AMENDMENT NO. 3 TO
STOCKHOLDERS AGREEMENT
This Amendment No. 3 to Stockholders Agreement (this "Amendment") is
made and entered into as of December 4, 1996 by and between Aftermarket
Technology Holdings Corp., a Delaware corporation (the "Company"), Aurora
Equity Partners L.P., a Delaware limited partnership ("AEP"), Aurora Overseas
Equity Partners I, L.P., a Cayman Islands exempted limited partnership
("AOEP"), and each of the stockholders of the Company who are signatories
hereto (the "Stockholders").
WHEREAS, Section 10.2 of that certain Stockholders Agreement dated as of
August 2, 1994 among the Company and certain of its stockholders,
optionholders and warrantholders, as amended (the "Stockholders Agreement"),
permits the amendment thereof by a written agreement signed by (a) the
Company, (b) AEP and AOEP and (c) the holders of a majority in voting
interest of the outstanding shares of Common Stock and Preferred Stock of the
Company;
WHEREAS, the Stockholders hold a majority in voting interest of the
outstanding shares of Common Stock and Preferred Stock of the Company; and
WHEREAS, the parties hereto desire to amend the Stockholders Agreement
as follows: (i) to clarify that from and after the effective date of the
merger (the "Merger") of the Company into Aftermarket Technology Corp., the
Company's wholly-owned subsidiary ("ATC"), any reference to the "Company"
shall be deemed to be a reference to ATC; (ii) to add demand registration
rights for the benefit of any stockholder who is a party to the Stockholders
Agreement and who, after a distribution of shares by AEP or AOEP to their
limited partners, owns at least 10% of the outstanding common stock and is
therefore unable to resell his shares without registration because his stock
ownership causes him to be an affiliate of ATC (and therefore subject to
certain statutory resale restrictions); (iii) to clarify that the Company
will pay all expenses relating to the registration of securities resulting
from an exercise of the "piggyback" or demand registration rights granted
therein; and (iv) to clarify that the holdback agreement provision applicable
to underwritten offerings applies to
a Qualified IPO (as defined in the Stockholders Agreement) that is
consummated on or before March 31, 1997.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. AMENDMENT.
(a) Section 10.6 of the Stockholders Agreement is hereby deleted in
its entirety and the following is hereby substituted in its place:
"10.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Stockholders
and their respective heirs, personal representatives, successors and
permitted assigns. In the event that the Company is merged into Aftermarket
Technology Corp., a Delaware corporation and the Company's wholly-owned
subsidiary ("ATC"), upon the effectiveness of such merger, any reference
in this Agreement to the "Company" shall be deemed to be a reference to
ATC."
(b) Exhibit D to the Stockholders Agreement is hereby deleted in its
entirety and the attached Annex A is hereby substituted in its place.
2. GOVERNING LAW. This Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware without
reference to choice or conflicts of law principles thereof.
3. EFFECT OF AMENDMENT. Except as amended by this Amendment, the
Stockholders Agreement shall remain unchanged and shall remain in full force
and effect.
2
IN WITNESS WHEREOF, the Company, AEP, AOEP and each of the Stockholders
have duly executed this Amendment as of the date first above written.
AFTERMARKET TECHNOLOGY
HOLDINGS CORP.
By:
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Name:
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Title:
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THE CLASS A STOCKHOLDERS:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ REVOCABLE TRUST
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▇▇▇▇▇ ▇. ▇▇▇▇, Grantor/Trustee
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
3
THE CLASS B STOCKHOLDERS:
ALLENWOOD VENTURES, INC.
By:
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Name:
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Title:
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ VARIABLE TRUST
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
THE ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ FOUNDATION
By:
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Name:
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Title:
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AURORA CAPITAL PARTNERS L.P.
By: Aurora Advisors, Inc.,
its general partner
By:
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Name:
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Title:
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4
AURORA OVERSEAS CAPITAL
PARTNERS, L.P.
By: Aurora Overseas Advisors Ltd.,
its general partner
By:
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Name:
-----------------------------
Title:
----------------------------
BANCBOSTON INVESTMENTS, INC.
By:
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Name:
-----------------------------
Title:
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BANKAMERICA CAPITAL CORPORATION
By:
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Name:
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Title:
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CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By:
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Name:
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Title:
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5
CASTLEROCK INVESTMENTS LTD.
By:
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Name:
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Title:
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CHEMICAL EQUITY ASSOCIATES
By:
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Name:
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Title:
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CHEMICAL INVESTMENTS, INC.
By:
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Name:
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Title:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
THE TRUSTEES OF DARTMOUTH COLLEGE
By:
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Name:
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Title:
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6
▇▇▇▇ ▇▇▇▇▇▇ AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇▇▇▇ ▇▇▇▇▇▇ AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO ▇▇▇▇ ▇. ▇▇▇▇▇
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇▇▇▇ ▇▇▇▇▇▇ AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO ▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
7
▇▇▇▇ ▇▇▇▇▇▇ AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇▇▇▇ ▇▇▇▇▇▇ AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO ▇. ▇▇▇▇▇▇▇▇ YORT
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
DELTA MASTER TRUST
By:
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Trustee
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
8
GENERAL ELECTRIC PENSION TRUST
By:
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Name:
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Title: Trustee
HARBOURTON REASSURANCE, INC.
By:
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Name:
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Title:
----------------------------
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▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ FINANCIAL, INC.
By:
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Name:
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Title:
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AMBASSADOR ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
9
L-A&A GIFT TRUST FBO
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
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Name:
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Title:
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L-A&A GIFT TRUST FBO
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
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Name:
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Title:
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▇▇▇▇ ▇. ▇▇▇▇▇▇
LODWRICK AND ▇▇▇▇▇▇ ▇▇▇▇ AS
TRUSTEES OF THE ▇▇▇▇ FAMILY
TRUST DATED SEPTEMBER 16, 1991
By:
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Trustee
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▇▇▇▇ ▇. ▇▇▇▇▇
10
NHL HOLDINGS LTD.
By:
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Name:
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Title:
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OGAC LIMITED
By:
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Name:
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Title:
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ORYX EQUITY PARTNERS FUND I LTD.
By:
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Name:
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Title:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ AND ▇.▇. ▇▇▇▇▇▇, JTWROS
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇ TRUST
By:
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Name:
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Title:
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SPRINGBROOK, G.P.
By:
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Name:
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Title:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SUMITOMO BANK OF CA TTEE FOR ▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇▇ RETIREMENT PLAN FBO
H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:
-------------------------------
Name:
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Title:
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SUMITOMO BANK OF CA TTEE FOR
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ RETIREMENT
PLAN FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
-------------------------------
Name:
-----------------------------
Title:
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▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
By:
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Name:
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Title:
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W. S. INVESTMENTS L.P.
By:
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Name:
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General Partner
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇. ▇▇▇▇▇▇▇▇ YORT
13
THE CLASS C STOCKHOLDERS:
AURORA EQUITY PARTNERS L.P.
By: Aurora Capital Partners L.P.,
its general partner
By: Aurora Advisors, Inc.,
its general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
AURORA OVERSEAS EQUITY
PARTNERS I, L.P.
By: Aurora Overseas Capital Partners, L.P.,
its general partner
By: Aurora Overseas Advisors Ltd.,
its general partner
By:
-------------------------------
Name:
-----------------------------
Title:
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14
ANNEX A
EXHIBIT D
REGISTRATION RIGHTS
1. "PIGGY-BACK" REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Except in the case of a
Qualified IPO that is consummated on or before March 31, 1997, if the Company
at any time proposes to effect a Qualified IPO or, following a Qualified IPO,
proposes to register any of its equity securities under the Act (other than
by a registration on Form S-4 or S-8 or any successor or similar forms),
whether or not for sale for its own account, in a manner which would permit
registration of Registrable Securities for sale to the public under the Act,
then the Company will each such time give prompt written notice (which shall
be at least 30 days prior to filing) to all Eligible Holders of Registrable
Securities of its intention to do so and of such Eligible Holders' rights
under this Paragraph 1. Upon the written request of any such Eligible Holder
made within 20 days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by such
Eligible Holder and the intended method of disposition thereof), the Company
will use its best efforts to effect the registration under the Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities
in the registration statement which covers the securities which the Company
proposes to register or in a separate registration statement concurrently
filed and on terms substantially the same as those being offered to the
Company; PROVIDED that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give
written notice of such determination to each Eligible Holder of Registrable
Securities and, thereupon:
(i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay
the Registration Expenses in connection therewith), and
(ii) in the case of a delay in registering, shall be permitted
to delay registering any Registrable Securities for the same period
as the delay in registering such other securities.
(b) PRIORITY IN "PIGGY-BACK" REGISTRATIONS. If a registration
pursuant to this Paragraph 1 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
securities
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-1
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the offering, the Company will
include in such registration to the extent of the number which the Company is so
advised can be sold in such offering without adversely affecting the offering,
securities determined as follows:
(i) first, the securities proposed by the Company to be sold
for its own account,
(ii) second, any Registrable Securities requested to be included
in such registration PRO RATA among the holders thereof requesting such
registration on the basis of the number of shares of such securities
requested to be included by such holders, and
(iii) third, any other securities of the Company proposed to be
included in such registration statement in accordance with the priorities,
if any, then existing among the holders of such securities.
2. DEMAND REGISTRATION RIGHT OF CERTAIN ELIGIBLE HOLDERS.
(a) RIGHT TO REQUIRE REGISTRATION. Subject to the provisions of this
Paragraph 2, if, at any time after the first anniversary of the consummation
of a Qualified IPO, any Eligible Holder (other than the Aurora Entities) is
the record owner of 10% or more of the outstanding Common Stock immediately
after a distribution of shares by either or both of the Aurora Entities to
their limited partners (such Eligible Holder being a "Demand Holder"), such
Demand Holder shall have the right to require the Company to file a registration
statement under the Securities Act for a public offering of all or any portion
of the Registrable Securities held by such Holder when such right is exercised
(the Registrable Securities to be subject to such registration being the "Demand
Registration Securities"), PROVIDED that any demand for registration under this
Paragraph 2 (a "Registration Demand") shall not be otherwise deemed to be
effective unless such Registration Demand is with respect to Registrable
Securities constituting at least five percent of the outstanding shares of the
class of Registrable Securities. The demand registration rights granted to the
Demand Holders in this Paragraph 2 are subject to the following limitations:
(i) each Demand Holder may make a Registration Demand under this
Paragraph 2 only one time, PROVIDED, HOWEVER, that if, after completion of
the resulting registered offering, such Demand Holder continues to hold
10% or more of the outstanding Common Stock or holds 10% or more of the
outstanding Common Stock as the result of a subsequent distribution of
shares by either or both of the Aurora Entities to their limited
partners, such Demand
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-2
Holder shall have the right to make one additional Registration Demand;
(ii) the Company shall not be obligated to cause any registration
statement filed under this Paragraph 2 to be declared effective less than
six months after the effective date of the most recent registration
statement filed by the Company on its own behalf;
(iii) the managing underwriter of any such offering shall be a
nationally recognized investment banking firm selected by the Company and
approved by the Demand Holder making the Registration Demand (which
approval shall not be unreasonably withheld);
(iv) notwithstanding the giving of a Registration Demand by a
Demand Holder, the Company may elect to convert the required registration
into a registration of shares for sale by the Company pursuant to
Paragraph 1 hereof by providing notice to the Eligible Holders in
accordance with Paragraph 1, and in such event the provisions of
Paragraph 1 shall apply to such registration rather than the provisions
of this Paragraph 2 and such registration shall not count as the exercise
of such Demand Holder's registration right under this Paragraph 2;
(v) during any two-year period, the Company may make a one-time
election to postpone the filing or the effectiveness of a registration
statement in response to a Registration Demand for up to six months if
the Board determines, in its good faith judgment, that (x) such
registration would reasonably be expected to have an adverse effect on,
interfere with or delay any proposal or plan by the Company or any of its
subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer
or similar transaction, (y) the filing of a registration statement or a
sale of Registrable Securities pursuant thereto would require disclosure
of material information that the Company has a bona fide business purpose
for preserving as confidential, or (z) the Company is unable to comply
with the registration requirements of the Commission; PROVIDED, that, in
such event, the Demand Holder making the Registration Demand will be
entitled to withdraw such demand and, if such demand is withdrawn, such
demand will not count as a Registration Demand hereunder and the Company
will pay all Registration Expenses in connection with such withdrawn
demand; and
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-3
(vi) any Registration Demand under this Paragraph 2 shall be for
for a firm commitment underwritten offering, with respect to which the
Company shall be required to maintain an effective registration statement
for a maximum of 30 days.
(b) NOTICE OF REGISTRATION DEMAND; PARTICIPATION RIGHTS. Any Demand
Holder desiring to make a Registration Demand shall do so by providing
written notice to the Company (which notice shall state the number of shares
of Registrable Securities the Demand Holder desires the Company to register),
and the Company promptly shall provide written notice of such Registration
Demand to all of the other Eligible Holders and all of the Eligible Holders
then will have the opportunity to include in the offering shares of
Registrable Securities then owned by such Eligible Holders, but in each case
only to the extent permitted by subdivision (c) of this Paragraph 2. In
addition, subject to subdivision (c) of this Paragraph 2, the Company may
elect to include in any registration statement and offering pursuant to this
Paragraph 2 newly issued shares of Registrable Securities. Solely for
purposes of Paragraphs 3 through 9 below, any securities registered pursuant
to this Paragraph 2 shall be deemed to be Registrable Securities.
(c) PRIORITY. Notwithstanding the foregoing, if the managing
underwriter of a registered offering being made in response to a Registration
Demand advises the Company in writing that the number of shares of
Registrable Securities desired to be offered by the Company or Eligible
Holders other than the Demand Holder who made the Registration Demand,
together with the Demand Registration Securities of such Demand Holder,
exceeds the maximum number of such shares which the managing underwriter
considers, in good faith, to be appropriate based on market conditions and
other relevant factors (including, without limitation, pricing) (the "Maximum
Number"), then the securities proposed to be included by Eligible Holders
other than such Demand Holder (the "Other Sellers") shall be excluded from
such registration before any such securities of such Demand Holder or the
Company shall be excluded. If, and to the extent that, after the exclusion
of the securities proposed to be included by the Other Sellers, the number of
securities proposed to be included by such Demand Holder and the Company
exceeds the Maximum Number, such securities to be included on behalf of the
Company shall be excluded to the extent necessary to avoid exceeding the
Maximum Number. Each of the Demand Holder, the Other Sellers and the Company
(in the event that any securities are to be offered by the Company) may
withdraw from any demand registration pursuant to this Paragraph 2 by giving
written notice to the Company prior to the filing date of such registration
statement and, in the event of a withdrawal by the Demand Holder whose
Registration Demand gave rise to the registration, such withdrawn
Registration Demand shall not be deemed to be a Registration Demand counting
against the permissible number of Registration Demands set forth in Paragraph
2(a)(i) if the Demand Holder pays or promptly reimburses the Company for all
Registration Expenses incurred by the Company in connection with such
withdrawn Registration Demand.
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-4
3. REGISTRATION PROCEDURES. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable
Securities under the Act as provided in Paragraph 1 or 2, the Company will as
expeditiously as possible (and, in any event, within 90 days), subject to the
terms and conditions of Paragraph 1 or 2:
(a) prepare and file with the Commission the requisite registration
statement to effect such registration and use its best efforts to cause
such registration statement to become effective; PROVIDED, HOWEVER, that
the Company may discontinue any registration of its securities which are
not Registrable Securities at any time prior to the effective date of
the registration statement relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the disposition of all securities covered by such registration
statement until the earlier of such time as all of such securities have
been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in such registration statement
or the expiration of 90 days after such registration statement becomes
effective; PROVIDED that if less than all the Registrable Securities are
withdrawn from registration after the expiration of such period, the shares
so withdrawn shall be allocated PRO RATA among the holders thereof on the
basis of the respective numbers of Registrable Securities held by them
included in such registration;
(c) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule 424
under the Act, in conformity with the requirements of the Act, and such
other documents, as such seller may reasonably request;
(d) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such securities or blue sky laws of such jurisdictions as each
seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement
remains in effect, and take any other action which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller,
except that the Company shall not for any such purpose be required to:
(i) qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this subdivision (d) be obligated to be so qualified,
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-5
(ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such
jurisdiction;
(e) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(f) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and the underwriters, if any), of:
(i) an opinion of counsel for the Company, dated the effective
date of such registration statement (or, if such registration includes
an underwritten public offering, an opinion of counsel for the Company
dated the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to such seller, and
(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a "comfort" letter dated the date of the
closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial
statements included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to the underwriters
in underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters as such seller or such
holder (or the underwriters, if any) may reasonably request;
(g) immediately notify each holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Act, of the happening of
any event or the existence of any condition as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, or if in the opinion of counsel for the Company it
is necessary to supplement or amend such prospectus to comply with law
and, at the request of any such holder promptly prepare and furnish to
such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-6
be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made or such prospectus,
as supplemented or amended, shall comply with law;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and the rules and
regulations of the Commission thereunder, and not file any amendment or
supplement to such registration statement or prospectus to which any such
seller of Registrable Securities covered by such registration statement
shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements
of the Act or of the rules or regulations thereunder, having been furnished
with a copy thereof at least five business days prior to the filing
thereof;
(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement;
(j) use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed; and
(k) pay all Registration Expenses relating to any such registration.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information and undertakings as it may reasonably request regarding such
seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities as follows:
(A) that upon receipt of any notice from the Company of the
happening of any event of the kind described in subdivision (g) of
this Paragraph 3, such holder will forthwith discontinue such
holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until
such holder's receipt of the copies of the supplemented or
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-7
amended prospectus contemplated by subdivision (g) of this
Paragraph 3 and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the
time of receipt of such notice, and
(B) that it will immediately notify the Company, at any time
when a prospectus relating to the registration of such Registrable
Securities is required to be delivered under the Act, of the
happening of any event as a result of which information previously
furnished by such holder to the Company in writing for inclusion in
such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made.
In the event the Company or any such holder shall give any such notice,
the period referred to in subdivision (b) of this Paragraph 3 shall be
extended by a number of days equal to the number of days during the period
from and including the giving of notice pursuant to subdivision (g) of this
Paragraph 3 to and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by subdivision
(g) of this Paragraph 3.
4. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITING AGREEMENT. If the Company at any time proposes
to register any of its securities under the Act as contemplated by
Paragraph 1 and such securities are to be distributed by or through one
or more underwriters or if the Company at any time is required to
register any of its securities under the Act as contemplated by
Paragraph 2, the Company will, subject to the provisions of subdivision
(b) of Paragraph 1 or subdivision (c) of Paragraph 2, use its best
efforts to arrange for such underwriters to include the Registrable
Securities to be offered and sold by each holder among the securities to
be distributed by such underwriters, and each holder of Registrable
Securities agrees, by acquisition of such Registrable Securities, that
all Registrable Securities of such holder to be included in such
registration shall be distributed and sold through such underwriters.
The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the
Company and such underwriters and may, at their option, require that any
or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders
of Registrable Securities and that any or all of the conditions
precedent to the obligations of such
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-8
underwriters shall also be made to and for the benefit of such holders
of Registrable Securities. No holder of Registrable Securities shall be
required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties
or agreements regarding such holder and such holder's intended method of
distribution and any other representation required by law.
(b) SELECTION OF UNDERWRITERS. The selection of the underwriter
or underwriters for the public offering to be made pursuant to a
registration statement filed under Paragraph 1 shall be made by the
Company, in its sole discretion, from amongst underwriting firms of
national reputation. Notwithstanding anything else in this Exhibit D to
the contrary, if General Electric Pension Trust ("GEPT") is eligible to
participate in an underwriting pursuant to the terms hereof and the
General Electric Company is directly or indirectly the beneficial owner
of five percent (5%) or more of the outstanding equity interests of an
underwriter or underwriters acting in such underwriting, GEPT shall have
the absolute right to disapprove such underwriter or underwriters so
owned by General Electric Company.
(c) HOLDBACK AGREEMENTS.
(i) Each holder of Registrable Securities agrees by
acquisition of such Registrable Securities, if so required by the
managing underwriter, not to effect any public sale or distribution
of such securities or sales of such securities pursuant to Rule 144
under the Act or otherwise, during the seven days prior to and the
90 days after any firm commitment underwritten registration
pursuant to Paragraph 1 or 2 or any Qualified IPO that is
consummated on or before March 31, 1997 has become effective or, if
the managing underwriter advises the Company in writing that, in
its opinion, no such public sale or distribution should be effected
for a specific period longer than 90 days after such underwritten
registration in order to complete the sale and distribution of
securities included in such registration and the Company gives
notice to such holder of Registrable Securities of such advice,
during a reasonable longer period of up to 270 days after such
underwritten registration, except as part of such underwritten
registration, whether or not such holder participates in such
registration.
(ii) The Company agrees:
(A) not to effect any public sale or distribution of its
equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during
the seven days prior to and the 90 days after any firm
commitment underwritten registration pursuant to Paragraph 1
or 2 has become effective,
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-9
except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or S-8 or any successor
or similar forms thereto, and
(B) to use its best efforts to cause each holder of its
equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in
each case purchased from the Company at any time after the
date hereof (other than in a public offering) to agree not to
effect any such public sale or distribution of such
securities, during such period or, in either case, if the
managing underwriter advises the Company in writing that in
its opinion, no such public sale or distribution should be
effected for a specified period longer than 90 days after such
underwritten registration in order to complete the sale and
distribution of securities included in such registration,
during a reasonably longer period after such underwritten
registration, except as part of such underwritten registration.
5. PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Act, the
Company will give the holders of Registrable Securities registered under such
registration statement, their underwriters, if any, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with
the Commission, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities
to discuss the business, finances and accounts of the Company and its
subsidiaries with its officers, directors and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the Act.
6. CERTAIN RIGHTS OF HOLDERS. The Company will not file any
registration statement under the Act which refers to any holder of
Registrable Securities by name or otherwise as the holder of any securities
of the Company, unless it shall first have given such holder the right to
require:
(a) the insertion therein of language, in form and substance
satisfactory to such holder, to the effect that, in the opinion of such
holder, the holding by such holder of such securities does not make such
holder a "controlling person" of the Company within the meaning of the
Act and is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that
such holding does not imply that such holder will assist in meeting any
future financial requirements of the Company, or
(b) in the event that such reference to such holder by name or
otherwise is not required by the Act or any rules and regulations
promulgated thereunder, the deletion of the reference to such holder.
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-10
7. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Act, the Company
will, and hereby does, indemnify and hold harmless the seller of any
Registrable Securities covered by any registration statement filed
pursuant to Paragraph 1 or 2, its directors, officers, partners,
employees, agents and investment advisors, each other Person who
participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such seller or
any such underwriter within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act, from and against any losses, claims,
damages or liabilities, joint or several (or actions or proceedings,
whether commenced or threatened, in respect thereof) (collectively,
"Claims"), to which such seller or any such director or officer or
employee or agent or investment advisor or underwriter or controlling
person may become subject under either Section 15 of the Act or Section
20 of the Exchange Act or otherwise, insofar as such Claims arise out of
or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under which
such securities were registered under the Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or
any amendment or supplement thereto (if used during the period the
Company is required to keep the registration statement current)
(collectively, "Registration Documents"), or 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 in light of
the circumstances in which made, or any violation by the Company of the
Act or any state securities law, or any rule or regulation promulgated
under the Act or any state securities law, or any other law applicable
to the Company relating to any such registration or qualification, and
the Company will reimburse such seller and each such director, officer,
employee, agent, investment advisor, underwriter and controlling person
for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; PROVIDED that
the Company shall not be liable in any such case to the extent that any
such Claim or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
such Registration Document in reliance upon and in conformity with
written information furnished to the Company through an instrument duly
executed by such seller stating that it is for use in the preparation
thereof; PROVIDED FURTHER that the Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act in any such case to the extent that any
such Claim, or expense arises out of such Person's failure to send or
give a copy of the final prospectus to the Person claiming an untrue
statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in
such final prospectus. Such indemnity shall remain in
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-11
full force and effect regardless of any investigation made by or on
behalf of such seller or any such director, officer, employee, agent,
investment advisor, partner, underwriter or controlling person and shall
survive the transfer of such securities by such seller.
(b) INDEMNIFICATION BY THE SELLERS. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to Paragraph 1 or 2, that the Company shall
have received an undertaking satisfactory to it from the prospective
seller of such securities, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this
Paragraph 7) the Company, each director of the Company, each officer of
the Company and each other person, if any, who controls the Company
within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act, with respect to any statement or alleged statement or
omission or alleged omission from such Registration Document, if such
statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by such seller
specifically stating that it is for use in the preparation of such
Registration Document. Notwithstanding the foregoing, in no event shall
any selling stockholder or any director, officer, employee, agent,
investment advisor or controlling person thereof be liable to indemnify
the Company pursuant to this subdivision (b) of this Paragraph 7 hereof
in an amount in excess of the amount of the net proceeds of the
Registrable Securities sold by him, her or it in any such offering.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company of any such director,
officer or controlling person and shall survive the transfer of such
securities by such seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a Claim referred to in the preceding subdivisions
of this Paragraph 7, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action; PROVIDED that the
failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Paragraph 7, except to the extent that
the indemnifying party is actually prejudiced by such failure to give
notice. In case any such action is brought against an indemnified
party, unless in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-12
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall consent to entry of any
judgment or enter into any settlement of any pending or threatened
proceeding in respect of which an indemnified party is or could have
been a party and indemnity could have been sought under subdivision (a)
of this Paragraph 7 without the consent of the indemnified party which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subdivisions of this Paragraph 7 (with
appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or
other qualification of securities under any Federal or state law or
regulation of any governmental authority, other than the Act. If the
indemnification provided for in subdivision (a), (b) or (c) of this
Paragraph 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party or parties on the
other hand from the offering of the securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations;
PROVIDED, HOWEVER, that in no event shall any contribution by the
selling stockholder or any director, officer, employee, agent,
investment advisor or controlling person thereof pursuant to this
subdivision (d) of this Paragraph 7 exceed the amount of the net
proceeds of the Registrable Securities sold by him, her or it in any
such offering.
(e) INDEMNIFICATION PAYMENTS. The indemnification required by
this Paragraph 7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred.
8. ADJUSTMENT AFFECTING REGISTRABLE SECURITIES. The Company will not
effect or permit to occur any combination or subdivision of shares which
would adversely affect the ability of the holders of Registrable Securities
to effect the registration of such securities in the manner contemplated by
these registration rights provisions.
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-13
9. COVENANTS RELATING TO RULE 144. At all times after the effective
date of the registration statement under the Act of the initial underwritten
public offering of Common Stock, and until such time as all of the
Registrable Securities are deregistered, the Company will file reports in
compliance with the Exchange Act and will, at its expense, forthwith upon the
request of any holder of Restricted Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating:
(a) the Company's name, address and telephone number (including
area code),
(b) the Company's Internal Revenue Service identification number,
(c) the Company's Commission file number,
(d) the number of shares of Common Stock of the Company
outstanding as shown by the most recent report or statement published by
the Company, and
(e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least 90 days prior to the
date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.
EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-14