EXHIBIT 10.8
FIRST AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
dated as of
September 26, 2003
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions..................................................................... 2
ARTICLE 2
CORPORATE GOVERNANCE
Section 2.01. Composition of the Board........................................................ 11
Section 2.02. Removal......................................................................... 12
Section 2.03. Vacancies....................................................................... 12
Section 2.04. Action by the Board............................................................. 13
Section 2.05. Conflicting Charter or Bylaw Provisions......................................... 15
Section 2.06. Subsidiary Governance........................................................... 15
ARTICLE 3
RESTRICTIONS ON TRANSFER
Section 3.01. General......................................................................... 15
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............................................... 20
Section 4.02. Right to Compel Participation in Certain Transfers.............................. 24
ARTICLE 5
REGISTRATION RIGHTS
Section 5.01. Demand Registration............................................................. 26
Section 5.02. Incidental Registration......................................................... 29
Section 5.03. Holdback Agreements............................................................. 31
Section 5.04. Registration Procedures......................................................... 31
Section 5.05. Indemnification by the Company.................................................. 35
Section 5.06. Indemnification by Participating Shareholders................................... 36
Section 5.07. Conduct of Indemnification Proceedings.......................................... 36
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Section 5.08. Contribution.................................................................... 37
Section 5.09. Participation in Public Offering................................................ 39
Section 5.10. Other Indemnification........................................................... 39
Section 5.11. Cooperation by the Company...................................................... 39
Section 5.12. No Transfer of Registration Rights.............................................. 39
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
Section 6.01. Confidentiality................................................................. 39
Section 6.02. Information..................................................................... 40
Section 6.03. Reports......................................................................... 42
Section 6.04. Cooperation in Refinancing...................................................... 42
Section 6.05. Appointment of Shareholder Representative....................................... 42
ARTICLE 7
MISCELLANEOUS
Section 7.01. Entire Agreement................................................................ 43
Section 7.02. Binding Effect; Benefit......................................................... 43
Section 7.03. Assignability................................................................... 44
Section 7.04. Waiver; Amendment; Termination.................................................. 44
Section 7.05. Notices......................................................................... 44
Section 7.06. Fees and Expenses............................................................... 47
Section 7.07. Headings........................................................................ 47
Section 7.08. Counterparts.................................................................... 47
Section 7.09. Applicable Law.................................................................. 47
Section 7.10. Waiver of Jury Trial............................................................ 47
Section 7.11. Specific Enforcement............................................................ 47
Section 7.12. Consent to Jurisdiction......................................................... 47
Section 7.13. Severability.................................................................... 48
Section 7.14. Recapitalization................................................................ 48
Section 7.15. No Inconsistent Agreements...................................................... 48
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FIRST AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
AGREEMENT dated as of September 26, 2003 (the "AGREEMENT") among (i)
AMIS Holdings, Inc., a Delaware corporation (the "COMPANY"), (ii) FP-McCartney,
L.L.C. ("FP"), (iii) Citigroup Venture Capital Equity Partners, L.P. ("EQUITY
PARTNERS"), CVC/SSB Employee Fund, L.P. ("EMPLOYEE FUND"), CVC Executive Fund
LLC ("EXECUTIVE FUND") and Natasha Foundation ("NATASHA"), taken together (the
"CVC ENTITIES," and each of the foregoing in this clause (iii), a "CVC ENTITY"),
(iv) Japan Energy Electronic Materials Inc. (formerly known as Japan Energy
Corporation, "JAPAN ENERGY"), (v) Merchant Capital, Inc. ("MERCHANT"), (vi)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") and (vii) such persons that shall sign joinder
agreements to this Agreement.
W I T N E S S E T H :
WHEREAS, the Company and certain parties hereto previously entered into
a Shareholders' Agreement dated as of December 21, 2000 (as amended as of
December 5, 2002, the "ORIGINAL AGREEMENT") in connection with such parties'
ownership or acquisition of securities of the Company pursuant to the Merger and
Recapitalization Agreement (as defined below);
WHEREAS, certain other parties hereto became parties to the Original
Agreement following the date of the Original Agreement in connection with such
parties' acquisition of Company Securities (as defined below) from the Company
or from a Permitted Transferee (as defined below) by signing joinder agreements
to the Original Agreement;
WHEREAS, concurrently herewith the Company is consummating its First
Public Offering (as defined below);
WHEREAS, concurrently with the consummation of the First Public
Offering and concurrently herewith, the Company's wholly owned subsidiary, AMIS
Opi, Inc. ("MERGER SUB"), is being merged with and into the Company (the
"MERGER"), and pursuant to a merger agreement between Merger Sub and the Company
(i) shares of the Company's Series A Preferred Stock, par value $0.01 per share
(the "OLD SERIES A PREFERRED STOCK"), are being converted into the right to
receive cash, (ii) shares of the Company's Series B Preferred Stock, par value
$0.01 per share (the "OLD SERIES B PREFERRED STOCK"), are being converted into
the right to receive cash and shares of Common Stock (as defined below), (iii)
shares of the Company's Class A Common Stock, par value $0.01 per share (the
"OLD CLASS A COMMON STOCK"), and Class B Common Stock, par value $0.01 per
share, are being converted into Common Stock and the Company shall have only one
class of common stock (the Common Stock) authorized and outstanding following
the Merger, (iv) instruments convertible into or exchangeable for Old Class A
Common Stock are being converted into
instruments convertible into or exchangeable for Common Stock and options,
warrants or other rights to acquire Old Class A Common Stock are being converted
into options, warrants or other rights to acquire Common Stock and (v) options,
warrants or other rights to acquire Old Series A Preferred Stock and Old Series
B Preferred Stock are being converted into the right to receive cash and/or
options, warrants or other rights to acquire Common Stock; and
WHEREAS, in connection with the First Public Offering, the parties to
the Original Agreement (by joinder agreement or otherwise) desire to amend and
restate the Original Agreement and agree that this Agreement shall supersede and
replace the Original Agreement in its entirety;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, 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.
"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
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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.
"AMI INSIGNIFICANT SUBSIDIARY" means a subsidiary of the Company that
does not meet any of the conditions contained in the definition of "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X promulgated under the
Securities Act.
"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.
"CHARTER" means the Amended and Restated Certificate of Incorporation
of the Company in effect following the Merger, as the same may be amended from
time to time.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON STOCK" means the Common Stock, par value $0.01 per share, of
the Company having the rights, including voting rights, described in the Charter
and any stock into which such Common Stock may thereafter be converted or
changed. "COMMON SHARES" means shares of Common Stock.
"COMPANY SECURITIES" means (i) the Common Stock, (ii) securities
convertible into or exchangeable for Common Stock, and (iii) options, warrants
(including the Warrants) or other rights to acquire Common Stock or any other
equity or equity-linked security issued by the Company.
"DISTRIBUTION IN KIND" means, with respect to the applicable
Institutional Shareholder, (A) any Transfer by an FP fund that is a partnership,
limited liability company, corporation or other entity of any of its Common
Shares to any partner, member, shareholder or other constituent of such entity
pursuant to a distribution that is made to such partner, member, shareholder or
other constituent in accordance with the respective partnership, limited
liability company agreement, certificate or articles of incorporation or other
organizational document of such FP fund without payment of consideration
therefor by such partner, member, shareholder or other constituent, and (B) any
Transfer by a CVC fund that is a
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partnership, limited liability company, corporation or other entity of any of
its Common Shares to any partner, member, shareholder or other constituent of
such entity pursuant to a distribution that is made to such partner, member,
shareholder or other constituent of such entity in accordance with the
respective partnership, limited liability company agreement, certificate or
articles of incorporation or other organizational document of such CVC fund
without payment of consideration therefor by such partner, member, shareholder
or other constituent.
"DRAG-ALONG PORTION" means, with respect to any Other Shareholder, (i)
the Aggregate Ownership of Common Shares by such Other Shareholder multiplied by
(ii) a fraction, the numerator of which is the number of Common Shares 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
Common Shares by the Institutional Shareholders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FIRST PUBLIC OFFERING" means the Public Offering of Common Stock
consummated on the date hereof.
"FIVE PERCENT SHAREHOLDER" means a Shareholder whose Aggregate
Ownership of Common Shares divided by all outstanding Common Shares 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
Warrants) 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, (i) 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 (as indicated on Schedule I hereto), provided
that if such Shareholder sells Common Shares to the underwriters pursuant to the
underwriters' exercise of the over-allotment option granted to the underwriters
in the underwriting agreement relating to the First Public Offering, such
Shareholder's Initial Ownership as of the date hereof shall be deemed to be the
Aggregate Ownership indicated on Schedule I hereto less the number of Common
Shares actually sold to such underwriters pursuant to such exercise, or, (ii)
with respect to any Person who shall become a party to this Agreement on a later
date,
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such Person's Aggregate Ownership of such class as of such later date (as
indicated on the joinder agreement signed by such Person), in each case taking
into account any stock split, stock dividend, reverse stock split or similar
event.
"INSTITUTIONAL SHAREHOLDERS" means FP and the CVC Entities.
"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.
"JAPAN ENERGY WARRANT" means the warrant to purchase Common Shares
dated December 21, 2000 issued by the Company to GA-TEK Inc. and transferred by
GA-TEK Inc. to Japan Energy.
"MERGER AND RECAPITALIZATION AGREEMENT" means the agreement dated
December 5, 2000, among the Company, Japan Energy, FP, TBW LLC and GA-TEK Inc.
and certain other parties named therein pursuant to which such parties acquired
Company Securities.
"OTHER SHAREHOLDERS" means all Shareholders other than the
Institutional Shareholders.
"PERMITTED TRANSFEREE" means
(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;
(ii) in the case of any CVC Entity and its Permitted
Transferees, (A) any CVC Entity, 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 "CVC
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PARTNER"), and any corporation, partnership or other entity that is an
Affiliate of Citigroup or any CVC Entity (collectively "CVC
AFFILIATES"), (B) any managing director, general partner, director,
limited partner, officer or employee of any CVC fund, any CVC Partner
or any CVC 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
(B) (collectively, "CVC ASSOCIATES") or (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 one or more CVC Entities, CVC Partners, CVC Affiliates, CVC
Associates, their spouses or their lineal descendants;
(iii) in the case of Japan Energy and its Permitted
Transferees, Nippon Mining Holdings Inc.;
(iv) in the case of Merchant, any of the following, which
are collectively referred to herein as the "CSFB ENTITIES", (A) 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"), (B) 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
(B) (collectively, "CSFB ASSOCIATES") or (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 Merchant, CSFB, CSFB Partners, CSFB Affiliates, CSFB Associates,
their spouses or their lineal descendants; and
(v) in the case of ▇▇▇▇▇ or any Other Shareholder (other
than Japan Energy or Merchant) that is or becomes a party to this
Agreement, (A) a Person to whom Company Securities 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.
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"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.
"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.
"REGISTRABLE SECURITIES" means, at any time, any Common Shares or
Warrant Shares and any securities issued or issuable in respect of such Common
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 Common Shares or
Warrant Shares has been declared effective by the SEC and such Common Shares or
Warrant Shares have been disposed of pursuant to such effective registration
statement, (ii) such Common 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
Common Shares or Warrant Shares are otherwise transferred, the Company has
delivered a new certificate or other evidence of ownership for such Common
Shares or Warrant Shares not bearing the legend required pursuant to this
Agreement and such Common 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
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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 (or any successor provisions) under the
Securities Act.
"RULE 144A" means 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.
"SELL-DOWN PERCENTAGE" means, with respect to any Shareholder (or group
of Shareholders), and with respect to any class of Company Securities, the
percentage equal to such Shareholder's (or group of Shareholders') Aggregate
Ownership of such class of Company Securities divided by such Shareholder's (or
group of Shareholders') Initial Ownership of such class of Company Securities.
"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.
"SHORTFORM REGISTRATION" means a registration statement on Form S-3 (or
any successor form thereto).
"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 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.
"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.
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"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.
"WARRANTS" mean the Japan Energy Warrant and the warrants to purchase
Common Stock dated June 26, 2003 issued by the Company to each of FP, Equity
Partners, Employee Fund, Executive Fund, Natasha and Merchant.
"WARRANT SHARES" means the Common Shares issuable by the Company upon
exercise of the Warrants.
(b) The term "INSTITUTIONAL SHAREHOLDER", to the extent such
entity 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; provided that any Permitted Transferee
who receives Company Securities pursuant to Section 3.03(b) shall not be
included in the term "Institutional Shareholder" to the extent of its Company
Securities received pursuant to Section 3.03(b).
(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.
(d) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
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Additional Directors 2.01
Agreement Preamble
Applicable Holdback Period 5.03
Cause 2.02
Company Preamble
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)
CVC Entity (ies) Preamble
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CVC Shareholder Representative 6.05(b)
Demand Registration 5.01(a)
Distributing Institution 3.03(b)
Drag-Along Rights 4.02(a)
Eligible Shareholder 4.01(a)
Employee Fund Preamble
▇▇▇▇▇ Preamble
Equity Partners Preamble
Escrow Amount 4.01(f)
Escrow Notice 4.01(f)
Executive Fund Preamble
FP Preamble
FP Shareholder Representative 6.05(a)
Holders 5.01(a)(ii)
Incidental Registration 5.02(a)
Indemnified Party 5.07
Indemnifying Party 5.07
Inspectors 5.04(g)
Institutional Demand 5.01(a)
Japan Energy Preamble
Japan Energy Demand 5.01(a)
Joint Demand 5.01(a)
Maximum Offering Size 5.01(e)
Merchant Preamble
Merger Recitals
Merger Sub Recitals
Natasha Preamble
Non-Requesting Shareholder 5.01(a)
Old Class A Common Stock Recitals
Old Series A Preferred Stock Recitals
Old Series B Preferred Stock Recitals
Original Agreement Recitals
Records 5.04(g)
Replacement Nominee 2.03(a)
Representatives 6.01(b)
Requesting Shareholder 5.01(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)
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Tagging Person 4.01(a)
Unused Tag Amount 4.01(d)
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 the CVC Entities (one of whom shall be an independent director
designated by the CVC Entities), one director will be designated by Japan
Energy, one director will be the chief executive officer of the Company for so
long as he or she is employed by the Company and one independent director will
be designated by the Chief Executive Officer and the Institutional Shareholders,
provided that such independent director collectively designated by the Chief
Executive Officer and the Institutional Shareholders, (i) 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 Japan Energy
and (ii) shall be an "independent director" (as such term is defined by the
rules of the securities exchange or quotation system on which the Common Stock
is traded). If the number of directors that comprise the entire Board is
increased in accordance with Section 2.04, 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 the CVC Entities 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 Japan
Energy to designate one member of the Board, shall terminate at such time as the
Aggregate Ownership of Common Shares by Japan Energy and its Permitted
Transferees falls below 50% of Japan Energy's Initial Ownership of Common
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Shares. 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 Common 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 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 Common 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 Section 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 Common 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.
12
Section 2.04. 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 at least one of the two non-independent designees of FP appointed
pursuant to Section 2.01(a) and at least one of the two non-independent
designees of the CVC Entities appointed pursuant to Section 2.01(a), 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.
(c) The Board may create executive, compensation, audit,
nominating and corporate governance 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 any director or directors designated by
FP to serve on such committee and half of which such majority representation
shall consist of any director or directors designated by the CVC Entities to
serve on such committee, provided that if rules or regulations of the SEC or the
securities exchange or quotation system on which the Common Stock is traded
require any committee to consist of one or more "independent directors" (as such
term is defined by the rules of the securities exchange or quotation system on
which the Common Stock is traded), the directors designated to serve on such
committee by FP or the CVC Entities shall be "independent directors" to the
extent required to meet such applicable rules or regulations.
(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 at least one of the
two non-independent designees of FP appointed pursuant to Section 2.01(a) and at
least one of the two non-independent designees of the CVC Entities appointed
pursuant to Section 2.01(a):
(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
13
single transaction or a series of related transactions) having a value
in each case in this clause (2) in excess of $10,000,000;
(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 $10,000,000 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), in each case
other than (1) pursuant to the Credit Agreement, dated December 21,
2000, among AMI Merger Company, Inc., AMI Spinco, Inc., AMI 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 (2) as specifically
contemplated by this Agreement;
(v) any determination of compensation, benefits,
perquisites and other incentives for the Chief Executive Officer or the
Chief Financial Officer 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;
(vi) any appointment or dismissal of any of the Chairman
of the Board, Chief Executive Officer, Chief Financial Officer or any
other executive officer in any similar capacity of the Company or any
Subsidiary;
(vii) 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;
14
(viii) any approval of the annual business plan, budget and
long-term strategic plan of the Company or any Subsidiary;
(ix) 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; or
(x) any increase or decrease to the number of Directors
that comprise the entire Board of the Company or any Subsidiary.
Section 2.05. Conflicting Charter or Bylaw Provisions. Each Shareholder
shall vote its Common 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 2.06. 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 and any AMI Insignificant 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 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 2.04. 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 2.06 in respect of any
Subsidiary of the Company.
ARTICLE 3
RESTRICTIONS ON TRANSFER
Section 3.01. General. (a) Each Shareholder understands and agrees that
the Company Securities acquired prior to the date of this 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
15
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 FIRST AMENDED AND
RESTATED SHAREHOLDERS' AGREEMENT DATED AS OF SEPTEMBER 26, 2003, COPIES OF WHICH
MAY BE OBTAINED UPON REQUEST FROM AMIS HOLDINGS, 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 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, 3.05, 4.01 and 4.02 so
long as (i) 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 (ii)
the Transfer to such Permitted Transferee is not in violation of applicable
federal or state securities laws.
(b) Notwithstanding the foregoing, the restriction in Section
3.03(a)(i) shall not apply to a Distribution in Kind, and any transferees
pursuant to such Distribution in Kind shall not be bound by the provisions of
this Agreement if the Distribution in Kind is made in compliance with the
following:
(i) from the date of this Agreement and until the first
anniversary of this Agreement, any Distribution in Kind by an
Institutional Shareholder (the "DISTRIBUTING INSTITUTION") so long as
the other
16
Institutional Shareholder has consented in writing prior to such
Distribution in Kind to the timing of the Distribution in Kind and the
number of each class of Company Securities subject to the Distribution
in Kind,
(ii) from the first anniversary of this Agreement and
until the second anniversary of this Agreement, any Distribution in
Kind by a Distributing Institution so long as (A) the Distributing
Institution has given the other Institutional Shareholder seven
Business Days prior notice of such Distribution in Kind, which notice
shall include the timing of the Distribution in Kind and the number of
each class of Company Securities subject to the Distribution in Kind,
and (B) such Distribution in Kind will not cause the number of Common
Shares distributed, together with all other Common Shares distributed
pursuant to Distributions in Kind by the Distributing Institution
during the preceding three months and all sales of Common Shares by the
Distributing Institution pursuant to Section 3.04(a)(iv) during the
preceding three months, to exceed the greater of (x) 3% of the Common
Shares outstanding as shown by the most recent report or statement
published by the Company, or (y) the average weekly reported volume of
trading of Common Shares on all national securities exchanges and/or
reported through the automated quotation system of a registered
securities association during the four calendar weeks preceding the
filing of the notice of proposed sale pursuant to paragraph (h) of Rule
144, or if no such notice is required, the date of receipt of the order
to execute the transaction by the broker or the date of execution of
the transaction directly with a market maker, or (z) the average weekly
volume of trading in Common Shares reported through the consolidated
transaction reporting system contemplated by Rule 11Aa3-1 under the
Exchange Act during the four-week period specified in clause (y) of
this Section 3.03(b)(ii), or
(iii) from the second anniversary of this Agreement, any
Distribution in Kind by a Distributing Institution so long as the
Distributing Institution has given the other Institutional Shareholder
seven Business Days prior notice of such Distribution in Kind, which
notice shall include the timing of the Distribution in Kind and the
number of each class of Company Securities subject to the Distribution
in Kind.
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,
17
(ii) in a Transfer made in compliance with Section 4.01
(provided that until December 21, 2003, no Institutional Shareholder
shall be permitted to Transfer any number of any class of Company
Securities pursuant to this Section 3.04(a)(ii) 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), or in a Transfer
made after Section 4.01 is terminated in accordance with Section
4.01(i) thereof,
(iii) in a Public Offering in connection with the exercise
of its rights under Article 5 hereof or in the First Public Offering,
or
(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, provided that from the first anniversary of this Agreement and
until the second anniversary of this Agreement, the number of Company
Securities Transferred pursuant to this Section 3.04(a)(iv), together
with the number of Company Securities Transferred pursuant to Section
3.03(b)(ii), shall not exceed the maximum number as provided in Section
3.03(b)(ii).
(b) 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 date of this Agreement, in any Transfer
made in compliance with Section 4.01 as a Tag-Along Seller (provided
that, other than any Transfer to either Institutional Shareholder that
both Institutional Shareholders have consented to in writing prior to
such Transfer, no Other Shareholder shall be permitted to Transfer
shares of any class of Company Securities pursuant to this Section
3.05(a)(iii) if such Transfer would cause such Other Shareholder's
Sell-down Percentage to fall below the greater of (A) two-thirds and
(B) the Sell-down Percentage of FP or the CVC Entities (whichever is
lower) immediately prior to such Transfer by such Other Shareholder),
or in a Transfer made after Section 4.01 is terminated in accordance
with Section 4.01(i) thereof,
18
(iv) after December 21, 2003, in any Transfer made in
compliance with Section 4.01 as a Tag-Along Seller (provided that,
other than any Transfer to either Institutional Shareholder that both
Institutional Shareholders have consented to in writing prior to such
Transfer, 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 Sell-down Percentage
to fall below the greater of (A) one-third and (B) the Sell-down
Percentage of FP or the CVC Entities (whichever is lower) immediately
prior to such Transfer by such Other Shareholder), or in a Transfer
made after Section 4.01 is terminated in accordance with Section
4.01(i) thereof,
(v) after December 21, 2004, in any Transfer made in
compliance with Section 4.01 (provided that, other than any Transfer to
either Institutional Shareholder that both Institutional Shareholders
have consented to in writing prior to such Transfer, no Other
Shareholder shall be permitted to Transfer shares of any class of
Company Securities pursuant to this Section 3.05(a)(v) if such Transfer
would cause such Other Shareholder's Sell-down Percentage to fall below
the Sell-down Percentage of FP or the CVC Entities (whichever is lower)
immediately prior to such Transfer by such Other Shareholder), or in a
Transfer made after Section 4.01 is terminated in accordance with
Section 4.01(i) thereof,
(vi) in a Public Offering in connection with the exercise
of its rights under Article 5 hereof or in the First Public Offering,
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 Japan Energy shall not
transfer the Japan Energy Warrant (prior to the exercise of such Warrant) at any
time, under any circumstances, to any Person, other than to Japan Energy'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
19
however that this Section 3.06 shall not prohibit Japan Energy from making a
Transfer to its Permitted Transferees.
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 3.03, 3.04, 3.05, 3.06 and 4.01(h), if any Shareholder or group of
Shareholders (such Shareholder or group of Shareholders, the "TAG-ALONG SELLER")
proposes to Transfer any number of Common Shares (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").
In the event of such a proposed Transfer, the Tag-Along Seller shall
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 of Common Shares 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 seven
Business Days after 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 Common Shares held by such Tagging Person as is specified in such
notice, provided that, if the aggregate number of Common Shares proposed to be
sold by the Tag-Along Seller and all Tagging Persons in such transaction exceeds
the number of Common Shares 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 Common Shares and
(ii) the Tag-Along Seller shall be entitled to include the number of Common
Shares 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 Common
Shares 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
Common Shares of such Tagging Person to be included in the Transfer, together
with a limited power-of-attorney authorizing the
20
Tag-Along Seller to Transfer such Common Shares on the terms set forth in the
Tag-Along Notice. Delivery of such certificate or certificates representing the
Common Shares to be Transferred and the limited power-of-attorney authorizing
the Tag-Along Seller to Transfer such Common Shares 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 Common Shares 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 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 Common Shares 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 Common Shares that such Tagging Person delivered
for Transfer pursuant to this Section 4.01(a) and (ii) not conduct any Transfer
of Common Shares 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
Common Shares 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
21
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 Common Shares held by it equal to Unused Tag Amount (reduced to the
extent necessary so that each Tagging Person who has elected to exercise its
Tag-Along Rights for the full amount of its Tag-Along Portion shall be able to
include its Tag-Along Portion with respect to the Unused Tag Amount) and each
Tagging Person who has elected to exercise its Tag-Along Rights for the full
amount of its Tag-Along Portion shall be entitled to Transfer in the Tag-Along
Sale its Tag-Along Portion of the Unused Tag Amount. "UNUSED TAG AMOUNT" means
the number of Common Shares constituting the sum of (i) the Tag-Along Portion of
any Eligible Shareholder that declined to exercise its Tag-Along Rights and (ii)
the portion of the Tag-Along Portion with respect to which Tag-Along Rights were
not exercised by any Tagging Person that exercised its Tag-Along Rights with
respect to less than such Tag-Along Person's Tag-Along Portion.
(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 Common Shares 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 Common Shares 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 Common Shares which it would have been entitled to include in
the Transfer.
22
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 (f) by delivery to the Tag-Along Seller, within seven Business Days
of the date after the Company delivered or caused to be delivered the Escrow
Notice, of (i) a written notice specifying the number of Common Shares 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 seventh Business Day after the
Company has delivered or caused to be delivered the Escrow Notice, (i) the
Tag-Along Seller shall purchase that number of Common Shares as the Tag-Along
Seller would have been required to include in the sale had the 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 Common Shares 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 Common Shares
received by the Tag-Along Seller) if the Transfer of Common Shares pursuant to
this Section 4.01 is not consummated for whatever reason. Whether to effect a
Transfer of Common Shares 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 Common Shares by the Tag-Along Seller (A) in a Public
Offering or pursuant to Rule 144 or (B) pursuant to Section 3.03 or 4.02.
(i) This Section 4.01 shall terminate upon the date on which the
Aggregate Ownership of Common Shares by the Institutional Shareholders together
falls below 35% of the aggregate Initial Ownership of such Institutional
Shareholders.
23
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 Common Shares to a Third Party in a bona fide
sale or (ii) a Transfer in which the Common Shares to be Transferred by the
Institutional Shareholders together, plus the Common Shares to be Transferred by
the Other Shareholders pursuant to this Section 4.02(a), constitute more than
50% of the outstanding Common Shares (a "COMPELLED SALE"), the Institutional
Shareholders together may at their option require all Other Shareholders to
Transfer the Drag-Along Portion of Common Shares ("DRAG-ALONG RIGHTS") then held
by every Other Shareholder 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 Common Share and otherwise on
the same terms and conditions as the Institutional Shareholders, provided that
any Other Shareholder who holds options or Warrants the exercise 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 Common Shares 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 Common Shares to be sold by each Other Shareholder
will be the Drag-Along Portion of the Common Shares 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 its Common Shares 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
24
Compelled Sale against delivery to such Other Shareholder of the consideration
therefor. If an Other Shareholder should fail to deliver such certificates or
other applicable instruments 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 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
25
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.
(e) This Section 4.02 shall terminate upon the earlier to occur of
(i) the third anniversary of the date of this Agreement and (ii) the date on
which the Aggregate Ownership of the Institutional Shareholders together falls
below 35% of the aggregate Initial Ownership of Common Shares by such
Institutional Shareholders.
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 consummation of the First Public Offering, either
Institutional Shareholder (an "INSTITUTIONAL DEMAND") or (y) either of the
Institutional Shareholders and Japan Energy (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 Japan Energy (a "JAPAN ENERGY DEMAND") that the
Company effect the registration under the Securities Act of all or a portion of
Japan Energy'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
26
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 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 either (x) 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 or (y) the remaining portion of Registrable Securities
held by at least one Requesting Shareholder would be registered pursuant to such
Demand Registration. 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 Japan Energy, and (iii) in respect of a Japan Energy
Demand, Japan Energy. "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 Japan Energy 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
27
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, (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 have
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
28
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
(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
29
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 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
Japan Energy and each of their Permitted Transferees, (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such
30
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 Rule
144A 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 (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 (but in any
event within (i) 45 days of receipt of a request for a Demand Registration or
(ii) in the case of a Shortform Registration, within 21 days of receipt of a
request for a Demand Registration) 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
31
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 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
32
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.
(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
33
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
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
34
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
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
35
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 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
36
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
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
37
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 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
38
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 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 or Rule 144A 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 or
Rule 144A 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
39
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, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process to which a Shareholder is subject,
provided that such Shareholder gives 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.
(a) "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:
40
(a) After the end of the first three fiscal quarters, as soon as
practicable and in any event on or before the applicable filing deadline for
filing quarterly reports on Form 10-Q (or any successor form) with the SEC,
consolidated balance sheets of the Company and 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) After the end of each fiscal year as soon as practicable and
in any event on or before the applicable filing deadline for filing annual
reports on Form 10-K (or any successor form), 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
41
by the Company to its securityholders or by any Subsidiary of the Company to its
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 a
Shareholder may reasonably request.
(h) The Company's obligation to provide information pursuant to
paragraphs (a) and (b) of this Section 6.02 and Section 6.03 shall be deemed
satisfied upon the timely filing of such information with the SEC.
Section 6.03. Reports. Subject to Section 6.02(h), 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 financing of debt of the
Company and any of its Subsidiaries, 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
42
the holders of the majority of the Fully Diluted Common Shares 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" means FP, as agent for 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
Fully Diluted Common Shares 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 CVC Entity and, to the extent that any Permitted
Transferee of any CVC Entity shall have become a Shareholder, such Shareholder
irrevocably appoint the CVC 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 CVC 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 CVC Shareholder Representative shall not take
any action or exercise any power to the extent that the holders of the majority
of the Fully Diluted Common Shares held by the CVC Entities and their Permitted
Transferees shall have voted to prevent the Shareholder Representative from
taking such action or exercising such power. "CVC SHAREHOLDER REPRESENTATIVE"
means Equity Partners as agent for the CVC Entities and their Permitted
Transferees that are Shareholders. The entity appointed as the CVC Shareholder
Representative may be replaced at any time and from time to time by the vote of
a majority of the Fully Diluted Common Shares held by the CVC Entities and their
Permitted Transferees. Either of Equity Partners or the new CVC 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 Warrants, the
Charter and the Bylaws 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
43
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.
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, subject to Section 3.03(b), 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, 7.09, 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 an Institutional Shareholder may be
effected only with the consent of such Institutional Shareholder.
(c) Any amendment or modification of any provision of this
Agreement that would adversely affect Japan Energy may be effected only with the
consent of Japan Energy.
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:
AMIS Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to FP and the CVC Entities at the addresses listed below.
if to FP, to:
FP-McCartney, L.L.C.
c/o Francisco Partners, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the CVC Entities, to:
Citigroup Venture Capital Equity Partners, L.P.
CVC/SSB Employee Fund, L.P.
CVC Executive Fund LLC
Natasha Foundation
c/o Citigroup Venture Capital Equity Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Dechert
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
45
if to Japan Energy, to:
Japan Energy Electronic Materials Inc.
▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Merchant, to:
Merchant Capital, Inc.
c/o Credit Suisse First Boston
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
if to ▇▇▇▇▇, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
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.
46
Section 7.06. Fees and Expenses. The Company shall pay all
out-of-pocket costs and expenses of the 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.
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
47
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 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.
48
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.
AMIS HOLDINGS, INC.
By:________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
FP-MCCARTNEY, L.L.C.
By:________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇
Title:
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:________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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:________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Title: Managing Partner
CVC EXECUTIVE FUND LLC
By: Citigroup Venture Capital GP Holdings,
Ltd., as managing member
By:________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Title: Managing Partner
JAPAN ENERGY ELECTRONIC
MATERIALS, INC.
By:________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director & General Manager,
Electronic Materials Division
Date: September 19, 2003
MERCHANT CAPITAL, INC.
By:________________________
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE I
INITIAL OWNERSHIP
CLASS OF COMPANY SECURITY
-------------------------
COMMON SHARES
SHAREHOLDER COMMON SHARES SUBJECT TO WARRANTS
----------------------------------------------- ------------- -------------------
FP-McCartney, L.L.P. 15,946,975 4,556,573
Citigroup Venture Capital Equity Partners, L.P. 15,652,322 4,315,849
CVC/SSB Employee Fund, L.P. 155,819 44,523
CVC Executive Fund LLC 138,835 39,669
Natasha Foundation --- 156,534
Japan Energy Electronic Materials Inc. 8,059,842 ---
Merchant Capital, Inc. 345,422 71,703
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 291,325 ---
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 First Amended and Restated Shareholders' Agreement dated as of _________,
2003 (the "SHAREHOLDERS' AGREEMENT") among AMIS Holdings, Inc., FP-Mc-Cartney,
L.L.C., Citigroup Venture Capital Equity Partners, L.P., CVC/SSB Employee Fund,
L.P., CVC Executive Fund LLC, Natasha Foundation, Japan Energy Electronic
Materials, Inc., Merchant Capital, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 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.
The Joining Party's Initial Ownership is __________ Common Shares and
__________ Common Shares subject to Warrants.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
as of the date written below.
Date: ___________ ___, 20___
[NAME OF JOINING PARTY]
By:_________________________
Name:
Title:
Address for Notices:
