Exhibit 10.16
▇▇▇▇▇, INC.
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
(COMMON STOCK UNDER STOCK INCENTIVE PLANS)
Amended and Restated Stockholders Agreement, dated as of this 4th day
of November 1999 (this "Agreement"), by and among Warburg, ▇▇▇▇▇▇ Ventures,
L.P., a Delaware limited partnership ("Warburg"); the individuals whose names
and addresses appear from time to time on Schedule I hereto (the "Management
Stockholders"); and ▇▇▇▇▇, Inc. (the "Company"), a Delaware corporation and
the successor to T.K.G. Acquisition Corp. Certain terms used in this
Agreement are defined in Section 6 hereof.
R E C I T A L S
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WHEREAS, pursuant to the T.K.G. Acquisition Corp. 1996 Stock Incentive
Plan, the Knoll 1997 Stock Incentive Plan and the Knoll 1999 Stock Incentive
Plan (together, as they may be amended from time to time, the "Stock Plan") of
the Company, the Company has or will make certain grants or sales of shares
(including any capital stock of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of such
shares and any shares of Common Stock issued upon exercise of any Options (as
defined below), the "Shares") of its Common Stock, par value $.01 per share
(the "Common Stock"), or options to purchase shares of Common Stock ("Options"
and, together with the Shares, the "Securities") to the Management
Stockholders; and
WHEREAS, Warburg, the Management Stockholders and the Company desire to
promote their mutual interests by agreeing to certain matters relating to the
operations of the Company and the disposition and voting of the Securities, as
further set forth herein; and
WHEREAS, Warburg, the Management Stockholders and the Company have
previously entered into a Stockholders Agreement (Common Stock Under Stock
Incentive Plan), dated as of February 29, 1996 (the "Old Stockholders
Agreement"), in connection with the Management Stockholders' ownership of
Securities and desire to amend and restate the Old Stockholders Agreement in
its entirety as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
1. COVENANTS OF THE PARTIES
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(a) Legends. The certificates evidencing the Securities owned or
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acquired by the Stockholders pursuant to the Stock Plan or their permitted
transferees will bear the following legends reflecting the restrictions on the
transfer of such securities under the Securities Act and those contained in
this Agreement:
"The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended (the "Act"), and may not be
transferred except pursuant to an effective registration under the Act
or in a transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt transaction under
the Act and the rules and regulations promulgated thereunder.
"The securities evidenced hereby are subject to the terms of that
certain Stockholders Agreement (Common Stock Under Stock
Incentive Plan), dated as of February 29, 1996, as amended by that
certain Amended and Restated Stockholders Agreement (Common Stock
Under Stock Incentive Plans), dated as of November __, 1999, and as
may be further amended from time to time, by and among the Company,
Warburg, ▇▇▇▇▇▇ Ventures, L.P. and certain holders of Common Stock,
including certain restrictions on transfer. A copy of such
Stockholders Agreement has been filed with the Secretary of the
Company and is available upon request."
(b) Additional Stockholders. The parties hereto acknowledge that,
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subject to the terms hereof, certain employees and/or consultants of the
Company or its Subsidiaries may become stockholders of the Company after the
date hereof and that such employees and/or consultants will be required, as a
condition to the issuance of Securities to them under the Stock Plan, to
execute a Joinder Agreement in the form attached hereto as Exhibit A (the
"Joinder Agreement"). Upon execution of a Joinder Agreement, such employees
and/or consultants shall be deemed to be Management Stockholders under this
Agreement and shall be entitled to all of the rights and benefits afforded to,
and shall be subject to all the obligations of, such Management Stockholders
hereunder.
2. TRANSFER OF SECURITIES
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Without the approval of the Board of Directors of the Company (the
"Board") and subject to the restrictions on transfer under the Stock Plan, no
Management Stockholder shall Transfer any Securities, or any beneficial
interest therein, except (i) to members of such Management Stockholder's
immediate family or trusts for the benefit of such Management Stockholder or
such Management Stockholder's immediate family; upon the death of any
Management Stockholder, to his or her respective executors, administrators or
testamentary trustees; to a corporation or partnership, the sole stockholders
or limited or general partners of which include only such Management
Stockholder and members of such Management Stockholder's immediate family; a
transfer from a Management Stockholder's trust or other transferee back to
such Management Stockholder; a transfer to the legal guardian of a disabled
Management Stockholder or of a Management Stockholder's disabled immediate
family member, provided in each instance that (A) such transferee executes and
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delivers to the Company and Warburg a Joinder Agreement and (B) any such
transferee shall take such Securities subject to all limitations and
obligations imposed on the Management Stockholder under the Stock Plan and any
related grant agreement, (ii) to Warburg or an Affiliate thereof, (iii) after
an Initial Public Offering, upon 30 days prior written notice to the Board or
(iv) sales
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pursuant to a Drag-Along Notice in accordance with Section 3; provided,
however, that the restrictions on Transfer pursuant to this Section 2 shall
terminate after an Initial Public Offering when Warburg owns less than 10% of
the outstanding Common Stock. Any Transfer or purported Transfer made in
violation of this Section 2 shall be null and void and of no effect.
3. DRAG-ALONG RIGHT
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(a) If at any time and from time to time after the date of this
Agreement, the holder or holders of a majority of the outstanding shares of
voting capital stock of the Company (the "Proposed Transferors") wish to
Transfer in a bona fide arms' length sale all shares of Common Stock then
owned by them to any Person or Persons who are not Affiliates of the Proposed
Transferors (for purposes of this Section 3(a), the "Proposed Transferee"),
the Proposed Transferors shall have the right (the "Drag-Along Right") to
require each Management Stockholder to sell to the Proposed Transferee all
Securities (for the same per share consideration received by the Proposed
Transferor for each such class of capital stock, and with respect to
unexercised Options, less any exercise price payable with respect thereto)
then held by the Management Stockholders, subject to purchase by the Proposed
Transferee. Each Management Stockholders, agrees to take all steps necessary
to enable him or it to comply with the provisions of this Section 3(a),
including, if necessary, voting any Securities in favor of the transaction
with the Proposed Transferee (whether effected as a merger or otherwise) to
facilitate the Proposed Transferors' exercise of a Drag-Along Right.
(b) To exercise a Drag-Along Right, the Proposed Transferors shall
give each Management Stockholder a written notice (for purposes of this
Section 3, a "Drag-Along Notice") containing (i) the number of Securities that
the Proposed Transferee proposes to acquire from the Proposed Transferors,
(ii) the name and address of the Proposed Transferee, and (iii) the proposed
purchase price, terms of payment and other material terms and conditions of
the Proposed Transferee's offer. Each Management Stockholder shall thereafter
be obligated to sell the Securities subject to such Drag-Along Notice, provided
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that the sale to the Proposed Transferee is consummated within 120 days of
delivery of the Drag-Along Notice. If the sale is not consummated within such
120-day period, then each Management Stockholder shall no longer be obligated
to sell such Management Stockholder's Securities pursuant to that specific
Drag-Along Right but shall remain subject to the provisions of this Section 3.
(c) Notwithstanding anything contained in this Section 3, in the
event that all or a portion of the purchase price consists of securities and
the sale of such securities to the Management Stockholders would require either
a registration under the Securities Act or the preparation of a disclosure
document pursuant to Regulation D under the Securities Act (or any successor
regulation) or a similar provision of any applicable state securities law,
then, at the option of the Proposed Transferors, the Management Stockholders
may receive, in lieu of such securities, the fair market value of such
securities in cash, as determined in good faith by the Board, unless, at the
request of the Management Stockholders holding a majority of the Shares, the
appraisal procedure set forth in Section 3(d) below is invoked.
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(d) Appraisal Procedure. If the Management Stockholders invoke
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an appraisal procedure to determine the amount of the fair market value in
cash of the consideration for the Securities under Section 3(c) (the "Subject
Securities"), then the Proposed Transferors, on the one hand, and the
Management Stockholders, on the other hand, shall each promptly appoint as an
appraiser an individual who shall be a member of a reputable valuation firm.
Each appraiser shall, within 30 days of appointment, separately investigate
the value of the consideration for the Subject Securities as of the proposed
transfer date and shall submit a notice of an appraisal of that value to each
party. Each appraiser shall be instructed to determine such value without
regard to income tax consequences to the Management Stockholders as a result of
receiving cash rather than other consideration. If, upon the completion of the
initial appraisals (the "Earlier Appraisals"), the higher appraised value of
such consideration is not more than 110% of the lower appraised value of such
consideration, the average of the two appraisals on a per share basis shall be
controlling as the amount of the cash equivalent. If the higher appraised value
is more than 110% of the lower appraised value, the appraisers, within 10 days
of the submission of the last appraisal, shall appoint a third appraiser who
shall be member of a reputable valuation firm. The third appraiser shall,
within 30 days of his appointment, appraise the value of the consideration for
the Subject Securities (without regard to the income tax consequences to the
Management Stockholders as a result of receiving cash rather than other
consideration) as of the proposed transfer date and submit notice of his
appraisal to each party. The value determined by the third appraiser shall be
controlling as the amount of the cash equivalent unless the value is greater
than the two Earlier Appraisals, in which case the higher of the two Earlier
Appraisals will control, and unless that value is lower than the two Earlier
Appraisals, in which case the lower of the two Earlier Appraisals will control.
If any party fails to appoint an appraiser or if one of the two initial
appraisers fails after appointment to submit his appraisal within the required
period, the appraisal submitted by the remaining appraiser shall be
controlling. The cost of the foregoing appraisals shall be shared one-half by
the Proposed Transferor and one-half by the Management Stockholders.
4. REGISTRATION RIGHTS
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(a) Definitions. As used in this Section 4:
(i) "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act;
(ii) the term "Holder" shall mean any holder of Registrable
Securities;
(iii) the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
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(iv) the term "Registrable Securities" means (A) the shares of
Common Stock issued to Management Stockholders under the Stock Plan, which
have theretofore become vested and have not theretofore become forfeited under
the Stock Plan, and (B) any capital stock of the Company issued as a dividend
or other distribution with respect to, or in exchange for or in replacement of,
the shares of Common Stock referred to in clause (A) above; provided that
"Registrable Securities" shall not include any shares previously registered on
a registration relating solely to employee benefit plans.
(v) "Registration Expenses" shall mean (x) all expenses incurred by
the Company in compliance with Sections 4(b) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which
shall be paid in any event by the Company) and (y) all reasonable fees and
disbursements of counsel for each of the Holders; and
(vi) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.
(b) Company Registration.
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(i) If the Company shall determine to register any shares of Common
Stock either for its own account or for the account of a security holder or
holders, other than a registration relating solely to employee benefit plans,
or a registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities, the Company will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable
blue sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities (of the same
class of equity securities being registered under such registration
statement) specified in a written request or requests, made by the Holders
within fifteen (15) days after receipt of the written notice from the
Company described in clause (i) above, except as set forth in Section
4(b)(ii) below. Such written request may specify all or a part of the
Holders' Registrable Securities of the same class of equity securities
being registered under such registration statement.
(ii) Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 4(b)(i)(A). In such event,
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the right of each of the Holders to registration pursuant to this Section 4(b)
shall be conditioned upon such Holders' participation in such underwriting and
the inclusion of such Holders' Registrable Securities in the underwriting to
the extent provided herein. The Holders whose shares are to be included in
such registration shall (together with the Company and the Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 4(b), if the representative
determines that marketing factors require a limitation on the number of shares
to be underwritten, the Company shall so advise all holders of Registrable
Securities requesting registration, and the Registrable Securities of the
Company held by Holders shall be excluded from such registration and
underwriting to the extent required by such limitation. If any of the Holders
or any officer, director or Other Stockholder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(iii) Number and Transferability. Each of the Holders shall be
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entitled to have its shares included in an unlimited number of registrations
pursuant to this Section 4(b). The registration rights granted pursuant to
this Section 4(b) shall be assignable, in whole or in part, to any permitted
transferee of the Shares, provided such transferee executes and delivers to
the Company and to Warburg a Joinder Agreement.
(c) Form S-3. Following the Initial Public Offering the Company
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shall use its best efforts to qualify for registration on Form S-3 for
secondary sales. After the Company has qualified for the use of Form S-3,
Holders of Registrable Securities shall have the right to request unlimited
registrations on Form S-3 (such requests shall be in writing and shall state
the number of shares of Registrable Securities to be disposed of and the
intended method of disposition of shares by such holders), subject only to the
following:
(i) The Company shall not be required to effect a registration
pursuant to this Section 4(c) unless the Holder or Holders of Registrable
Securities requesting registration propose to dispose of shares of Registrable
Securities having an aggregate price to the public (before deduction of
underwriting discounts and expenses of sale) of more than $5,000,000.
(ii) The Company shall not be required to effect a registration
pursuant to this Section 4(c) within 180 days of the effective date of the
most recent registration pursuant to this Section 4(c) in which securities
held by the requesting Holder could have been included for sale or
distribution.
(iii) The Company shall not be required to effect a registration
pursuant to this Section 4(c) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the
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filing of such registration statement. In such event, the Company shall have
the right to defer the filing of the registration statement no more than once
during any twelve (12) month period for a period of not more than one hundred
twenty (120) days after receipt of the request of the Holder or Holders under
this Section 4(d).
(iv) The Company shall not be obligated to effect any registration
pursuant to this Section 4(c) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless the Company
is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder.
The Company shall give written notice thereof to all Holders of
Registrable Securities within five (5) days of the receipt of a request for
registration pursuant to this Section 4(c) and shall provide a reasonable
opportunity for other Holders of Registrable Securities to participate in the
registration, provided that if the registration is for an underwritten
offering, the terms of Section 4(b)(ii) shall apply to all participants in such
offering. Subject to the foregoing, the Company will use its best efforts to
effect promptly the registration of all shares of Registrable Securities on
Form S-3 to the extent requested by the Holder or Holders thereof for purposes
of disposition.
(d) Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to this
Section 4 (whether or not such registration, qualification or compliance is
effectuated) shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered (or proposed to be
registered) pro rata on the basis of the number of their shares so registered
(or proposed to be registered.
(e) Registration Procedures. In the case of each registration
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effected by the Company pursuant to Section 4, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
will:
(i) keep such registration effective for a period of one hundred
twenty (120) days or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto,
whichever first occurs; provided, however, that (A) such 120-day period shall
be extended for a period of time equal to the period during which the Holders,
as applicable, refrain from selling any securities included in such
registration in accordance with provisions in Section 4(i) hereof; and (B) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided further that
applicable rules under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
which (y) includes any prospectus required by Section 10(a)(3) of the
Securities Act or (z) reflects facts or events representing a material or
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fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (y)
and (z) above to be contained in periodic reports filed pursuant to Section 13
or 15(d) of the Exchange Act in the registration statement; and
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time may
reasonably request.
(f) Indemnification.
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(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors and partners, and each person controlling each
of the Holders, with respect to each registration which has been effected
pursuant to this Section 4, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on 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, or any violation by the Company of
the Securities Act or any rule or regulation thereunder applicable to the
Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each of the Holders, each of its officers, directors and partners,
and each person controlling each of the Holders, each such underwriter and each
person who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not
be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by any Holder
with respect to such Holder or underwriter with respect to such underwriter and
stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each Other Stockholder and each of their officers,
directors, and partners, and each person controlling such Other Stockholder
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact with respect to such Holder contained in any such
registration statement, prospectus, offering circular or other document made
by such Holder, or any omission (or alleged omission) to state therein a
material fact with respect to such Holder required to be stated therein or
necessary to make the statements by such Holder therein not misleading, and
will reimburse the Company and such Other Stockholders,
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directors, officers, partners, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
in each case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder with respect to such Holder and stated to be
specifically for use therein; provided, however, that the obligations of each
of the Holders hereunder shall be limited to an amount equal to the proceeds
to such Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section 4(f)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at its own expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of counsel shall be at the expense of the
Indemnifying Party), and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 4 unless, and only to the extent,
the Indemnifying Party is materially prejudiced thereby. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
(iv) If the indemnification provided for in this Section 4(f) is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent,
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knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated
by this Agreement are in conflict with the foregoing provisions, the provisions
in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter if a copy of the Final Prospectus was furnished to the underwriter
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.
(vii) Any indemnification payments required to be made to an
Indemnified Party under this Section 4(f) shall be made as the related claims,
losses, damages, liabilities or expenses are incurred.
(g) Information by the Holders. Each of the Holders and each Other
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Stockholder holding securities included in any registration, shall furnish to
the Company such information regarding such Holder or Other Stockholder and
the distribution proposed by such Holder or Other Stockholder as the Company
may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 4.
(h) Rule 144 Reporting.
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With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of the restricted
securities to the public without registration, the Company agrees to:
(A) make and keep public information available as those terms
are understood and defined in Rule 144, at all times from and after ninety
(90) days following the effective date of the first registration under the
Securities Act filed by the Company after the date of this Agreement for an
offering of its securities to the general public;
(B) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the
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Securities Act and the Exchange Act at any time after the date of this
Agreement the Company has become subject to such reporting requirements;
and
(C) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time
from and after ninety (90) days following the effective date of the first
registration statement filed by the Company after the date of this
Agreement for an offering of its securities to the general public), and of
the Securities Act and the Exchange Act (at any time after the date of this
Agreement the Company has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed as the Holder may reasonably request
in availing itself of any rule or regulation of the Commission allowing the
Holder to sell any such securities without registration.
(i) "Market Stand-off" Agreement. Each of the Holders agrees, if
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requested by the Company and an underwriter of shares of Common Stock (or other
securities) of the Company, not to sell or otherwise transfer or dispose of
any shares of Common Stock (or other securities) of the Company held by such
Holder during the 90-day period (or such longer period if requested by such
underwriter, up to 180 days) following the effective date of a registration
statement of the Company filed under the Securities Act, provided that:
(i) such agreement only applies to the first such registration
statement of the Company after the date of this Agreement which includes
securities to be sold on the Company's behalf to the public in an
underwritten offering; and
(ii) all officers and directors of the Company enter into
similar agreements.
If requested by the underwriters, the Holders shall execute a separate
agreement to the foregoing effect. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of said 90-day period (or such longer
period if requested by the underwriter, up to 180 days). The provisions of
this Section 4(i) shall be binding upon any transferee who acquires Registrable
Securities, whether or not such transferee is entitled to the registration
rights provided hereunder.
(j) Termination. The registration rights set forth in this Section 4
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shall not be available to any Holder if, in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any 90-day period pursuant to Rule 144 under the Securities Act
(without giving effect to the provisions of Rule 144(k)). The Company will
arrange for a provision to the transfer agent for such shares of an opinion of
counsel in connection with any such sale under Rule 144.
5. TERMINATION. The Agreement shall terminate on the date on which
-----------
the Board and the holder or holders of a majority of the Securities issued
under the Stock Plan
11
shall have agreed in writing to terminate this Agreement; provided that
Section 3 shall terminate upon an Initial Public Offering.
Notwithstanding anything in this Agreement to the contrary, if a
Management Stockholder's employment with the Company or its Subsidiaries is
terminated, whether by such Management Stockholder or by the Company or its
Subsidiaries, whether with or without cause, all rights of such Management
Stockholder under this Agreement (but not the obligations) shall be terminated;
provided that the Company's rights under Section 3 shall remain in full force
and effect.
6. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Terms Defined. As used in this Agreement, the following terms
-------------
have the respective meaning set forth below:
Affiliate: means any person or entity, directly or indirectly,
---------
controlling, controlled by or under common control with such person or entity.
Exchange Act: the Securities Exchange Act of 1934, as amended.
------------
Initial Public Offering: means the completion of an underwritten
-----------------------
initial public offering after the date of this Agreement for shares of Common
Stock pursuant to a registration statement under the Securities Act resulting
in net proceeds to the Company and/or any selling stockholders of not less
than $25,000,000.
Other Stockholders: holders of securities of the Company other than
------------------
Registrable Securities who are entitled, by contract with the Company or
otherwise, to have securities included in a registration.
Person: an individual, partnership, joint-stock company, corporation,
------
limited liability company, trust or unincorporated organization, and a
government or agency or political subdivision thereof.
Security, Securities: as defined in Section 2(1) of the Securities
--------------------
Act.
Securities Act: the Securities Act of 1933, as amended.
--------------
Subsidiary: a corporation of which the Company owns, directly or
----------
indirectly, more than fifty percent (50%) of the Voting Stock.
Transfer: any sale, assignment, pledge, hypothecation, or other
--------
disposition or encumbrance, whether or not for consideration.
12
Voting Stock: securities of any class or classes of a corporation the
------------
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
(b) Accounting Principles. Where the character or amount of any
---------------------
asset or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, this shall be done
in accordance with U.S. generally accepted accounting principles at the time
in effect, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
(c) Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(d) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
(e) Section Headings. The headings of the sections and subsections
----------------
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
7. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in writing
and shall be delivered by hand or mailed by overnight courier or by registered
or certified mail, postage prepaid:
(A) if to any of the Management Stockholders, at the address
of such Management Stockholder shown on Schedule I, or at such other address
as the Management Stockholder may have furnished the Company in writing;
(B) if to Warburg, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or at such other address as
Warburg may have furnished the Company in writing; and
(C) if to the Company, to ▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, or at such other
address as it may have furnished in writing to Warburg and the Management
Stockholders, with a copy to Warburg pursuant to the previous clause (B).
13
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed and , (ii) documents received by
each Stockholders pursuant hereto and (iii) financial statements, certificates
and other information previously or hereafter furnished to each Management
Stockholder, may be reproduced by each Management Stockholder by an
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and each Management Stockholder may destroy any original
document so reproduced. All parties hereto agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by each Management
Stockholder in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement, together
--------------------------------------
with the Stock Plan, constitutes the entire understanding of the parties hereto
relating to the subject matter hereof and supersede all prior understandings
among such parties (including the Old Stockholders Agreement). This Agreement
may be amended, and the observance of any term of this Agreement may be waived,
with (and only with) the written consent of Warburg and the holder or holders
of a majority of the Securities.
(e) Severability. In the event that any part or parts of this
------------
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(f) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
14
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first above written.
▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
WARBURG, ▇▇▇▇▇▇ VENTURES, L.P.
By: Warburg, ▇▇▇▇▇▇ & Co.,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Partner
MANAGEMENT STOCKHOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
15
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
16
SCHEDULE I
(Intentionally Omitted)
Exhibit A
---------
JOINDER AGREEMENT
-----------------
Joinder Agreement, dated as of this __ day of ________, _____, by
and among ▇▇▇▇▇, Inc., a Delaware corporation (the "Company"), and the
undersigned (the "Stockholder").
Reference is made to that certain Amended and Restated Stockholders
Agreement (Common Stock Under Stock Incentive Plans) (the "Stockholders
Agreement"), dated as of November __, 1999, by and among ▇▇▇▇▇, Inc., Warburg,
▇▇▇▇▇▇ Ventures, L.P. and the other holders of Securities from time to time
party thereto, as the same may from time to time be amended.
By executing this Joinder Agreement, the Stockholder hereby agrees to
be bound by the terms of the Stockholders Agreement as if he were an original
signatory to such Agreement and shall be deemed to be a Management Stockholder
thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Joinder
Agreement as of the date first above written.
____________________________
Name:
Agreed to and Accepted by:
▇▇▇▇▇, INC.
_____________________________
Name:
Title: