principal amount of Indebtedness (such principal
amount to include, for purposes of this definition, any premiums, penalties or
accrued interest paid with the proceeds of the Refinancing Indebtedness) of such
Person or (ii) create Indebtedness with (a) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being refinanced or (b) a final maturity earlier than the final maturity of the
Indebtedness being refinanced.
"Registrable Shares" means Common Registrable Shares and/or Preference
Registrable Shares, as applicable.
"Registration Expenses" shall have the meaning provided in Section 2.7
hereof.
"Required Filing Date" means 45 days after the Company received a Common
Demand Request or a Preference Demand Request, as applicable.
"Rights Offering" means the offering of rights to purchase 9% Preference
Shares as described in the Plan.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Seller Affiliates" shall have the meaning provided in Section 2.8(a)
hereof.
"Selling Piggyback Holders" shall have the meaning provided in Section
2.3.2(b) hereof.
"Senior Shares" shall mean shares of "Senior Stock," as that term is
defined in the 9% Convertible Preference Shares Authorization.
"SN Designees" shall have the meaning provided in Section 4.1.1(c) hereof.
"Stockholders" shall have the meaning set forth in the introductory
paragraph hereof.
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"Subordinated Notes" shall have the meaning ascribed to such term in the
Plan.
"Subsidiary" of any Person means (i) a corporation a majority of whose
outstanding shares of capital stock or other equity interests with voting power,
under ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by such Person, by one or more subsidiaries of such Person or
by such Person and one or more subsidiaries of such Person, and (ii) any other
Person (other than a corporation) in which such Person, a subsidiary of such
Person or such Person and one or more subsidiaries of such Person, directly or
indirectly, at the date of determination thereof, has (x) at least a majority
ownership interest or (y) the power to elect or direct the election of the
directors or other governing body of such Person.
"Suspension Notice" shall have the meaning provided in Section 2.6 hereof.
"Trading Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for trading
on the NYSE, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities exchange, on The Nasdaq Stock Market, or if such
securities are not quoted on The Nasdaq Stock Market, in the applicable
securities market in which the securities are traded.
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
Section 1.2 Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions; and
(5) "herein," "thereof' and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE 2
REGISTRATION RIGHTS
Section 2.1 Common Demand Registration.
2.1.1 Request for Registration.
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(a) The Holders shall be entitled to make certain
demands on the Company with respect to its or their Common Registrable Shares as
follows:
(i) At any time after the third anniversary of the
Effective Date, Holders of Common Registrable Shares that represent at least 30%
of the Original Common Shares, and at any time after the earlier of (1) the
Initial Public Offering or (2) the date on which the Company otherwise has any
class of equity securities registered under Section 12(b) or 12(g) of the
Exchange Act, the Holders of Common Registrable Shares that represent at least
15% of the Original Common Shares, may request the Company, in writing, to
effect the registration under the Securities Act of all or part of its or their
Common Registrable Shares (a "Common Demand Registration") on Form S-3 or any
successor form (or, if Form S-3 or such successor form is not then available to
the Company, Form S-1, or any successor form); provided, that the Common
Registrable Shares proposed to be sold by the Common Requesting Holders pursuant
to such Common Demand Registration represent, in the aggregate, at least the
Common Registrable Amount applicable to such Common Demand Registration. Subject
to Section 2.1.5(b) hereof, the Company shall not be obligated to affect more
than three such Common Demand Registrations; provided, that each of (i) Xxxxx
Muse and its Affiliates, collectively, and (ii) the NHM Subordinated
Noteholders, collectively, shall be entitled to exercise at least one Common
Demand Request pursuant to this Section 2.1.1(a)(i). A Common Demand Shelf
Registration may not be demanded pursuant to this Section 2.1.1(a)(i).
(ii) At any time after the Company is entitled to
effect a registration of Common Stock on Form S-3 (or any successor form) under
the Securities Act, Holders of Common Registrable Shares that represent at least
10% of the total number of Original Common Shares ("Common Shelf Demand
Holders") may request the Company, in writing, to effect a registration under
the Securities Act of all or part of its or their Common Registrable Shares (a
"Common Demand Shelf Registration") on a shelf registration statement pursuant
to Rule 415 promulgated under the Securities Act covering the resale of such
Common Registrable Shares; provided, that the number of Common Registrable
Shares to be included in such Common Demand Shelf Registration by the Common
Requesting Holders represent, in the aggregate, at least 10% of the total number
of Original Common Shares. Upon effectiveness of a Common Demand Shelf
Registration, Holders whose Common Registrable Shares are included in such
Common Demand Shelf Registration may from time to time cause the Company, by
written notice to the Company, to effect a "takedown" of Common Registrable
Shares included in such Common Demand Shelf Registration; provided, that the
Common Registrable Shares requested to be included in a takedown that is
pursuant to an underwritten offering by the Common Requesting Holders represent,
in the aggregate, at least 10% of the Original Common Shares. The Company shall
not be required to effect a Common Demand Registration with respect to any
Common Registrable Shares that are included in an effective Common Demand Shelf
Registration at the time the Common Demand Request for such Common Demand
Registration is received by the Company.
(b) Each Common Demand Request shall specify the number of
Common Registrable Shares proposed to be sold and the intended method of
disposition thereof. Subject to Section 2.9 hereof, the Company shall use its
commercially reasonable efforts to file the Common Demand Registration or Common
Demand Shelf Registration, as applicable, by the Required Filing Date, to cause
the same to be declared effective by the SEC as promptly as practicable after
such filing, and, with respect to a Common Shelf Demand Registration, to
maintain the effectiveness of any such shelf registration statement continuously
for two years or such shorter period of time that shall terminate the day after
the date on which all of the shares of
11
Common Stock that are Common Registrable Shares and are covered by the Common
Demand Shelf Registration have been sold pursuant to the shelf registration
statement or the first day on which there shall cease to be any Common
Registrable Shares held by the Holders whose Common Registrable Shares are
included in the Common Demand Shelf Registration.
(c) (i) The Company shall not be obligated to file a
registration statement relating to a registration request under this Section 2.1
or effect an underwritten takedown of Common Registrable Shares under a Common
Demand Shelf Registration more frequently than once in any six month period or
within a period of six months after the effective date of any other registration
statement of the Company other than an Excluded Registration or any registration
statement filed at the request or on behalf of, or for the benefit of, another
securityholder of the Company (other than pursuant to this Section 2.1) that is
not an underwritten offering or, if such registration is an underwritten
offering, in which Holders were not entitled to include all Common Registrable
Shares requested to be included therein and sell concurrently with such
securities sold pursuant to such registration all Common Registrable Shares
covered by an effective Common Demand Shelf Registration and (ii) the Company
shall not be obligated to file a registration statement relating to a
registration request under this Section 2.1 if the Company shall at the time
have effective a shelf registration pursuant to which Common Demand Holders that
requested registration could effect the disposition of their Common Registrable
Shares in the manner requested.
(d) The Common Registrable Amount requirement shall not
apply to any Common Demand Shelf Registration made by (i) Xxxxx Muse or (ii) the
NHM Subordinated Stockholders (each a "Common Requesting Group"), as applicable,
if all members of the Common Requesting Group and its Affiliates who hold Common
Registrable Shares request inclusion therein of all Common Registrable Shares
then held by them that are not otherwise included in another effective
registration statement.
2.1.2 Effective Registration and Expenses. A registration will not
count as a Common Demand Registration until it has become effective (unless (a)
(i) the Common Requesting Holders shall have made a written request for a
registration which is subsequently withdrawn by the Common Requesting Holders
with respect to a number of Common Registrable Shares such that the number of
Common Registrable Shares requested to be included in such registration
statement is less than a Common Registrable Amount after the Company has filed a
registration statement with the SEC in connection therewith, (ii) the Company
has performed its obligations hereunder in all material respects and (iii) there
has not been any event, change or effect which, individually or in the
aggregate, has had or would be reasonably likely to have a material adverse
effect on the business, operations, prospects, assets, condition (financial or
otherwise) or results of operations of the Company, or (b) such registration
statement is not declared effective solely as a result of the failure of the
Common Requesting Holders to take all actions reasonably required in order to
have the registration and the related registration statement declared effective
by the SEC, in which case such demand will count as a Common Demand Registration
unless the Common Requesting Holders pay all Registration Expenses, as
hereinafter defined, in connection with such withdrawn registration); provided,
that if, after it has become effective, an offering of Common Registrable Shares
pursuant to a registration is interfered with by any stop order, injunction, or
other order or requirement of the SEC or other governmental agency or court,
such registration will be deemed not to have been effected and will not count as
a Common Demand Registration, unless such order, injunction or requirement shall
have been imposed solely as a result of the actions of the Common Requesting
Holders or the failure of the Common Requesting Holders to take all actions
reasonably required in order to prevent such
12
imposition, in which case such registration shall be counted as a Common Demand
Registration without regard to whether it is so interfered with. Subject to the
following sentence, in the event that a Common Demand Request is made that is
subsequently withdrawn by a Common Demand Holder and, as a result of such
withdrawal (together with all other withdrawals by other Holders with respect to
such Common Demand Request), there shall be less than a Common Registrable
Amount for such registration or underwritten takedown, as applicable, all
Registration Expenses incurred in connection therewith shall be borne by the
withdrawing Holders on a Pro Rata Basis and, if applicable, such withdrawn
Common Demand Request shall not be counted as a Common Demand Registration in
determining the number of Common Demand Registrations to which the Holders are
entitled pursuant to Section 2.1.1(a)(i) hereof In the event that a Common
Demand Request is made that is subsequently withdrawn by a Holder and, as a
result of such withdrawal (together with all other withdrawals by other Holders
with respect to such Common Demand Request), there shall be less than a Common
Registrable Amount for such registration or underwritten takedown, as
applicable, all Registration Expenses shall be borne by the Company if (a) the
Company has not performed its obligations hereunder in all material respects,
(b) there has been any event, change or effect that, individually or in the
aggregate, has had or would be reasonably likely to have a material adverse
effect on the business, operations, prospects, assets, condition (financial or
otherwise) or results of operations of the Company or (c) in the event of a
Common Demand Registration, the Company elects to convert such Common Demand
Registration into a registration for its own account pursuant to Section 2.1.6
hereof; and in such case a withdrawn Common Demand Request shall not be counted
as a Common Demand Registration in determining the number of Common Demand
Registrations to which the Holders are entitled pursuant to Section 2.1.1(a)(i)
hereof, if applicable.
2.1.3 Selection of Underwriters. If requested by the Common Demand
Holders, the offering of Common Registrable Shares pursuant to a Common Demand
Registration or a takedown under a Common Demand Shelf Registration shall be in
the form of a "firm commitment" underwritten offering. The Common Requesting
Holders holding a majority of the Common Registrable Shares to be registered in
a Common Demand Registration or offered in an underwritten takedown shall select
a nationally recognized investment banking firm or firms to manage the
underwritten offering; provided, that such selection shall be subject to the
consent of the Company, which consent shall not be unreasonably withheld;
provided, further, that in the event of a Company Conversion pursuant to Section
2.1.6 hereof, the Company shall have the right, in its sole discretion, to
select a nationally recognized investment banking firm or firms to manage such
offering.
2.1.4 Priority on Common Demand Registrations. Subject to Section
2.1.6, no securities to be sold for the account of any Person (including the
Company) other than a Common Requesting Holder shall be included in a Common
Demand Registration relating to an underwritten offering or an underwritten
takedown under a Common Demand Shelf Registration if the managing underwriter or
underwriters shall advise the Common Requesting Holders in writing that the
inclusion of such securities will materially and adversely affect the price or
success of the offering (a "Material Adverse Effect"). Furthermore, in the event
the managing underwriter or underwriters shall advise the Common Requesting
Holders that even after exclusion of all securities of other Persons pursuant to
the immediately preceding sentence, the amount of Common Registrable Shares
proposed to be included in such Common Demand Registration or underwritten
takedown by Common Requesting Holders is sufficiently large to cause a Material
Adverse Effect, the Common Registrable Shares of the Common Requesting Holders
to be included in such Common Demand Registration or underwritten takedown shall
equal the number of shares which the Common Requesting Holders are so advised
can be sold in
13
such offering without a Material Adverse Effect and such shares shall be
allocated on a Pro Rata Basis among the Common Requesting Holders.
2.1.5 Rights of Nonrequesting Holders.
(a) Upon receipt of any Common Demand Request, the Company
shall promptly (but in any event within 10 days) give written notice of such
proposed Common Demand Registration or underwritten takedown to all other
Holders, who shall have the right, exercisable by written notice to the Company
within 15 days after their receipt of the Company's notice, to elect pursuant to
this Section 2.1.5 to include in such Common Demand Registration, Common Demand
Shelf Registration or underwritten takedown under a Common Demand Shelf
Registration, as applicable, such portion of their Common Registrable Shares as
they may request (provided, in the case of an underwritten takedown under a
Common Demand Shelf Registration, the Common Registrable Shares requested to be
included are covered by an effective shelf registration statement pursuant to
which such offer and sale may be made).
(b) All Holders requesting to have their Common Registrable
Shares included in a Common Demand Registration or an underwritten takedown
under a Common Demand Shelf Registration in accordance with Section 2.1.5(a)
hereof shall be deemed to be "Common Requesting Holders" for purposes of this
Section 2.1; provided, however, that if any Holder elects to become a Common
Requesting Holder in a Common Demand Registration and any Common Registrable
Shares requested to be registered pursuant to such Common Demand Request by the
Common Requesting Holders are excluded from a registration pursuant to Section
2.1.4 hereof, the Holders shall have the right to one additional Common Demand
Request under Section 2.1.1(a)(i) hereof; and (i) if Xxxxx Muse and its
Affiliates shall have exercised their minimum Common Demand Requests right as
set forth in the penultimate sentence of Section 2.1.1(a)(i) hereof at such time
and shall have been Common Requesting Holders in such Common Demand
Registration, then Xxxxx Muse and its Affiliates, collectively, shall be deemed
to have the right to exercise at least one additional Common Demand Request
pursuant to Section 2.1.1(a)(i) (without regard to the Common Registrable Amount
if all Common Registrable Shares then held by Xxxxx Muse and its Affiliates are
included in such Common Demand Registration) and (ii) if the NHM Subordinated
Noteholders shall have exercised their minimum Common Demand Requests right as
set forth in the penultimate sentence of Section 2.1.1(a)(i) hereof and at least
one or more NHM Subordinated Noteholders shall have been Common Requesting
Holders in such Common Demand Registration, then the NHM Subordinated
Noteholders, collectively, shall be deemed to have the right to exercise at
least one additional Common Demand Request pursuant to Section 2.1.1(a)(i)
hereof (without regard to the Common Registrable Amount if all Common
Registrable Shares then held by the NHM Subordinated Noteholders are included in
such Common Demand Registration).
2.1.6 Company Conversion of Common Demand Registration. The Company
may elect to convert and include shares in (a "Company Conversion") any Common
Demand Registration into a registration for its own account if within 30 days of
its receipt of a Common Demand Request (and in any event prior to filing the
registration statement with respect to such Common Demand Request) it provides,
in writing, notice to each Common Requesting Holder of the Company's election to
effect a Company Conversion pursuant to this Section 2.1.6; provided, that the
Company can exercise its right to effect a Company Conversion only if (a) the
Board determines in good faith that the registration of such shares are in the
best interest of the Company and (b) the amount of gross proceeds to be received
by the Company in such registered offering exceed $100 million; and provided,
further, that upon a Company Conversion the
14
Common Demand Request related to the Common Demand Registration that is
converted shall not count as a Common Demand Request for purposes of Section
2.1.1(a)(i) hereof.
Section 2.2 Preference Demand Shelf Registration.
2.2.1 Request for Registration.
(a) The Holders shall be entitled to make certain demands on
the Company with respect to its or their Preference Registrable Shares as
follows:
(i) At any time after the earlier of (1) the Initial
Public Offering, (2) the first anniversary of the Effective Date, and (3) the
date on which the Company otherwise has any class of equity securities
registered under Section 12(b) or 12(g) of the Exchange Act, Holders of Junior
Preference Shares that represent at least 20% of the Original Preference Shares
may request the Company, in writing (a "Preference Demand Request"), to effect
the registration under the Securities Act of all or part of its or their
Preference Registrable Shares (a "Preference Demand Shelf Registration") on a
shelf registration statement pursuant to Rule 415 under the Securities Act
covering the resale of such Preference Registrable Shares; provided, that the
Preference Registrable Shares requested to be included in such registration by
the Preference Requesting Holders represent, in the aggregate, at least 20% of
the Original Preference Shares.
(ii) At any time after the Company is entitled to
effect registration of Junior Preference Shares on Form S-3 under the Securities
Act, the Holders of Junior Preference Shares that represent at least 10% of the
total number of Original Preference Shares may submit a Preference Demand
Request to the Company to effect a Preference Demand Shelf Registration;
provided, that the Preference Registrable Shares requested to be included in
such registration by the Preference Requesting Holders represent, in the
aggregate, at least 10% of the Original Preference Shares.
(iii) Upon effectiveness of a Preference Demand Shelf
Registration, Holders whose Preference Registrable Shares are included in such
Preference Demand Shelf Registration may from time to time cause the Company, by
written notice to the Company, to effect a takedown of Preference Registrable
Shares included in such Preference Demand Shelf Registration; provided, that the
Registrable Preference Shares requested to be included in a takedown that is
pursuant to an underwritten offering by the Preference Requesting Holders
represent, in the aggregate, at least the Preference Registrable Amount required
to effect the Preference Demand Shelf Registration under which such takedown is
being effected.
(b) Each Preference Demand Request shall specify the number
of Preference Registrable Shares proposed to be sold and the intended method of
disposition thereof Subject to Section 2.9 hereof, the Company shall use its
commercially reasonable efforts to file the Preference Demand Shelf Registration
by the Required Filing Date, to cause the same to be declared effective by the
SEC as promptly as practicable after such filing, and to maintain the
effectiveness of any such shelf registration statement continuously for two
years or such shorter period of time that shall terminate the day after the date
on which all of the Preference Registrable Shares included in the Preference
Demand Shelf Registration have been sold pursuant to the shelf registration
statement or the first day on which there shall cease to be any Preference
Registrable Shares held by the Holders whose Preference Registrable Shares are
covered by the Preference Demand Shelf Registration.
15
(c) The Company shall not be obligated to file a
registration statement relating to a registration request under this Section 2.2
(i) more frequently than once in any six month period or within a period of six
months after the effective date of any other registration statement of the
Company other than an Excluded Registration or any registration statement filed
at the request or on behalf of, or for the benefit of, another securityholder of
the Company (other than pursuant to this Section 2.2) that is not an
underwritten offering or, if such registration is an underwritten offering, in
which Holders were not entitled to include all Preference Registrable Shares
requested to be included therein and sell concurrently with such securities sold
pursuant to such registration all Preference Registrable Shares covered by an
effective Preference Demand Shelf Registration or (ii) if the Company shall at
the time have effective a shelf registration pursuant to which the Preference
Demand Holders that requested registration could effect the disposition of their
Preference Registrable Shares in the manner requested.
(d) The Preference Registrable Amount requirement shall not
apply to any Preference Demand Shelf Registration made by Xxxxx Muse pursuant to
Section 2.2.1(a)(ii) or (iii) if Xxxxx Muse and all of its Affiliates who hold
Preference Registrable Shares request inclusion therein of all Preference
Registrable Shares then held by them that are not otherwise included in another
effective registration statement.
2.2.2 Expenses. Subject to the following sentence, in the event that
a Preference Demand Request is made that is subsequently withdrawn by a
Preference Demand Holder and, as a result of such withdrawal (together with all
other withdrawals by other Preference Demand Holders with respect to such
Preference Demand Request), there shall be less than a Preference Registrable
Amount for such registration or underwritten takedown, as applicable, all
Registration Expenses incurred in connection therewith shall be borne by the
withdrawing Preference Demand Holders on a Pro Rata Basis. In the event that a
Preference Demand Request is made that is subsequently withdrawn by a Preference
Demand Holder and, as a result of such withdrawal (together with all other
withdrawals by other Preference Demand Holders with respect to such Preference
Demand Request), there shall be less than a Preference Registrable Amount for
such registration or underwritten takedown, as applicable, all Registration
Expenses shall be borne by the Company if (a) the Company has not performed its
obligations hereunder in all material respects or (b) there has been any event,
change or effect that, individually or in the aggregate, has had or would be
reasonably likely to have a material adverse effect on the business, operations,
prospects, assets, condition (financial or otherwise) or results of operations
of the Company.
2.2.3 Selection of Underwriters. If requested by the Preference
Demand Holders, the offering of Preference Registrable Shares pursuant to a
Preference Demand Shelf Registration or a takedown under a Preference Demand
Shelf Registration shall be in the form of a "firm commitment" underwritten
offering. The Preference Requesting Holders holding a majority of the Preference
Registrable Shares to be registered in a Preference Demand Shelf Registration or
offered in an underwritten takedown shall select a nationally recognized
investment banking firm or firms to manage the underwritten offering; provided,
that such selection shall be subject to the consent of the Company, which
consent shall not be unreasonably withheld.
2.2.4 Priority on Preference Demand Shelf Registrations. No
securities to be sold for the account of any Person (including the Company)
other than a Preference Requesting Holder shall be included in a Preference
Demand Shelf Registration relating to an underwritten
16
offering or an underwritten takedown under a Preference Demand Shelf
Registration if the managing underwriter or underwriters shall advise the
Preference Requesting Holders in writing that the inclusion of such securities
will have a Material Adverse Effect. Furthermore, in the event the managing
underwriter or underwriters shall advise the Preference Requesting Holders that
even after exclusion of all securities of other Persons pursuant to the
immediately preceding sentence, the amount of Preference Registrable Shares
proposed to be included in such Preference Demand Shelf Registration or an
underwritten takedown under a Preference Demand Shelf Registration by Preference
Requesting Holders is sufficiently large to cause a Material Adverse Effect, the
Preference Registrable Shares of the Preference Requesting Holders to be
included in such Preference Demand Shelf Registration or underwritten takedown
shall equal the number of shares which the Preference Requesting Holders are so
advised can be sold in such offering without a Material Adverse Effect and such
shares shall be allocated on a Pro Rata Basis among the Preference Requesting
Holders.
2.2.5 Rights of Nonrequesting Holders.
(a) Upon receipt of any Preference Demand Request, the
Company shall promptly (but in any event within 10 days) give written notice of
such proposed Preference Demand Shelf Registration or underwritten takedown to
all other Holders, who shall have the right, exercisable by written notice to
the Company within 15 days after their receipt of the Company's notice, to elect
pursuant to this Section 2.2.5 to include in such Preference Demand Shelf
Registration or underwritten takedown, as applicable, such portion of their
Preference Registrable Shares as they may request (provided, in the case of an
underwritten takedown under a Preference Demand Shelf Registration, the
Preference Registrable Shares requested to be included are covered by an
effective shelf registration statement pursuant to which such offer and sale may
be made) pursuant to which such offer and sale may be made.
(b) All Holders requesting to have their Preference
Registrable Shares included in a Preference Demand Shelf Registration or
underwritten takedown in accordance with Section 2.2.5(a) hereof shall be deemed
to be "Preference Requesting Holders" for purposes of this Section 2.2.
Section 2.3 Piggyback Registrations.
2.3.1 Right to Piggyback. (a) At any time after the earlier of
(x) the Initial Public Offering and (y) the date on which the Company has a
class of equity securities registered under Section 12(b) or 12(g) of the
Exchange Act, each time (i) the Company proposes to register any of its equity
securities (other than pursuant to an Excluded Registration) under the
Securities Act for sale to the public (whether for the account of the Company or
the account of any securityholder of the Company and including any registration
statement pursuant to Rule 415 under the Securities Act (such as a "universal
shelf' registration statement)), and the form of registration to be used permits
the registration of Rcgistrable Shares or (ii) the Company or any other person
proposes to make an underwritten offering of such equity securities pursuant to
a previously filed registration statement pursuant to Rule 415 under the
Securities Act in which Registrable Shares held by a Holder are included and
have not previously been disposed of, the Company shall give prompt written
notice to each Holder of Registrable Shares (which notice shall be given not
less than 30 days prior to the effective date of the Company's registration
statement or the commencement of an offering in the case of an offering made
under a registration statement pursuant to Rule 415 under the Securities Act
that previously has become effective), which notice shall offer each such Holder
the opportunity to (x) in the case of a
17
registration statement under clause (i) above, include any or all Registrable
Shares in such registration or, at the Company's option, in a separate
registration statement filed concurrently therewith or (y) in the case of an
underwritten offering to be made under a registration statement that previously
has been declared effective, include in such offering any or all such Holder's
Registrable Shares that are covered by such registration statement or another
effective registration statement pursuant to which such offer and sale may be
made (a "Piggyback Registration"), subject to the limitations contained in
Section 2.3.2 hereof, and, if the proposed registration or offering relates to
an underwritten offering, shall specify the name of the managing underwriter.
(b) Each Holder who desires to have its or his Registrable
Shares included in such Piggyback Registration shall so advise the Company in
writing (stating the number of Registrable Shares desired to be included and the
intended method of disposition) within 20 days after receipt of such notice from
the Company. Any Holder shall have the right to withdraw such Holder's request
for inclusion of such Holder's Registrable Shares in any Piggyback Registration
by giving written notice to the Company of such withdrawal prior to the
effectiveness of such Piggyback Registration without any liability for any
Registration Expenses other than payment of registration and filing fees
actually paid by the Company to the SEC prior to receipt of such written notice
requesting withdrawal to the extent related to the Rcgistrable Shares to be
withdrawn; provided, however, that such withdrawing Holder shall not be
obligated to pay Registration Expenses if after the registration statement has
first been filed with the SEC there has been any event, change or effect which,
individually or in the aggregate, had had or would be reasonably likely to have
a material adverse effect on the business, operations, prospects, assets,
condition (financial or otherwise) or results of operations of the Company.
Subject to Section 2.3.2 hereof, the Company shall include in such Piggyback
Registration all such Registrable Shares so requested to be included therein;
provided, however, that the Company may at any time withdraw or cease proceeding
with any such registration if it shall at the same time withdraw or cease
proceeding with the registration of all other equity securities originally
proposed to be registered.
(c) The rights under this Section 2.3.1 shall not apply to
Common Registrable Shares in the event of a Common Demand Registration or a
Common Demand Shelf Registration (or any takedown thereunder) or to Preference
Registrable Shares in the event of a Preference Demand Shelf Registration (or
any takedown thereunder).
2.3.2 Priority on Registrations. (a) If the Piggyback Registration
contemplated by Section 2.3.1 hereof is to be an underwritten offering and the
Registrable Shares requested to be included in the registration statement
pursuant to Section 2.3.1 hereof by any Holder differ from the type of
securities proposed to be registered or offered by the Company or any other
person (other than a Holder) on whose behalf the Piggyback Registration is to be
effected and the managing underwriter advises the Company that due to such
differences the inclusion of such Registrable Shares would cause a Material
Adverse Effect, then (i) the number of such Registrable Shares to be included by
all Holders in the registration statement or offering, as applicable, and the
number of securities requested to be included therein by all persons (other than
the Holder, the Company and any other Person on whose behalf the Piggyback
Registration is to be effected) that are different from the types of securities
proposed to be registered or offered by the Company or the Person on whose
behalf the Piggyback Registration is to be effected shall be reduced to an
amount which, in the opinion of the managing underwriter, would eliminate such
Material Adverse Effect or (ii) if no such reduction would, in the opinion of
the managing underwriter, eliminate such Material Adverse Effect, then the
Company shall have the right to exclude all such Registrable Shares from such
registration statement provided no other
18
securities of such type are included and offered for the account of any other
Person in such registration statement or offering, as applicable. Any partial
reduction in number of Registrable Shares to be included in the registration
statement pursuant to clause (i) of the immediately preceding sentence shall be
effected pro rata based on the ratio which (A) the number of Registrable Shares
of such Holder to be included in the Piggyback Registration that are different
from the securities proposed to be registered or offered bears to (B) the
aggregate number of Registrable Shares and all other securities of the Company
which arc being excluded from such registration statement in the same or similar
basis as the Registrable Shares.
(b) If the Piggyback Registration is to be an underwritten
offering and the Registrable Shares requested to be included in the registration
statement pursuant to Section 2.3.1 hereof are of the same type as the
securities being registered or offered, as applicable, by the Company or any
other person (other than a Holder) on whose behalf the Piggyback Registration is
to be effected and the managing underwriter advises the Company in writing that
the inclusion of such Registrable Shares and any other shares to be included are
sufficiently large to cause a Material Adverse Effect, then (i) if such
Piggyback Registration is incident to a primary offering on behalf of the
Company, the amount of securities to be included in the Piggyback Registration
for any Persons (other than the Company and the Holders requesting inclusion of
Registrable Shares (such Holders, collectively, the "Selling Piggyback
Holders")) shall first be reduced, and thereafter the Registrable Shares
requested to be included for the account of the Selling Piggyback Holders shall
be reduced or limited on a Pro Rata Basis so that the total number of securities
to be included shall be the total number of securities recommended by such
managing underwriter, unless any of the Selling Piggyback Holders desires to
include a number of Registrable Shares that is less than the total pro rata
amount that he is entitled to include, in which event the number of Registrable
Shares not so elected to be included shall be allocated among the other Selling
Piggyback Holders on a Pro Rata Basis, and (ii) if such Piggyback Registration
is incident to a secondary registration on behalf of holders of securities of
the Company (excluding a Demand Registration), the Company shall include in such
Piggyback Registration (A) first, the number of securities of such person(s),
other than the Holders, on whose behalf the Piggyback Registration is being made
(B) second, the number of Registrable Shares of Holders requested to be included
in such Piggyback Registration that the managing underwriters advise the Company
can be sold without causing a Material Adverse Effect, allocated among the
Holders on a Pro Rata Basis, if necessary, and (C) third, the number of
securities requested to be included in such Piggyback Registration by the
Company and all other persons (allocated among the Company and such other
persons as they may so determine).
(c) If as a result of the provisions of this Section 2.3.2
any Holder shall not be entitled to include all Registrable Shares in a
registration that such Holder has requested to be so included, such Holder may
withdraw such Holder's request to include Registrable Shares in such Piggyback
Registration by giving written notice to the Company of such withdrawal any time
prior to the effective date of such Piggyback Registration; provided, that if
the Piggyback Registration is pursuant to Section 2.3.1(a)(i), such Holder
reimburses the Company for all registration or filing fees remitted by the
Company to the SEC with respect to the Registrable Shares requested to be
withdrawn from the Piggyback Registration (provided that the Holder shall not be
required to reimburse the Company if (i) such Holder shall have first been
notified after the registration statement has first been filed with the SEC that
the number of Registrable Shares to be included in such Piggyback Registration
for the account of such Holder at the time it is declared effective will be less
than 80% of the total number of Registrable Shares requested to be included
therein by such Holder or (ii) after the registration statement has first been
filed with the SEC there has been any event, change or effect which,
individually or in the
19
aggregate, had had or would be reasonably likely to have a material adverse
effect on the business, operations, prospects, assets, condition (financial or
otherwise) or results of operations of the Company.
2.3.3 Participation in Underwritten Piggyback Registration. If any
Piggyback Registration is to be an underwritten offering, no Holder may
participate in such registration statement hereunder unless such Demand Holder
(x) agrees to sell such Holder's Registrable Shares on the basis provided in any
underwriting arrangements approved by the Company and (y) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements,
and other documents reasonably required under the terms of such underwriting
arrangements; provided, however, that no such Holder shall be required to make
any representations or warranties in connection with any such registration other
than representations and warranties on the same basis as other similar situated
selling stockholders as to (i) such Holder's ownership of his or its Registrable
Shares to be sold or transferred free and clear of all Liens, (ii) such Holder's
power and authority to effect such transfer, and (iii) such matters pertaining
to compliance with securities laws and other applicable laws and governmental
rules and regulations, if any, as may be reasonably requested; provided further,
however, that the obligation of such Holder to indemnify pursuant to any such
underwriting arrangements shall be several, not joint and several, among such
Holders selling securities, and the liability of each such Holder will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such Holder from the sale of his or its Registrable
Shares pursuant to such registration.
Section 2.4 Holdback Agreement. Unless the managing underwriter otherwise
agrees, each of the Company and the Holders agrees, in connection with any
underwritten offering or takedown, to use its reasonable efforts to cause its
Affiliates to agree, not to effect any public sale or private offer or
distribution of any Common Stock or Common Stock Equivalents, or in the case of
an underwritten offering of Preference Shares, any Preference Shares, during the
five business days prior to the effectiveness under the Securities Act or
pricing of any underwritten offering pursuant to a registration statement in
which Registrable Securities are included and during such time period after the
effectiveness under the Securities Act of any underwritten registration or
pricing of underwritten securities (not to exceed 90 days) (except, if
applicable, as part of such underwritten registration) as the Company and the
managing underwriter may agree, or, in any case, during the shorter period
requested or consented to by the managing underwriter(s) with respect to the
Company or any other holder of Capital Stock of the Company.
Section 2.5 Registration Procedures. Whenever any Holder has requested
that any Rcgistrable Shares be registered pursuant to this Agreement, the
Company will use its commercially reasonable efforts to effect the registration
and the sale of such Registrable Shares in accordance with the intended method
of disposition thereof, and pursuant thereto the Company will as expeditiously
as reasonably possible:
(a) prepare and file with the SEC a registration statement
on any appropriate form under the Securities Act with respect to such
Registrable Shares and use its commercially reasonable efforts to cause such
registration statement to become effective as soon as practicable thereafter,
provided that, before filing any registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to each seller of
Registrable Shares and their counsel, copies of all such documents proposed to
be filed at least three (3) days prior thereto; provided, further, that the
Company will not name or otherwise provide any information with respect to such
seller in any registration statement or prospectus without the
20
express written consent of such seller, which consent shall not be unreasonably
withheld, unless required to do so by the Securities Act and the rules and
regulations thereunder;
(b) prepare and file with the SEC such amendments,
post-effective amendments, and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 120 days (or such
lesser period as is necessary for the underwriters in an underwritten offering
to sell unsold allotments) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Shares and the
underwriters of the securities being registered such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus),
any documents incorporated by reference therein and such other documents as such
seller or underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by such seller or the sale of such
securities by such underwriters (it being understood that, subject to Section
2.6 and the requirements of the Securities Act and applicable state securities
laws, the Company consents to the use of the prospectus and any amendment or
supplement thereto by each seller and the underwriters in connection with the
offering and sale of the Registrable Shares covered by the registration
statement of which such prospectus, amendment or supplement is a part);
(d) use its commercially reasonable efforts to register or
qualify such Registrable Shares under such other securities or blue sky laws of
such jurisdictions as the managing underwriter reasonably requests; use its
commercially reasonable efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period in which such registration
statement is required to be kept effective; and do any and all other acts and
things which may be reasonably necessary or advisable to enable each seller to
consummate the disposition of the Registrable Shares owned by such seller in
such jurisdictions (provided, however, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (ii) consent to
general service of process in any such jurisdiction);
(e) promptly notify each seller and each underwriter and (if
requested by any such Person) confirm such notice in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (ii) of the issuance or
threatened issuance by any state securities or other regulatory authority of any
order suspending the qualification or exemption from qualification of any of the
Registrable Shares under state securities or "blue sky" laws or the initiation
of any proceedings for that purpose, and (iii) of the happening of any event
which makes any statement made in a registration statement, related prospectus
or any document incorporated therein by reference untrue in any material respect
or which requires the making of any changes in such registration statement,
prospectus or documents so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and, as promptly as
practicable thereafter, prepare and file with the SEC and furnish a supplement
or amendment to such prospectus so that, as thereafter deliverable to the
Stockholders of such Registrable Shares, such prospectus will not contain any
untrue statement of
21
a material fact or omit a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(f) make generally available to the Company's
securityholders an earnings statement satisfying the provisions of Section 11(a)
of the Securities Act no later than 30 days after the end of the 12-month period
beginning with the first day of the Company's first fiscal quarter commencing
after the effective date of a registration statement, which earnings statement
shall cover said 12-month period, and which requirement will be deemed to be
satisfied if the Company timely files complete and accurate information on Forms
10-Q, 10-K and 8-K under the Exchange Act and otherwise complies with Rule 158
under the Securities Act;
(g) if requested by the managing underwriter or reasonably
requested by any seller, promptly incorporate in, and make all required filings
of, a prospectus supplement or post-effective amendment such information as the
managing underwriter or any seller reasonably requests to be included therein,
including, without limitation, with respect to the Registrable Shares being sold
by such seller, the purchase price being paid therefor by the underwriters and
with respect to any other terms of the underwritten offering of the Registrable
Shares to be sold in such offering, and promptly make all required filings of
such prospectus supplement or post-effective amendment;
(h) as promptly as practicable after filing with the SEC of
any document which is incorporated by reference into a registration statement
(in the form in which it was incorporated), deliver a copy of each such document
to each seller;
(i) cooperate with the sellers and the managing underwriter
to facilitate the timely preparation and delivery of certificates (which shall
not bear any restrictive legends unless required under applicable law)
representing securities sold under any registration statement, and enable such
securities to be in such denominations and registered in such names as the
managing underwriter or such sellers may request and keep available and make
available to the Company's transfer agent prior to the effectiveness of such
registration statement a supply of such certificates;
(j) promptly make available for inspection by any seller,
any underwriter participating in any disposition pursuant to any registration
statement, and any attorney, accountant or other agent or representative
retained by any such seller or underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such Inspector in connection with such registration statement;
provided, that, unless the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the registration statement or the release
of such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide any
information under this subparagraph (x) if (i) the Company believes, after
consultation with counsel for the Company, that to do so would cause the Company
to forfeit an attorney-client privilege that was applicable to such information
or (ii) if either (1) the Company has requested and been granted from the SEC
confidential treatment of such information contained in any filing with the SEC
or documents provided supplementally or otherwise or (2) the Company reasonably
determines in good faith that such Records are confidential and so notifies the
Inspectors in writing unless prior to furnishing any such information with
respect to (1) or (2) such Holder of Registrable Securities
22
requesting such information agrees to enter into a confidentiality agreement in
customary form and subject to customary exceptions; and provided, further, that
each Holder of Registrable Securities agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, use
reasonable efforts to give notice to the Company and allow the Company at its
expense, to undertake appropriate action and to prevent disclosure of the
Records deemed confidential;
(k) furnish to each seller and underwriter a signed
counterpart of (i) an opinion or opinions of counsel to the Company, and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
sellers or managing underwriter reasonably requests;
(1) use its commercially reasonable efforts to cause the
Registrable Shares included in any registration statement to be (i) listed on
each securities exchange, if any, on which securities of the same type issued by
the Company are then listed, or (ii) authorized to be quoted and/or listed (to
the extent applicable) on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") or The New York Stock Exchange if the Registrable
Shares so qualify and securities of the same type issued by the Company are so
listed or quoted;
(m) provide a CUSIP number for the Registrable Shares
included in any registration statement not later than the effective date of such
registration statement;
(n) cooperate with each seller and each underwriter
participating in the disposition of such Registrable Shares and their respective
counsel in all reasonable respects in connection with any filings required to be
made with the National Association of Securities Dealers, Inc. ("NASD"); ----
(o) during the period when the prospectus is required to be
delivered under the Securities Act, file within the required time periods all
documents required to be filed with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act;
(p) notify each seller of Registrable Shares promptly of any
request by the SEC for the amending or supplementing of such registration
statement or prospectus or for additional information;
(q) prepare and file with the SEC promptly any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel for the Company or the managing underwriter, is required in
connection with the distribution of the Registrable Shares;
(r) enter into such agreements (including underwriting
agreements in the managing underwriter's customary form) containing, among other
things, reasonable and customary indemnification provisions and procedures which
are no less favorable than those set forth in Section 2.8 hereof (or such other
provisions and procedures acceptable to the selling Holders) with respect to all
parties to be indemnified pursuant to such section, and take such other actions
as reasonably requested by the Holders as are customary in connection with an
underwritten registration; and
23
(s) advise each seller of such Registrable Shares, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for such purpose
and promptly use all commercially reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal at the earliest possible moment if
such stop order should be issued.
Section 2.6 Suspension of Dispositions. Each Holder agrees that, upon
receipt of any notice (a "Suspension Notice") from the Company of the happening
of any event of the kind described in Section 2.5(e)(iii) hereof, such Holder
will forthwith discontinue disposition of Registrable Shares until such Holder's
receipt of the copies of the supplemented or amended prospectus, 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, such Holder will deliver to the Company all copies,
other than permanent file copies then in such -Holder's possession, of the
prospectus covering such Registrable Shares current at the time of receipt of
such notice. In the event the Company shall give any such notice, the time
period regarding the effectiveness of registration statements set forth in
Section 2.1.1(b) hereof shall be extended by the number of days during the
period from and including the date of the giving of the Suspension Notice to and
including the date when each seller of Registrable Shares covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus or the Advice. The Company shall use its commercially
reasonable efforts and take such actions as are reasonably necessary to render
the Advice as promptly as practicable.
Section 2.7 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Article 2 (the "Registration Expenses"),
including, without limitation, (i) all registration and filing fees; (ii) all
fees and expenses associated with filings required to be made with the NASD
(including, if applicable, the fees and expenses of any "qualified independent
underwriter" as such term is defined in Schedule E of the By-Laws of the NASD,
and of its counsel), as may be required by the rules and regulations of the
NASD; (iii) fees and expenses of compliance with securities or "blue sky" laws
(including reasonable fees and disbursements of counsel in connection with "blue
sky" qualifications of the Registrable Shares); (iv) rating agency fees; (v)
printing expenses (including expenses of printing certificates for the
Registrable Shares in a form eligible for deposit with Depository Trust Company
and of printing prospectuses if the printing of prospectuses is requested by a
holder of Registrable Shares); (vi) messenger and delivery expenses; (vii) the
Company's internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting duties);
(viii) the fees and expenses incurred in connection with any listing of the
Registrable Shares; (ix) fees and expenses of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit or "cold comfort" letters required by or incident to such performance);
(x) securities acts liability insurance (if the Company elects to obtain such
insurance); (xi) the fees and expenses of any special experts retained by the
Company in connection with such registration; (xii) the fees and expenses of
other persons retained by the Company, subject to Section 2.1.2 hereof, will be
borne by the Company, whether or not any registration statement becomes
effective; and (xiii) with respect to each Demand Registration and Piggyback
Registration, the reasonable fees and expenses related to the applicable
registration statement that are incurred by one firm of attorneys selected by a
majority of Holders of Registrable Shares to be registered under such
registration statement to represent the Holders in connection with such Demand
Registration or Piggyback Registration; provided, that in no event shall
Registration Expenses include any underwriting discounts or commissions or
transfer taxes.
24
Section 2.8 Indemnification.
(a) The Company agrees to indemnify and reimburse, to the fullest
extent permitted by law, each seller of Registrable Shares, and each of its
employees, advisors, agents, representatives, partners, members, officers, and
directors and each Person who controls such seller (within the meaning of the
Securities Act or the Exchange Act) and the employees, advisors, agents,
representatives, partners, members, officers, and directors thereof
(collectively, the "Seller Affiliates") against any and all losses, claims,
damages, liabilities, and expenses, joint or several (including, without
limitation, attorneys' fees and disbursements except as limited by Section
2.8(c) hereof) and any investigation, legal or other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted) (collectively, "Damages") to which
such Person may become subject under the Securities Act, the Exchange Act or
other federal or state securities laws or regulation, at common law or
otherwise, insofar as such Damages are based upon, arising out of or resulting
from (i) any untrue or alleged untrue statement of a material fact contained in
any registration statement, prospectus, or preliminary prospectus relating to
the offer and sale of Registrable Shares or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(ii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act or any state securities or blue sky laws in connection with the
registration statement, prospectus or preliminary prospectus or any amendment or
supplement thereto, except insofar as the same are (A) made in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of such seller or any Seller Affiliate specifically for inclusion in the
registration statement, (B) made in any preliminary prospectus if the seller
failed to deliver a copy of the prospectus with or prior to the delivery of
written confirmation of the sale by the seller to the party asserting the claim
underlying such Damages and such prospectus would have corrected such untrue
statement or omission, or (C) made in any prospectus if such untrue statement or
omission was corrected in an amendment or supplement to such prospectus
delivered to the seller prior to the sale of Registrable Shares and the seller
failed to deliver such amendment or supplement prior to or concurrently with the
sale of Registrable Shares to the party asserting the claim underlying such
Damages. The Company shall also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution customarily indemnified by issuers in underwritten public
offerings, their officers, directors, agents and employees and each Person who
controls such Persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act), to the same extent as provided above with
respect to the indemnification of the seller hereunder. The reimbursements
required by this Section 2.8(a) will be made promptly by periodic payments
during the course of the investigation or defense, as and when bills are
received or expenses incurred.
(b) In connection with any registration statement in which a
seller of Registrable Shares is participating, each such seller will furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the fullest extent permitted by law, each such seller will
indemnify and reimburse the Company and its directors and officers and each
Person who controls the Company (within the meaning of the Securities Act or the
Exchange Act) against any and all Damages, based upon, arising out of or
resulting from any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, prospectus, or any preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or alleged
25
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with any information or affidavit so furnished in writing by such
seller or any of its Seller Affiliates specifically for inclusion in the
registration statement; provided, that the obligation to indemnify will be
several, not joint and several, among such sellers of Registrable Shares, and
the liability of each such seller of Registrable Shares will be in proportion
to, and provided further that such liability will be limited to, the net amount
received by such seller from the sale of Registrable Shares pursuant to such
registration statement; provided, however, that such seller of Registrable
Shares shall not be liable in any such case to the extent that prior to the
filing of any such registration statement or prospectus or amendment thereof or
supplement thereto, such seller has furnished in writing to the Company
information expressly for use in such registration statement or prospectus or
any amendment thereof or supplement thereto which corrected or made not
misleading information previously furnished to the Company. Each seller shall
indemnify the underwriters under terms customary to such underwritten offerings
as reasonably requested by such underwriters. The Company and each seller shall
be entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as customarily furnished by such Persons in
similar circumstances.
(c) 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 (provided that the failure to give such notice
shall not limit the rights of such Person except to the extent that the
indemnifying party is materially prejudiced thereby) and (ii) unless such
indemnified party has been advised by counsel that a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however,
that any person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such person unless
(A) the indemnifying party has agreed to pay such fees or expenses, (B) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person, (C) the named parties to
any such action or proceeding (including any impleaded parties) include both
such indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel in writing that there is a conflict of
interest on the part of counsel employed by the indemnifying party to represent
such indemnified party or (D) the indemnified party's counsel shall have advised
the indemnified party that there are defenses available to the indemnified party
that are different from or in addition to those available to the indemnifying
party and that the indemnifying party is not able to assert on behalf of or in
the name of the indemnified party (in which case of either (C) or (D), if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
or proceeding on behalf of such indemnified party but shall have the right to
participate through its own counsel). If such defense is not assumed by the
indemnifying party as permitted hereunder, the indemnifying party will not be
subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). If
such defense is assumed by the indemnifying party pursuant to the provisions
hereof, such indemnifying party shall not settle or otherwise compromise the
applicable claim without the prior written consent of the indemnified party
(such consent not to be unreasonably withheld), unless the settlement involves
only the payment of money by the indemnifying party, provides for a full and
unconditional release of the indemnified party and does not include a statement
as to, or any admission of, fault, culpability or a failure to act by, or on
behalf of, the
26
indemnified party. 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 any indemnified party
shall have been advised by counsel in writing that a conflict of interest exists
between such indemnified party and 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 disbursements of such additional counsel or
counsels.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Sections 2.8(a) or 2.8(b) hereof are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, liabilities, or expenses (or actions in respect thereof) (i) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the actions which resulted in
the losses, claims, damages, liabilities or expenses or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect the relative benefits of the indemnified
party and indemnifying party from the offering of the securities covered by such
registration statement as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or
indemnified party, and the parties, relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 2.8(d) were determined by pro rata allocation (even if
the Holders or any underwriters or all of them were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 2.8(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities, or expenses (or actions in respect thereof) referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or, except
as provided in Section 2.8(c) hereof, defending any such action or claim.
Notwithstanding the provisions of this Section 2.8(d), no Holder shall be
required to contribute an amount greater than the dollar amount by which the
proceeds received by such Holder with respect to the sale of any Registrable
Shares exceeds the amount of damages which such Holder has otherwise been
required to pay by reason of such statement or omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations in this
Section 2.8(d) to contribute shall be several in proportion to the amount of
Registrable Shares registered by them and not joint.
If sufficient indemnification is available under this Section 2.8, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 2.8(a) hereof and Section 2.8(b) without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 2.8(d).
(e) The indemnification and contribution provided for under this
Stockholders Agreement will remain in full force and effect regardless of any
investigation made
27
by or on behalf of the indemnified party or any officer, director, or
controlling Person of such indemnified party and will survive the transfer of
securities.
Section 2.9 Deferral of Filing. The Company may defer the filing (but not
the preparation) of a registration statement required by Sections 2.1 or 2.2
hereof until a date not later than 120 days after the Required Filing Date (or,
if longer, 120 days after the effective date of the registration statement
contemplated by clause (ii) below) if (a) at the time the Company receives the
Demand Request, the Company or any of its Subsidiaries are engaged in
confidential negotiations or other confidential business activities, disclosure
of which would be required in such registration statement (but would not be
required if such registration statement were not filed), and the Board
determines in good faith that such disclosure would be materially detrimental to
the Company and its stockholders or would have a material adverse effect on any
such confidential negotiations or other confidential business activities, or (b)
prior to receiving the Demand Request, the Board had determined to effect a
registered underwritten public offering of the Company's securities for the
Company's account and the Company had taken substantial steps (including, but
not limited to, selecting a managing underwriter for such offering) and is
proceeding with reasonable diligence to effect such offering. A deferral of the
filing of a registration statement pursuant to this Section 2.9 shall be lifted,
and the requested registration statement shall be filed forthwith, if, in the
case of a deferral pursuant to clause (a) of the preceding sentence, the
negotiations or other activities are disclosed by the Company or terminated, or,
in the case of a deferral pursuant to clause (b) of the preceding sentence, the
proposed registration for the Company's account is abandoned. In order to defer
the filing of a registration statement pursuant to this Section 2.9, the Company
shall promptly (but in any event within 10 days), upon determining to seek such
deferral, deliver to each Common Requesting Holder or Preference Requesting
Holder, as applicable, a certificate signed by an executive officer of the
Company stating that the Board has determined in good faith that the Company is
deferring such filing pursuant to this Section 2.9 and, subject to applicable
confidentiality agreements, a general statement of the reason for such deferral
and an approximation of the anticipated delay. Within 20 days after receiving
such certificate, the holders of a majority of the Common Registrable Shares or
Preference Registrable Shares held by the Common Requesting Holders or
Preference Requesting Holders, as applicable, and for which registration was
previously requested may withdraw such Demand Request by giving notice to the
Company; if withdrawn, the Demand Request shall be deemed not to have been made
for all purposes of this Agreement. The Company may defer the filing of a
particular registration statement pursuant to this Section 2.9 only once in any
twelve-month period. The Company may defer a takedown under an effective
registration statement on the same terms as it may defer the filing of a
registration statement under this Section 2.9. If the Company declines to file
any registration statement pursuant to this Section 2.9, it shall not file any
registration statement (other than an Excluded Registration) without the prior
written approval of the Demand Holders, which approval may be withheld at the
Demand Holders' sole discretion, unless and until it files a registration
statement including Registrable Shares under Section 2.1 or 2.2 hereof.
Section 2.10 Rule 144 and Rule 144A. At all times during which the Company
is subject to the periodic reporting requirements of the Exchange Act, the
Company covenants that it will use reasonable best efforts to file, on a timely
basis, the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder, and it
will take such further action as any Holder may reasonably request (including,
without limitation, compliance with the current public information requirements
of Rule 144(c) and Rule 144A under the Securities Act), all to the extent
required from time to time to enable the Holders to sell Registrable Securities
without registration under the Securities Act within the
28
limitation of the conditions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, (b) Rule l44A under the
Securities Act, as such Rule may be amended from time to time, or (c) any
similar rule or regulation hereafter adopted by the SEC.
Upon the request of a Holder, the Company will provide reasonable and customary
assistance to facilitate such Holder's sale of Registrable Securities in block
trades or other similar transactions. Notwithstanding the foregoing, nothing in
this Section 2.10 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
ARTICLE 3
PREEMPTIVE RIGHTS
Section 3.1 Preemptive Rights.
3.1.1 Right to Participate in Future Sales. In case the Company
proposes to issue or sell any shares of Common Stock or Common Stock Equivalents
(the "Additional Securities"), the Company shall, no later than 20 days prior to
the consummation of such transaction (a "Preemptive Rights Transaction"), give
written notice of such Preemptive Rights Transaction (the "Preemptive Rights
Offer Notice") to each Holder. The Preemptive Rights Offer Notice shall describe
the proposed Preemptive Rights Transaction, identify the proposed purchaser, and
contain an offer (the "Preemptive Rights Offer") to sell to each Holder, at the
same price and for the same consideration to be paid by the proposed purchaser,
all or any part of such Holder's pro rata portion of the Additional Securities
(which shall be based on the ratio that the Fully-Diluted Common Stock held by
such Holder bears to the Fully-Diluted Common Stock, excluding, for purposes of
such calculation, any shares of Common Stock issuable upon exercise of any
Common Stock Equivalents granted pursuant to the Incentive Option Plan);
provided, that a Holder shall not be entitled to participate in any Preemptive
Rights Transaction unless such Holder (i) provides to the Company such
representations substantially the same as being obtained from the other
purchasers (or proposed purchasers) of such securities who are not Holders and
(ii) if the offering of the Additional Securities is being made only to
Accredited Investors, certifies (to the reasonable satisfaction of the Company)
that such Holder is an Accredited Investor. Any additional Securities not
subscribed for by a Holder may be purchased by the other Holders, on a pro rata
basis among those so electing. If any such Holder fails to accept in writing the
Preemptive Rights Offer with respect to all or any part of such Additional
Securities offered to such Holder by the 10th day after receipt of the
Preemptive Rights Offer Notice, the Company shall have up to 90 days to complete
the sale of any Additional Securities offered to but not purchased by the
Holders upon the same terms specified in the Preemptive Rights Offer Notice,
free of any right on the part of any non-responding Holder under this Section
3.1.1 in respect thereof. If the Company later changes the terms of the sale in
any material respect, the Company shall first reoffer such Additional Securities
to the Holders pursuant to the procedure set forth above. In the event that such
terms and conditions of a bona fide offer do not provide for the purchaser to
have any registration rights, the Company agrees with the Holders that in the
event the Holders acquire any Additional Securities pursuant to this Section
3.1.1, such Additional Securities shall be deemed Registrable Shares for the
purposes of Article 2 hereof
3.1.2 Exceptions to Preemptive Rights. Section 3.1.1 hereof shall
not apply to (a) issuances or sales of shares of Common Stock or Common Stock
Equivalents upon exercise, conversion or exchange of any Common Stock Equivalent
that, when issued, was subject to or exempt from the preemptive rights provided
under this Section 3.1, (b) shares of Common Stock
29
or Common Stock Equivalents distributed or set aside ratably to all holders of
Common Stock or Common Stock Equivalents (or any class or series thereof) on a
per share equivalent basis, (c) issuances or sales of shares of Common Stock or
Common Stock Equivalents pursuant to a bona fide registered underwritten public
offering, pursuant to a merger of the Company or a Subsidiary of the Company
into or with another entity not affiliated with the Company or any of its
Affiliates or pursuant to an acquisition by the Company or a Subsidiary of the
Company of the capital stock or assets of another business entity or business
segment of any such entity (or substantially all of the assets thereof) not
affiliated with the Company of any of its Affiliates, (d) issuances or sales of
shares of Common Stock or Common Stock Equivalents to employees, officers,
consultants, and/or directors of the Company and/or any of its Subsidiaries
pursuant to the Incentive Option Plan or any other compensation plan approved by
the Board (which shall include one of the SN Designees for so long as a SN
Designee is entitled to be a member of the compensation committee of the Board
pursuant to Section 4.1.4) or compensation committee of the Board (which shall
include one of the SN Designees for so long as a SN Designee is entitled to be a
member of the compensation committee of the Board pursuant to Section 4.1.4),
(e) issuances or sales of Common Stock pursuant to the Plan, including but not
limited to the Rights Offering, upon exercise of the New Warrants and upon
conversion of the 9% Preference Shares, (f) issuances of shares of Common Stock
or Common Stock Equivalents in payment of all or any portion of the principal
of, or interest or premium on, any unaffiliated third-party indebtedness of the
Company or any of its Subsidiaries, (g) the issuance of the shares of Senior
Preferred Shares and the New Warrants pursuant to the Plan (transactions
described in clauses (b), (d), (e) and (g) herein referenced as "Exempt
Issuances"), or (h) issuances of shares of Common Stock or Common Stock
Equivalents in connection with the issuance of debt securities of the Company or
any of its Subsidiaries.
3.1.3 Closing. The closing of the purchase of shares pursuant to
this Article 3 shall occur at the principal office of the Company (i) on the
fifth business day after the expiration of 10 days after receipt of the
Preemptive Rights Offer Notice if the Holders purchase all such Additional
Securities, (ii) concurrently with the closing of the sale of Additional
Securities if the Holders do not purchase all such additional Securities, (iii)
at such other time as the Holders and the Company may mutually determine, or
(iv) at such later date as may be required for purposes of satisfying and filing
requirement of waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, or any other required governmental consent or approval.
At the closing, the Company shall deliver to each such Holder exercising its
rights under this Article 3, the certificate or certificates representing such
shares, free and clear of all liens and encumbrances whatsoever, and such Holder
shall deliver to the Company the consideration for the shares of Additional
Securities purchased by such Holder pursuant to this Article 3.
3.1.4 Termination of Preemptive Rights. This Article 3 shall
terminate upon the earlier of (i) the termination of this Agreement or (ii) the
consummation of a Qualified Public Offering.
30
ARTICLE 4
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
Section 4.1 Board.
4.1.1 Board Representation. Subject to the provisions of Section
4.1.6 below, the Board shall consist of individuals who may be designated for
election from time to time in the following manner:
(a) the Chief Executive Officer of the Company shall be
designated for election by the Board or any nominating committee thereof;
(b) five individuals shall be designated for election by
Xxxxx Muse; and
(c) three individuals shall be designated for election by
NHM Subordinated Noteholders who receive shares of Common Stock or 9% Preference
Shares under the Plan.
Members of the Board designated by Xxxxx Muse pursuant to this Section
4.1.1 or elected to fill a vacancy by members designated by Xxxxx Muse as
provided in Section 4.1.5 hereof shall be referred to as the "HM Designees."
Members of the Board designated by NHM Subordinated Noteholders pursuant to this
Section 4.1.1 or elected to fill a vacancy by members designated by NHM
Subordinated Noteholders as provided in Section 4.1.5 hereof shall be referred
to as "SN Designees." The SN Designees together with the HM Designees and the
designee designated pursuant to clause (a) of this Section 4.1.1 herein shall be
referred to as the "Agreed Designees." Subject to Section 4.1.6 hereof, the
Company and the Board shall take such actions as necessary to cause Agreed
Designees to be nominated and submitted to the stockholders for election to the
Board as provided in Sections 4.1.2 and 4.1.3 hereof, and each Holder agrees to
vote all shares of Common Stock and all 9% Preference Shares over which such
Holder has voting power or control and which are entitled to vote on any matter
presented to stockholders pursuant to this Article 4 (or to execute written
consents with respect to such shares) in accordance with and to give effect to
the provisions of this Article 4.
4.1.2 Initial Board Designees. Simultaneously with the execution and
delivery of this Agreement, the Company and the Board shall take such actions as
necessary to cause the Board to consist of nine members in accordance with
Section 4.1.1 hereof.
4.1.3 Annual Meeting. (a) At each annual meeting of the Company's
stockholders or any special meeting in lieu thereof at which the term of any
Agreed Designee is to expire or prior to which there shall be less than the
maximum number of Agreed Designees serving on the Board, the Board, Xxxxx Muse
and/or the NHM Subordinated Noteholders, as applicable, shall be entitled to
designate for nomination as a director the number of individuals as necessary so
that, if such designees are elected to the Board at such annual meeting or any
special meeting in lieu thereof, the maximum number of Agreed Designees,
designated in accordance with Section 4.1.1 hereof, shall be serving on the
Board. The Company agrees to cause each Agreed Designee so designated pursuant
to Section 4.1.1 hereof to be submitted for election to the Board at each annual
meeting of the Company's stockholders or any special meeting in lieu thereof. To
the extent the Company's proxy statement for any annual meeting of stockholders,
or any special meeting in lieu thereof, includes a recommendation regarding the
election of any
31
other nominees to the Board, the Company agrees to include a recommendation of
its Board that the stockholders also vote in favor of each Agreed Designee
standing for election at such meeting. The Company shall take all actions
necessary to ensure that the Certificate of Incorporation of the Company as in
effect immediately following the date hereof does not, at any time thereafter,
conflict in any respect with the provisions of this Section 4.1.
(b) If, at any time Xxxxx Muse and/or the NHM Subordinated
Noteholders, as applicable, fail to advise (on or before the later of (i) 60
days prior to the next annual meeting or (ii) 10 Business Days after HMTF and
the NHM Subordinated Noteholders' representative receive notice of the date of
such annual meeting as provided in the last sentence of this Section 4.1.3(b))
the Board in writing of its intention to designate the number of directors which
Xxxxx Muse and/or the NHM Subordinated Noteholders, as applicable, is then
entitled to designate for nomination at the next annual meeting of the Company's
stockholders or special meeting in lieu thereof (other than any such meeting
that occurs within 60 days after the resignation of a director designated by
Xxxxx Muse and/or the NHM Subordinated Noteholders, as applicable, in which case
such writing shall be delivered within a reasonable amount of time prior to the
mailing of proxy materials for such meeting), then the rights granted under this
Section 4.1 with respect to the designation of Agreed Designees shall be
applicable for such meeting only with respect to the number of nominees as
indicated in such writing, if any, that Xxxxx Muse and/or the NHM Subordinated
Noteholders, as applicable, intend to designate, but shall continue to be fully
effective with respect to subsequent meetings and interim vacancies. At each
annual meeting or special meeting in lieu thereof for which Xxxxx Muse and/or
the NHM Subordinated Noteholders, as applicable, fail to advise the Board of
their intention to nominate the maximum number of directors which it is entitled
to nominate for such meeting, the nominees for election to the Board, other than
those nominated by Xxxxx Muse and/or the NHM Subordinated Noteholders, as
applicable, shall be determined by the Board and the Company. The Company shall
deliver to HMTF and to GSC Partners, as the representative of the NHM
Subordinated Noteholders for purposes of this Section 4.1.3 (which
representative may be changed by written notice to the Company by NHM
Subordinated Noteholders constituting a Majority Interest), written notice of
any annual or special meeting of the stockholders of the Company at which Board
members are to be elected promptly after the date for any such meeting has been
set by the Board, which notice shall request designations for Board nominees for
purposes of Section 4.1.
4.1.4 Board Committees. Subject to applicable law and applicable
corporate governance standards of any national securities exchange or NASDAQ
with which the Company is required to comply, for so long as Xxxxx Muse and/or
the NHM Subordinated Noteholders are entitled to nominate at least one HM
Designee or SN Designee, as applicable, the Company and the Board shall take
such actions as necessary to cause at least one HM Designee and one SN Designee,
as applicable, to be elected to, and to at all times be a member of, each
committee established by the Board. The Board shall create such committees as it
deems appropriate; provided, that, unless the Board elects to do otherwise by a
two-thirds vote of its members, the Board shall, at all times, maintain a
compensation committee and delegate to such committee the responsibility to
review and recommend the compensation arrangements for the officers and
directors of the Company and any other responsibilities the Board deems
appropriate. Subject to Section 4.1.6 hereof, the voting members of the
compensation committee of the Board shall total no more than three, two of whom
shall be designated by the HM Designces (and may include the HM Designees), and
one of whom shall be designated by the SN Designees (and may include the SN
Designees), and, for so long as any SN Designee is entitled to be a member of
the compensation committee of the Board pursuant to Section 4.1.6, any amendment
to the Incentive
32
Option Plan and the adoption of any other equity compensation plan shall require
the approval of at least one SN Designee serving as a member of the Board or the
compensation committee of the Board.
4.1.5 Vacancies. (a) If, prior to his or her election to the Board
pursuant to Section 4.1.1 hereof; any Agreed Designee shall be unable or
unwilling to serve as a director of the Company, then the Board, Xxxxx Muse
and/or the NHM Subordinated Noteholders, as applicable, shall be entitled to
nominate a replacement who shall then be an Agreed Designee for purposes of this
Article 4. If, following an election or appointment to the Board pursuant to
Section 4.1.1 hereof, any HM Designee or SN Designee shall resign or be removed
or be unable to serve for any reason prior to the expiration of his or her term
as a director of the Company, then Xxxxx Muse and/or the NHM Subordinated
Noteholders, as applicable, shall, within 30 days of such event, notify the
Board in writing of a replacement Agreed Designee, and the Company and the Board
shall take such action as necessary to cause such replacement Agreed Designee to
be appointed to the Board and each applicable committee thereof to fill the
unexpired term of the Agreed Designee who such new Agreed Designee is replacing.
(b) If, prior to or following an election or appointment to
the Board pursuant to Section 4.1.1 hereof, any Agreed Designee designated by
the Board or any nominating committee thereof pursuant to Section 4.1.1(a)
hereof shall be unable or unwilling to serve or shall resign or be removed or be
unable to serve for any reason prior to the expiration of his or her term as a
director of the Company, then such position shall be filled by any successor
Chief Executive Officer of the Company and, during any interim period prior to
such successor's election, such position shall remain vacant or be filled on an
interim basis, at the discretion of the Board.
4.1.6 Reduction/Termination of Rights. The right of Xxxxx Muse and
the NHM Subordinated Noteholders to designate directors under this Section 4. 1
shall be reduced and terminate as follows:
If at any time after the Distribution Date the number of shares of Common
Stock and 9% Preference Shares (assuming conversion of such shares into Common
Stock) held of record by (i) Xxxxx Muse and its Affiliates, collectively, or
(ii) the NHM Subordinated Noteholders and their Affiliates, collectively,
represent less than the below specified percentage of the number of the HM Plan
Voting Securities or the NHMSN Plan Voting Securities, as applicable (in each
case, the number of shares constituting HM Plan Voting Securities and NHMSN Plan
Voting Securities shall be determined assuming full conversion of 9% Preference
Shares into the number of shares of Common Stock into which such 9% Preference
Shares are convertible as of such time of determination), the number of
directors and compensation committee members that Xxxxx Muse and the NHM
Subordinated Noteholders shall be entitled to designate shall be reduced to
and/or equal the number indicated:
33
PERCENTAGE OF HM PLAN
VOTING SECURITIES HELD XXXXX MUSE
BY XXXXX MUSE AND XXXXX MUSE COMPENSATION COMMITTEE
ITS AFFILIATES DIRECTORS MEMBERS
--------------------------- --------- ----------------------
Less than 80% but equal to or 4 2
more than 60%
Less than 60% but equal to or 3 2
more than 40%
Less than 40% but equal to or 2 1
more than 20%
Less than 20% but equal to or 1 1
more than 10%
Less than 10% 0 0
PERCENTAGE OF NHMSN
PLAN VOTING SECURITIES NHM
HELD BY NHM SUBORDINATED
SUBORDINATED NOTEHOLDER
NOTE/SOLDERS NHM SUBORDINATED COMPENSATION COMMITTEE
AND THEIR AFFILIATES NOTEHOLDER DIRECTORS MEMBERS
--------------------- --------------------- -----------------------
Less than 70% but equal to or 2 1
more than 40%
Less than 40% but equal to or 1 1
more than 10%
Less than 10% 0 0
Upon written request to Xxxxx Muse or NHM Subordinated Noteholders at any
time that the number of Agreed Designees exceeds the number of directors Xxxxx
Muse or NHM Subordinated Noteholders shall be entitled to designate pursuant to
this Section 4.1.6, Xxxxx Muse or NHM Subordinated Noteholders shall cause one
or more of its Agreed Designees to resign from the Board as necessary to reduce
the number of Xxxxx Muse or NHM Subordinated Noteholders designees to the number
such Persons are then entitled to designate.
Section 4.2 Other Activities; Fiduciary Duties. (a) It is understood and
accepted that Xxxxx Muse and its Affiliates may have interests in other business
ventures which may be in conflict with the activities of the Company and its
Subsidiaries and that, subject to applicable law, nothing in this Agreement
shall limit the current or future business activities of Xxxxx Muse and its
Affiliates whether or not such activities are competitive with those of the
Company and its Subsidiaries. Nothing in this Agreement, express or implied,
shall relieve any officer or director of the Company (including any designee of
Xxxxx Muse or its Affiliates pursuant to Section 4.1.1) or any of its
Subsidiaries of any fiduciary or other duties or obligations they may have to
the Company's stockholders.
(b) It is understood and accepted that the NHM Subordinated
Noteholders and their respective Affiliates may have interests in other business
ventures which may be in conflict with the activities of the Company and its
Subsidiaries and that, subject to
34
applicable law, nothing in this Agreement shall limit the current or future
business activities of the NHM Subordinated Noteholders and their respective
Affiliates whether or not such activities are competitive with those of the
Company and its Subsidiaries. Nothing in this Agreement, express or implied,
shall relieve any officer or director of the Company (including any designee of
NHM Subordinated Noteholders or its Affiliates pursuant to Section 4.1.1) or any
of its Subsidiaries of any fiduciary or other duties or obligations they may
have to the Company's stockholders.
Section 4.3 Actions Requiring Consent of Xxxxx Muse. (a) Subject to
Section 4.3(c), from and after the Effective Date, the Company shall not,
directly or indirectly through any Subsidiary of the Company, take any of the
following actions without the prior written approval of Xxxxx Muse:
(i) issue or sell equity securities of the Company,
debt or equity instruments convertible into or exercisable or exchangeable for
equity securities of the Company, or any other obligations having rights to
purchase or acquire any equity securities of the Company other than pursuant to
issuances or transactions (1) in which Xxxxx Muse and its Affiliates may
exercise their rights under Section 3.1 hereof, (2) if such issuances or
transactions involve equity securities other than Common Stock or Common Stock
Equivalents, in which Xxxxx Muse and its Affiliate have the right to acquire its
and/or their Proportionate Percentage of such issuances to the extent involving
equity securities other than Common Stock or Common Stock Equivalents, (3) that
constitute Exempt Issuances or (4) occurring upon any exercise, conversion or
exchange of any debt or equity instrument that, when issued, was issued in
accordance with this Section 4.3(a)(i)
(ii) issue or sell equity securities of the Company,
debt instruments convertible into or exercisable or exchangeable for equity
securities of the Company or any other obligations having rights to purchase or
acquire any equity securities of the Company for consideration below Current
Market Price, other than issuances that constitute Exempt Issuances;
(iii) other than the 9% Preference Shares and the Junior
Preference Shares authorized and issued in accordance with the Plan, authorize,
create or issue any equity security of the Company, including any other security
convertible into or exercisable or exchangeable for any equity security of the
Company, having a preference or priority over Common Stock with respect to
voting, the receipt of dividends or the receipt of amounts distributable upon
liquidation, dissolution or winding up of the Company;
(iv) create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to any Indebtedness (other than Permitted Indebtedness) or issue, or
permit any Subsidiary of the Company to issue, any Preferred Stock (except
Preferred Stock issued to the Company or a wholly owned Subsidiary of the
Company);
(v) issue, or permit any Subsidiary of the Company to
issue, any equity security of any Subsidiary of the Company, any debt or equity
instrument convertible into or exercisable or exchangeable for any equity
security of any Subsidiary of the Company or any other obligations having rights
to purchase or acquire any equity security of any Subsidiary of the Company, in
each case other than issuances to the Company or other wholly-owned Subsidiaries
of the Company;
35
(vi) issue any shares of 9% Preference Shares other
than pursuant to the terms of the Plan, the Plan Documents and the Rights
Offering; or
(vii) issue any shares of Junior Preference Shares other
than pursuant to the terms of the Plan and the Plan Documents.
(b) In the event that Xxxxx Muse owns in the aggregate less
than 50.1% of the Fully-Diluted Common Stock as a result of dilution occurring
after giving effect to the exercise of the New Warrants, the shares issued in
relation to or satisfaction of the DTI Guaranty Claim, securities issued
pursuant to the Incentive Option Plan (or any other compensation plan approved
by the Board or the compensation or similar committee of the Board), or other
issuances of equity securities, the Company shall not take any of the following
actions without the prior written consent of Xxxxx Muse:
(i) any actions set forth in clauses (i) through (vii)
in Section 4.3(a) hereof;
(ii) other than redemptions of 9% Preference Shares and
Junior Preference Shares in accordance with the terms thereof as in effect on
the date hereof, redeem or repurchase any of outstanding Capital Stock of the
Company;
(iii) other than with respect to the 9% Preference
Shares and the Junior Preference Shares in accordance with the terms thereof as
in effect on the date hereof, declare, pay or set aside for payment any
dividends or other distributions (whether in cash, shares or property) with
respect to, or redeem or otherwise purchase, any shares of capital stock of the
Company or, in the case of any Subsidiary of the Company, any shares of capital
stock held other than by the Company or any wholly-owned Subsidiary of the
Company;
(iv) other than as part of a transaction permitted
under clause (v) of this Section 4.3(b), consummate any corporate
reorganization, sell, lease to a third party or otherwise dispose of (in a
single transaction or a series of related transactions) assets comprising in
excess of 25% of the market value of the assets of the Company and its
Subsidiaries as a whole during any 12 consecutive month period (calculated as of
the closing date of each such transaction) or dissolve, liquidate or terminate
the Company (including without limitation an Actual Liquidation) or engage in
any act of bankruptcy;
(v) consummate any merger, sale, lease to a third
party or other disposition of (in a single transaction or a series of related
transactions) all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole or any other transaction that results in any
person who, immediately prior to such transaction, "beneficially owns" (as
determined in accordance with Rule l3d-3 promulgated under the Exchange Act)
less than 50% of the Fully-Diluted Common Stock beneficially owning, upon
consummation of such transaction, in excess of 50% of the Fully-Diluted Common
Stock, other than in any transaction based on an enterprise value in excess of
$828 million;
(vi) enter into any transaction(s) with Affiliates or
insiders (including directors, officers and stockholders) of the Company that
are not wholly-owned Subsidiaries of the Company outside the ordinary course and
on other than arm's length terms (provided that no approval shall be required
under this Section 4.3(b)(vi) with respect to any management or advisory
agreements entered into between the Company (or any Subsidiaries of the Company)
and Affiliates of the Company provided that the amount of fees accrued or paid
to
36
such Affiliates in such agreements, in the aggregate, do not exceed any
limitations on amounts permitted to be accrued or paid under such agreements
pursuant to the Credit Agreement);
(vii) other than amendments effected in conjunction with
a transaction permitted under Sections 4.3(a) or (b), modify its certificate of
incorporation or bylaws;
(viii) change the number of directors on the Board;
(ix) establish any new committees; or
(x) engage in new corporate governance activities.
(c) The restrictions in Sections 4.3(a) and 4.3(b) shall
cease to be effective upon Xxxxx Muse and its Affiliates, collectively, ceasing
to hold of record shares of Common Stock and 9% Preference Shares (assuming
conversion into Common Stock of all 9% Preference Shares held by Xxxxx Muse and
its Affiliates) representing in the aggregate at least (i) 50% of the of the HM
Plan Voting Securities (with the number of shares constituting the HM Plan
Voting Securities determined assuming full conversion of 9% Preference Shares
into the number of shares of Common Stock into which such 9% Preference Shares
were convertible as of the time of such determination) or (ii) 10% of the
Fully-Diluted Common Stock. The provisions of clauses (i), (ii), (iii) and (v)
of Section 4.3(a) and (vi), (vii), (ix) and (x) of Section 4.3(b) shall cease to
be effective from and after the consummation of the company's first Qualified
Public Offering.
Section 4.4 Actions Requiring Consent of NHM Subordinated Noteholders. (a)
Subject to Section 4.4(b), from and after the Effective Date, the Company,
directly or indirectly through any Subsidiary, shall not take any of the
following actions without the prior written approval of at least a Majority
Interest of the NHM Subordinated Noteholders:
(i) issue or sell equity securities of the Company,
debt or equity instruments convertible into or exercisable or exchangeable for
equity securities of the Company, or any other obligations having rights to
purchase or acquire any equity securities of the Company other than pursuant to
issuances or transactions (1) in which the NHM Subordinated Noteholders may
exercise their rights under Section 3.1 hereof, (2) if such issuances or
transactions involve equity securities other than Common Stock or Common Stock
Equivalents, the NHM Subordinated Noteholders have the right to acquire their
Proportionate Percentage of such issuances to the extent involving equity
securities other than Common Stock or Common Stock Equivalents, (3) that
constitute Exempt Issuances or (4) occurring upon any exercise, conversion or
exchange of any debt or equity instrument that, when issued, was issued in
accordance with this Section 4.4(a)(i)
(ii) issue or sell equity securities of the Company,
debt instruments convertible into or exercisable or exchangeable for equity
securities of the Company or any other obligations having rights to purchase or
acquire any equity securities of the Company for consideration below Current
Market Price, other than issuances that constitute Exempt Issuances;
(iii) issue, or permit any Subsidiary of the Company to
issue, any equity security of any Subsidiary of the Company, any debt or equity
instrument convertible into or exercisable or exchangeable for any equity
security of any Subsidiary of the Company or
37
any other obligations having rights to purchase or acquire any equity security
of any Subsidiary of the Company, in each case other than issuances to the
Company or other wholly-owned Subsidiaries of the Company;
(iv) issue any shares of 9% Preference Shares other
than pursuant to the terms of the Plan, the Plan Documents and the Rights
Offering;
(v) other than redemptions of 9% Preference Shares and
Junior Preference Shares in accordance with the terms thereof as in effect on
the date hereof, redeem or repurchase any outstanding Capital Stock of the
Company;
(vi) other than with respect to the 9% Preference
Shares and the Junior Preference Shares in accordance with the terms thereof as
in effect on the date hereof; declare, pay or set aside for payment any
dividends or other distributions (whether in cash, shares or property) with
respect to, or redeem or otherwise purchase, any shares of capital stock of the
Company or, in the case of any Subsidiary of the Company, any shares of capital
stock held other than by the Company or any wholly-owned Subsidiary of the
Company;
(vii) other than as part of a transaction permitted
under clause (viii) of this Section 4.4(a) hereof, consummate any corporate
reorganization, sell, lease to a third party or otherwise dispose of (in a
single transaction or a series of related transactions) assets comprising in
excess of 25% of the market value of the assets of the Company and its
Subsidiaries as a whole during any 12 consecutive month period (calculated as of
the closing date of each such transaction) or dissolve, liquidate or terminate
the Company (including without limitation an Actual Liquidation) or engage in
any act of bankruptcy;
(viii) consummate any merger, sale, lease to a third
party or other disposition of (in a single transaction or a series of related
transactions) all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole or any other transaction that results in any
person who, immediately prior to such transaction, "beneficially owns" (as
determined in accordance with Rule 13d-3 promulgated under the Exchange Act)
less than 50% of the Fully-Diluted Common Stock beneficially owning, upon
consummation of such transaction, in excess of 50% of the Fully-Diluted Common
Stock, other than in any transaction based on an enterprise value in excess of
$828 million;
(ix) enter into any transaction(s) with Affiliates or
insiders (including directors, officers and stockholders) of the Company that
are not wholly-owned Subsidiaries of the Company outside the ordinary course and
on other than arm's length terms (provided that no approval shall be required
under this Section 4.4(a)(ix) with respect to any management or advisory
agreements entered into between the Company (or any Subsidiaries of the Company)
and Affiliates of the Company provided that the amount of fees accrued or paid
to such Affiliates in such agreements, in the aggregate, do not exceed any
limitations on amounts permitted to be accrued or paid under such agreements
pursuant to the Credit Agreement);
(x) create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to any Indebtedness (other than Permitted Indebtedness) or issue, or
permit any Subsidiary of the Company to issue, any Preferred Stock (except
Preferred Stock issued to the Company or a wholly owned Subsidiary of the
Company);
38
(xi) other than amendments effected in conjunction with
a transaction permitted under this Section 4.4, modify its certificate of
incorporation or bylaws; or
(xii) change the number of directors on the Board;
(xiii) establish any new committees; or
(xiv) engage in new corporate governance activities.
(b) The restrictions in Sections 4.4(a) shall cease to be
effective upon the NHM Subordinated Noteholders and their Affiliates,
collectively, ceasing to hold of record shares of Common Stock and 9% Preference
Shares (assuming conversion into Common Stock of all 9% Preference Shares held
by the NHM Subordinated Noteholders and their Affiliates) representing in the
aggregate at least (i) 50% of the of the NHMSN Plan Voting Securities (with the
number of shares constituting the NHMSN Plan Voting Securities determined
assuming full conversion of 9% Preference Shares into the number of shares of
Common Stock into which such 9% Preference Shares are convertible as of the time
of such determination) or (ii) 10% of the Fully-Diluted Common Stock The
provisions of clauses (i), (ii), (iii), (ix), (xi), (xiii) and (xiv) of Section
4.4(a) shall cease to be effective from and after the consummation of the
Company's first Qualified Public Offering.
Section 4.5 Action by Holders. (a) At any time there shall be more than
one NHM Subordinated Noteholder, the designation of SN Designees and the consent
of the NHM Subordinated Noteholders required for actions referred to in this
Agreement shall be effected by delivery to the Company of a written instrument
designating such SN Designees or granting (or denying) such consent executed by
the NHM Subordinated Noteholders holding a majority of outstanding Common Stock
(calculated giving effect to the full conversion of all 9% Preference Shares
held by all NHM Subordinated Noteholders) held by all NHM Subordinated
Noteholders (a "Majority Interest"). Each such written instrument shall indicate
the number of shares of Common Stock and 9% Preference Shares held by the NHM
Subordinated Noteholder or NHM Subordinated Noteholders executing same and shall
contain a certification that such Holders' 9% Preference Shares represent a
Majority Interest.
(b) At any time the group of Xxxxx Muse consists of more
than one Holder, the designation of HM Designees and the consent of Xxxxx Muse
required for actions referred to in this Agreement shall be effected by delivery
to the Company of a written instrument designating such HM Designees or granting
(or denying) such consent executed by HMTF; provided, however, that HMTF shall
have the right to assign to any Affiliate of HMTF or any Person to whom Xxxxx
Muse or any Affiliate of Xxxxx Muse transfers or assigns shares of Common Stock
or 9% Preference Shares HMTF's rights pursuant to this Section 4.5(b).
ARTICLE 5
INSPECTION AND INFORMATION RIGHTS
Section 5.1 Periodic Reports: Budgets. (a) The Company will furnish to the
Stockholders as soon as available, and in any event within 90 days after the end
of each fiscal year of the Company, the consolidated balance sheet of the
Company and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, of stockholders' equity and of cash flows for
such fiscal year, setting forth comparative consolidated figures for the
preceding fiscal year and a report on such consolidated balance sheets and
financial
39
statements by independent certified public accountants of recognized national
standing which report shall state that such consolidated financial statements
present fairly the consolidated financial position of the Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years and that the examination by such accountants
was conducted in accordance with generally accepted auditing standards.
(b) The Company will furnish to the Stockholders as soon as
available, and in any event within 45 days after the end of each of the first
three quarterly periods in each fiscal year of the Company, the consolidated
balance sheet of the Company as at the end of such quarterly period and the
related consolidated statements of income, of stockholders' equity and of cash
flows for such quarterly period and of the elapsed portion of the fiscal year
ended with the last day of such quarterly period, and in each case prepared in
accordance with GAAP and setting forth comparative consolidated figures for the
related periods in the prior fiscal year, subject to normal year-end audit
adjustments, all in reasonable detail and certified by the principal financial
or accounting officer of the Company.
(c) The Company will, upon reasonable prior notice, make
available to the Stockholders or the Stockholders' representatives or designees
during normal business hours (i) all assets, properties and business records of
the Company for inspection and copying and (ii) the directors, officers and
employees of the Company for interviews concerning the business, affairs and
finances of the Company.
(d) Confidential information regarding the Company provided
to any Stockholder or any representative or designee of a Stockholder pursuant
to this Article 5 shall be held in confidence and not disclosed to any other
Person (other than officers, directors and employees of Stockholders to or on
behalf of whose request such disclosure is made) or used for any purpose adverse
or detrimental to the Company for so long as such information remains
confidential (provided that the voting of any Capital Stock of the Company on
any matter on the basis of such information shall not be deemed adverse or
detrimental to the Company). Each Stockholder shall be responsible for any
breach of this Section 5(d) by any of its representatives, designees, officers,
directors or employees.
(e) The rights granted to Stockholders in Sections (a), (b)
and (c) above automatically shall terminate upon the consummation of a Qualified
Public Offering by the Company.
ARTICLE 6
TERMINATION
The provisions of this Agreement, unless earlier terminated pursuant to
their terms, shall terminate on the tenth anniversary of the date of this
Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex,
40
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows (or at such other address as may be substituted
by notice given as herein provided):
If to the Company:
Viasystems Group, Inc.
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
If to HMTF:
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Xxxxxx Xxxxxxxxxx
Telecopy No.: (000) 000-0000
If to GSC Partners:
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxxxxxxx
Telecopy No.: (000) 000-0000
If to any Holder, at its address and the address of its representative, if
any, listed on the signature pages hereof.
Any notice or communication hereunder shall be deemed to have been given
or made as of the date so delivered if personally delivered; when answered back,
if telexed; when receipt is acknowledged, if telecopied; and five calendar days
after mailing if sent by registered or certified mail (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
Section 7.2 Third Party Registration Rights. The Company is not a party,
or otherwise subject, to any agreement granting registration rights to any other
Person with respect to the securities of the Company. The Company will not on or
after the date of this Agreement enter into any agreement granting (a) demand
registration rights to any other Person with respect to the securities of the
Company or (b) piggy-back registration rights to any other Person that are not
junior or subordinate to the rights granted to the holders of Registrable
Securities under Sections 2.1, 2.2 and 2.3 hereof, without the written consent
of Xxxxx Muse and a Majority Interest of NHM Subordinated Noteholders. Any
agreement entered into pursuant to such consent shall not be amended without a
further written consent of the Xxxxx Muse and a Majority Interest of NHM
Subordinated Noteholders.
41
Section 7.3 Governing Law: Venue; Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each party hereby agrees that
any action arising out of or relating to this Agreement (including, but not
limited to, any action concerning the violation or threatened violation of this
Agreement) may be instituted in a federal or state court sitting in New Castle
County, Delaware. Each party hereby waives any objection that it may now or
hereafter have to the laying of venue of any such action, and irrevocably
submits to the non-exclusive jurisdiction of any such court in any such action
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any court that any such lawsuit, claim or other proceeding
brought in any such court has been brought in any inconvenient forum. In
addition, each party consents to process being served in any such lawsuit,
action or proceeding by mailing, certified mail, return receipt requested, a
copy thereof to such party at the address in effect for notices hereunder, and
agrees that such services shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 7.3 shall affect or limit
any right to serve process in any other manner permitted by law.
Section 7.4 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RESPECTIVE
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
Section 7.5 Successors and Assigns. Whether or not an express assignment
has been made pursuant to the provisions of this Agreement, provisions of this
Agreement that are for the Holders' benefit as the holders of any Registrable
Shares are also for the benefit of, and enforceable by, all subsequent holders
of Registrable Shares and such subsequent holders shall be deemed to be Holders
and to have become parties to this Agreement (including without limitation for
purposes of Article 4 hereof), except as otherwise expressly provided herein;
provided, that the provisions of this Agreement shall not be for the benefit of;
applicable to or enforceable by any transferee, and such transferee shall not be
deemed a Holder for purposes of this Agreement of Registrable Shares if the
Holder effecting such transfer expressly shall have designated such transferee
as not constituting a Holder subject to or entitled to the benefit of this
Agreement at or prior to the effectiveness of the transfer of Registrable Shares
to such transferee. Subject to the preceding sentence, this Agreement shall be
binding upon the Company, each Holder, and their respective successors and
permitted assigns.
Section 7.6 Duplicate Originals. All parties may sign any number of copies
of this Agreement. Each signed copy shall be an original, but all of them
together shall represent the same agreement.
Section 7.7 Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction is, as to such
jurisdiction, ineffective to the extent of any such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof, or affecting the validity, enforceability or legality of such
provision
42
in any other jurisdiction, unless the ineffectiveness of such provision would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable. Upon a determination that any provision
of this Agreement is prohibited, unenforceable or not authorized, the parties
hereto agree to negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties hereto as closely as possible, in a mutually
acceptable manner, in order that the transactions contemplated hereby are
consummated as originally contemplated to the fullest extent possible.
Section 7.8 Specific Performance. The Company and the Holder or Holders
recognize that if the Company refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to compensate the Holder
or Holders for its or their injury. The Holder or Holders shall therefore be
entitled, in addition to any other remedies that may be available, to obtain
specific performance of the terms of this Agreement and to seek appropriate
remedies in furtherance thereof; including without limitation injunctions,
without the necessity of posing bond or proving actual damages.
Section 7.9 No Waivers; Amendments.
7.9.1 No failure or delay on the part of the Company or any Holder
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Holder at law or in equity or otherwise.
7.9.2 Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is with the written consent of the
Company, HMTF and a Majority Interest of the NHM Subordinated Noteholders. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each party to the Agreement, regardless of whether such party has signed
such amendment or waiver, each then current and future holder of all such
Registrable Shares, and the Company.
Section 7.10 No Affiliate Liability. The partners, members, officers,
directors, stockholders and Affiliates of a Holder, the Company or their
respective Affiliates shall not have any personal liability or obligation to any
Person arising under this Agreement in such capacities.
Section 7.11 Recapitalization, Exchanges Etc. Affecting Securities. The
provisions of this Agreement shall apply, to the full extent set forth herein
with respect to the Registrable Shares and to any and all shares of the Capital
Stock of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise, including shares issued by a
parent company in connection with a triangular merger) which may be issued in
respect of, in exchange for, or in substitution of Registrable Shares,
appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, reclassifications and the like occurring after the date hereof
Section 7.12 Further Assurances. Each party shall cooperate and shall take
such further action and shall execute and deliver such further documents as may
be reasonably requested by any other party in order to carry out the provisions
and purposes of this Agreement.
Section 7.13 Entire Agreement. This Agreement (including all schedules and
exhibits hereto) contains the entire agreement among the parties hereto with
respect to the subject matter
43
hereof and supersedes all prior agreements and understandings, oral or written,
with respect to such matters.
[Remainder of Page Intentionally Left Blank]
44
SIGNATURES TO STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first written above.
VIASYSTEMS GROUP, INC.
/s/ XXXXX X. XXXXXXXX
--------------------------------------
Xxxxx X. Xxxxxxxx
Chief Executive Officer
45
*HICKS, MUSE, XXXX & XXXXX *HMTF EQUITY FUND IV (1999), L.P.
EQUITY FUND III, L.P.
By: HM3/GP Partners, L.P., By: HM4/GP (1999) Partners, L.P.,
its general partner its general partner
By: Xxxxx, Muse GP Partners III, By: Xxxxx, Xxxx XX (1999) Partners
L.P., its general partner IV, L.P.,its general partner
By: Xxxxx, Muse Fund III Incorporated, By: Xxxxx, Muse (1999) Fund IV,
its general partner LLC, its general partner
By: /s/ XXX XXXXXXXXXX By: /s/ XXX XXXXXXXXXX
---------------------------------- ------------------------------
Name: Xxx Xxxxxxxxxx Name: Xxx Xxxxxxxxxx
Title: Principal Title: Principal
*HM3 COINVESTORS, L.P. *HMTF PRIVATE EQUITY FUND IV(1999),
L.P.
By: Xxxxx, Muse GP Partners III, By: HM4/GP (1999) Partners, L.P.,
L.P., its general partner its general partner
By: Xxxxx, Muse Fund III Incorporated, By: Xxxxx, Muse GP (1999) Partners
its general partner IV, L.P., its general partner
By: Xxxxx, Muse (1999) Fund IV,
By: /s/ XXX XXXXXXXXXX LLC, its general partner
----------------------------------
Name: Xxx Xxxxxxxxxx
Title: Principal
By: /s/ XXX XXXXXXXXXX
------------------------------
Name: Xxx Xxxxxxxxxx
Title: Principal
46
*XXXXX, MUSE PG-IV (1999), C.V. *HM4-EQ (1999) COINVESTORS, L.P.
By: HM Equity Fund IV/GP Partners By: Xxxxx, Xxxx XX (1999) Partners
(1999), C.V., its general partner IV, L.P., its general partner
By: HM GP Partners IV Cayman, L.P., By: Xxxxx, Muse (1999) Fund IV,
its general partner LLC, its general partner
By: HM Fund IV Cayman, LLC,
its general partner
By: /s/ XXX XXXXXXXXXX By: /s/ XXX XXXXXXXXXX
--------------------------------- ------------------------------
Name: Xxx Xxxxxxxxxx Name: Xxx Xxxxxxxxxx
Title: Principal Title: Principal
*HM 4-SBS (1999) COINVESTORS, L.P. *PEARL STREET, L.P.
By: Xxxxx, Xxxx XX (1999) Partners By: Pearl Street Limited,
IV, L.P., its general partner its general partner
By: Xxxxx, Muse (1999) Partners IV,
LLC, its general partner
By: /s/ XXX XXXXXXXXXX By: /s/ XXX XXXXXXXXXX
--------------------------------- ------------------------------
Name: Xxx Xxxxxxxxxx Name: Xxx Xxxxxxxxxx
Title: Principal Title: Principal
47
* PEARL STREET II, L.P.
By: Pearl Street II GP, LLC,
its general partner
By: Hicks, Muse, Xxxx & Xxxxx Equity Fund
III, L.P., a member
By: HM3/GP Partners, L.P.,
its general partner
By: Xxxxx, Muse GP Partners III, L.P.,
its general partner
By: Xxxxx, Muse Fund III Incorporated,
its general partner
By: /s/ XXX XXXXXXXXXX
---------------------------------
Name: Xxx Xxxxxxxxxx
Title: Principal
*Notice Address:
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
48
*GSC PARTNERS CDO FUND, LIMITED *GSC PARTNERS CDO FUND II, LIMITED
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
-------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Managing Director Title: Managing Director
*GSC RECOVERY II, L.P. *GSC RECOVERY IIA, L.P.
By: GSC Recovery II GP, L.P., By: GSC Recovery IIA GP, L.P.,
its general partner its general partner
By: GSC RII, LLC, By: GSC RIIA, LLC,
its general partner its general partner
By: GSCP (NJ) Holdings, L.P., By: GSCP (NJ) Holdings, L.P.,
its sole member its sole member
By: GSCP (NJ), Inc., By: GSCP (NJ), Inc.
its general partner its general partner
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
-------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Managing Director Title: Managing Director
*GSC RECOVERY IIA, L.P. (SECOND CLOSE)
By: GSC Recovery IIA GP, L.P.,
its general partner
By: GSC RIIA, LLC,
its general partner
By: GSCP (NJ) Holdings, L.P.,
its sole member
By: GSCP (NJ), Inc.,
its general partner
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
*Notice Address:
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxxxxxxx
Telecopy No.: (000) 000-0000
49
*POST TOTAL RETURN FUND, L.P. *MW POST PORTFOLIO FUND, LP
By: MW Post Advisory Group, LLC By: MW Post Advisory Group, LLC
as General Partner as General Partner
By: /s/ XXXX XXXXXXXXX By: /s/ XXXX XXXXXXXXX
------------------------------ -------------------------------
Name: Xxxx Xxxxxxxxx Name: Xxxx Xxxxxxxxx
Title: Managing Member Title: Managing Member
*THE OPPORTUNITY FUND, LLC *STATE OF SOUTH DAKOTA
RETIREMENT SYSTEM FUND
By: MW Post Advisory Group, LLC By: MW Post Advisory Group, LLC
as Investment Manager as Investment Manager
By: /s/ XXXX XXXXXXXXX By: /s/ XXXX XXXXXXXXX
------------------------------ -------------------------------
Name: Xxxx Xxxxxxxxx Name: Xxxx Xxxxxxxxx
Title: Managing Member Title: Managing Member
*POST OPPORTUNITY FUND, LP SPRUGOS INVESTMENTS IV, LLC
By: MW Post Advisory Group, LLC By: MW Post Advisory Group, LLC
as General Partner as Investment Manager
By: /s/ XXXX XXXXXXXXX By: /s/ XXXX XXXXXXXXX
------------------------------ -------------------------------
Name: Xxxx Xxxxxxxxx Name: Xxxx Xxxxxxxxx
Title: Managing Member Title: Managing Member
*Notice Address:
MW Post Advisory Group
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Telecopy No.: 310-996-9669
With a copy to:
Xxxxxxx X. Xxxx
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Telecopy No.: 000-000-0000
50
