EXHIBIT 10.7
SHAREHOLDERS' AGREEMENT
dated as of
December 21, 2000
among
AMI HOLDINGS, INC.
FP-MCCARTNEY, L.L.C.
TBW LLC
GA-TEK INC.
and
CERTAIN OTHER PERSONS NAMED HEREIN
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions ...................................................... 1
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board ......................................... 10
SECTION 2.02. Removal .......................................................... 11
SECTION 2.03. Vacancies ........................................................ 12
SECTION 2.04. Meetings ......................................................... 12
SECTION 2.05. Action by the Board .............................................. 12
SECTION 2.06. Conflicting Charter or Bylaw Provisions .......................... 15
SECTION 2.07. Notice of Meeting ................................................ 15
SECTION 2.08. Subsidiary Governance ............................................ 15
SECTION 2.09. Affiliate Transactions ........................................... 15
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General .......................................................... 16
SECTION 3.02. Legends .......................................................... 16
SECTION 3.03. Permitted Transferees ............................................ 16
SECTION 3.04. Restrictions on Transfers by the Institutional Shareholders ...... 17
SECTION 3.05. Restrictions on Transfers by the Other Shareholders .............. 18
SECTION 3.06. Restrictions on Transfer under a Credit Agreement, Indenture or
Other Agreement for Indebtedness ....................................... 19
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; RIGHTS OF FIRST REFUSAL;
PREEMPTIVE RIGHTS
SECTION 4.01. Rights to Participate in Transfer ................................ 19
SECTION 4.02. Right to Compel Participation in Certain Transfers ............... 23
SECTION 4.03. Right of First Refusal ........................................... 26
SECTION 4.04. Preemptive Rights ................................................ 28
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SECTION 4.05. Right to Compel the First Public Offering ........................ 30
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration .............................................. 31
SECTION 5.02. Incidental Registration .......................................... 35
SECTION 5.03. Holdback Agreements .............................................. 36
SECTION 5.04. Registration Procedures .......................................... 36
SECTION 5.05. Indemnification by the Company ................................... 40
SECTION 5.06. Indemnification by Participating Shareholders .................... 41
SECTION 5.07. Conduct of Indemnification Proceedings ........................... 42
SECTION 5.08. Contribution ..................................................... 43
SECTION 5.09. Participation in Public Offering ................................. 44
SECTION 5.10. Other Indemnification ............................................ 44
SECTION 5.11. Cooperation by the Company ....................................... 44
SECTION 5.12. No Transfer of Registration Rights ............................... 45
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01. Confidentiality .................................................. 45
SECTION 6.02. Information ...................................................... 46
SECTION 6.03. Reports .......................................................... 48
SECTION 6.04. Cooperation in Refinancing ....................................... 48
SECTION 6.05. Appointment of Shareholder Representative ........................ 48
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Entire Agreement ................................................. 49
SECTION 7.02. Binding Effect; Benefit .......................................... 49
SECTION 7.03. Assignability .................................................... 49
SECTION 7.04. Waiver; Amendment; Termination ................................... 50
SECTION 7.05. Notices .......................................................... 50
SECTION 7.06. Fees and Expenses ................................................ 52
SECTION 7.07. Headings ......................................................... 52
SECTION 7.08. Counterparts ..................................................... 52
SECTION 7.09. Applicable Law ................................................... 52
SECTION 7.10. Waiver of Jury Trial ............................................. 52
SECTION 7.11. Specific Enforcement ............................................. 52
SECTION 7.12. Consent to Jurisdiction .......................................... 53
ii
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SECTION 7.13. Severability ..................................................... 53
SECTION 7.14. Recapitalization ................................................. 53
SECTION 7.15. No Inconsistent Agreements ....................................... 54
iii
SHAREHOLDERS' AGREEMENT
AGREEMENT dated as of December 21, 2000 among (i) AMI Holdings, Inc., a
Delaware corporation (the "COMPANY"), (ii) FP-McCartney, LLC ("FP"), (iii) TBW
LLC ("TBW" and, together with FP, the "INSTITUTIONAL SHAREHOLDERS"), (iv) GA-TEK
Inc. ("GA-TEK") and (v) such persons that shall sign joinder agreements to this
Agreement.
W I T N E S S E T H :
WHEREAS, pursuant to the Merger and Recapitalization Agreement (as
defined below) certain parties hereto own or will be acquiring securities of the
Company;
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Merger and Recapitalization Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and in the Merger and Recapitalization Agreement, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"ADVERSE PERSON " means any Person whom the Board determines in good
faith is a competitor or a potential competitor of the Company or its
Subsidiaries.
"AFFILIATE " means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person, provided that no securityholder of the Company shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in the
Company. For the purpose of this definition, the term "CONTROL" (including with
correlative meanings, the terms "CONTROLLING", "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"AGGREGATE OWNERSHIP" means, with respect to any Shareholder or group
of Shareholders, and with respect to any class of Company Securities, the total
amount of such class of Company Securities "beneficially owned" (as such term is
defined in Rule 13d-3 of the Exchange Act) (without duplication) by such
Shareholder or group of Shareholders as of the date of such calculation,
calculated on a Fully Diluted basis.
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in San Francisco or New York City are authorized by law
to close.
"BYLAWS" means the Amended and Restated Bylaws of the Company, as
amended from time to time.
"CHANGE OF CONTROL" means such time as:
(i) any "person" (as such term is used in Sections
3(a)(9) and 13(d)(3) of the Exchange Act), other than
(A) the Institutional Shareholders and/or their
respective Permitted Transferees or
(B) any "group" (within the meaning of such Section
13(d)(3)) of which either of the Institutional Shareholders
constitutes a majority (on the basis of ownership interest),
acquires, directly or indirectly, by virtue of the consummation of any
purchase, merger or other combination, securities of the Company
representing more than 51% of the combined voting power of the
Company's then outstanding voting securities with respect to matters
submitted to a vote of the stockholders generally; or
(ii) a sale or transfer by the Company or any of its
Subsidiaries of substantially all of the consolidated assets of the
Company and its Subsidiaries to a Person that is not an Affiliate of
the Company prior to such sale or transfer.
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"CHARTER" means the Amended and Restated Certificate of Incorporation
of the Company, as the same may be amended from time to time.
"CLASS A COMMON STOCK " means the Class A Common Stock, par value $.01
per share, of the Company having the rights, including voting rights, described
in the Charter and any stock into which such Class A Common Stock may thereafter
be converted or changed. "CLASS A COMMON SHARES" means shares of Class A Common
Stock.
"CLASS B COMMON STOCK" means the Class B Common Stock, par value $.01
per share, of the Company having the rights described in the Charter and any
stock into which such Class B Common Stock may thereafter be converted or
changed. "CLASS B COMMON SHARES" means shares of Class B Common Stock.
"CLOSING DATE" means December 21, 2000.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMON STOCK" means the Class A Common Stock and the Class B Common
Stock and "COMMON SHARES" means shares of Common Stock.
"COMPANY SECURITIES" means (i) the Common Stock and Preferred Stock,
(ii) securities convertible into or exchangeable for Common Stock and/or
Preferred Stock, and (iii) options, warrants (including the Warrant) or other
rights to acquire Common Stock, Preferred Stock or any other equity or
equity-linked security issued by the Company.
"DRAG-ALONG PORTION" means, with respect to any Other Shareholder and
any class of Company Securities, (i) the Aggregate Ownership of such class of
Company Securities by such Other Shareholder multiplied by (ii) a fraction, the
numerator of which is the number of such class of Company Securities proposed to
be sold by the Institutional Shareholders in the applicable Compelled Sale under
Section 4.02 and the denominator of which is the Aggregate Ownership of such
class of Company Securities by the Institutional Shareholders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FIRST PUBLIC OFFERING" means the first Public Offering of Class A
Common Stock after the date hereof.
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"FIVE PERCENT SHAREHOLDER" means a Shareholder whose Aggregate
Ownership of Common Shares divided by the Aggregate Ownership of such Common
Shares by all Shareholders is 5% or more.
"FULLY DILUTED" means, with respect to any class of Company Securities,
all outstanding shares of such class of Company Securities and all shares
issuable in respect of securities convertible into or exchangeable for such
shares, all stock appreciation rights, options, warrants (including the Warrant)
and other rights to purchase or subscribe for shares of such class of Company
Securities or securities convertible into or exchangeable for shares of such
class of Company Securities, provided that, to the extent any of the foregoing
stock appreciation rights, options, warrants or other rights to purchase or
subscribe for such Company Securities are subject to vesting, the Company
Securities subject to vesting shall be included in the definition of "FULLY
DILUTED" only upon and to the extent of such vesting.
"INITIAL OWNERSHIP" means, with respect to any Shareholder and any
class of Company Securities, the Aggregate Ownership of such class by such
Shareholder as of the date hereof, or, in the case of any Person who shall
become a party to this Agreement on a later date, as of such later date, in each
case taking into account any stock split, stock dividend, reverse stock split or
similar event.
"INVESTMENT" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including any partnership,
limited liability and joint venture interest) of any other Person and (ii) any
capital contribution by such Person to any other Person.
"JEC" means Japan Energy Corporation, a company incorporated in Japan.
"JUNIOR PREFERRED STOCK" means the 14.5% Junior Preferred Stock, par
value $.01 per share, of the Company, and "JUNIOR PREFERRED SHARES" means shares
of Junior Preferred Stock.
"MERGER AND RECAPITALIZATION AGREEMENT" means the agreement dated
December 5, 2000, among the Company, JEC, FP, TBW and GA-TEK and certain other
parties named therein pursuant to which the Company Securities were acquired.
"OTHER SHAREHOLDERS" means all Shareholders other than the
Institutional Shareholders.
"PERMITTED TRANSFEREE" means
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(i) in the case of FP and its Permitted Transferees, (A)
any FP fund or co-investment partnership, (B) any general or limited
partner of any FP fund or co-investment partnership (collectively, an
"FP PARTNER"), and any corporation, partnership or other entity that is
an Affiliate of any FP Partner (collectively "FP AFFILIATES"), (C) any
managing director, general partner, director, limited partner, officer
or employee of any FP fund, any FP Partner or any FP Affiliate, or any
spouse, lineal descendant, sibling, parent, heir, executor,
administrator, testamentary trustee, legatee or beneficiary of any of
the foregoing persons described in this clause (C) (collectively, "FP
ASSOCIATES"), (D) any trust, the beneficiaries of which, any charitable
trust, the grantor of which, or any corporation, limited liability
company or partnership, the stockholders, members or general or limited
partners of which include only FP, FP Partners, FP Affiliates, FP
Associates, their spouses or their lineal descendants, or (E) Merchant
Capital, Inc. ("MERCHANT") or any of the following, which are
collectively referred to herein as the "CSFB ENTITIES", (x) Credit
Suisse First Boston ("CSFB"), any CSFB fund or co-investment
partnership, any affiliate of CSFB or any general or limited partner of
any CSFB fund or co-investment partnership (collectively, a "CSFB
Partner"), and any corporation, partnership or other entity that is an
Affiliate of CSFB or any CSFB Affiliates (collectively, "CSFB
AFFILIATES"), (y) any managing director, general partner, director,
limited partner, officer or employee of any CSFB fund, any CSFB Partner
or any CSFB Affiliate, or any spouse, lineal descendant, sibling,
parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of any of the foregoing persons described in this clause
(y) (collectively, "CSFB ASSOCIATES"), or (z) any trust, the
beneficiaries of which, any charitable trust, the grantor of which, or
any corporation, limited liability company or partnership, the
stockholders, members or general or limited partners of which include
only Merchant, CSFB, CSFB Partners, CSFB Affiliates, CSFB Associates,
their spouses or their lineal descendants;
(ii) in the case of TBW and its Permitted Transferees, (A)
Citicorp Venture Capital Ltd. ("CVC"), any CVC fund or co-investment
partnership, Citigroup, any affiliate of Citigroup or any general or
limited partner of any CVC fund or co-investment partnership
(collectively, a "TBW PARTNER"), and any corporation, partnership or
other entity that is an Affiliate of Citigroup or any TBW Partner
(collectively "TBW AFFILIATES"), (B) any managing director, general
partner, director, limited partner, officer or employee of any CVC
fund, any TBW Partner or any TBW Affiliate, or any spouse, lineal
descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of any of the foregoing
persons described in this clause
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(B) (collectively, "TBW ASSOCIATES"), (C) any trust, the beneficiaries
of which, any charitable trust, the grantor of which, or any
corporation, limited liability company or partnership, the
stockholders, members or general or limited partners of which include
only TBW, CVC, TBW Partners, TBW Affiliates, TBW Associates, their
spouses or their lineal descendants or (D) Merchant or any of the CSFB
Entities;
(iii) in the case of GA-TEK and its Permitted Transferees,
JEC or any direct or indirect majority-owned subsidiary of JEC; and
(iv) in the case of any Other Shareholder (other than
GA-TEK) that is or becomes a party to this Agreement, (A) a Person to
whom Common Shares are Transferred from such Other Shareholder (1) by
will or the laws of descent and distribution or (2) by gift without
consideration of any kind, provided that, in the case of clause (2),
such transferee is the spouse or the lineal descendant, sibling or
parent of such Shareholder, or (B) a trust that is for the exclusive
benefit of such Other Shareholder or its Permitted Transferees under
(A) above.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PREFERRED STOCK" means the Senior Preferred Stock and the Junior
Preferred Stock of the Company, and "PREFERRED SHARES" means shares of Preferred
Stock.
"PUBLIC OFFERING" means an underwritten public offering of Registrable
Securities of the Company pursuant to an effective registration statement under
the Securities Act other than pursuant to a registration statement on Form S-4
or Form S-8 or any similar or successor form, provided that the proceeds of such
public offering amounts to $30,000,000 gross proceeds to the Company.
"REGISTRABLE SECURITIES" means, at any time, any Shares or Warrant
Shares and any securities issued or issuable in respect of such Shares or
Warrant Shares by way of conversion, exchange, stock dividend, split or
combination, recapitalization, merger, consolidation, other reorganization or
otherwise until (i) a registration statement covering such Shares or Warrant
Shares has been declared effective by the SEC and such Shares or Warrant Shares
have been disposed of pursuant to such effective registration statement, (ii)
such Shares or Warrant Shares are sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met or (iii) such Shares or Warrant Shares are
otherwise
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transferred, the Company has delivered a new certificate or other evidence of
ownership for such Shares or Warrant Shares not bearing the legend required
pursuant to this Agreement and such Shares or Warrant Shares may be resold
without subsequent registration under the Securities Act.
"REGISTRATION EXPENSES" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with any securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses relating to any comfort letters
or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters requested pursuant to Section
5.04(h) hereof), (vi) reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, (vii) reasonable
fees and expenses of one counsel for all of the Shareholders participating in
the offering selected (A) by the Institutional Shareholders, in the case of any
offering in which such entities participate, or (B) in any other case, by the
Shareholders holding the majority of Shares to be sold for the account of all
Shareholders in the offering, (viii) fees and expenses in connection with any
review of underwriting arrangements by the National Association of Securities
Dealers, Inc. (the "NASD") including fees and expenses of any "qualified
independent underwriter" and (ix) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses (except as set forth in
clause (vii) above) of the Shareholders (or the agents who manage their
accounts) or any fees and expenses of underwriter's counsel.
"RULE 144" means Rule 144 and Rule 144A (or any successor provisions)
under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR PREFERRED STOCK" means the 13.5% Senior Preferred Stock, par
value $.01 per share of the Company, and "SENIOR PREFERRED SHARES" means shares
of Senior Preferred Stock.
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"SHARES" means Common Shares, Senior Preferred Shares and Junior
Preferred Shares.
"SHAREHOLDER" means each Person (other than the Company) who shall be a
party to or bound by this Agreement, whether in connection with the execution
and delivery hereof as of the date hereof, pursuant to Sections 3.03 or 7.03 or
otherwise, so long as such Person shall "beneficially own" (as such term is
defined in Rule 13d-3 of the Exchange Act) any Company Securities.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TAG-ALONG PORTION" means
(i) where the Tag-Along Seller is Transferring Common
Stock, the product of the Aggregate Ownership of Common Shares by the
Tagging Person immediately prior to such Transfer and a fraction the
numerator of which is the maximum number of Common Shares that the
buyer in the Tag-Along Sale is willing to purchase, and the denominator
of which is the Aggregate Ownership of Common Shares by all
Shareholders, and
(ii) where the Tag-Along Seller is Transferring Senior
Preferred Stock, the product of the Aggregate Ownership of Senior
Preferred Shares by the Tagging Person immediately prior to such
Transfer and a fraction the numerator of which is the maximum number of
Senior Preferred Shares that the buyer in the Tag-Along Sale is willing
to purchase, and the denominator of which is the Aggregate Ownership of
Senior Preferred Shares by all Shareholders, and
(iii) where the Tag-Along Seller is Transferring Junior
Preferred Stock, the product of the Aggregate Ownership of Junior
Convertible Shares by the Tagging Person immediately prior to such
Transfer and a fraction the numerator of which is the maximum number of
Junior Preferred Shares that the buyer in the Tag-Along Sale is willing
to purchase, and the denominator of which is the Aggregate Ownership of
Junior Preferred Shares by all Shareholders.
"THIRD PARTY" means a prospective purchaser(s) of Company Securities in
an arm's-length transaction from a Shareholder where such purchaser is not a
Permitted Transferee or other Affiliate of such Shareholder.
8
"TRANSFER" means, with respect to any Company Security, (i) when used
as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate
or otherwise transfer such security or any participation or interest therein,
whether directly or indirectly, or agree or commit to do any of the foregoing
and (ii) when used as a noun, a direct or indirect sale, assignment,
disposition, exchange, pledge, encumbrance, hypothecation or other transfer of
such security or any participation or interest therein or any agreement or
commitment to do any of the foregoing.
"WARRANT" means the warrant dated the date of this Agreement issued by
the Company to GA-TEK for the purchase of Class A Common Shares.
"WARRANT SHARES" means the Common Shares issuable by the Company upon
exercise of the Warrant.
(b) The term "INSTITUTIONAL SHAREHOLDER", to the extent such shall
have transferred any of its Company Securities to any of its "Permitted
Transferees," shall mean the Institutional Shareholder and such Permitted
Transferees, taken together, and any right, obligation or action that may be
exercised or taken at the election of the Institutional Shareholder and such
Permitted Transferees.
(c) The term "OTHER SHAREHOLDERS", to the extent any such Other
Shareholders shall have transferred any of their Company Securities to any of
their "Permitted Transferees," shall mean the Other Shareholders and such
Permitted Transferees, taken together, and any right, obligation or action that
may be exercised or taken at the election of the Other Shareholders and such
Permitted Transferees.
(d) Each of the following terms is defined in the Section set
opposite such term:
Term Section
---- -------
Additional Directors 2.01
Applicable Holdback Period 5.03
Cause 2.02
Compelled Sale 4.02(a)
Compelled Sale Notice 4.02(a)
Compelled Sale Notice Period 4.02(a)
Compelled Sale Price 4.02(a)
Confidential Information 6.01(b)
Demand Registration 5.01(a)
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Drag-Along Rights 4.02(a)
Holders 5.01(a)(ii)
Incidental Registration 5.02(a)
Indemnified Party 5.07
Indemnifying Party 5.07
Independent Directors 2.01(a)
Inspectors 5.04(g)
Joint Demand 5.01(a)
Maximum Offering Size 5.01(e)
Non-Selling Shareholders 4.03(a)
Non-Requesting Shareholder 5.01(a)
Offer 4.03(a)
Offered Securities 4.03(a)
Offer Notice 4.03(a)
Offer Price 4.03(a)
Offer Pro Rata Portion 4.03(b)
Records 5.04(g)
Replacement Nominee 2.03(a)
Representatives 6.01(b)
Requesting Shareholder 5.01(a)
Issuance Notice 4.04(a)
Issuance Pro Rata Portion 4.04(a)
Seller 4.03(a)
Shareholder 7.03
Tag-Along Notice 4.01(a)
Tag-Along Notice Period 4.01(a)
Tag-Along Offer 4.01(a)
Tag-Along Response Notice 4.01(a)
Tag-Along Right 4.01(a)
Tag-Along Sale 4.01(a)
Tag-Along Seller 4.01(a)
Tagging Person 4.01(a)
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board. (a) The Board shall consist of
nine directors, of whom three directors will be designated by FP (one of whom
shall be an independent director designated by FP), three directors will be
designated by TBW (one of whom shall be an independent director designated by
TBW), one director will be designated by GA-TEK, one director will be the chief
executive officer of the Company for so long as he or she is employed by the
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Company and one independent director will be designated by the CEO and the
Institutional Shareholders, provided that such independent director shall not be
either an "Affiliate" or an "Associate" (as such terms are used within the
meaning of Rule 12b-2 under the Exchange Act) of the Institutional Shareholders
or GA-TEK (the "INDEPENDENT DIRECTOR"). If the number of directors that comprise
the entire Board is increased in accordance with Section 2.05, the number of
directors added to the Board (the "ADDITIONAL DIRECTORS") must be a multiple of
two, and for every two Additional Directors, FP shall be permitted to designate
one such Additional Director and TBW shall be permitted to designate one such
Additional Director.
(b) Each Shareholder entitled to vote for the election of
directors to the Board agrees that it will vote its Shares or execute written
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of Shareholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01.
(c) The right of each Institutional Shareholder to designate three
or more members of the Board pursuant to this Article 2 shall (i) be reduced to
the right to designate only one member of the Board at such time as the
Aggregate Ownership of Common Shares by such Institutional Shareholder divided
by the Aggregate Ownership of such Common Shares by all Shareholders is less
than 10% and (ii) terminate at such time as the Aggregate Ownership of Common
Shares by such Institutional Shareholder divided by the Aggregate Ownership of
such Common Shares by all Shareholders is less than 5%. The right of GA-TEK to
designate one member of the Board, shall terminate at such time as the Aggregate
Ownership of GA-TEK and its Permitted Transferees falls below 50% of GA-TEK's
Initial Ownership. The obligations imposed on the Shareholders to give effect to
the rights to designate directors set forth in Section 2.01 shall terminate as
to any Person when such Person's right to designate a director is terminated.
(d) The Company agrees to cause each individual designated
pursuant to Section 2.01(a) or 2.03 to be nominated to serve as a director on
the Board, and to take all other necessary actions (including calling a special
meeting of the Board and/or shareholders) to ensure that the composition of the
Board is as set forth in this Section 2.01.
SECTION 2.02. Removal. Each Shareholder agrees that if, at any time, it
is then entitled to vote for the removal of directors of the Company, it will
not vote any of its Shares in favor of the removal of any director who shall
have been designated or nominated in accordance with Section 2.01, unless such
removal shall be for Cause or the Person or Persons entitled to designate or
nominate such director shall have consented to such removal in writing, provided
that if the
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Person or Persons entitled to designate or nominate any director pursuant to
Section 2.01 shall request in writing the removal, with or without Cause, of
such director, such Shareholder shall vote its Shares in favor of such removal.
Removal for "CAUSE" shall mean removal of a director because of such director's
(a) willful and continued failure substantially to perform his or her statutory
or fiduciary duties with the Company in his or her established position, (b)
participation in a fraud, act of dishonesty or other misconduct that is
injurious, monetarily or otherwise, to the Company or any of its Subsidiaries,
(c) being charged with or pleading guilty to a felony or a crime involving fraud
or dishonesty, (d) violation of any state or federal law that has an adverse
effect on the Company or (e) abuse of illegal drugs or other controlled
substances or habitual intoxication.
SECTION 2.03. Vacancies. If, as a result of death, disability,
retirement, resignation, removal (with or without Cause) or otherwise, there
shall exist or occur any vacancy on the Board:
(a) the Person or Persons entitled under Section 2.01 to designate
or nominate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy may, subject to the provisions of Sections
2.01, designate another individual (the "REPLACEMENT NOMINEE") to fill such
vacancy and serve as a director of the Company; and
(b) subject to Section 2.01, each Shareholder then entitled to
vote for the election of the Replacement Nominee as a director of the Company
agrees that it will vote its Shares, or execute a proxy or written consent, as
the case may be, in order to ensure that the Replacement Nominee be elected to
the Board.
SECTION 2.04. Meetings. The Board shall hold a regularly scheduled
meeting at least once every calendar quarter.
SECTION 2.05. Action by the Board. (a) A quorum of the Board shall
consist of a majority of the total number of directors, which such majority
shall include a majority of the designees of FP and a majority of the designees
of TBW, provided that the Institutional Shareholders together shall have the
right at any time to increase the number of directors necessary to constitute
such quorum.
(b) All actions of the Board shall require (i) the affirmative
vote of at least a majority of the directors present at a duly convened meeting
of the Board at which a quorum is present or (ii) the unanimous written consent
of the Board, provided that, in the event that there is a vacancy on the Board
and an individual has been nominated to fill such vacancy, the first order of
business shall be to fill such vacancy.
12
(c) The Board may create executive, compensation, audit and such
other committees as it may determine. The Institutional Shareholders together
shall be entitled to majority representation on any committee created by the
Board, half of which such majority representation shall consist of a director or
directors designated by FP and half of which such majority representation shall
consist of a director or directors designated by TBW.
(d) No action by the Company (including but not limited to any
action by the Board or any committee thereof) shall be taken after the date
hereof with respect to any of the following matters without the affirmative
approval of the Board, including the affirmative approval of a majority of the
designees of each of the Institutional Shareholders:
(i) (1) any merger or consolidation of the Company with
or into any Person, other than a wholly owned Subsidiary, or of any
Subsidiary with or into any Person other than the Company or any other
wholly owned Subsidiary, or (2) any sale of the Company or any
Subsidiary or any significant operations of the Company or any
Subsidiary or any joint venture transaction, acquisition or disposition
of assets, business, operations or securities by the Company or any
Subsidiary (in a single transaction or a series of related
transactions) having a value in each case in this clause (2) in excess
of $3,000,000,
(ii) the declaration of any dividend on or the making of
any distribution with respect to, or the recapitalization,
reclassification, redemption, repurchase or other acquisition of, any
securities of the Company or any Subsidiary, except as expressly
permitted by this Agreement,
(iii) any liquidation, dissolution, commencement of
bankruptcy, liquidation or similar proceedings with respect to the
Company or any Subsidiary,
(iv) any incurrence, refinancing, alteration of material
terms or prepayment by the Company or any Subsidiary of indebtedness
for borrowed money in excess of $2,000,000 in the aggregate (or the
guaranty by the Company or any Subsidiary of any such indebtedness), or
the issuance of any security by the Company or any Subsidiary (not
including issuances of such securities in connection with employee or
stock option plans previously approved by the Board pursuant to clause
(vii) below), in each case other than (i) pursuant to the Credit
Agreement, dated December 21, 2000, among AMI Merger Company, Inc., AMI
Spinco, Inc., AMI
13
Holdings, Inc., the lenders named therein and Credit Suisse First
Boston as administrative agent and collateral agent, as amended and in
effect from time to time, provided that the aggregate indebtedness
under such agreement shall not exceed $250,000,000 and (ii) as
specifically contemplated by this Agreement,
(v) any capital expenditure or capital lease in excess of
$1,000,000 which is not specifically contemplated by the annual
business plan of the Company or any Subsidiary,
(vi) any entering into, amending or modifying in any
material respect any agreements of the Company or any Subsidiary
providing for payments by or to the Company or such Subsidiary in
excess of $2,000,000 per annum or $5,000,000 in the aggregate;
(vii) any determination of compensation, benefits,
perquisites and other incentives for senior management of the Company
or its Subsidiaries and the approval or amendment of any plans or
contracts in connection therewith, and any approval or amendment to any
equity or other compensation or benefit plans for employees of the
Company or its Subsidiaries,
(viii) any appointment or dismissal of any of the Chairman
of the Board, Chief Executive Officer, President, Chief Financial
Officer or Chief Operating Officer or any other executive officer in
any similar capacity of the Company or any Subsidiary,
(ix) any change in accounting or tax principles, policies
with respect to the financial statements, records or affairs of the
Company or any Subsidiary, except as required by generally accepted
accounting principles or by law or any other matters that could affect
any regulatory status or tax liability of the Company or any
Subsidiary, or any Shareholder with respect to the investment by such
Shareholder in the Company,
(x) any appointment or removal of the auditors, regular
legal counsel, financial advisors, underwriters (except underwriters
selected as provided in the first sentence of Section 5.04(f)(i) and
(ii), unless such Demand Registration constitutes a First Public
Offering), investment bankers or company-wide insurance providers of
the Company or any Subsidiary,
14
(xi) any amendment to this Agreement, any exercise or
waiver of the Company's rights under this Agreement, any amendment to
the Charter or Bylaws or any adoption of or amendment to the
certificate of incorporation or bylaws of any Subsidiary,
(xii) any approval of the annual business plan, budget and
long-term strategic plan of the Company or any Subsidiary,
(xiii) any modification of the long-term business strategy
or scope of the business of the Company or any Subsidiary or any
material customer relationships thereof.
(xiv) any increase or decrease to the number of Directors
that comprise the entire Board of the Company or any Subsidiary, or
(xv) any contract with, obligation to or transaction or
series of transactions between, the Company or any Subsidiary and one
or more of its stockholders or their Affiliates.
SECTION 2.06. Conflicting Charter or Bylaw Provisions. Each Shareholder
shall vote its Shares or execute proxies or written consents, as the case may
be, and shall take all other actions necessary, to ensure that the Company's
Charter and Bylaws (i) facilitate, and do not at any time conflict with, any
provision of this Agreement and (ii) permit each Shareholder to receive the
benefits to which each such Shareholder is entitled under this Agreement.
SECTION 2.07. Notice of Meeting. Each director shall receive notice and
the agenda of each meeting of the Board or any committee thereof at least five
days prior to such meeting.
SECTION 2.08. Subsidiary Governance. The Company and each Shareholder
agree that (i) the board of directors of each Subsidiary of the Company shall be
comprised of the individuals who are serving as directors on the Board in
accordance with Section 2.01 and (ii) the board of directors of any Subsidiary
shall be subject to all the provisions of this Article 2, including paragraph
(d) of Section 2.05. Each Shareholder agrees to vote its Shares and to cause its
representatives on the Board, subject to their fiduciary duties, to vote and
take other appropriate action to effectuate the agreements in this Section 2.08
in respect of any Subsidiary of the Company.
SECTION 2.09. Affiliate Transactions. The Company shall not, and will
not permit any of its Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property
15
or assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with or for the benefit of,
any Affiliate of the Company, unless such transaction is on terms that are no
less favorable to the Company or such Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Subsidiary with an
unrelated Person.
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General. (a) Each Shareholder understands and agrees that
the Company Securities purchased pursuant to the Merger and Recapitalization
Agreement have not been registered under the Securities Act and are restricted
securities under such Act and the rules and regulations promulgated thereunder.
Each Shareholder agrees that it will not Transfer any Company Securities (or
solicit any offers in respect of any Transfer of any Company Securities), except
in compliance with the Securities Act, any applicable foreign or state
securities or "blue sky" laws, and the terms and conditions of this Agreement.
(b) Any attempt to Transfer any Company Securities not in compliance
with this Agreement shall be null and void and the Company shall not, and shall
cause any transfer agent not to, give any effect in the Company's stock records
to such attempted Transfer.
SECTION 3.02. Legends. (a) In addition to any other legend that may be
required, each certificate for Company Securities that is issued to any
Shareholder shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SHAREHOLDERS' AGREEMENT
DATED AS OF DECEMBER 21, 2000, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM
AMI SPINCO, INC. OR ANY SUCCESSOR THERETO."
(b) If any Company Securities shall cease to be Registrable Securities
under clause (i) or clause (ii) of the definition thereof, the Company, upon the
written request of the holder thereof, shall issue to such holder a new
certificate evidencing such shares without the first sentence of the legend
required by Section
16
3.02(a) endorsed thereon. If any Company Securities cease to be subject to any
and all restrictions on Transfer set forth in this Agreement, the Company, upon
the written request of the holder thereof, shall issue to such holder a new
certificate evidencing such Company Securities without the second sentence of
the legend required by Section 3.02(a) endorsed thereon.
SECTION 3.03. Permitted Transferees. (a) Notwithstanding anything in
this Agreement to the contrary, any Shareholder may at any time Transfer any or
all of its Company Securities to one or more of its Permitted Transferees
without the consent of the Board or any other Shareholder or group of
Shareholders and without compliance with Sections 3.04, 4.01, 4.02 and 4.03 so
long as (a) such Permitted Transferee shall have agreed in writing to be bound
by the terms of this Agreement in the form of Exhibit A attached hereto and (b)
the Transfer to such Permitted Transferee is not in violation of applicable
federal or state securities laws.
(b) If any Permitted Transferee of any Shareholder to which Shares
have been transferred ceases to be a Permitted Transferee of such Shareholder,
such Permitted Transferee shall, and such Shareholder shall cause such Permitted
Transferee to, transfer back to such Shareholder (or to another Permitted
Transferee of such Shareholder) any Shares it owns on or prior to the date that
such Permitted Transferee ceases to be a Permitted Transferee of such
Shareholder.
SECTION 3.04. Restrictions on Transfers by the Institutional
Shareholders. (a) Except as provided in Section 3.03, each Institutional
Shareholder may transfer its Company Securities only as follows:
(i) in a Transfer made in compliance with Section 4.02,
(ii) in a Transfer made in compliance with Section 4.01 or
4.03, provided that until the third anniversary of the date of this
Agreement, no Institutional Shareholder shall be permitted to Transfer
any number of any class of Company Securities if such Transfer would
cause such Institutional Shareholder's Aggregate Ownership of such
class immediately following such Transfer to fall below two-thirds of
such Institutional Shareholder's Initial Ownership,
(iii) in a Public Offering in connection with the exercise
of its rights under Article 5 hereof, or
17
(iv) in a Transfer made at the conclusion of the
Applicable Holdback Period (as defined in Section 5.03) following the
First Public Offering, in compliance with Rule 144 under the Securities
Act.
(b) In addition to the foregoing paragraph (a) of this Section
3.04, if the Institutional Shareholders agree in writing, the Institutional
Shareholders may each Transfer 10% of such Institutional Shareholder's Initial
Ownership of any class of Company Securities to any Person on or before the
181st day following the date of this Agreement. The provisions of Section 4.01
and 4.03 shall not apply to Transfers made pursuant to this paragraph (b) of
this Section 3.04.
(c) No Institutional Shareholder shall Transfer Company Securities
to an Adverse Person (other than by Transfer pursuant to Section 4.02, in a
Public Offering or through a national securities exchange) at any time.
SECTION 3.05. Restrictions on Transfers by the Other Shareholders. (a)
Except as provided in Section 3.03, each Other Shareholder may transfer its
Company Securities only as follows:
(i) as a Tagging Person in a Transfer made in compliance
with Section 4.01,
(ii) in a Transfer made in compliance with Section 4.02,
(iii) after the second anniversary after the date of this
Agreement, in any Transfer made in compliance with Section 4.01 as a
Tag-Along Seller or Section 4.03, provided that no Other Shareholder
shall be permitted to Transfer shares of any class of Company
Securities pursuant to this 3.05(a)(iii) if such Transfer would cause
such Other Shareholder's Aggregate Ownership of such class immediately
following such Transfer to fall below two-thirds of such Other
Shareholder's Initial Ownership,
(iv) after the third anniversary after the date of this
Agreement, in any Transfer made in compliance with Section 4.01 as a
Tag-Along Seller or Section 4.03, provided that no Other Shareholder
shall be permitted to Transfer shares of any class of Company
Securities pursuant to this Section 3.05(a)(iv) if such Transfer would
cause such Other Shareholder's Aggregate Ownership of such class
immediately following such Transfer to fall below one-third of such
Other Shareholder's Initial Ownership,
(v) after the fourth anniversary after the date of this
Agreement, in any Transfer made in compliance with Section 4.01 or
4.03,
18
(vi) in a Public Offering in connection with the exercise
of its rights under Article 5 hereof, or
(vii) in a Transfer made at the conclusion of the
Applicable Holdback Period (as defined in Section 5.03) following the
First Public Offering, in compliance with Rule 144 under the Securities
Act.
(b) No Other Shareholder shall Transfer Company Securities to an
Adverse Person (other than by Transfer pursuant to Section 4.02, in a
Public Offering or through a national securities exchange) at any time.
(c) It is understood and agreed that GA-TEK shall not transfer the
Warrant (prior to the exercise of such Warrant) at any time, under any
circumstances, to any Person, other than to GA-TEK's Permitted
Transferees.
SECTION 3.06. Restrictions on Transfer under a Credit Agreement,
Indenture or Other Agreement for Indebtedness. Notwithstanding the foregoing
provisions of this Article 3, if a Transfer otherwise permitted hereunder would
trigger, under the terms of any outstanding credit agreement, indenture or any
other agreement for indebtedness, (i) a change of control requiring repayment or
(ii) other adverse consequence, then such Transfer shall be prohibited, provided
however that this Section 3.06 shall not prohibit GA-TEK from making a Transfer
to JEC.
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; RIGHTS OF FIRST REFUSAL;
PREEMPTIVE RIGHTS
SECTION 4.01. Rights to Participate in Transfer. (a) Subject to
Sections 3.04, 3.05, 3.06, 4.01(h) and 4.03, if any Shareholder (the "TAG-ALONG
SELLER") proposes to Transfer any number of any class of Company Securities (a
"TAG-ALONG SALE"), the Shareholders other than the Tag-Along Seller (each, an
"ELIGIBLE SHAREHOLDER") may elect, at their option, to exercise their rights
under this Section 4.01 (each such Shareholder, a "TAGGING PERSON"), provided
that with respect to any such Transfer that is also governed by Section 4.03
hereof, the Shareholders having a right of first refusal under such Section (and
the Company) shall have first been afforded the opportunity to acquire any
Company Securities to be sold in a Tag-Along Sale in accordance with the
provisions of Section 4.03.
In the event of such a proposed Transfer, the Tag-Along Seller shall,
after such Shareholders and the Company have declined, or are deemed to have
19
declined, to exercise their right of first refusal as provided in Section 4.03,
provide each Eligible Shareholder written notice of the terms and conditions of
such proposed transfer ("TAG-ALONG NOTICE") and offer each Tagging Person the
opportunity to participate in such sale. The Tag-Along Notice shall identify the
number and class of Company Securities subject to the offer ("TAG-ALONG OFFER"),
the cash price at which the Transfer is proposed to be made, and all other
material terms and conditions of the Tag-Along Offer, including the form of the
proposed agreement, if any.
From the date of the receipt of the Tag-Along Notice, each Tagging
Person shall have the right (a "TAG-ALONG RIGHT"), exercisable by written notice
("TAG-ALONG RESPONSE NOTICE") given to the Tag-Along Seller within 15 Business
Days of its receipt of the Tag-Along Notice (the "TAG-ALONG NOTICE PERIOD"), to
request that the Tag-Along Seller include in the proposed Transfer the number of
Company Securities held by such Tagging Person as is specified in such notice,
provided that, if the aggregate number of Company Securities proposed to be sold
by the Tag-Along Seller and all Tagging Persons in such transaction exceeds the
number of Company Securities that can be sold on the terms and conditions set
forth in the Tag-Along Notice, then (i) each Tagging Person shall be entitled to
include in the Tag-Along Sale only its Tag-Along Portion of Company Securities
and (ii) the Tag-Along Seller shall be entitled to include the number of Company
Securities proposed to be Transferred by the Tag-Along Seller as set forth in
the Tag-Along Notice (reduced, to the extent necessary, so that each Tagging
Person shall be able to include its Tag-Along Portion) and such additional
Company Securities as permitted by Section 4.01(d). Each Tagging Person that
exercises its Tag-Along Rights hereunder shall deliver to the Tag-Along Seller,
together with its Tag-Along Response Notice, the certificate or certificates
representing the Company Securities of such Tagging Person to be included in the
Transfer, together with a limited power-of-attorney authorizing the Tag-Along
Seller to Transfer such Company Securities on the terms set forth in the
Tag-Along Notice. Delivery of such certificate or certificates representing the
Company Securities to be Transferred and the limited power-of-attorney
authorizing the Tag-Along Seller to Transfer such Company Securities shall
constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging
Persons. Each Tag-Along Response Notice shall include wire transfer instructions
for payment of the purchase price for the Company Securities to be sold in such
Tag-Along Sale. The Tagging Persons shall (a) be required (i) to bear their
proportionate share of any escrows, holdbacks or adjustments in purchase price
and any transaction expenses and (ii) to make such representations, warranties
and covenants and enter into such agreements as are customary for transactions
of the nature of the Tag-Along Offer, in each case under the terms of any
definitive agreement(s) relating to such Tag-Along Offer and (b) benefit from
all of the same provisions of the definitive agreements as the Tag-Along Seller,
it being understood that any
20
liability of any Tagging Person for indemnification or similar post-closing
obligations shall not exceed the consideration such Tagging Person receives in
the Tag-Along Sale and shall not exceed a proportional share of any such
liability based on such Tagging Person's share of the aggregate consideration in
the Tag-Along Sale.
If, at the end of a 90-day period after such delivery (which 90-day
period shall be extended if any of the transactions contemplated by the
Tag-Along Offer are subject to regulatory approval until the expiration of five
Business Days after all such approvals have been received, but in no event later
than 180 days following receipt of the Tag-Along Response Notice by the
Tag-Along Seller), the Tag-Along Seller has not completed the Transfer of all
such Company Securities on substantially the same terms and conditions set forth
in the Tag-Along Notice, the Tag-Along Seller shall (i) return to each Tagging
Person the limited power-of-attorney (and all copies thereof) together with all
certificates representing the Company Securities that such Tagging Person
delivered for Transfer pursuant to this Section 4.01(a) and (ii) not conduct any
Transfer of Company Securities without again complying with this Section.
(b) Concurrently with the consummation of the Tag-Along Sale, the
Tag-Along Seller shall notify the Tagging Persons thereof, shall remit to the
Tagging Persons the total consideration (by bank or certified check) for the
Company Securities of the Tagging Persons transferred pursuant thereto, and
shall, promptly after the consummation of such Tag-Along Sale, furnish such
other evidence of the completion and time of completion of such transfer and the
terms thereof as may be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any
Eligible Shareholder shall not have elected to participate in the Tag-Along
Sale, such Eligible Shareholder will be deemed to have waived its rights under
Section 4.01(a) with respect to the Transfer of its securities pursuant to such
Tag-Along Sale.
(d) If (i) any Eligible Shareholder declines to exercise its
Tag-Along Rights or (ii) any Tagging Person elects to exercise its Tag-Along
Rights with respect to less than such Tagging Person's Tag-Along Portion, the
Tag-Along Seller shall be entitled to Transfer, pursuant to the Tag-Along Offer,
a number of Company Securities held by it equal to the number of Company
Securities constituting, as the case may be, the Tag-Along Portion of such
Eligible Shareholder or the portion of such Tagging Person's Tag-Along Portion
with respect to which Tag-Along Rights were not exercised.
21
(e) The Tag-Along Seller may Transfer, on behalf of itself and any
Tagging Person who exercises the Tag-Along Rights pursuant to this Section
4.01(a), the Company Securities subject to the Tag-Along Offer and elected to be
Transferred on the terms and conditions set forth in the Tag-Along Notice within
90 days (or such longer period as extended under Section 4.01(a)) of the date on
which all Tag-Along Rights shall have been waived, exercised or expire provided
that, if such Tag-Along Sale is subject to regulatory approval, such 90 day
period shall be extended until the expiration of five Business Days after all
such approvals have been received, but in no event later than 180 days following
the effective date of the Tag-Along Sale Notice.
(f) Notwithstanding the requirements of this Section 4.01, a
Tag-Along Seller may Transfer Company Securities at any time without complying
with the requirements of paragraphs (a) and (b) of Section 4.01 so long as such
Transfer is solely for cash and the Tag-Along Seller deposits into escrow with
an independent third party at the time of Transfer that amount of the
consideration received in the sale equal to the "Escrow Amount." The "ESCROW
AMOUNT" shall equal that amount of consideration that all the Eligible
Shareholders would have been entitled to receive if each of the Eligible
Shareholders had the opportunity to participate in the Transfer as a Tagging
Person to the extent of its Tag-Along Portion, determined as if each such
Eligible Shareholder (i) delivered a Tag-Along Response Notice to the Tag-Along
Seller in the time period set forth in Section 4.01(a) and (ii) proposed to
include all of its Company Securities which it would have been entitled to
include in the Transfer.
No later than the date of the Transfer, the Tag-Along Seller shall
notify the Company in writing of the proposed Transfer. Such notice (the "ESCROW
NOTICE") shall set forth the information required in the Tag-Along Notice, and
in addition, such notice shall state the name of the escrow agent and the
account number of the escrow account. The Company shall promptly, and in any
event within 10 days, deliver or cause to be delivered the Escrow Notice to each
Eligible Shareholder.
An Eligible Shareholder may exercise the tag-along right described in
this clause (e) by delivery to the Tag-Along Seller, within 15 days of the date
the Company delivered or caused to be delivered the Escrow Notice, of (i) a
written notice specifying the number of Company Securities it proposes to sell
(which such number shall not exceed such Eligible Shareholder's Tag-Along
Portion), and (ii) the certificates representing such securities, with transfer
powers duly endorsed in blank.
Promptly after the expiration of the 15th day after the Company has
delivered or caused to be delivered the Escrow Notice, (i) the Tag-Along Seller
shall purchase that number of Company Securities as Tag-Along Seller would
22
have been required to include in the sale had Tag-Along Seller complied with the
provisions of Section 4.01(a), (ii) the Company shall cause to be released from
the escrow to the Eligible Shareholder from whom the Tag-Along Seller purchases
Company Securities pursuant to clause (i) of this paragraph the applicable
amount of consideration due to such Eligible Shareholder together with any
interest thereon, and (iii) all remaining funds and other consideration held in
escrow shall be released to the Tag-Along Seller.
(g) Notwithstanding anything contained in this Section 4.01, there
shall be no liability on the part of the Tag-Along Seller to the Tagging Persons
(other than the obligation to return any certificates evidencing Company
Securities received by the Tag-Along Seller) if the Transfer of Company
Securities pursuant to Section 4.01 is not consummated for whatever reason.
Whether to effect a Transfer of Company Securities pursuant to this Section 4.01
by the Tag-Along Seller is in the sole and absolute discretion of the Tag-Along
Seller.
(h) The provisions of this Section 4.01 shall not apply to any
proposed Transfer of any class of Company Securities by the Tag-Along Seller (A)
in a Public Offering or pursuant to Rule 144 or (B) pursuant to Section 4.02 or
Section 4.03.
(i) This Section 4.01 shall terminate upon the date on which the
Aggregate Ownership of the Institutional Shareholders together falls below 35%
of the aggregate Initial Ownership of such Institutional Shareholders.
SECTION 4.02. Right to Compel Participation in Certain Transfers. (a)
If the Institutional Shareholders together propose (i) to Transfer not less than
50% of their Initial Ownership of any class of Company Securities to a Third
Party in a bona fide sale or (ii) a Transfer in which the Company Securities to
be Transferred by the Institutional Shareholders together, plus the Company
Securities to be Transferred by the Other Shareholders pursuant to this Section
4.02(a), constitute more than 50% of the outstanding Company Securities in a
particular class (a "COMPELLED SALE"), the Institutional Shareholders together
may at their option require all Other Shareholders to Transfer the Drag-Along
Portion of such class of Company Securities ("DRAG-ALONG RIGHTS") then held by
every Other Shareholder, and in the case of a Compelled Sale involving Common
Shares (but subject to and at the closing of the Compelled Sale) to exercise
such number of options or Warrants for Common Shares held by every Other
Shareholder as is required in order that a sufficient number of Common Shares
are available to Transfer the relevant Drag-Along Portion of each such Other
Shareholder, for the same consideration per unit of the relevant class of
Company Security and otherwise on the same terms and conditions as the
Institutional Shareholders, provided that any Other Shareholder who holds
options or Warrants the exercise
23
price per share of which is greater than the per share price at which the Common
Shares are to be Transferred to the Third Party may, if required by the
Institutional Shareholders to exercise such options, in place of such exercise,
submit to irrevocable cancellation thereof without any liability for payment of
any exercise price with respect thereto. If the Compelled Sale is not
consummated with respect to any Common Shares acquired upon exercise of such
options or Warrants, or the Compelled Sale is not consummated, such options or
Warrants shall be deemed not to have been exercised or canceled, as applicable.
The Institutional Shareholders shall provide written notice of such Compelled
Sale to the Other Shareholders (a "COMPELLED SALE NOTICE") not later than the
15th day prior to the proposed Compelled Sale. The Compelled Sale Notice shall
identify the transferee, the number of Company Securities subject to the
Compelled Sale, the consideration for which a Transfer is proposed to be made
(the "COMPELLED SALE PRICE") and all other material terms and conditions of the
Compelled Sale. The number of Company Securities to be sold by each Other
Shareholder will be the Drag-Along Portion of the class of Company Securities
that such Other Shareholder owns. Each Other Shareholder shall be required to
participate in the Compelled Sale on the terms and conditions set forth in the
Compelled Sale Notice and to tender all its Company Securities as set forth
below. The price payable in such Transfer shall be the Compelled Sale Price. Not
later than the 10th day following the date of the Compelled Sale Notice (the
"COMPELLED SALE NOTICE PERIOD"), each of the Other Shareholders shall deliver to
a representative of the Institutional Shareholders designated in the Compelled
Sale Notice certificates, and in the case of Warrants, the applicable
instrument, representing all Company Securities comprising the Drag-Along
Portion held by such Other Shareholder, duly endorsed, together with all other
documents required to be executed in connection with such Compelled Sale or, if
such delivery is not permitted by applicable law, an unconditional agreement to
deliver such Company Securities pursuant to this Section 4.02(a) at the closing
for such Compelled Sale against delivery to such Other Shareholder of the
consideration therefor. If an Other Shareholder should fail to deliver such
certificates to the Institutional Shareholders, the Company (subject to reversal
under Section 4.02(b)) shall cause the books and records of the Company to show
that such Company Securities are bound by the provisions of this Section 4.02(a)
and that such Company Securities shall be Transferred to the Third Party
immediately upon surrender for Transfer by the holder thereof. The Other
Shareholders shall (a) be required (i) to bear their proportionate share of any
escrows, holdbacks or adjustments in purchase price and any transaction expenses
and (ii) to make such representations, warranties and covenants and enter into
such agreements as are customary for transactions of the nature of the Compelled
Sale, in each case under the terms of any definitive agreements relating to such
Compelled Sale and (b) benefit from all of the same provisions of the definitive
agreements as the Institutional Shareholders, it being understood that any
liability of any Other Shareholder for indemnification or
24
similar post-closing obligations shall not exceed the consideration such Other
Shareholder receives in the Compelled Sale and shall be a proportional share of
any such liability based on such Other Shareholder's share of the aggregate
consideration in the Compelled Sale.
(b) The Institutional Shareholders shall have a period of 90 days
from the date of receipt of the Compelled Sale Notice to consummate the
Compelled Sale on the terms and conditions set forth in such Compelled Sale
Notice, provided that, if such Compelled Sale is subject to regulatory approval,
such 90-day period shall be extended until the expiration of five Business Days
after all such approvals have been received, but in no event later than 180 days
following the effective date of the Compelled Sale Notice. If the Compelled Sale
shall not have been consummated during such period, the Institutional
Shareholders shall return to each of the Other Shareholders all certificates or
other applicable instruments representing Company Securities that such Other
Shareholders delivered for Transfer pursuant hereto, together with any documents
in the possession of the Institutional Shareholders executed by the Other
Shareholders in connection with such proposed Transfer, and all the restrictions
on Transfer contained in this Agreement or otherwise applicable at such time
with respect to such Company Securities owned by the Other Shareholders shall
again be in effect.
(c) Concurrently with the consummation of the Transfer of Company
Securities pursuant to this Section 4.02, the Institutional Shareholders shall
give notice thereof to the Other Shareholders, shall remit to each of the Other
Shareholders who have surrendered their certificates or other applicable
instruments the total consideration (the cash portion of which is to be paid by
bank or certified check) for the Company Securities Transferred pursuant hereto
and shall furnish such other evidence of the completion and time of completion
of such Transfer and the terms thereof as may be reasonably requested by such
Other Shareholders.
(d) Notwithstanding anything contained in this Section 4.02, there
shall be no liability on the part of the Institutional Shareholders to the Other
Shareholders (other than the obligation to return any certificates or other
applicable instruments representing Company Securities received by any
Institutional Shareholders) if the Transfer of Company Securities pursuant to
this Section 4.02 is not consummated for whatever reason, regardless of whether
the Institutional Shareholders have delivered a Compelled Sale Notice. Whether
to effect a Transfer of Company Securities pursuant to this Section 4.02 by the
Institutional Shareholders is in the sole and absolute discretion of the
Institutional Shareholders.
25
(e) This Section 4.02 shall terminate upon the earlier to occur of
(i) the third anniversary of the First Public Offering and (ii) the date on
which the Aggregate Ownership of the Institutional Shareholders together falls
below 35% of the aggregate Initial Ownership of such Institutional Shareholders.
(f) The Institutional Shareholders together shall be permitted,
instead of effecting a Compelled Sale pursuant to this Section 4.02, instead to
elect to effect a Compelled Sale pursuant to Section 4.06 of the Charter, in
which case the provisions in Section 4.06 of the Charter shall govern for
purposes of such Compelled Sale in lieu of Section 4.02.
SECTION 4.03. Right of First Refusal. (a) Subject to Sections 3.04,
3.05 and 3.06, if any of the Shareholders receives from or otherwise negotiates
with a Third Party in a private transaction an offer to purchase for cash any or
all of the Company Securities owned or held by such Shareholder (an "OFFER ")
and such Shareholder (a "SELLER") intends to pursue such Transfer of such
Company Securities to such Third Party, such Seller shall provide the
Institutional Shareholders (the "NON-SELLING SHAREHOLDERS"), and the Company
written notice of such Offer (an "OFFER NOTICE "). The Offer Notice shall
identify the number and class of Company Securities subject to the Offer (the
"OFFERED SECURITIES"), the cash price per share at which a sale is proposed to
be made (the "OFFER PRICE") and all other material terms and conditions of the
Offer.
(b) The receipt of an Offer Notice by the Company and the
Non-Selling Shareholders from any Seller shall constitute an offer by such
Seller to Transfer, to the Company and such Non-Selling Shareholders, for cash
in whole and not in part, with the Company having priority with respect to the
acceptance of the Offer, the Offered Securities at the Offer Price. If the
Company does not accept the offer, in whole and not in part, in accordance
herewith, then such offer may be accepted at the Offer Price by each of the
Non-Selling Shareholders on a pro rata basis based on each such Non-Selling
Shareholder's Offer Pro Rata Portion unless the Non-Selling Shareholders shall
agree to another allocation resulting in acceptance of the Offer with respect to
all Offered Securities. Such offer shall be irrevocable for 15 days after
receipt of such Offer Notice by the Company and each Non-Selling Shareholder.
During such 15-day period, subject to the Company's priority right of exercise
as set forth above, each Non-Selling Shareholder shall have the right to accept
such offer (as provided above) within such period. The offer may be accepted by
giving a written irrevocable notice of acceptance to such Seller prior to the
expiration of such 15-day period.
If every Non-Selling Shareholder receiving the Offer Notice does not
elect to purchase Offered Securities, the Seller shall not be required to sell
any Offered Securities accepted pursuant to the offer, but shall, within five
days of the
26
expiration of the initial 15-day period, provide written notice to all
Non-Selling Shareholders that did accept the initial offer, informing them that
they have the right to increase the number of Offered Securities that they
accepted pursuant to the initial offer. Each such Non-Selling Shareholder will
then have a five-day period in which to accept such second offer, by giving
written notice of acceptance to the Seller prior to the expiration of such
five-day period, as to all of such Shareholder's portion of the Offered
Securities not accepted pursuant to the initial offer (on the basis of such
Shareholder's Offer Pro Rata Portion compared to the Offer Pro Rata Portion of
all other Non-Selling Shareholders receiving the second offer) plus any
additional portion not accepted by any other Non-Selling Shareholder during such
five-day period.
If any Non-Selling Shareholder fails to notify the Seller prior to the
expiration of the initial 15-day period or the second five-day period, as
applicable, referred to above, it will be deemed to have declined the initial
offer or second offer, as applicable.
For purposes of this Section 4.03 only, "OFFER PRO RATA PORTION" means
the fraction that results from dividing (i) the Aggregate Ownership of the same
class of Company Securities as the Offered Securities by such Non-Selling
Shareholder by (ii) the Aggregate Ownership of such class of all Non-Selling
Shareholders.
(c) If the Company and/or the Non-Selling Shareholders elect to
purchase all the Offered Securities, the Company and/or the Non-Selling
Shareholders, as the case may be, exercising their rights of first refusal as to
the Offered Securities shall purchase and pay, by bank or certified check (in
immediately available funds), at the Offer Price for all Offered Securities
within a 30-day period of the date on which all Offered Securities have been
accepted, provided that, if the purchase and sale of such Offered Securities is
subject to any prior regulatory approval, subject to Section 4.03(d)(iii), the
time period during which such purchase and sale may be consummated shall be
extended until the expiration of five Business Days after all such approvals
shall have been received, but in no event shall such period be extended for more
than an additional 90 days without the consent of the Company.
(d) Upon the earlier to occur of (i) full rejection of the offer
by the Company and the Non-Selling Shareholders, (ii) the expiration of the
initial 15-day period and the second five-day period without Non-Selling
Shareholders electing to purchase all of the Offered Securities or (iii) the
failure to obtain any required consent or regulatory approval for the purchase
of all of the Offered Securities by the Company or the Non-Selling Shareholders
within 90 days of full acceptance of the offer, Seller shall have a 90-day
period during which to effect a
27
Transfer to the Third Party making the Offer of any or all of the Offered
Securities on substantially the same or more favorable (as to the Seller) terms
and conditions as were set forth in the Offer Notice at a price in cash not less
than the Offer Price, provided that (i) such Third Party shall have agreed in
writing to be bound by the terms of this Agreement and (ii) the Transfer to such
Third Party is not in violation of applicable federal or state or foreign
securities laws, and provided, further, that, if the Transfer is subject to
regulatory approval, such 90-day period shall be extended until the expiration
of five Business Days after all such approvals shall have been received, but in
no event shall such period be extended for more than an additional 90 days
without the consent of the Company. If the Seller does not consummate the
Transfer of the Offered Securities in accordance with the foregoing time
limitations, then the right of the Seller to Transfer such Offered Securities,
and the rights of the Company and the Non-Selling Shareholders to purchase them
pursuant to this Section 4.03, shall terminate and the Seller shall again comply
with the procedures set forth in this Section 4.03 with respect to any proposed
Transfer in accordance with Section 3.04 and 3.05.
(e) The provisions of this Section 4.03 shall not apply to any
Transfer (i) pursuant to a Public Offering or (ii) to the Company.
(f) This Section 4.03 shall terminate upon the earlier to occur of
(i) the First Public Offering and (ii) a Change of Control.
SECTION 4.04. Preemptive Rights. (a) The Company shall provide each
Shareholder with a written notice (an "ISSUANCE NOTICE") of any proposed
issuance by the Company of any class of Company Securities or any new class of
Company Securities ("NEW SECURITIES") to any Shareholder or its Affiliates (the
"PURCHASING SHAREHOLDER") at least 20 days prior to the proposed issuance date.
Such notice shall specify the price at which such Company Securities or New
Securities are to be issued, the class of such securities and the other material
terms of the issuance. Subject to Section 4.04(e) below, if the Purchasing
Shareholder proposes to purchase any such Company Securities or New Securities
from the Company, each Shareholder (other than the Purchasing Shareholder, the
"PREEMPTIVE SHAREHOLDERS") shall be entitled to purchase, at the price and on
the terms at which the Purchasing Shareholder proposes to purchase such Company
Securities or New Securities and specified in such Issuance Notice, such
Preemptive Shareholder's Issuance Pro Rata Portion (as hereinafter defined) of
the Company Securities or New Securities proposed to be issued.
"ISSUANCE PRO RATA PORTION" means, with respect to any Preemptive
Shareholder and any class of Company Securities proposed to be issued by the
Company with respect to which Preemptive Shareholders shall be entitled to
exercise their rights under this Section 4.04, the fraction that results from
dividing
28
(x) such Preemptive Shareholder's Aggregate Ownership of such class by (y) the
Aggregate Ownership of such class of all Shareholders. To the extent that the
class of Securities proposed to be issued are New Securities, "Issuance Pro Rata
Portion" shall mean, (i) if such New Securities are Common Shares or are
convertible into Common Shares, the fraction that results from dividing (x) such
Preemptive Shareholder's Aggregate Ownership of Common Stock by (y) the
Aggregate Ownership of Common Stock of all Shareholders, or (ii) if such New
Securities are shares of preferred stock or are convertible into shares of
preferred stock, the fraction that results from dividing (x) such Preemptive
Shareholder's Aggregate Ownership of Senior Preferred Stock by (y) the Aggregate
Ownership of Senior Preferred Stock of all Shareholders.
(b) A Preemptive Shareholder may exercise its rights under this
Section 4.04 by delivering written notice of its election to purchase such
Company Securities to the Company and the Purchasing Shareholder and to each
Preemptive Shareholder within five days of receipt of the Issuance Notice. A
delivery of such a written notice (which notice shall specify the number (or
amount) of Company Securities to be purchased by the Preemptive Shareholder
submitting such notice) by such Preemptive Shareholder shall constitute a
binding agreement of such Preemptive Shareholder to purchase, at the price and
on the terms specified in the Issuance Notice, the number of shares (or amount)
of Company Securities specified in such Preemptive Shareholder's written notice.
If, at the termination of such five-day period, any Preemptive Shareholder shall
not have exercised its rights to purchase any of such Preemptive Shareholder's
Issuance Pro Rata Portion of such Company Securities or New Securities, such
Preemptive Shareholder will be deemed to have waived any and all of its rights
under this Section 4.04 with respect to the purchase of such Company Securities
or New Securities.
(c) If every Preemptive Shareholder receiving an Issuance Notice
does not elect to purchase the securities offered thereunder, the Company shall,
within five days prior to the proposed issuance, provide written notice to all
participating Preemptive Shareholders that did elect to participate in such
Issuance, informing them that they have the right to increase the number of
securities that they elected to purchase pursuant to the Issuance Notice. Each
such participating Preemptive Shareholder will then have a five-day period in
which to elect to participate in such second offer, by giving written notice of
acceptance to the Company prior to the expiration of such five-day period, as to
all of such Preemptive Shareholder's portion of securities not accepted pursuant
to the initial offer (on the basis of such Preemptive Shareholder's Issuance Pro
Rata Portion compared to the Issuance Pro Rata Portion of all other Preemptive
Shareholders receiving the second offer) plus any additional portion not
accepted by any other Preemptive Shareholder during such five-day period.
29
If any Preemptive Shareholder fails to notify the Company prior to the
expiration of the initial five-day period or the second five-day period, as
applicable, referred to above, it will be deemed to have declined the initial
offer or second offer, as applicable.
(d) The Company shall have 90 days from the date of the Issuance
Notice to consummate the proposed issuance of any or all of such Company
Securities or New Securities that the Purchasing Shareholder and the Preemptive
Shareholders have elected to purchase at the price and upon terms that are not
materially less favorable to the Company than those specified in the Issuance
Notice, provided that, if such issuance is subject to regulatory approval, such
90-day period shall be extended until the expiration of five Business Days
after all such approvals have been received, but in no event later than 180 days
from the date of the Issuance Notice. At the consummation of such issuance, the
Company shall issue certificates representing the Company Securities or New
Securities to be purchased by each Purchasing Shareholder and each Preemptive
Shareholder registered in the name of such Shareholder, against payment by such
Shareholder of the purchase price for such Company Securities or New Securities.
If the Company proposes to issue any class of Company Securities or New
Securities to any Shareholder after such 90-day period, it shall again comply
with the procedures set forth in this Section.
(e) Notwithstanding the foregoing, no Shareholder shall be
entitled to purchase Company Securities or New Securities as contemplated by
this Section 4.04 in connection with issuances of Company Securities or New
Securities (i) to employees of the Company or any Subsidiary pursuant to
employee benefit plans or arrangements approved by the Board (including upon the
exercise of employee stock options), (ii) pursuant to any bona fide,
arm's-length restructuring of outstanding debt of the Company or any Subsidiary,
(iii) pursuant to any bona fide, arm's-length direct or indirect merger,
acquisition or similar transaction, (iv) pursuant to the First Public Offering
or (v) for consideration other than cash. The Company shall not be under any
obligation to consummate any proposed issuance of Company Securities or New
Securities, nor shall there be any liability on the part of the Company to any
Shareholder if the Company has not consummated any proposed issuance of Company
Securities or New Securities pursuant to this Section 4.04 for whatever reason,
regardless of whether it shall have delivered a Issuance Notice in respect of
such proposed issuance.
(f) The provisions of this Section 4.04 shall terminate upon the
consummation of the First Public Offering. The rights of any Preemptive
Shareholder with respect to any class of Company Securities or New Securities
under this Section 4.04 shall terminate at such time as such Preemptive
30
Shareholder's Aggregate Ownership of such class (determined as to New Securities
in the manner described in the second sentence of the definition of Issuance Pro
Rata Portion) divided by its Initial Ownership of such class is less than 10%.
SECTION 4.05. Right to Compel the First Public Offering.
(a) Notwithstanding anything to the contrary contained in this
Agreement or otherwise, the stockholders of the Company can compel the Company
to commence a First Public Offering by the affirmative vote of the Institutional
Shareholders.
(b) The Institutional Shareholders agree, at the request of one of
the Institutional Shareholders, to vote in favor of a First Public Offering if
such offering can be completed on a basis such that the Total Equity Value
(calculated as provided below based upon the IPO Valuation) is greater than or
equal to the Threshold Price. The "IPO VALUATION" means a valuation prepared in
good faith by a nationally recognized independent investment banking firm (which
may be a proposed underwriter for such offering) reasonably acceptable to both
Institutional Shareholders, and establishing to the reasonable satisfaction of
both Institutional Shareholders that there is a reasonable certainty that the
Company's First Public Offering would be completed at or above the Threshold
Price. "THRESHOLD PRICE" means $840,000,000 reduced by (i) any cash actually
received by the Institutional Shareholders with respect to their Initial
Ownership of Company Securities during the period from the Closing Date through
the date of such IPO Valuation, (ii) any cash that the investment banking firm
shows in its IPO Valuation is to be actually received by the Institutional
Shareholders with respect to their Initial Ownership of Company Securities in
connection with the First Public Offering and (iii) the liquidation preference
of any Preferred Stock that is part of the Institutional Shareholders' Initial
Ownership and that the investment banking firm shows in its IPO Valuation will
remain outstanding after the First Public Offering. "TOTAL EQUITY VALUE" means
the value (based upon the IPO Valuation) of the Initial Ownership of Common
Shares of all Institutional Shareholders (excluding unexercised options and
warrants, but including all Common Shares that are to be acquired by the
Institutional Shareholders upon the conversion of any of their Initial Ownership
of Company Securities in connection with the First Public Offering).
31
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration. (a) If, at any time after the
earlier of 180 days after the consummation of the Company's First Public
Offering and the Applicable Holdback Period, the Company shall receive a written
request from either (x) both Institutional Shareholders or after the first
anniversary of the First Public Offering, either Institutional Shareholder (an
"INSTITUTIONAL DEMAND") or (y) either of the Institutional Shareholders and
GA-TEK (a "JOINT DEMAND") that the Company effect the registration under the
Securities Act of all or a portion of such Requesting Shareholder's Registrable
Securities, and specifying the intended method of disposition thereof, then the
Company shall promptly give written notice of such requested registration at
least 15 days prior to the anticipated filing date of the registration statement
relating to such Demand Registration to each Non-Requesting Shareholder. In
addition, if at any one time after the first anniversary of the Company's First
Public Offering, the Company shall receive a written request from GA-TEK (a
"GA-TEK DEMAND") that the Company effect the registration under the Securities
Act of all or a portion of GA-TEK's Registrable Securities, and specifying the
intended method of disposition thereof, then the Company shall promptly give
written notice of such requested registration at least 15 days prior to the
anticipated filing date of the registration statement relating to such Demand
Registration to each Non-Requesting Shareholder. Upon the Company's giving
notice of a requested registration, the Company will use its best efforts to
effect, as expeditiously as possible, the registration under the Securities Act
of:
(i) the Registrable Securities that the Company has been
so requested to register by the Requesting Shareholders, then held by
the Requesting Shareholders, and
(ii) subject to the restrictions set forth in Section
5.02, all other Registrable Securities of the same class as that
requested to be registered by the Requesting Shareholders which any
Non-Requesting Shareholder entitled to request the Company to effect an
Incidental Registration pursuant to Section 5.02 (all such
Shareholders, together with the Requesting Shareholders, the "HOLDERS")
have requested the Company to register by written request received by
the Company within 15 days after the receipt by such Holders of such
written notice given by the Company,
all to the extent necessary to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered, provided that any such Joint Demand occurring during the
period between the First Public Offering and the first anniversary of the First
Public
32
Offering can occur only following the first Institutional Demand, and provided
further that the Company shall not be obligated to effect a Demand Registration
unless the aggregate proceeds expected to be received from the sale of the
Common Shares requested to be included in such Demand Registration equal or
exceed $25,000,000 or, in the case of a Shortform Registration, $5,000,000. In
no event will the Company be required to effect more than one Demand
Registration hereunder within any six-month period.
"REQUESTING SHAREHOLDER" means (i) with respect to an Institutional
Demand, the Institutional Shareholder or Shareholders exercising such
Institutional Demand, or, (ii) in respect of a Joint Demand, an Institutional
Shareholder together with JEC, and (iii) in respect of a GA-TEK Demand, GA- TEK.
"NON-REQUESTING SHAREHOLDER" means each Shareholder with respect to a Demand
Registration that is not a Requesting Shareholder. Each of the Institutional
Demand, the Joint Demand and the GA-TEK Demand is referred to herein as a
"DEMAND REGISTRATION".
(b) Promptly after the expiration of the 15-day period referred to
in Section 5.01(a)(ii) hereof, the Company will notify all the Holders to be
included in the Demand Registration of the other Holders and the number of
shares of Registrable Securities requested to be included therein. At any time
prior to the effective date of the registration statement relating to such
registration, the Requesting Shareholders may revoke such request, without
liability to any of the other Holders, by providing a written notice to the
Company revoking such request. A request, so revoked, shall be considered to be
a Demand Registration unless (i) such revocation arose out of the fault of the
Company (in which case the Company shall be obligated to pay all Registration
Expenses in connection with such revoked request), or (ii) the Requesting
Shareholders reimburse the Company for all Registration Expenses of such revoked
request.
(c) The Company will be liable for and pay all Registration
Expenses in connection with any Demand Registration, regardless of whether it is
effected, except as provided in (b)(ii) above.
(d) A Demand Registration shall not be deemed to have occurred
(i) unless the registration statement relating thereto
(A) has become effective under the Securities Act and (B) has remained effective
for a period of at least 120 days (or such shorter period in which all
Registrable Securities of the Holders included in such registration have
actually been sold thereunder), provided that such registration statement shall
not be considered a Demand Registration if, after any registration statement
requested pursuant to this Section 5.01 becomes effective,
33
(x) such registration statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or other
governmental agency or court and (y) less than 75% of the Registrable
Securities included in such registration statement has been sold
thereunder, or
(ii) if the Maximum Offering Size (as defined below) is
reduced in accordance with Section 5.01(e) such that less than 75% of
the Registrable Securities of the Requesting Shareholders sought to be
included in such registration are included.
(e) If a Demand Registration involves an underwritten Public
Offering and the managing underwriter shall advise the Company and the
Requesting Shareholders that, in its view, the number of shares of Registrable
Securities requested to be included in such registration (including any
securities that the Company proposes to be included that are not Registrable
Securities) exceeds the largest number of shares that can be sold without having
an adverse effect on such offering, including the price at which such shares can
be sold (the "MAXIMUM OFFERING SIZE"), the Company will include in such
registration, in the priority listed below, up to the Maximum Offering Size:
(A) first, all Registrable Securities requested to be
registered by the Requesting Shareholders and their Permitted
Transferees and, in the case of a Joint Demand or an Institutional
Demand exercised by a single Institutional Shareholder, all Registrable
Securities requested to be registered by both Institutional
Shareholders and their Permitted Transferees (allocated, if necessary
for the offering not to exceed the Maximum Offering Size, pro rata
among such entities on the basis of the relative number of shares of
Registrable Securities so requested to be registered),
(B) second, all Registrable Securities requested to be
included in such registration by any Non-Requesting Shareholder and its
Permitted Transferees (allocated, if necessary for the offering not to
exceed the Maximum Offering Size, pro rata among the Non-Requesting
Shareholders and their Permitted Transferees on the basis of the
relative number of Registrable Securities so requested to be included
in such registration) excluding, for purposes of this paragraph (B),
the Registrable Securities of a Non-Requesting Institutional
Shareholder in the case of a Joint Demand or an Institutional Demand in
which such Non-Requesting Institutional Shareholder is included in
paragraph (A) above, and
34
(C) third, any securities proposed to be registered for
the account of any other Persons (including the Company), with such
priorities among them as the Company shall determine.
(f) Upon written notice to each Requesting Shareholder, the
Company may postpone effecting a registration pursuant to this Section 5.01 on
one occasion during any period of 12 consecutive months for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed), if (1) an investment banking firm of recognized national
standing shall advise the Company and the Requesting Shareholders in writing
that effecting the registration would materially and adversely affect an
offering of securities of such Company the preparation of which had then been
commenced or (2) the Company is in possession of material non-public information
the disclosure of which during the period specified in such notice the Company
believes would not be in the best interests of the Company.
SECTION 5.02. Incidental Registration. (a) If, at any time after the
First Public Offering, the Company proposes to register any Company Securities
under the Securities Act (other than a registration on Form S-8 or S-4, or any
successor or similar forms, relating to Common Shares issuable upon exercise of
employee stock options or in connection with any employee benefit or similar
plan of the Company or in connection with a direct or indirect acquisition by
the Company of another Person), whether or not for sale for its own account, it
will each such time, subject to the provisions of Section 5.02(b), give prompt
written notice at least 30 Business Days prior to the anticipated filing date of
the registration statement relating to such registration to each Shareholder,
which notice shall set forth such Shareholder's rights under this Section 5.02
and shall offer such Shareholder the opportunity to include in such registration
statement the number of Registrable Securities of the same class or series as
those proposed to be registered as each such Shareholder may request (an
"INCIDENTAL REGISTRATION"), subject to the provisions of 5.02(b). Upon the
written request of any such Shareholder made within 15 days after the receipt of
notice from the Company (which request shall specify the number of Registrable
Securities intended to be disposed of by such Shareholder), the Company will use
all reasonable efforts to effect the registration under the Securities Act of
all Registrable Securities that the Company has been so requested to register by
all such Shareholders, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered, provided that (i) if such
registration involves an underwritten Public Offering, all such Shareholders
requesting to be included in the Company's registration must sell their
Registrable Securities to the underwriters selected as provided in Section
5.04(f) on the same terms and conditions as apply to the Company or the
Requesting Shareholder, as applicable, and (ii) if, at any time after giving
written notice of its intention to register any securities pursuant to this
Section 5.02(a) and
35
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such securities, the Company shall give written notice to all such
Shareholders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration. No registration
effected under this Section 5.02 shall relieve the Company of its obligations to
effect a Demand Registration to the extent required by Section 5.01. The Company
shall pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 5.02.
(b) If a registration pursuant to this Section 5.02 involves an
underwritten Public Offering (other than any Demand Registration, in which case
the provisions with respect to priority of inclusion in such offering set forth
in Section 5.01(e) shall apply) and the managing underwriter advises the Company
that, in its view, the number of Shares that the Company and such Shareholders
intend to include in such registration exceeds the Maximum Offering Size, the
Company will include in such registration, in the following priority, up to the
Maximum Offering Size:
(i) first, so much of the securities proposed to be
registered for the account of the Company as would not cause the
offering to exceed the Maximum Offering Size,
(ii) second, all Registrable Securities requested to be
included in such registration by the Institutional Shareholders and
GA-TEK and each of their Permitted Transferees, (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such entities or persons on the basis of the relative number
of shares of Registrable Securities so requested to be included in such
registration),
(iii) third, any securities proposed to be registered for
the account of any other Persons with such priorities among them as the
Company shall determine.
SECTION 5.03. Holdback Agreements. If any registration of Registrable
Securities shall be in connection with a Public Offering, each Institutional
Shareholder and each Other Shareholder and the Company agree not to effect any
public sale or distribution, including any sale pursuant to Rule 144, or any
successor provision, under the Securities Act, of any Registrable Securities,
and not to effect any such public sale or distribution of any other security of
the Company or of any stock convertible into or exchangeable or exercisable for
any Common Stock (in each case, other than as part of such Public Offering)
during the 14 days prior to the effective date of the applicable registration
statement
36
(except as part of such registration) or during the period after such effective
date equal to the lesser of (i) such period of time as the Company and the lead
managing underwriter shall agree and (ii) 180 days (such lesser period, the
"APPLICABLE HOLDBACK PERIOD").
SECTION 5.04. Registration Procedures. Whenever Shareholders request
that any Registrable Securities be registered pursuant to Section 5.01 or 5.02
hereof, subject to the provisions of such Sections, the Company will use its
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a registration statement on any form reasonably acceptable to the
Requesting Shareholders for which the Company then qualifies or that counsel for
the Company shall deem appropriate and which form shall be available for the
sale of the Registrable Securities to be registered thereunder in accordance
with the intended method of distribution thereof, and use its best efforts to
cause such filed registration statement to become and remain effective for a
period of not less than 180 days, or in the case of a shelf registration
statement, one year (or such shorter period in which all of the Registrable
Securities of the Holders included in such registration statement shall have
actually been sold thereunder).
(b) Prior to filing a registration statement or prospectus or any
amendment or supplement thereto, the Company will, if requested, furnish to each
participating Shareholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such registration
statement as proposed to be filed, and thereafter the Company will furnish to
such Shareholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 or Rule 430A under the Securities Act and such other
documents as such Shareholder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Shareholder. Each Institutional Shareholder shall have the right to request that
the Company modify any information contained in such registration statement,
amendment and supplement thereto pertaining to such Institutional Shareholder
and the Company shall use all reasonable efforts to comply with such request,
provided, however, that the Company shall not have any obligation so to modify
any information if so doing would cause the prospectus to contain an untrue
statement of a material fact or omit to state any
37
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(c) After the filing of the registration statement, the Company
will (i) cause the related prospectus to be supplemented by any required
prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act, (ii) to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such registration statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus and (iii) promptly
notify each Shareholder holding Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC or any
state securities commission under state blue sky laws and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will use all reasonable efforts to (i) register or
qualify the Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions in the United
States as any Shareholder holding such Registrable Securities reasonably (in
light of such Shareholder's intended plan of distribution) requests and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder, provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
(e) The Company will immediately notify each Shareholder holding
such Registrable Securities covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an 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 promptly prepare and make available to each such Shareholder and
file with the SEC any such supplement or amendment.
38
(f) (i) The Institutional Shareholders will have the right, in
their sole discretion, to select an underwriter or underwriters in connection
with any Public Offering resulting from the exercise of a Demand Registration,
which underwriter or underwriters may include any Affiliate of any Institutional
Shareholder, and (ii) the Company will select an underwriter or underwriters in
connection with any other Public Offering. In connection with any Public
Offering, the Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities in any such Public Offering, including the engagement of
a "qualified independent underwriter" in connection with the qualification of
the underwriting arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and
substance reasonably satisfactory to the Company, the Company will make
available for inspection by any Shareholder and any underwriter participating in
any disposition pursuant to a registration statement being filed by the Company
pursuant to this Section 5.04 and any attorney, accountant or other professional
retained by any such Shareholder 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 or desirable 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 Inspectors in connection with
such registration statement. Records that the Company determines, in good faith,
to be confidential and that it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such registration
statement or (ii) the release of such Records is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction. Each Shareholder agrees
that information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it or its Affiliates as the basis for any
market transactions in the Company Securities unless and until such is made
generally available to the public. Each Shareholder further agrees that, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, it will give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
(h) The Company will furnish to each such Shareholder and to each
such underwriter, if any, a signed counterpart, addressed to such Shareholder or
underwriter, 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 kind
39
customarily covered by opinions or comfort letters, as the case may be, as a
majority of such Shareholders or the managing underwriter therefor reasonably
requests.
(i) The Company will otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement or
such other document covering a period of 12 months, beginning within three
months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder.
(j) The Company may require each such Shareholder promptly to
furnish in writing to the Company such information regarding the distribution of
the Registrable Securities as the Company may from time to time reasonably
request and such other information as may be legally required in connection with
such registration.
(k) Each such Shareholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5.04(e) hereof, such Shareholder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Shareholder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5.04(e) hereof, and,
if so directed by the Company, such Shareholder will deliver to the Company all
copies, other than any permanent file copies then in such Shareholder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event that the Company shall give
such notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 5.04(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 5.04(e) hereof to
the date when the Company shall make available to such Shareholder a prospectus
supplemented or amended to conform with the requirements of Section 5.04(e)
hereof.
(l) The Company will use its best efforts to list all Registrable
Securities covered by such registration statement on any securities exchange or
quotation system on which any of the Registrable Securities are then listed or
traded.
(m) The Company will provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such registration
40
statement from and after a date not later than the effective date of such
registration statement.
SECTION 5.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder holding Registrable Securities
covered by a registration statement, its officers, directors, employees,
partners and agents, and each Person, if any, who controls such Shareholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission so made based upon information furnished in writing to the Company by
such Shareholder or on such Shareholder's behalf expressly for use therein,
provided that, with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus, or in any
prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the prospectus
(or such amended or supplemented prospectus, as the case may be) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that the Company has
provided such prospectus to such Shareholder and it was the responsibility of
such Shareholder to provide such Person with a current copy of the prospectus
(or such amended or supplemented prospectus, as the case may be) and such
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The Company also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Shareholders provided in this Section 5.05.
SECTION 5.06. Indemnification by Participating Shareholders. Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each Person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to
41
such Shareholder, but only (i) with respect to information furnished in writing
by such Shareholder or on such Shareholder's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus or (ii) to
the extent that any loss, claim, damage, liability or expense described in
Section 5.05 results from the fact that a current copy of the prospectus (or
such amended or supplemented prospectus, as the case may be) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that it was the
responsibility of such Shareholder to provide such Person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. Each such Shareholder also agrees to
indemnify and hold harmless underwriters of the Registrable Securities, their
officers and directors and each Person who controls such underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 5.06. As a condition to including Registrable
Securities in any registration statement filed in accordance with Article 5
hereof, the Company may require that it shall have received an undertaking
reasonably satisfactory to it from any underwriter to indemnify and hold it
harmless to the extent customarily provided by underwriters with respect to
similar securities. No Shareholder shall be liable under this Section 5.06 for
any loss, claim, damage, liability or expense in excess of the net proceeds
realized by such Shareholder in the sale of Registrable Securities of such
Shareholder to which such loss, claim, damage, liability or expense relates.
SECTION 5.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 5, such Person (an "INDEMNIFIED PARTY") shall promptly notify the
Person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses, provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
42
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that, in connection with any proceeding
or related proceedings in the same jurisdiction, the Indemnifying Party shall
not be liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment. Without the prior written consent of the Indemnified Party, no
Indemnifying Party shall effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such proceeding.
SECTION 5.08. Contribution. If the indemnification provided for in this
Article 5 is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (i) as between the Company and the Shareholders
holding Registrable Securities covered by a registration statement on the one
hand and the underwriters on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and such Shareholders on
the one hand and the underwriters on the other, from the offering of the
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and such Shareholders on the
one hand and of such underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations and (ii) as between the
Company on the one hand and each such Shareholder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Shareholder in connection with such statements or omissions, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and such Shareholders on the one hand and such underwriters on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and
43
such Shareholders bear to the total underwriting discounts and commissions
received by such underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and such
Shareholders on the one hand and of such underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and such
Shareholders or by such underwriters. The relative fault of the Company on the
one hand and of each such Shareholder on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.08 were determined by pro
rata allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.08, no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Shareholder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such Shareholder were offered
to the public exceeds the amount of any damages that such Shareholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Each Shareholder's obligation to contribute
pursuant to this Section 5.08 is several in the proportion that the proceeds of
the offering received by such Shareholder bears to the total proceeds of the
offering received by all such Shareholders and not joint.
SECTION 5.09. Participation in Public Offering. No Person may
participate in any Public Offering hereunder unless such Person (a) agrees to
sell
44
such Person's securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and the provisions of this Agreement in
respect of registration rights.
SECTION 5.10. Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Company
and each Shareholder participating therein with respect to any required
registration or other qualification of securities under any federal or state law
or regulation or governmental authority other than the Securities Act.
SECTION 5.11. Cooperation by the Company. If any Shareholder shall
transfer any Registrable Securities pursuant to Rule 144 under the Securities
Act, the Company shall cooperate, to the extent commercially reasonable, with
such Shareholder and shall provide to such Shareholder such information as such
Shareholder shall reasonably request.
SECTION 5.12. No Transfer of Registration Rights. None of the rights of
Shareholders under this Article 5 shall be assignable by any Shareholder to any
Person acquiring Securities in any Public Offering or pursuant to Rule 144 of
the Securities Act.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01. Confidentiality. (a) Each Shareholder agrees that
Confidential Information (as defined below) furnished and to be furnished to it
was and will be made available in connection with such Shareholder's investment
in the Company. Each Shareholder agrees that it will use, and that it will cause
any Person to whom Confidential Information is disclosed pursuant to clause (i)
below to use, the Confidential Information only in connection with its
investment in the Company and not for any other purpose (including, without
limitation, to disadvantage competitively the Company or any other Shareholder).
Each Shareholder further acknowledges and agrees that it will not disclose any
Confidential Information to any Person, provided that Confidential Information
may be disclosed (i) to such Shareholder's Representatives (as defined below) in
the normal course of the performance of their duties or to any financial
institution providing credit to such Shareholder, (ii) to the extent required by
applicable law, rule or regulation (including complying with any oral or written
questions,
45
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process to which a Shareholder is subject,
provided that such Shareholder give the Company prompt notice of such
request(s), to the extent practicable, so that the Company may seek an
appropriate protective order or similar relief (and the Shareholder shall
cooperate with such efforts by the Company, and shall in any event make only the
minimum disclosure required by such law, rule or regulation)), (iii) to any
Person to whom such Shareholder is contemplating a Transfer of its Company
Securities (provided that such Transfer would not be in violation of the
provisions of this Agreement and as long as such potential transferee is advised
of the confidential nature of such information and agrees to be bound by a
confidentiality agreement in form and substance satisfactory to the Company and
consistent with the provisions hereof), (iv) to any regulatory authority or
rating agency to which the Shareholder or any of its affiliates is subject or
with which it has regular dealings, as long as such authority or agency is
advised of the confidential nature of such information or (v) if the prior
written consent of the Board shall have been obtained. Nothing contained herein
shall prevent the use (subject, to the extent possible, to a protective order)
of Confidential Information in connection with the assertion or defense of any
claim by or against the Company or any Shareholder.
(b) "CONFIDENTIAL INFORMATION" means any information concerning
the Company and Persons that are or become its Subsidiaries or the financial
condition, business, operations or prospects of the Company and Persons that are
or become its Subsidiaries in the possession of or furnished to any Shareholder
(including, without limitation by virtue of its present or former right to
designate a director of the Company), provided that the term "Confidential
Information" does not include information that (i) is or becomes generally
available to the public other than as a result of a disclosure by a Shareholder
or its partners, directors, officers, employees, agents, counsel, investment
advisers or representatives (all such persons being collectively referred to as
"REPRESENTATIVES") in violation of this Agreement, (ii) is or was available to
such Shareholder on a non-confidential basis prior to its disclosure to such
Shareholder or its Representatives by the Company or (iii) was or becomes
available to such Shareholder on a non-confidential basis from a source other
than the Company, provided that such source is or was (at the time of receipt of
the relevant information) not, to the best of such Shareholder's knowledge,
bound by a confidentiality agreement with (or other confidentiality obligation
to) the Company or another Person.
SECTION 6.02. Information. So long as any Company Securities remain
outstanding, the Company shall deliver to each Five Percent Shareholder:
(a) As soon as practicable and in any event within 30 days after
the end of the first three fiscal quarters, consolidated balance sheets of the
Company and
46
its Subsidiaries as at the end of such period and the related consolidated
statements of income, stockholders' equity and cash flow of the Company and its
Subsidiaries for such fiscal quarter, setting forth in each case in comparative
form the consolidated figures for the corresponding periods of the previous
fiscal year, all in reasonable detail and certified by the Company's Chief
Financial Officer that they fairly present the financial condition of the
Company and its Subsidiaries as at the dates indicated and the results of their
operations and changes in their financial position for the periods indicated,
subject to normal year-end adjustments;
(b) As soon as practicable and in any event within 90 days after
the end of each fiscal year of the Company commencing with the fiscal year
ending December 31, 2000, consolidated balance sheets of the Company and its
Subsidiaries as at the end of such year and the related consolidated statements
of income, stockholders' equity and cash flow of the Company and its
Subsidiaries for such fiscal year, setting forth in each case, in comparative
form, the consolidated figures for the previous year, all in reasonable detail
and accompanied by a report thereon of independent certified public accountants
of recognized national standing selected by the Company, which report shall be
unqualified as to going concern and scope of audit and shall state that such
consolidated financial statements present fairly the financial position of the
Company and its Subsidiaries as at the dates indicated and the results of their
operations and changes in their financial position for the periods indicated in
conformity with generally accepted accounting principles applied on a basis
consistent with prior years (except as otherwise stated therein) and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;
(c) As soon as practicable and in any event no later than 20 days
after the end of each fiscal month of the Company, the Company monthly
management report for such month, substantially in the form of and covering the
items set forth in Exhibit B hereto;
(d) Promptly upon receipt thereof, copies of all reports submitted
to the Company by independent public accountants in connection with each annual,
interim or special audit of the Company's financial statements made by such
accountant, including, without limitation, the comment letter submitted by such
accountants to management in connection with their annual audit;
(e) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by the Company to its securityholders or by any Subsidiary
of the Company to its
47
securityholders other than the Company or another Subsidiary, of all regular and
periodic reports and all registration statements and prospectuses, if any, filed
by the Company or any of its Subsidiaries with any securities exchange or with
the SEC or any governmental authority succeeding to any of its functions, and of
all press releases and other written statements made available generally by the
Company or any Subsidiary to the public concerning material developments in the
business of the Company and its Subsidiaries;
(f) All information provided in writing to the banks pursuant to
the Company's principal credit facility; and
(g) From time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as the
Shareholders may reasonably request.
SECTION 6.03. Reports. The Company will furnish the Shareholders with
the quarterly and annual financial reports that the Company is required to file
with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act or, in
the event the Company is not required to file such reports, quarterly and annual
reports containing the same information as would be required in such reports.
SECTION 6.04. Cooperation in Refinancing. Each Shareholder agrees to
cooperate to the extent commercially reasonable with the Company and take such
steps as the Board reasonably deems appropriate in any refinancing of debt of
the Company and any of its Subsidiaries in connection with the financing of
transactions contemplated in the Merger and Recapitalization Agreement,
including executing such documents as the Board reasonably determines should be
filed with any governmental agency and conducting presentations to potential
investors and rating agencies. This Section 6.04 shall not be construed to
require any Shareholder to contribute any additional capital to the Company.
SECTION 6.05. Appointment of Shareholder Representative. (a) Each of FP
and, to the extent that any Permitted Transferee of FP shall have become a
Shareholder, such Shareholder irrevocably appoint the FP Shareholder
Representative its agent and true and lawful attorney-in-fact, with full power
of substitution, to take the actions, receive notices and exercise the powers
delegated to the FP Shareholder Representative under this Agreement in the name
of each such Shareholder, together with such actions and powers as are
reasonably incidental thereto. Notwithstanding the foregoing, the FP Shareholder
Representative shall not take any action or exercise any power to the extent
that the holders of the majority of the Company Securities held by FP and its
Permitted Transferees shall have voted to prevent the Shareholder Representative
from taking such action or exercising such power. "FP SHAREHOLDER
REPRESENTATIVE"
48
means FP, as agent for the FP and its Permitted Transferees that are
Shareholders. The entity appointed as the FP Shareholder Representative may be
replaced at any time and from time to time by the vote of a majority of the
Company Securities held by FP and its Permitted Transferees. Either of FP or the
new FP Shareholder Representative shall notify the Company of such appointment
as promptly as practicable after such appointment.
(b) Each of TBW and, to the extent that any Permitted Transferee
of TBW shall have become a Shareholder, such Shareholder irrevocably appoint the
TBW Shareholder Representative its agent and true and lawful attorney-in-fact,
with full power of substitution, to take the actions, receive notices and
exercise the powers delegated to the TBW Shareholder Representative under this
Agreement in the name of each such Shareholder, together with such actions and
powers as are reasonably incidental thereto. Notwithstanding the foregoing, the
TBW Shareholder Representative shall not take any action or exercise any power
to the extent that the holders of the majority of the Company Securities held by
TBW and its Permitted Transferees shall have voted to prevent the Shareholder
Representative from taking such action or exercising such power. "TBW
SHAREHOLDER REPRESENTATIVE" means TWB as agent for TBW and its Permitted
Transferees that are Shareholders. The entity appointed as the TBW Shareholder
Representative may be replaced at any time and from time to time by the vote of
a majority of the Company Securities held by TBW and its Permitted Transferees.
Either of TBW or the new TBW Shareholder Representative shall notify the Company
of such appointment as promptly as practicable after such appointment.
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Entire Agreement. This Agreement, the Merger and
Recapitalization Agreement the Warrant and the Charter constitute the entire
agreement among the parties hereto and supersede all prior and contemporaneous
agreements and understandings, both oral and written, among the parties hereto
with respect to the subject matter hereof and thereof.
SECTION 7.02. Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto, and their respective heirs, successors, legal
representatives and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
49
SECTION 7.03. Assignability. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by any party hereto pursuant to any Transfer of Company Securities or
otherwise, except that any Permitted Transferee acquiring Company Securities and
any Person acquiring Company Securities who is required by the terms of this
Agreement or any employment agreement or stock purchase, option, stock option or
other compensation plan of the Company or any Subsidiary to become a party
hereto shall (unless already bound hereby) execute and deliver to the Company an
agreement to be bound by this Agreement in the form of Exhibit A hereto and
shall thenceforth be a "SHAREHOLDER". Any Shareholder who ceases to own
beneficially any Company Securities shall cease to be bound by the terms hereof
(other than (i) the provisions of Sections 5.05, 5.06, 5.07, 5.08 and 5.10
applicable to such Shareholder with respect to any offering of Registrable
Securities completed before the date such Shareholder ceased to own any Company
Securities and (ii) Sections 6.01, 7.10 and 7.11).
SECTION 7.04. Waiver; Amendment; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the party
against whom the waiver is to be effective. No provision of this Agreement may
be amended or otherwise modified except by an instrument in writing executed by
the Company with approval of the Board and Shareholders (including both
Institutional Shareholders) holding at least 50% of the outstanding Common
Shares held by the parties hereto at the time of such proposed amendment or
modification.
(b) Any amendment or modification of any provision of this
Agreement that would adversely affect the Institutional Shareholders may be
effected only with the consent of such Institutional Shareholders.
(c) Any amendment or modification of any provision of this
Agreement that would adversely affect GA-TEK may be effected only with the
consent of GA-TEK.
SECTION 7.05. Notices. All notices, requests and other communications
to any party shall be in writing (including facsimile transmissions) and shall
be given,
if to the Company to:
AMI Holdings, Inc.
00000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Chief Financial Officer
50
Fax: (000) 000-0000
with a copy to FP and TBW at the addresses listed below.
if to FP, to:
FP-McCartney, L.L.C.
c/o Francisco Partners, L.P.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxx
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
if to TBW LLC, to:
TBW LLC
c/o Citicorp Venture Capital
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, XX
Fax: (000) 000-0000
with a copy to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
if to GA-TEK, to:
GA-TEK Inc.
00000 Xxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxx 00000-0000
51
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
All notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5:00 p.m.
in the place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.
Any notice, request or other written communication sent by facsimile
transmission shall be confirmed by certified mail, return receipt requested,
posted within one Business Day, or by personal delivery, whether courier or
otherwise, made within two Business Days after the date of such facsimile
transmissions.
Any Person who becomes a Shareholder shall provide its address and fax
number to the Company, which shall promptly provide such information to each
other Shareholder.
SECTION 7.06. Fees and Expenses. Except as otherwise provided in the
Merger and Recapitalization Agreement, the Company shall pay all out-of-pocket
costs and expenses of the Institutional Shareholders, including the fees and
expenses of counsel, incurred in connection with the preparation of this
Agreement, or any amendment or waiver hereof, and the transactions contemplated
hereby and all matters related hereto.
SECTION 7.07. Headings. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
SECTION 7.08. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
52
SECTION 7.09. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to the conflicts of laws rules of such state.
SECTION 7.10. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 7.11. Specific Enforcement. Each party hereto acknowledges that
the remedies at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this fact, any party
to this Agreement, without posting any bond, and in addition to all other
remedies that may be available, shall be entitled to obtain equitable relief in
the form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy that may then be available.
SECTION 7.12. Consent to Jurisdiction. The parties hereby agree that
any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in the United States District
Court for the District of Delaware or any Delaware State court sitting in
Delaware, so long as one of such courts shall have subject matter jurisdiction
over such suit, action or proceeding, and that any cause of action arising out
of this Agreement shall be deemed to have arisen from a transaction of business
in the State of Delaware, and each of the parties hereby irrevocably consents to
the nonexclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient form. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 7.05 shall be deemed effective service of process on such
party.
SECTION 7.13. Severability. If one or more provisions of this Agreement
are held to be unenforceable to any extent under applicable law, such provision
shall be interpreted as if it were written so as to be enforceable to the
maximum possible extent so as to effectuate the parties' intent to the maximum
possible extent, and the balance of the Agreement shall be interpreted as if
such provision
53
were so excluded and shall be enforceable in accordance with its terms to the
maximum extent permitted by law.
SECTION 7.14. Recapitalization. If any capital stock or other
securities are issued in respect of, in exchange for, or in substitution of, any
Company Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Company Securities or any other change in
capital structure of the Company, appropriate adjustments shall be made with
respect to the relevant provisions of this Agreement so as fairly and equitably
to preserve, as far as practicable, the original rights and obligations of the
parties hereto under this Agreement.
SECTION 7.15. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities that is
inconsistent with, or grants rights superior to the rights granted to the
Shareholders pursuant to, this Agreement. The Company represents and warrants to
each Shareholder that it has not previously entered into any agreement with
respect to any of its securities granting any registration rights to any Person.
54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMI Holdings, Inc.
By: /s/ H. Xxxx Xxxxxxxxx
_________________________________
Name: H. Xxxx Xxxxxxxxx
Title: Chief Executive Officer
FP-McCartney, L.L.C.
By: /s/ Xxxxx X. XxxXxx
_________________________________
Name: Xxxxx X. XxxXxx
Title: Vice President
TBW LLC
By: /s/ Xxxxx X. Xxxx
_________________________________
Name: Xxxxx X. Xxxx
Title:
GA-TEK Inc.
By: /s/ Xxxxxxx X. Xxxxxx
_________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
55
EXHIBIT A
JOINDER TO SHAREHOLDERS' AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the
date written below by the undersigned (the "JOINING PARTY") in accordance with
the Shareholders' Agreement dated as of _________, 20__ (the "SHAREHOLDERS'
AGREEMENT") among [parties], as the same may be amended from time to time.
Capitalized terms used, but not defined, herein shall have the meaning ascribed
to such terms in the Shareholders' Agreement.
The Joining Party hereby acknowledges, agrees and confirms that, by its
execution of this Joinder Agreement, the Joining Party shall be deemed to be a
party to the Shareholders' Agreement as of the date hereof and shall have all of
the rights and obligations of a "Shareholder" thereunder as if it had executed
the Shareholders' Agreement. The Joining Party hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Shareholders' Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
as of the date written below.
Date: ___________ ___, ______
[NAME OF JOINING PARTY]
By:_________________________
Name:
Title:
Address for Notices:
56
AMENDMENT NO. 1 TO THE SHAREHOLDERS' AGREEMENT
Amendment No. 1 dated as of December 5, 2002, by and among AMIS
Holdings, Inc. (the "COMPANY"), FP-McCartney, L.L.C. ("FP"), Citigroup Venture
Capital Equity Partners, L.P. ("EQUITY PARTNERS"), CVC/SSB Employee Fund, L.P.
("EMPLOYEE FUND"), CVC Executive Fund LLC ("EXECUTIVE FUND" and, together with
Equity Partners and Employee Fund, the "CVC ENTITIES"), Japan Energy Corporation
("JEC"), Merchant Capital, Inc. ("MERCHANT") and Xxxxxx X. Xxxxx ("XXXXX") to
that certain Shareholders' Agreement dated as of December 21, 2000, by and among
the parties named therein and in Joinder Agreements thereto (the "SHAREHOLDERS'
AGREEMENT").
WHEREAS, the Company has formed and/or intends to form one or more
direct or indirect subsidiaries organized under the laws of a jurisdiction other
than a State of the United States of America (each, a "FOREIGN SUBSIDIARY" and
collectively, the "FOREIGN SUBSIDIARIES");
WHEREAS, Section 2.08 of the Shareholders' Agreement governs the board
composition and required board approvals of each of the Company's Subsidiaries
(as defined in the Shareholders' Agreement), including Foreign Subsidiaries;
WHEREAS, the parties hereto desire to amend the Shareholders' Agreement
as provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment.
(a) The following definition is hereby added to Section
1.01 of the Shareholders' Agreement:
"AMI FOREIGN SUBSIDIARY" means, with respect to the Company, any entity
organized under the laws of a jurisdiction other than a State of the United
States of America of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by the Company."
(b) Section 2.08 of the Shareholders' Agreement is
hereby deleted and replaced in its entirety with the following:
"Section 2.08 Subsidiary Governance. The Company and each Shareholder
agree that (i) the board of directors or other persons performing similar
functions of each Subsidiary of the Company (other than any AMI Foreign
Subsidiary) shall be comprised of the individuals who are serving as directors
on the Board in accordance with Section 2.01 and (ii) the board of directors or
other
1
persons performing similar functions of any Subsidiary of the Company shall be
subject to all the provisions of this Article 2, including paragraph (d) of
Section 2.05. Each Shareholder agrees to vote its Shares and to cause its
representatives on the Board, subject to their fiduciary duties, to vote and
take other appropriate action to effectuate the agreements in this Section 2.08
in respect of any Subsidiary of the Company."
2. Definitions. Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Shareholders' Agreement.
3. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to the conflicts of laws rules of such state.
4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
2
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
as of the date set forth above.
AMIS HOLDINGS, INC.
By: /s/ Xxxxxxxxx Xxxx
----------------------------------
Name: Xxxxxxxxx Xxxx
Title: President & CEO
3
FP-MCCARTNEY, L.L.C.
By: /s/ Xxxxxxxx Xxx
----------------------------------
Name: Xxxxxxxx Xxx
Title: Partner
4
CITIGROUP VENTURE CAPITAL EQUITY
PARTNERS, L.P.
By: CVC Partners LLC, as general partner
By: Citigroup Venture Capital GP Holdings, Ltd., as
managing member
By: /s/ Xxxx X. Xxxxxx XX
----------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Managing Partner
CVC/SSB EMPLOYEE FUND, L.P.
By: CVC Partners LLC, as general partner
By: Citigroup Venture Capital GP Holdings,
Ltd., as managing member
By: /s/ Xxxx X. Xxxxxx XX
----------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Managing Partner
CVC EXECUTIVE FUND LLC
By: Citigroup Venture Capital GP Holdings,
Ltd., as managing member
By: /s/ Xxxx X. Xxxxxx XX
----------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Managing Partner
5
JAPAN ENERGY CORPORATION
By: /s/ Xxxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Associate Corporate Officer
6
MERCHANT CAPITAL, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
7
XXXXXX X. XXXXX
/s/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
000 00xx Xxxxxx
Xxxxx Xxxxxx, XX 00000
8
