EXHIBIT 4.3
RESTRICTED SECURITIES PURCHASE AGREEMENT
This Restricted Securities Purchase Agreement (this "AGREEMENT") dated as
of November 26, 2002 (the "PURCHASE DATE") is made by and between Ultra Clean
Holdings, Inc., a Delaware corporation (the "COMPANY"), and the purchaser whose
name is set forth on the signature page hereto ("PURCHASER").
Section 1. Purchase and Grant. (a) Pursuant to the Notice of Securities
Purchase Right (the "NOTICE"), Purchaser hereby elects to purchase the following
securities, in the amounts and at the purchase prices set forth on Schedule I
hereto, subject to the terms and conditions of this Agreement:
(i) the number of shares of common stock, $0.001 par value (the
"COMMON STOCK"), of the Company set forth on Schedule I (the "PURCHASED
SHARES"); and
(ii) 5.0% unsecured senior debt of the Company evidenced by a
promissory note substantially in the form of, and subject to all of the
terms and conditions set forth in, Exhibit A hereto (the "SERIES A
NOTES"), which is incorporated herein by reference, in the principal
amount set forth on Schedule I hereto (the "PURCHASED NOTES" and, together
with the Purchased Shares, the "PURCHASED SECURITIES").
(b) In accordance with the terms set forth in the Notice, the Company
hereby grants to Purchaser additional shares of Common Stock (the "BONUS SHARES"
and, together with the Purchased Shares, the "SHARES") and additional Series A
Notes (the "BONUS NOTES" and, together with the Purchased Notes, the "NOTES";
the Notes and Shares collectively being referred to as the "SECURITIES") in the
amounts set forth on Schedule I.
(c) Purchaser herewith delivers to the Company the aggregate purchase
price set forth on Schedule I in respect of the Purchased Securities, together
with assignments in the forms attached hereto as Exhibit B-1 and Exhibit B-2
executed by Purchaser in blank with respect to the Bonus Securities (which
assignments shall only be used by the Company with respect to Securities
remaining subject to forfeiture provisions and only in accordance with the terms
set forth herein).
Section 2. Vesting of Bonus Securities. Purchaser understands and agrees
that the Bonus Shares and the Bonus Notes (the "BONUS SECURITIES") will be
subject to the following provisions:
(a) The Bonus Securities shall vest on the following schedule, subject
to Purchaser's continued employment with the Company or one of its subsidiaries
on the applicable vesting date:
(i) On each of the first four anniversaries of the Purchase Date,
25% of the Bonus Securities shall become vested.
(ii) In the event of a Change in Control, all unvested Bonus
Securities shall become fully vested.
(b) For purposes of this Agreement, "CHANGE IN CONTROL" means the
occurrence of one of the following events:
(i) the consummation of a merger or consolidation of the Company
with or into any other entity (other than with any entity or group in
which Purchaser has not less than a 5% beneficial interest) pursuant to
which the holders of outstanding equity of the Company immediately prior
to such merger or consolidation hold directly or indirectly 50% or less of
the voting power of the equity securities of the surviving entity;
(ii) the sale or other disposition of all or substantially all of
the Company's assets (other than to any entity or group in which Purchaser
has not less than a 5% beneficial interest); or
(iii) any acquisition by any person or persons (other than the
direct and indirect holders of outstanding equity of the Company as of the
Purchase Date and other than any entity or group in which Purchaser has
not less than a 5% beneficial interest) of the beneficial ownership of
more than 50% of the voting power of the Company's equity securities in a
single transaction or series of related transactions; provided, however,
that an underwritten public offering of the Company's securities shall not
be considered a Change in Control;
provided, however, that a transaction shall not constitute a Change in Control
if its sole purpose is to change the state of the Company's incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who directly or indirectly held the Company's
securities immediately before such transaction.
(c) In the event that Purchaser's employment with the Company or any of
its subsidiaries terminates for any reason, all Bonus Securities will be
forfeited to the extent that they have not vested before such date of
termination. In such event, the unvested Bonus Securities will immediately
revert to the Company, and Purchaser will receive no payment for (and, if
applicable, no accrued interest on) the unvested Bonus Securities.
(d) In the event that Purchaser's employment with the Company or any of
its subsidiaries is terminated by the Company for Cause, all Bonus Securities
(including vested Bonus Securities) will be forfeited as of the date of such
termination. In such event, all Bonus Securities will immediately revert to the
Company, and Purchaser will receive no payment for (and, if applicable, no
accrued but unpaid interest on) such Bonus Securities. For purposes of this
Agreement, "CAUSE" means the occurrence of any one or more of the following:
(i) the failure, refusal or willful neglect of Purchaser to
perform the services required of Purchaser in his capacity as an employee;
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(ii) the Company forming a good faith belief that Purchaser has
engaged in fraudulent conduct in connection with the business of the
Company or its subsidiaries or that Purchaser has committed a felony;
(iii) Purchaser's breach of any trade secret or confidential
information agreement with the Company or its subsidiaries; or
(iv) the Company forming a good faith belief that Purchaser has
committed an act of misconduct, violated the Company's or its
subsidiaries' anti-discrimination policies prohibiting discrimination or
harassment on the grounds of race, sex, age or any other legally
prohibited basis, or otherwise has caused material harm to the Company's
or its subsidiaries' reputation or goodwill.
(e) With respect to the Bonus Notes, Purchaser will not be entitled to
receive any accrued interest or other payments made on the Series A Notes until
such time as the applicable portion of the Bonus Notes vests. Promptly after any
Bonus Notes vest, Purchaser will receive (i) a cash payment for interest accrued
on such Bonus Notes prior to the vesting date, (ii) a pro rata cash payment for
any repurchase or redemption of such Bonus Notes prior to the vesting date, and
(iii) a promissory note with a principal balance equal to the vested portion of
such Bonus Notes less any pro rata repurchase or redemption under clause (ii).
Section 3. Acknowledgment Of Company's Rights. Purchaser's acquisition of
the Securities hereunder is subject to Purchaser signing and delivering to the
Company a Securityholders' Agreement in the form attached hereto as Exhibit D
(the "SECURITYHOLDERS' AGREEMENT"), which is incorporated herein by reference.
Purchaser understands and agrees that all Securities acquired hereunder
(including the Bonus Securities as well as the Purchased Securities) are subject
to the restrictions on transfer, the rights of repurchase by the Company and the
other restrictions set forth herein and in the Securityholders' Agreement.
Purchaser understands that all certificates and notes representing unvested
Shares and Notes acquired hereunder shall be held in escrow by the Company.
Section 4. Tax Consequences. (a) Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase, receipt or
disposition of the Securities. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase, receipt or disposition of the Securities and that Purchaser is not
relying on the Company or any of its affiliates for any tax advice.
(b) By purchasing the Purchased Securities and accepting the Bonus
Securities, Purchaser agrees that the Company may require Purchaser to enter
into an arrangement providing for the payment by Purchaser to the Company of any
tax withholding obligation of the Company arising by reason of (1) the grant of
the Bonus Shares (if Purchaser makes a Section 83(b) election), (2) the vesting
of the Bonus Shares (if Purchaser does not make a Section 83(b) election), (3)
the payment of any amounts pursuant to the terms of the Bonus Notes, or (4) any
other act, event or occurrence giving
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rise to a withholding tax obligation of the Company in respect of the Bonus
Securities. At any time as requested by the Company, Purchaser hereby authorizes
withholding from payroll and any other amounts payable to Purchaser, any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company, if any, which arise in connection with the
Securities.
(c) A sample Form 83(b) is attached as Exhibit C hereto for the
convenience of Purchaser if Purchaser wishes to make an election under Section
83(b) of the Internal Revenue Code with respect to the Bonus Shares. Purchaser
acknowledges that he has been advised by the Company to consult with his
personal tax advisors as to the consequences of filing an election on Form 83(b)
with the Internal Revenue Service with respect to the Bonus Shares. Purchaser
represents and warrants that he has not received and is not relying upon tax
advice from the Company or any of its representatives on the consequences of
filing an election on Form 83(b). PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S
SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE ANY ELECTION UNDER SECTION
83(b) OF THE CODE IN A TIMELY MANNER EVEN IF PURCHASER REQUESTS THE COMPANY OR
ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER'S BEHALF. IN ORDER TO BE
EFFECTIVE, A SECTION 83(b) ELECTION MUST BE FILED WITH THE INTERNAL REVENUE
SERVICE WITHIN 30 DAYS OF THE DATE THE BONUS SHARES ARE GRANTED.
Section 5. Repurchase Of Securities by the Company. (a) Subject to
Section 2(c) hereof in the event of termination for Cause, if Purchaser's
employment with the Company or any of its subsidiaries terminates for any
reason, the Company shall have the right (the "REPURCHASE RIGHT"), at its
option, to repurchase:
(i) all vested Shares held by Purchaser or his or her permitted
transferees, as applicable, at a purchase price equal to the fair market
value thereof (the "FAIR MARKET VALUE"), as conclusively determined in
good faith by the Board of Directors of the Company (the "BOARD"); and
(ii) all vested Notes held by Purchaser or his or her permitted
transferees, as applicable, at a purchase price equal to the then current
principal balance of such Notes plus any accrued but unpaid interest on
such vested Notes at the time of repurchase.
(b) If the Company elects to exercise its Repurchase Right, the Company
shall deliver written notice to Purchaser or his or her permitted transferee, as
applicable, setting forth the number of Shares and/or principal amount of Notes
proposed to be purchased and the then Fair Market Value, principal amount and/or
accrued and unpaid interest, as applicable. Upon the consummation of any such
purchase, Purchaser shall deliver certificates, as applicable, or other
documents satisfactory to the Company in its sole discretion evidencing such
Securities duly endorsed, or accompanied by written instruments of transfer,
free and clear of any encumbrances against delivery of payment for such
Securities. If the Board determines that the Company is unable to repurchase all
or some portion of the Securities for cash without breaching the terms of any
debt
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instruments or other agreement to which the Company or any of its subsidiaries
is a party, or the Board determines that such repurchase would otherwise have a
material adverse effect on the financial condition of the Company, the Company
will pay in cash the maximum amount permitted under such debt instruments, or
that would not result in such a material adverse effect, and deliver to
Purchaser a promissory note for the balance, payable as soon as (and in the
maximum amounts that) the terms of such debt instruments or other agreements
will permit or that will not have such a material adverse effect and bearing
interest at a rate no less than the applicable federal rate.
(c) The Repurchase Right shall lapse and be of no further force and
effect upon the date that is 12 months after termination of Purchaser's
employment; provided, however, that the Repurchase Right shall lapse with
respect to the vested Shares upon a Qualified Initial Public Offering (as
defined below), if earlier; provided further that in no event shall the
Repurchase Right lapse with respect to any Bonus Securities prior to the
applicable vesting date of such Securities.
Section 6. Restrictions On Transfer. (a) All Notes and, prior to a
Qualified Initial Public Offering (as defined below), all Shares that have been
or are issued hereunder may not be sold, given, transferred, assigned, or
otherwise hypothecated by Purchaser, except to such Purchaser's Allowable
Transferees (as defined below). Any attempted transfer in violation of this
Section will be void ab initio. Securities held by Allowable Transferees who
receive such Securities in accordance with this Section shall be subject to the
restrictions in this Agreement and the Securityholders' Agreement as if such
Allowable Transferee were the original holder of the Securities transferred to
the Allowable Transferee and will be required to execute an acknowledgment to
such effect prior to the transfer.
(b) For purposes of this Agreement, the following terms have the
following meanings:
(i) "ALLOWABLE TRANSFEREES", with respect to Purchaser, are
limited to (i) those persons who acquire Securities pursuant to such
Purchaser's will or the laws of descent and distribution or as a result of
other donative transfers to Family Members and (ii) the Company.
(ii) "FAMILY MEMBER" means, with respect to Purchaser, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing Purchaser's household (other than a
tenant or employee), or a trust for the exclusive benefit of these persons
(or Purchaser).
(iii) "QUALIFIED INITIAL PUBLIC OFFERING" means the date that is 180
days following the date of the final prospectus in connection with an
underwritten public offering of any class of the Company's equity
securities with gross proceeds of at least $25,000,000.
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Section 7. Right Of First Refusal. In the event that the restrictions on
transfer in Section 6 above are no longer in effect, the Company shall have the
following right of first refusal with respect to all Notes and, prior to a
Qualified Initial Public Offering, all Shares:
(i) If Purchaser proposes to sell, pledge or otherwise transfer to
a third party (other than an Allowable Transferee) any Securities acquired
under this Agreement, the Company shall have a right of first refusal with
respect to such Securities ("RIGHT OF FIRST REFUSAL"). Purchaser shall
give a written notice to the Company describing fully the proposed
transfer ("TRANSFER NOTICE"), including the number of Shares or principal
amount of Notes proposed to be transferred, the proposed transfer price,
the name and address of the proposed transferee and proof satisfactory to
the Company that the proposed sale or transfer will not violate any
applicable federal or state securities laws. The Transfer Notice shall be
signed both by Purchaser and by the proposed transferee and must
constitute a binding commitment of both parties to the transfer of the
applicable Securities. The Company shall have the right to purchase such
Securities on the terms of the proposal described in the Transfer Notice
by delivery of a notice of exercise of the Right of First Refusal within
30 days after the date when the Transfer Notice is received by the
Company. The Company's rights under this Section shall be freely
assignable, in whole or in part.
(ii) If the Company fails to exercise its Right of First Refusal
within 30 days after the date when it received the Transfer Notice, and
subject to Section 6 above, Purchaser may, not later than 90 days
following receipt of the Transfer Notice by the Company, conclude a
transfer of the Securities subject to the Transfer Notice on the terms and
conditions described in the Transfer Notice, provided that any such sale
is made in compliance with applicable federal and state securities laws
and not in violation of any other contractual restrictions to which
Purchaser is bound. Any proposed transfer on terms and conditions
different from those described in the Transfer Notice, as well as any
subsequent proposed transfer by Purchaser, shall again be subject to the
Right of First Refusal and shall require compliance with the procedure
described in clause (i) above. If the Company exercises its Right of First
Refusal, the parties shall consummate the sale of the Securities on the
terms set forth in the Transfer Notice within 60 days after the date when
the Company received the Transfer Notice (or within such longer period as
may have been specified in the Transfer Notice); provided, however, that
in the event the Transfer Notice provided that payment for the Securities
was to be made in a form other than cash or cash equivalents paid at the
time of transfer, the Company shall have the option of paying for the
Securities with cash or cash equivalents reasonably equal to the present
value of the consideration described in the Transfer Notice.
(iii) If Purchaser transfers any Securities acquired under this
Agreement pursuant to this Section, then this Agreement and the
Securityholders' Agreement shall apply to the transferee to the same
extent as to Purchaser, and Purchaser shall ensure that the transferee
signs an acknowledgment to such effect.
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Section 8. Restrictive Legends And Stop Transfer Orders. (a) Purchaser
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares and on the Notes, as
applicable, together with any other legends that may be required by the Company
or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE RESTRICTED SECURITIES
PURCHASE AGREEMENT DATED AS OF NOVEMBER 26, 2002 BETWEEN THE ISSUER
AND THE ORIGINAL HOLDER OF THESE SECURITIES, AND THE
SECURITYHOLDERS' AGREEMENT DATED AS OF NOVEMBER 26, 2002, BETWEEN
THE ISSUER, THE ORIGINAL HOLDER OF THESE SECURITIES AND THE OTHER
PARTIES NAMED THEREIN, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST
FROM THE ISSUER OF THESE SECURITIES OR ANY SUCCESSOR THERETO. SUCH
TRANSFER RESTRICTIONS ARE BINDING ON ALLOWABLE TRANSFEREES (AS
SPECIFIED THEREIN) OF THESE SECURITIES.
(b) Purchaser agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
acts as transfer agent for its own securities, it may make appropriate notations
to the same effect in its own records.
(c) The Company shall not be required (i) to transfer on its books any
Securities that have been sold or otherwise transferred in violation of any of
the provisions of this Agreement or (ii) to treat as owner or holder of such
Securities or to accord the right to vote or pay dividends or interest, as
applicable, to any purchaser or other transferee to whom such Securities shall
have been so transferred.
Section 9. Lock-up Period. Purchaser hereby agrees that, if so requested
by the Company or any representative of the underwriters (the "MANAGING
UNDERWRITER") in connection with any registration of the offering of any
securities of the Company under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), Purchaser shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period (or such lesser period
as may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the "MARKET STANDOFF PERIOD")
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following the date of the final prospectus in connection an underwritten
offering of the Company's securities. Purchaser further agrees to enter into an
agreement with the Managing Underwriter in respect of the preceding sentence if
so requested by the Company and/or the Managing Underwriter. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.
Section 10. Representations And Warranties Of Purchaser. Purchaser
understands that the Securities have not been registered under the Securities
Act. Purchaser also understands that the Securities are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon Purchaser's representations contained in this Agreement. Purchaser
hereby represents and warrants to the Company as follows:
(i) Purchaser has had an opportunity to obtain the advice of
counsel prior to executing this Agreement. Purchaser has reviewed this
Agreement (including the exhibits hereto) and fully understands all of the
provisions hereof and thereof. Purchaser has been given the opportunity to
examine all documents and to ask questions of, and to receive answers
from, the Company and its representatives concerning the terms and
conditions of the acquisition of the Securities and related matters and to
obtain all additional information regarding the Company and the Securities
which Purchaser deems necessary.
(ii) Purchaser is acquiring the Securities for Purchaser's own
account for investment only, and not with a view towards, or for sale in
connection with, their distribution. Purchaser is aware of no publication
of any advertisement in connection with the transactions contemplated in
this Agreement.
(iii) Purchaser represents that he is an accredited investor within
the meaning of Regulation D under the Securities Act.
(iv) Purchaser is an "executive officer" (as defined in Regulation
D under the Securities Act) of the Company or one of its subsidiaries.
(v) Purchaser understands that an investment in the Securities is
very risky and that Purchaser may lose some or all of his investment.
(vi) Purchaser understands the risk that the price at which he
disposes of the Bonus Securities, if any, may be less than the amount of
taxes withheld or due with respect to such Bonus Securities.
(vii) Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies
similar to the Company so that he is capable of evaluating the merits and
risks of his investment in the Company and has the capacity to protect his
own interests. Purchaser understands he must, and is able to without
impairing his financial condition, bear the economic risk of this
investment indefinitely and to suffer a complete loss of the value of the
Securities.
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(viii) Purchaser represents that by reason of his business or
financial experience, Purchaser has the capacity to protect his own
interests in connection with the transactions contemplated in this
Agreement.
(ix) Purchaser acknowledges and agrees that the Securities have not
been registered under the Securities Act and that the Securities must be
held indefinitely. Purchaser understands that the Company has no present
intention and is under no obligation to register any of the Securities.
Purchaser also understands that there is no assurance that any exemption
from registration under the Securities Act will be available to permit the
resale of the Securities and that, even if available, such exemption may
not allow Purchaser to transfer all or any portion of the Securities under
the circumstances, in the amounts or at the times Purchaser might propose.
(x) In addition to the restrictions on transfer set forth herein,
Purchaser agrees not to sell, transfer or otherwise dispose of the
Securities in violation of the Securities Act, the Securities Exchange Act
of 1934, as amended, or the rules promulgated thereunder, including Rule
144 under the Securities Act.
Section 11. Spousal Consent. As a condition to the Company's obligations
under this Agreement, the spouse of Purchaser, if any, shall execute and deliver
to the Company the Consent of Spouse attached hereto as Schedule II.
Section 12. Adjustment For Stock Split. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split (forward or reverse), stock
dividend or other change in the shares of Common Stock effected without receipt
of consideration by the Company after the date of this Agreement, and all
restrictions on Shares set forth herein shall apply to any additional Shares
acquired by Purchaser pursuant to such stock split, stock dividend or other
change in the Common Stock of the Company.
Section 13. No Employment Rights. This Agreement does not confer on
Purchaser any right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the Company or any of its
subsidiaries to determine the terms of Purchaser's employment.
Section 14. Interpretation. Any dispute regarding the interpretation of
this Agreement shall be promptly submitted by Purchaser or by the Company to the
Board, which shall review such dispute at its next regular meeting. The
resolution of such dispute by the Board shall be binding, conclusive and final
on all parties.
Section 15. Notices. All notices, requests and other communications to
any party shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by facsimile
transmission,
if to the Company to:
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Ultra Clean Holdings, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
if to Purchaser, to the address set forth on the signature page hereof; or
in each case, to such other address as such party may hereafter specify for such
purpose by written notice to the other party hereto.
All notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Any notice, request or other written communication sent by facsimile
transmission shall be confirmed by certified or registered mail, return receipt
requested, posted within one business day, or by personal delivery, whether
courier or otherwise, made within two business days after the date of such
facsimile transmissions.
Section 16. Survival Of Terms. This Agreement shall apply to and bind
Purchaser and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.
Section 17. Governing Law. This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
California.
Section 18. Jurisdiction. The parties hereby agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
Northern District of California or any California State court sitting in San
Jose, California, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any case of action
arising out of this Agreement shall be deemed to have arisen from a transaction
of business in the State of California, and each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient form.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 15 shall be deemed effective service of
process on such party.
Section 19. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
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IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 20. Counterparts; Effectiveness. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Section 21. Entire Agreement. This Agreement, together with the
Securityholders' Agreement and the Series A Senior Note, constitute the entire
agreement among the parties hereto and supersede all prior and contemporaneous
agreements and understandings, both oral and written, among the parties hereto
with respect to the subject matter hereof and thereof.
Section 22. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
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IN WITNESS WHEREOF, this Agreement is deemed made as of the date set forth
above.
ULTRA CLEAN HOLDINGS, INC.
By:
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Name:
Title:
PURCHASER:
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Address:
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SCHEDULE I
TO RESTRICTED SECURITIES PURCHASE AGREEMENT
Date of Purchase: November 26, 2002
To be completed by the Purchaser:
Pursuant to the terms and conditions of the foregoing Restricted
Securities Purchase Agreement, I have elected to purchase shares of Common Stock
and principal amount of Series A Notes in the following aggregate dollar amount:
$_____________ (the "ELECTED PURCHASE AMOUNT").
I understand that the Company will allocate my purchase between Common
Stock and Series A Notes, and determine the amount and allocation of my Bonus
Securities, in accordance with the terms of the Notice of Securities Purchase
Right dated November 20, 2002, and that my Elected Purchase Amount and such
allocations may be subject to rounding in accordance therewith.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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(Signature)
To be completed by the Company:
PURCHASED SECURITIES:
Number of Shares
or Initial Principal Purchase Price per Total Purchase
Class of Security Amount Unit Price
----------------- ------ ---- -----
Common Stock 424,800 Shares $0.25 per Share $106,200
Series A Note $318,600 Principal Amount $318,600
--------
Total Purchase $424,800
BONUS SECURITIES:
Number of Shares Total Fair Market
or Initial Principal Value or Principal
Class of Security Amount Fair Market Value Amount
----------------- ------ ----------------- ------
Common Stock 637,200 Shares $0.25 per Share $159,300
Series A Note $477,900 Principal Amount $477,900
--------
Total Bonus $637,200
13
SCHEDULE II
TO RESTRICTED SECURITIES PURCHASE AGREEMENT
CONSENT OF SPOUSE
I, ____________________, spouse of ________________, have read and approve
the foregoing Agreement. In consideration of granting of the right to my spouse
to purchase securities of Ultra Clean Holdings, Inc., as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement (including the provisions of the agreements
incorporated therein by reference) insofar as I may have any rights in said
Agreement or any shares issued pursuant thereto under the community property
laws or similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated: _______________, 2002
14
EXHIBIT A
TO RESTRICTED SECURITIES
PURCHASE AGREEMENT
[FORM OF SERIES A NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE MAKER, SUCH OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN SECTION
3 HEREOF, AND IN THE RESTRICTED SECURITIES PURCHASE AGREEMENT DATED AS OF
NOVEMBER 26, 2002, BETWEEN THE MAKER AND THE ORIGINAL HOLDER OF THIS NOTE, AND
THE SECURITYHOLDERS' AGREEMENT DATED AS OF NOVEMBER 26, 2002, BETWEEN THE MAKER,
THE ORIGINAL HOLDER OF THIS NOTE AND THE OTHER PARTIES NAMED THEREIN, COPIES OF
WHICH MAY BE OBTAINED UPON REQUEST FROM THE MAKER OR ANY SUCCESSOR THERETO. SUCH
TRANSFER RESTRICTIONS ARE BINDING ON ALL TRANSFEREES OF THIS NOTE. ANY
TRANSFEREE RECEIVING THIS NOTE IN VIOLATION OF SAID TRANSFER RESTRICTIONS SHALL
HAVE NO RIGHT TO RECEIVE PAYMENT HEREUNDER AND THE MAKER SHALL BE UNDER NO
OBLIGATION TO PAY SUCH TRANSFEREE.
SERIES A
SENIOR NOTE
$__________ Menlo Park, CA
[DATE]
FOR VALUE RECEIVED, ULTRA CLEAN HOLDINGS, INC., a Delaware corporation
(the "MAKER") promises to pay to _________________ (the "HOLDER") on November
15, 2009 (the "MATURITY DATE") at Menlo Park, California or such other place as
the Holder may designate, in lawful money of the United States of America in
immediately available funds, the principal sum of ________________ dollars
($__________), and to pay interest thereon at the rates and times hereinafter
provided. The Maker will pay all amounts due hereunder free and clear of, and
without reduction for, any taxes, levies, imposts, deductions, withholding or
charges (except as required by applicable law) and without set-off or
counterclaim.
This Note, issued on _______________ (the "ISSUE DATE") and due on the
Maturity Date, is one of the SERIES A SENIOR NOTES of the Maker, each having
terms substantially similar to the terms set forth herein, other than with
respect to
assignments, the provisions for which may vary (each a "NOTE" and, collectively,
the "SERIES A NOTES").
1. Interest Rate. Interest shall accrue on the principal amount hereof
from time to time outstanding at a rate equal to five percent (5.0%) per annum,
payable in cash on June 15 and December 15 of each year (or, if any such June 15
or December 15 is not a Business Day (as hereinafter defined), on the next
succeeding Business Day) beginning June 15, 2003 and on the Maturity Date (each
such June 15, December 15, succeeding Business Day and the Maturity Date, an
"INTEREST PAYMENT DATE"). Interest payable hereunder shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed from
and including the preceding Interest Payment Date (or in the case of interest to
be paid on the first Interest Payment Date, the Issue Date) to but excluding the
Interest Payment Date on which such interest is to be paid. For purposes of this
Section 1, the term "BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banking institutions in San Francisco, California are
authorized or obligated by law, executive order or governmental decree to be
closed.
2. Pro Rata Treatment, Payment and Prepayments.
(a) Each payment (including each prepayment) by the Maker on
account of the principal of or interest on any of the Series A Notes, including
this Note, shall be made pro rata to all holders of the Series A Notes in
proportion to the respective outstanding principal amounts of the Series A Notes
held by each such holder; provided that any interest paid on any of the Series A
Notes on the first Interest Payment Date shall also take into account the number
of days in respect of which interest is payable on the outstanding principal
amount.
(b) Any prepayment by the Maker on account of the principal of and
interest on any of the Series A Notes, including this Note, may be made in whole
or in part at any time or from time to time, without penalty. Any such
prepayments shall be applied first to accrued interest, and then to principal.
(c) This Section 2 may not be amended except with the consent of
the Maker and upon a vote in favor of such amendment by the holders of 100% of
the then outstanding principal amount of the Series A Notes.
3. Assignments.
(a) This Note shall be binding upon the Maker and its successors,
heirs and legal representatives and is for the benefit of the Holder; provided,
however, that the Maker may not assign, pledge or otherwise transfer any of its
rights or obligations under this Note (including without limitation by merger or
otherwise by operation of law) without the prior written consent of FP-Ultra
Clean, L.L.C., a Delaware limited liability company. The Holder may not assign,
pledge or otherwise transfer any of its rights or obligations under this Note
without the prior written consent of FP-Ultra Clean, L.L.C., except to the
Holder's Allowable Transferees (as hereinafter defined). Any attempted transfer
in violation of this Section 3 shall be void. Any Allowable Transferee to whom
this Note is transferred in accordance with this Section 3 shall be subject to
the restrictions in this Section 3 as if such Allowable Transferee were the
Holder of this Note. The consent provision of this Section 3 is for the benefit
of and enforceable by FP-Ultra Clean, L.L.C. In the event of a transfer by the
Holder in accordance with this Section 3(a), the Maker shall have no duty to
recognize the transferee as the holder of this Note for purposes of any payments
due hereunder or otherwise unless and until the Maker shall have received
written notice by the transferor of such transfer, which notice shall include
the name and address of the transferee, the principal amount being transferred,
and the signature of the transferor and the transferee, together with the
original promissory note endorsed to the transferee (or the applicable portion
endorsed to the transferee), and the Maker shall have issued a replacement note
or notes, as applicable.
(b) For purposes of this Section 3, "ALLOWABLE TRANSFEREE(S)"
means (i) any persons who acquire this Note, or any interest herein, pursuant to
the Holder's will or the laws of descent and distribution or as a result of
other donative transfers to Family Members (as hereinafter defined) and (ii) the
Maker. For purposes of this Section 3(b), "FAMILY MEMBERS" means, with respect
to the Holder, any child, stepchild, grandchild, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing Holder's household (other than a
tenant or employee), or a trust for the exclusive benefit of these persons or
the Holder.
4. No Waiver. Neither any delay on the part of the Holder in the
exercise of any right or remedy hereunder nor the partial exercise by it of any
right or remedy hereunder shall preclude the enforcement of this Note or the
exercise by the Holder of any right or remedy.
5. Governing Law; Jurisdiction. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE MAKER
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA AND OF ANY CALIFORNIA STATE COURT
SITTING IN EITHER SANTA ▇▇▇▇▇ OR SAN MATEO COUNTY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE. THE MAKER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THE MAKER
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE MAKER HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS NOTE.
6. Expenses. The Maker agrees to pay all costs and expenses, including
reasonable attorneys' fees, incurred by the Holder in connection with the
successful enforcement of this Note, as well as all fees and expenses incurred
in connection with the
successful enforcement of any judgment, and hereby waives presentment for
payment, protest, notice of protest, demand for payment and notice of dishonor.
ULTRA CLEAN HOLDINGS, INC.
By:
-----------------------
Name:
Title:
EXHIBIT B-1
TO RESTRICTED SECURITIES
PURCHASE AGREEMENT
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, ________________, hereby sell, assign and transfer
to ____________________________________________ (________) shares of the Common
Stock of Ultra Clean Holdings, Inc. (the "Company") in my name on the books of
the Company represented by Certificate No(s). __________ (or the applicable
portion thereof) and do hereby irrevocably constitute and appoint
______________, attorney, to transfer said stock on the books of the Company
with full power of substitution in the premises.
This Assignment Separate from Certificate may only be used in accordance
with the Restricted Securities Purchase Agreement dated as of November 26, 2002.
Dated:
Signature: _______________________
PLEASE DO NOT FILL IN ANY OF THE BLANKS ON THIS PAGE.
PLEASE SIGN ONLY WHERE INDICATED.
EXHIBIT B-2
TO RESTRICTED SECURITIES
PURCHASE AGREEMENT
ASSIGNMENT
FOR VALUE RECEIVED I, ________________, hereby sell, assign and transfer
to ____________________________________________ $____________ principal amount
of the Series A Note(s) of Ultra Clean Holdings, Inc. (the "Company"), or a
portion thereof, in my name in the records of the Company and do hereby
irrevocably constitute and appoint ______________, attorney, to transfer said
note(s) on the books of the Company with full power of substitution in the
premises.
This Assignment may only be used in accordance with the Restricted
Securities Purchase Agreement dated as of November 26, 2002.
Dated:
Signature: _______________________
PLEASE DO NOT FILL IN ANY OF THE BLANKS ON THIS PAGE.
PLEASE SIGN ONLY WHERE INDICATED.
EXHIBIT C
TO RESTRICTED SECURITIES
PURCHASE AGREEMENT
ELECTION TO INCLUDE IN GROSS INCOME FOR YEAR OF
TRANSFER OF PROPERTY PURSUANT TO SECTION 83(B)
OF THE INTERNAL REVENUE CODE
FILE ONE COPY WITH YOUR EMPLOYER AND ONE COPY WITH IRS OFFICE WHERE YOU FILE
YOUR TAX RETURN WITHIN 30 DAYS OF DATE OF TRANSFER SHOWN IN ITEM 3, BELOW AND
ATTACH ONE COPY TO YOUR TAX RETURN FOR THE CURRENT TAX YEAR. THE FILING WITH THE
IRS OFFICE SHOULD BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED.
The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated
thereunder:
1. The name, address and taxpayer identification number of the
undersigned are:
---------------------------------------------------
Name
---------------------------------------------------
Address
---------------------------------------------------
Social Security Number
2. Description of property with respect to which the election is being
made:
___________ shares of Common Stock, par value $0.001 per share, of
Ultra Clean Holdings, Inc. ("Common Stock")
3. Date on which property was transferred is November 26, 2002.
4. Nature of restrictions to which property is subject:
The property is Common Stock which is subject to a substantial risk
of forfeiture within the meaning of Section 83(c)(1) of the Internal
Revenue Code upon a termination of employment occurring prior to
full vesting of shares.
5. The fair market value at the time of transfer (determined without
regard to any restrictions other than restrictions which by their terms will
never lapse) of the property with respect to which this election is being made
is $0.25 per share.
6. The amount paid by taxpayer for said property is $0 per share.
7. A copy of this statement has been furnished to:
Ultra Clean Holdings, Inc.
(Name of Employer)
Dated: ______ __, 2002 ______________________________
(Signature of Taxpayer)
EXHIBIT D
TO RESTRICTED SECURITIES
PURCHASE AGREEMENT
SECURITYHOLDERS' AGREEMENT
dated as of
November 26, 2002
among
ULTRA CLEAN HOLDINGS, INC.
FP-ULTRA CLEAN, L.L.C.
and
CERTAIN OTHER PERSONS NAMED HEREIN
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions
Section 1.01. Definitions 1
ARTICLE 2
Corporate Governance
Section 2.01. Composition of the Board 5
Section 2.02. Removal 6
Section 2.03. Vacancies 6
Section 2.04. Meetings 6
Section 2.05. Action by the Board 7
Section 2.06. Charter or Bylaw Provisions 7
ARTICLE 3
Restrictions on Transfer
Section 3.01. General Restrictions on Transfer 7
Section 3.02. Legends 8
Section 3.03. Allowable Transferees 9
Section 3.04. Restrictions On Transfer 9
ARTICLE 4
Drag-along Rights; Preemptive Rights
Section 4.01. Drag-Along Rights 9
Section 4.02. Additional Conditions to Drag-Along Sales 12
Section 4.03. Preemptive Rights 12
ARTICLE 5
Amendments To The Notes
Section 5.01. Amendments to the Notes by FP 14
ARTICLE 6
Certain Covenants and Agreements
Section 6.01. Confidentiality 14
Section 6.02. Lock-Up Agreements 15
Section 6.03. Conflicting Agreements 16
ARTICLE 7
Miscellaneous
Section 7.01. Binding Effect; Assignability; Benefit 16
Section 7.02. Notices 17
Section 7.03. Waiver; Amendment 17
Section 7.04. Governing Law 18
Section 7.05. Jurisdiction 18
Section 7.06. WAIVER OF JURY TRIAL 18
Section 7.07. Specific Enforcement 18
Section 7.08. Counterparts; Effectiveness 19
Section 7.09. Entire Agreement 19
Section 7.10. Termination 19
Section 7.11. Captions 19
Section 7.12. Severability 19
Exhibit A Joinder Agreement
ii
SECURITYHOLDERS' AGREEMENT
AGREEMENT (this "AGREEMENT") dated as of November 26, 2002 among (i) Ultra
Clean Holdings, Inc., a Delaware corporation (the "COMPANY"), (ii) FP-Ultra
Clean, L.L.C. ("FP"), and (iii) certain other Persons listed on the signature
pages hereof (the "MANAGEMENT SHAREHOLDERS"). "FP" and "Management Shareholders"
shall each mean, if such entities or persons shall have Transferred any of their
"Company Securities" to any of their respective "Allowable Transferees" (as such
terms are defined below), such entities or persons and such Allowable
Transferees, taken together, and any right, obligation or action that may be
exercised or taken at the election of such entities or persons may be taken at
the election of such entities or persons and such Allowable Transferees.
W I T N E S S E T H :
WHEREAS, pursuant to the Securities Purchase Agreements, certain parties
hereto are or will be acquiring shares of common stock and senior notes of the
Company;
WHEREAS, the parties hereto desire to enter into this Agreement to govern
certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Securities Purchase Agreements;
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein and in the Securities Purchase Agreements, the parties hereto agree as
follows:
Article 1
Definitions
Section 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person. For the purpose of this definition, the term "CONTROL" (including, with
correlative meanings, the terms "CONTROLLING", CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGGREGATE OWNERSHIP" means: (i) with respect to any Shareholder or group
of Shareholders, and with respect to any class of equity Company Securities, the
total amount of such class of equity Company Securities Beneficially Owned
(without duplication) by such Shareholder or group of Shareholders as of the
date of such calculation, calculated on a Fully-Diluted basis; and (ii) with
respect to any Noteholder or group of Noteholders, and with respect to any class
of debt Company Securities (including, but not limited to, the Notes), the total
aggregate amount of principal plus accrued but unpaid interest under such debt
Company Securities, which are Beneficially Owned by such Noteholder or group of
Noteholders as of the date of such calculation.
"ALLOWABLE TRANSFEREE" means
(i) in the case of FP, any Person, and
(ii) in the case of any Other Shareholder, (A) a Person to whom
Common Shares are Transferred from such Other Shareholder by will or the
laws of descent and distribution or as a result of other donative
transfers to Family Members or (B) the Company.
"BENEFICIALLY OWED" and "BENEFICIALLY OWN" shall have the meaning ascribed
in Rule 13d-3 of the Securities Act.
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in San Francisco are authorized by law to close.
"BYLAWS" means the Bylaws of the Company, as amended from time to time.
"CHARTER" means the Amended and Restated Certificate of Incorporation of
the Company, as the same may be amended from time to time.
"CLOSING DATE" means November 15, 2002.
"COMMON SHARES" means shares of Common Stock.
"COMMON STOCK" means the common stock, par value $0.001 per share, of the
Company and any stock into which such Common Stock may thereafter be converted
or changed.
"COMPANY SECURITIES" means (i) the Common Stock, (ii) securities
convertible into or exchangeable for Common Stock, (iii) any other equity or
equity-linked security issued by the Company, (iv) options, warrants or other
2
rights to acquire Common Stock or any other equity or equity-linked security
issued by the Company and (v) the Notes.
"DRAG-ALONG PORTION" means, with respect to any Other Shareholder and any
class of Company Securities, (i) the Aggregate Ownership of such class of
Company Securities by such Other Shareholder multiplied by (ii) a fraction the
numerator of which is the number of such class of Company Securities proposed to
be sold by the Drag-Along Seller in the applicable Drag-Along Sale under Section
4.01 and the denominator of which is the Aggregate Ownership of such class of
Company Securities by the Drag-Along Seller.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means the fair market value of the Company Securities
as determined in good faith by the Board.
"FAMILY MEMBER" means, with respect to an Other Shareholder, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing such Other Shareholder's household (other than
a tenant or employee), or a trust for the exclusive benefit of these persons (or
such Other Shareholder).
"FULLY-DILUTED" means, with respect to any class of Company Securities,
all outstanding shares and all shares issuable in respect of securities
convertible into or exchangeable for such shares, all stock appreciation rights,
options, warrants and other rights to purchase or subscribe for such Company
Securities or securities convertible into or exchangeable for such Company
Securities, provided that, if any of the foregoing stock appreciation rights,
options, warrants or other rights to purchase or subscribe for such Company
Securities are subject to vesting, the Company Securities subject to vesting
shall be included in the definition of "Fully-Diluted" only upon and to the
extent of such vesting.
"NOTEHOLDER" means at any time, any Person (other than the Company) who
shall then be a party to or bound by this Agreement, so long as such Person
shall Beneficially Own any Notes.
"NOTES" means those Series A Senior Notes issued by the Company pursuant
to the Securities Purchase Agreements.
"OTHER SECURITYHOLDERS" means all Securityholders other than FP.
"OTHER SHAREHOLDERS" means all Shareholders other than FP.
3
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PUBLIC OFFERING" means an underwritten public offering of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act, other than pursuant to a registration statement on Form S-4
or Form S-8 or any similar or successor form.
"QUALIFIED PUBLIC OFFERING" means a Public Offering with gross proceeds of
at least $25,000,000.
"RULE 144" means Rule 144 (or any successor provisions) under the
Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES PURCHASE AGREEMENT(S)" means the Stock Purchase Agreement(s)
dated on or about the Closing Date between FP and the Company with respect to
the purchase of Common Stock, the Note Purchase Agreement(s) dated on or about
the Closing Date between FP and the Company with respect to the purchase of
Notes, and each Restricted Securities Purchase Agreement dated as of November
26, 2002 between the Company and each Management Shareholder, as applicable.
"SECURITYHOLDER" means at any time, any Person (other than the Company)
who shall then be a party to or bound by this Agreement, so long as such Person
shall Beneficially Own any Company Securities.
"SHAREHOLDER" means any Securityholder who Beneficially Owns
equity Company Securities.
"SHARES" means Common Shares.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TRANSFER" means, with respect to any Company Securities, (i) when used as
a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or
otherwise transfer such Company Securities or any participation or interest
therein, whether directly or indirectly, or agree or commit to do any of the
foregoing and (ii) when used as a noun, a direct or indirect sale, assignment,
disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of
4
such Company Securities or any participation or interest therein or any
agreement or commitment to do any of the foregoing.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
---- -------
Cause................................... 2.02
Company................................. Preamble
Confidential Information................ 6.01(b)
Drag-Along Rights....................... 4.01(a)
Drag-Along Sale......................... 4.01(a)
Drag-Along Sale Notice.................. 4.01(a)
Drag-Along Sale Notice Period........... 4.01(a)
Drag-Along Sale Price................... 4.01(a)
Drag-Along Seller....................... 4.01(a)
Drag-Along Transferee................... 4.01(a)
Management Shareholders................. Preamble
Pro Rata Share.......................... Section 4.03
Replacement Nominee..................... 2.03(a)
Article 2
Corporate Governance
Section 2.01. Composition of the Board. (a) The Board shall initially
consist of three directors, of whom two shall be designated by FP, and one shall
be the then Chief Executive Officer of the Company. The size of the Board may be
increased by amendment of the Company's Charter or Bylaws.
(b) If at any time the Board shall be expanded to a larger number of
directors, a majority of the Board shall be designated by FP; provided that the
number of directors to be designated by FP shall be adjusted upwards, if
necessary, so that at no time are the number of directors designated by FP less
than a majority of the Board.
(c) Each Shareholder agrees that, if at any time it is then entitled to
vote for the election of directors to the Board, it shall vote its Shares or
execute proxies or written consents, as the case may be, and take all other
necessary action (including causing the Company to call a special meeting of
shareholders) in order to ensure that the composition of the Board is as set
forth in this Section 2.01.
5
(d) The Company agrees to cause each individual designated pursuant to
Section 2.01(a) or 2.03 to be nominated to serve as a director on the Board, and
to take all other necessary actions (including calling a special meeting of the
Board and/or shareholders) to ensure that the composition of the Board is as set
forth in this Section 2.01.
Section 2.02. Removal. Each Shareholder agrees that, if at any time it is
then entitled to vote for the removal of directors from the Board, it shall not
vote any of its Shares in favor of the removal of any director who shall have
been designated pursuant to Section 2.01, unless such removal shall be for Cause
or the Person or Persons entitled to designate or nominate such director shall
have consented to such removal in writing, provided that, if the Person or
Persons entitled to designate any director pursuant to Section 2.01 shall
request in writing the removal, with or without Cause, of such director, such
Shareholder shall vote its Shares in favor of such removal. Removal for "CAUSE"
shall mean removal of a director because of such director's (a) willful and
continued failure substantially to perform his or her duties with the Company in
his or her established position, (b) willful conduct that is injurious,
monetarily or otherwise, to the Company or any of its Subsidiaries, (c)
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, (d) abuse of illegal drugs or other controlled substances or habitual
intoxication or (e) willful breach of this Agreement.
Section 2.03. Vacancies. If, as a result of death, disability, retirement,
resignation, removal (with or without Cause) or otherwise, there shall exist or
occur any vacancy on the Board:
(a) the Person or Persons entitled under Section 2.01 to designate such
director whose death, disability, retirement, resignation or removal resulted in
such vacancy, subject to the provisions of Section 2.01, may designate another
individual (the "REPLACEMENT NOMINEE") to fill such vacancy and serve as a
director on the Board; and
(b) subject to Section 2.01, each Shareholder then entitled to vote for
the election of directors to the Board agrees that it shall vote its Shares, or
execute proxies or written consents, as the case may be, in order to ensure that
the Replacement Nominee be elected to the Board.
Section 2.04. Meetings. The Board shall hold a regularly scheduled meeting
at least once every calendar quarter. The Company shall pay all reasonable
out-of-pocket expenses incurred by each director in connection with attending
regular and special meetings of the Board and any committee thereof, and any
such meetings of the board of directors of any Subsidiary of the Company and any
committee thereof.
6
Section 2.05. Action by the Board. (a) A quorum of the Board shall consist
of two directors, of whom at least one shall be a designee of FP, provided that
FP shall have the right at any time to increase the number of directors
necessary to constitute such quorum; and provided further that any increase in
the number of directors necessary to constitute a quorum shall also require that
a majority of the quorum shall be designees of FP.
(b) All actions of the Board shall require (i) the affirmative vote of
at least a majority of the directors present at a duly-convened meeting of the
Board at which a quorum is present or (ii) the unanimous written consent of the
Board, provided that, if there is a vacancy on the Board and an individual has
been nominated to fill such vacancy, the first order of business shall be to
fill such vacancy.
(c) The Board may create executive, compensation, audit and such other
committees as it may determine. FP shall be entitled to majority representation
on any committee created by the Board.
Section 2.06. Charter or Bylaw Provisions. Each Shareholder agrees to vote
its Shares or execute proxies or written consents, as the case may be, and to
take all other actions necessary, to ensure that the Company's Charter and
Bylaws (a) facilitate, and do not at any time conflict with, any provision of
this Agreement and (b) permit each Shareholder to receive the benefits to which
each such Shareholder is entitled under this Agreement. The Charter and Bylaws
shall provide for (a) the elimination of the liability of each director on the
Board to the maximum extent permitted by applicable law and (b) indemnification
of each director on the Board for acts on behalf of the Company to the maximum
extent permitted by applicable law.
Article 3
Restrictions on Transfer
Section 3.01. General Restrictions on Transfer. (a) Each Securityholder
understands and agrees that the Company Securities purchased pursuant to its
Securities Purchase Agreement have not been registered under the Securities Act
and are restricted securities under such Act and the rules and regulations
promulgated thereunder. Each Securityholder agrees that it shall not Transfer
any Company Securities (or solicit any offers in respect of any Transfer of any
Company Securities), except in compliance with the Securities Act, any other
applicable securities or "blue sky" laws, the terms and conditions of this
Agreement, the terms and conditions of the applicable Securities Purchase
Agreement and with any terms and conditions contained in the Company Securities
themselves.
7
(b) Any attempt to Transfer any Company Securities not in compliance
with this Agreement, with the applicable Securities Purchase Agreement and with
any terms and conditions contained in the Company Securities themselves shall be
null and void, and the Company shall not, and shall cause any transfer agent not
to, give any effect in the Company's stock records or other applicable records
to such attempted Transfer.
Section 3.02. Legends. (a) In addition to any other legend that may be
required, and unless an equivalent legend has been required by the applicable
Securities Purchase Agreement, each certificate or promissory note for Company
Securities issued to any Securityholder shall bear a legend in substantially the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE RESTRICTED SECURITIES
PURCHASE AGREEMENT DATED AS OF NOVEMBER 26, 2002 BETWEEN THE ISSUER
AND THE ORIGINAL HOLDER OF THESE SECURITIES, AND THE
SECURITYHOLDERS' AGREEMENT DATED AS OF NOVEMBER 26, 2002, BETWEEN
THE ISSUER, THE ORIGINAL HOLDER OF THESE SECURITIES AND THE OTHER
PARTIES NAMED THEREIN, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST
FROM THE ISSUER OF THESE SECURITIES OR ANY SUCCESSOR THERETO. SUCH
TRANSFER RESTRICTIONS ARE BINDING ON ALLOWABLE TRANSFEREES (AS
SPECIFIED THEREIN) OF THESE SECURITIES.
(b) If any Company Securities cease to be subject to all restrictions on
Transfer set forth in this Agreement, the Company, upon the request of the
written holder thereof, shall issue to such holder a new certificate evidencing
such Company Securities without the legend required by Section 3.02(a) endorsed
thereon; provided, however, that if a legend is otherwise required by the
8
applicable Securities Purchase Agreement or by the terms of the security itself,
this Section 3.02(b) shall not obligate the Company to remove such legend.
Section 3.03. Restrictions On Transfer. Except with the prior written
consent of the Company and FP, no Securityholder shall Transfer any of its
Company Securities, except (i) to one or more of its Allowable Transferees in
accordance with Section 3.04, (ii) in accordance with any restrictions contained
in the applicable Securities Purchase Agreement, and (iii) in accordance with
any restrictions contained in the terms and conditions of the Company Securities
themselves.
Section 3.04. Allowable Transferees. Notwithstanding anything in this
Agreement to the contrary, any Securityholder may at any time Transfer any or
all of its Company Securities to one or more of its Allowable Transferees
without the consent of the Board or any other Securityholder or group of
Securityholders so long as (a) such Allowable Transferee shall have agreed in
writing to be bound by the terms of this Agreement in the form of Exhibit A
attached hereto, and (b) the Transfer to such Allowable Transferee is in
compliance with the Securities Act and any other applicable securities or "blue
sky" laws.
ARTICLE 4
Drag-along Rights; Preemptive Rights
Section 4.01. Drag-Along Rights. (a) Subject to Sections 4.01(e), and
4.02, if FP (the "DRAG-ALONG SELLER") proposes:
(i) to Transfer not less than 50% of its Aggregate Ownership of
any class of Company Securities to a Third Party (the "DRAG-ALONG
TRANSFEREE") in a bona fide sale, or
(ii) to Transfer Company Securities in any amount that, together
with the Company Securities to be Transferred by the Other Shareholders
pursuant to this Section 4.01(a), constitutes more than 50% of the voting
power or the outstanding principal, as the case may be, of any class of
the Company Securities then outstanding,
(each of the Transfers referred to in clauses (i) and (ii) above, a "DRAG-ALONG
SALE"), the Drag-Along Seller may at its option require all Other
Securityholders (i) to Transfer the Drag-Along Portion of such class of Company
Securities ("DRAG-ALONG RIGHTS") then held by every Other Securityholder, and
(ii) in the case of a Drag-Along Sale involving Common Shares (but subject to
and at the closing of the Drag-Along Sale), to exercise such number of options
for Common Shares that are vested (or would become vested on or prior to the
consummation
9
of the Drag-Along Sale) held by every Other Securityholder as is required in
order that a sufficient number of Common Shares are available to Transfer the
relevant Drag-Along Portion of Company Securities of each such Other
Securityholder, in each case for the same consideration per unit of the relevant
class of Company Securities and otherwise on the same terms and conditions as
the Drag-Along Seller, provided that any Other Securityholder that holds such
options the exercise price per share of which is greater than the per share
price at which the Common Shares are to be Transferred to the Drag-Along
Transferee, if required by the Drag-Along Seller to exercise such options, may,
in place of such exercise, submit to irrevocable cancellation thereof without
any liability for payment of any exercise price with respect thereto. If the
Drag-Along Sale is not consummated with respect to any Common Shares acquired
upon exercise of such options, or the Drag-Along Sale is not consummated, such
options shall be deemed not to have been exercised or canceled, as applicable.
The Drag-Along Seller shall provide notice of such Drag-Along Sale to the
Other Securityholders (a "DRAG-ALONG SALE NOTICE") not less than 10 Business
Days prior to the proposed Drag-Along Sale. The Drag-Along Sale Notice shall
identify the transferee, the number and class of Company Securities subject to
the Drag-Along Sale, the consideration for which a Transfer is proposed to be
made (the "DRAG-ALONG SALE PRICE") and all other material terms and conditions
of the Drag-Along Sale. The number of Company Securities to be sold by each
Other Securityholder shall be the Drag-Along Portion of the class of Company
Securities that such Other Securityholder owns. Each Other Securityholder shall
be required to participate in the Drag-Along Sale on the terms and conditions
set forth in the Drag-Along Sale Notice and to tender all its Company Securities
as set forth below. The price payable in such Transfer shall be the Drag-Along
Sale Price. Not later than five Business Days after the date of the Drag-Along
Sale Notice (the "DRAG-ALONG SALE NOTICE PERIOD"), each of the Other
Securityholders shall deliver to a representative of the Drag-Along Seller
(designated in the Drag-Along Sale Notice) the certificates and other applicable
instruments representing the Company Securities of such Other Securityholder to
be included in the Drag-Along Sale, together with a limited power-of-attorney
authorizing the Drag-Along Seller or such representative to Transfer such
Company Securities on the terms set forth in the Drag-Along Notice and wire
transfer instructions for payment of the cash portion of the consideration to be
received in such Drag-Along Sale, or, if such delivery is not permitted by
applicable law, an unconditional agreement to deliver such Company Securities
pursuant to this Section 4.01(a) at the closing for such Drag-Along Sale against
delivery to such Other Securityholder of the consideration therefor. If an Other
Securityholder should fail to deliver such certificates to the Drag-Along
Seller, the Company (subject to reversal under Section 4.01(b)) shall cause the
books and records of the Company to show that such Company Securities are bound
by the provisions of this Section 4.01(a) and that such Company Securities shall
be
10
Transferred to the Drag-Along Transferee immediately upon surrender for Transfer
by the holder thereof.
(b) The Drag-Along Seller shall have a period of 180 days from the date
of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on
the terms and conditions set forth in such Drag-Along Sale Notice, provided
that, if such Drag-Along Sale is subject to regulatory approval, such 180-day
period shall be extended until the expiration of 10 Business Days after all such
approvals have been received, but in no event later than 365 days following the
effective date of the Drag-Along Sale Notice. If the Drag-Along Sale shall not
have been consummated during such period, the Drag-Along Seller shall return to
each of the Other Securityholders the limited power-of-attorney and all
certificates and other applicable instruments representing Company Securities
that such Other Securityholders delivered for Transfer pursuant hereto, together
with any other documents in the possession of the Drag-Along Seller executed by
the Other Securityholders in connection with such proposed Transfer, and all the
restrictions on Transfer contained in this Agreement or otherwise applicable at
such time with respect to such Company Securities owned by the Other
Securityholders shall again be in effect.
(c) Concurrently with the consummation of the Transfer of Company
Securities pursuant to this Section 4.01, the Drag-Along Seller shall give
notice thereof to the Other Securityholders, shall remit to each of the Other
Securityholders that have surrendered their certificates and other applicable
instruments the total consideration (the cash portion of which is to be paid by
wire transfer in accordance with such Other Securityholder's wire transfer
instructions, or otherwise as directed by such Other Securityholder) for the
Company Securities Transferred pursuant hereto and shall furnish such other
evidence of the completion and time of completion of such Transfer and the terms
thereof as may be reasonably requested by such Other Securityholders.
(d) Notwithstanding anything contained in this Section 4.01, there shall
be no liability on the part of the Drag-Along Seller to the Other
Securityholders (other than the obligation to return the limited
power-of-attorney and the certificates and other applicable instruments
representing Company Securities received by the Drag-Along Seller) if the
Transfer of Company Securities pursuant to this Section 4.01 is not consummated
for whatever reason, regardless of whether the Drag-Along Seller has delivered a
Drag-Along Sale Notice. Whether to effect a Transfer of Company Securities
pursuant to this Section 4.01 by the Drag-Along Seller is in the sole and
absolute discretion of the Drag-Along Seller.
11
(e) The provisions of this Section 4.01 shall not apply to any proposed
Transfer of Company Securities by the Drag-Along Seller in a Public Offering or
pursuant to Rule 144.
Section 4.02. Additional Conditions to Drag-Along Sales. Notwithstanding
anything contained in Section 4.01 or 4.02, the rights and obligations of the
Other Securityholders to participate in a Drag-Along Sale under Section 4.01 are
subject to the following conditions:
(a) upon the consummation of such Drag-Along Sale, all of the
Securityholders participating therein will receive the same form and amount of
consideration per share, or, if any Securityholders are given an alternative as
to the form and amount of consideration to be received, all Securityholders
participating therein will be given the same alternative; and
(b) each Other Securityholder shall (i) make such representations,
warranties and covenants and enter into such definitive agreements as are
customary for transactions of the nature of the proposed Transfer, (ii) benefit
from all of the same provisions of the definitive agreements as the Drag-Along
Seller, and (iii) be required to bear their proportionate share of any
indemnities, escrows, holdbacks or adjustments in purchase price.
Section 4.03. Preemptive Rights. (a) The Company shall give each
Management Shareholder notice (an "ISSUANCE NOTICE") of any proposed issuance by
the Company of any equity Company Securities at least 10 Business Days prior to
the proposed issuance date. The Issuance Notice shall specify the price at which
such equity Company Securities are to be issued and the other material terms of
the issuance. Subject to Section 4.03(e) below, each Management Shareholder
shall be entitled to purchase up to such Management Shareholder's Pro Rata Share
of the equity Company Securities proposed to be issued, at the price and on the
terms specified in the Issuance Notice. "PRO RATA SHARE" means, with respect to
a Management Shareholder, the fraction that results from dividing (i) such
Management Shareholder's Aggregate Ownership (immediately before giving effect
to the issuance) of Common Stock by (ii) the Aggregate Ownership (immediately
before giving effect to the issuance) of Common Stock by all Shareholders.
(b) A Management Shareholder shall deliver notice of its election to
purchase such equity Company Securities to the Company and FP within five
Business Days of receipt of the Issuance Notice. Such delivery of notice (which
notice shall specify the number (or amount) of equity Company Securities to be
purchased by the Management Shareholder submitting such notice) to the Company
shall constitute exercise by such Management Shareholder of its rights under
this Section 4.03 and a binding agreement of such Management Shareholder to
purchase, at the price and on the terms specified in the Issuance
12
Notice, the number of shares (or amount) of equity Company Securities specified
in such Management Shareholder's notice. If, at the termination of such
five-Business-Day period, any Management Shareholder shall not have exercised
its rights to purchase any of its Pro Rata Share of such equity Company
Securities, such Management Shareholder shall be deemed to have waived all of
its rights under this Section 4.03 with respect to the purchase of such equity
Company Securities.
(c) If any Management Shareholder shall not have exercise its rights to
purchase to the full amount of its Pro Rata Share of such equity Company
Securities, such Management Shareholder shall be deemed to have waived all of
its rights under this Section 4.03 with respect to any future issuance of equity
Company Securities.
(d) The Company shall have 180 days from the date of the Issuance Notice
to consummate the proposed issuance and sale of any or all of such equity
Company Securities that the Management Shareholders have not elected or were not
eligible to purchase at the price and upon terms that are not materially less
favorable to the Company than those specified in the Issuance Notice, provided
that, if such issuance is subject to regulatory approval, such 180-day period
shall be extended until the expiration of 10 Business Days after all such
approvals have been received, but in no event later than 365 days from the date
of the Issuance Notice.
(e) At the consummation of the issuance and sale of such equity Company
Securities, the Company shall issue certificates representing the equity Company
Securities to be purchased by each Management Shareholder exercising preemptive
rights pursuant to this Section 4.03 registered in the name of such Management
Shareholder, against payment by such Management Shareholder of the purchase
price for such equity Company Securities as specified in the Issuance Notice. If
the Company proposes to issue any equity Company Securities after such 90-day
period, it shall again comply with the procedures set forth in this Section
4.03.
(f) Notwithstanding the foregoing, no Management Shareholder shall be
entitled to purchase Company Securities as contemplated by this Section 4.03 in
connection with issuances of Company Securities (i) to employees of the Company
or any Subsidiary pursuant to employee benefit plans or arrangements approved by
the Board (including upon the exercise of employee stock options granted
pursuant to any such plans or arrangements), (ii) in connection with any bona
fide, arm's length restructuring of outstanding debt of the Company or any
Subsidiary, (iii) in connection with any bona fide, arm's-length direct or
indirect merger, acquisition or similar transaction, (iv) pursuant to a Public
Offering, (v) to a customer, supplier or joint venture partner of the Company or
its
13
subsidiaries, or (vi) that are debt securities. The Company shall not be
obligated to consummate any proposed issuance of Company Securities, nor be
liable to any Management Shareholder if the Company has not consummated any
proposed issuance of Company Securities pursuant to this Section 4.03 for
whatever reason, regardless of whether it shall have delivered an Issuance
Notice in respect of such proposed issuance.
Article 5
Amendments To The Notes by FP
Section 5.01. Amendments to the Notes by FP. Each Noteholder hereby agrees
that if at any time FP and the Company agree to amend, modify, supplement,
suspend or waive the Notes, or any provision thereof, all the Notes (or the
applicable provisions thereof) will thereupon automatically be so amended,
modified, supplement, suspended or waived; provided, however, that this Section
5.01 shall not apply to any amendment, modification, supplement, suspension or
waiver of Section 2 of the Notes; provided further that any such action shall
apply ratably to all the Notes. FP and the Company shall provide written notice
to the Noteholders after any action taken pursuant to this Section 5.01, and the
Company shall issue replacement notes reflecting such action to the Noteholders,
if applicable.
Article 6
Certain Covenants and Agreements
Section 6.01. Confidentiality. (a) Each Other Securityholder agrees that
Confidential Information furnished and to be furnished to it was and shall be
made available in connection with such Other Securityholder's investment in the
Company. Each Other Securityholder agrees that it shall use, and that it shall
cause any Person to whom Confidential Information is disclosed pursuant to
clause (i) below to use, the Confidential Information only in connection with
its investment in the Company and not for any other purpose (including to
disadvantage competitively the Company or any other Securityholder). Each Other
Securityholder further acknowledges and agrees that it shall not disclose any
Confidential Information to any Person, except that Confidential Information may
be disclosed:
(i) to the extent required by applicable law, rule or regulation
(including complying with any oral or written questions, interrogatories,
requests for information or documents, subpoena, civil investigative
demand or similar process to which such Other Securityholder is subject,
provided that such Other Securityholder give the Company prompt notice
14
of such request(s), to the extent practicable, so that the Company may
seek an appropriate protective order or similar relief (and the Other
Securityholder shall cooperate with such efforts by the Company, and shall
in any event make only the minimum disclosure required by such law, rule
or regulation)), or
(ii) if the prior written consent of the Board shall have been
obtained.
Nothing contained herein shall prevent the use (subject, to the extent possible,
to a protective order) of Confidential Information in connection with the
assertion or defense of any claim by or against the Company or any
Securityholder.
(b) "CONFIDENTIAL INFORMATION" means any information concerning the
Company or any Persons that are or become its Subsidiaries or Affiliates or the
financial condition, business, operations or prospects of the Company or any
such Persons in the possession of or furnished to any Securityholder (including
by virtue of its present or former right to designate a director of the
Company), provided that the term "Confidential Information" does not include
information that (i) is or becomes generally available to the public other than
as a result of a disclosure by a Securityholder or its partners, directors,
officers, employees, agents, counsel, investment advisers or representatives
(all such persons being collectively referred to as "REPRESENTATIVES") in
violation of this Agreement, (ii) is or was available to such Securityholder on
a non-confidential basis prior to its disclosure to such Securityholder or its
Representatives by the Company or (iii) was or becomes available to such
Securityholder on a non-confidential basis from a source other than the Company,
which source is or was (at the time of receipt of the relevant information) not,
to the best of such Securityholder's knowledge, bound by a confidentiality
agreement with (or other confidentiality obligation to) the Company or another
Person.
Section 6.02. Lock-Up Agreements. Each Other Securityholder hereby agrees
that, if so requested by the Company or any representative of the underwriters
(the "MANAGING UNDERWRITER") in connection with any registration of the offering
of any securities of the Company under the Securities Act, such Other
Securityholder shall not sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period (or such lesser period as
may be requested in writing by the Managing Underwriter and agreed to in writing
by the Company) (the "MARKET STANDOFF PERIOD") following the date of the final
prospectus in connection an underwritten offering of the Company's securities.
Each Other Securityholder further agrees to enter into an agreement with the
Managing Underwriter in respect of the preceding sentence if so requested by the
Company and/or the Managing Underwriter. The Company may impose stop-
15
transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
Section 6.03. Conflicting Agreements. The Company and each Securityholder
represents and agrees that it shall not (a) grant any proxy or enter into or
agree to be bound by any voting trust or agreement with respect to the Company
Securities, except as expressly contemplated by this Agreement, (b) enter into
any agreement or arrangement of any kind with any Person with respect to its
Company Securities inconsistent with the provisions of this Agreement or for the
purpose or with the effect of denying or reducing the rights of any other
Securityholder under this Agreement, including agreements or arrangements with
respect to the Transfer or voting of its Company Securities or (c) act, for any
reason, as a member of a group or in concert with any other Person in connection
with the Transfer or voting of its Company Securities in any manner that is
inconsistent with the provisions of this Agreement; provided, however, that
notwithstanding any other provisions of this Agreement, in the event of any
inconsistency or conflict between this Agreement and the applicable Securities
Purchase Agreement, the Securities Purchase Agreement shall govern. This
Agreement is expressly subject to the terms of the applicable Securities
Purchase Agreement.
Article 7
Miscellaneous
Section 7.01. Binding Effect; Assignability; Benefit. (a) This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and permitted assigns.
(b) Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any party
hereto pursuant to any Transfer of Company Securities or otherwise, except that
any Allowable Transferee acquiring Company Securities or Person acquiring
Company Securities that is required or permitted by the terms of this Agreement
or any employment agreement or stock purchase, option, stock option or other
compensation plan of the Company or any Subsidiary to become a party hereto
shall (unless already bound hereby) execute and deliver to the Company an
agreement to be bound by this Agreement in the form of Exhibit A hereto and
shall thenceforth be a "Securityholder", as such term is used in this Agreement.
(c) Nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto, and their respective heirs,
successors, legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
16
Section 7.02. Notices. All notices, requests and other communications to
any party shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by facsimile
transmission,
if to the Company to:
Ultra Clean Holdings, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to FP and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ at the addresses listed below.
if to FP, to:
FP-Ultra Clean, L.L.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. in
the place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.
Any notice, request or other written communication sent by facsimile
transmission shall be confirmed by certified or registered mail, return receipt
requested, posted within one Business Day, or by personal delivery, whether
courier or otherwise, made within two Business Days after the date of such
facsimile transmissions.
Any Person that becomes a Securityholder shall provide its address and fax
number to the Company.
Section 7.03. Waiver; Amendment. (a) No provision of this Agreement may be
waived except by an instrument in writing executed by the party against
17
whom the waiver is to be effective. No provision of this Agreement may be
amended or otherwise modified except by an instrument in writing executed by the
Company with approval of the Board and Shareholders holding at least 50% of the
outstanding Common Shares held by the parties hereto at the time of such
proposed amendment or modification.
(b) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect FP may be effected only with the consent
of FP.
Section 7.04. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without
regard to the conflicts of laws rules of such state.
Section 7.05. Jurisdiction. The parties hereby agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
Northern District of California or any California State court sitting in San
Jose, California, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any case of action
arising out of this Agreement shall be deemed to have arisen from a transaction
of business in the State of California, and each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient form.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 7.02 shall be deemed effective service of
process on such party.
Section 7.06. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 7.07. Specific Enforcement. Each party hereto acknowledges that
the remedies at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this fact, any party
to this Agreement, without posting any bond, and in addition to all other
remedies that may be available, shall be entitled to obtain equitable relief in
the form of specific
18
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy that may then be available.
Section 7.08. Counterparts; Effectiveness. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Section 7.09. Entire Agreement. This Agreement and the Securities Purchase
Agreements constitute the entire agreement among the parties hereto and
supersede all prior and contemporaneous agreements and understandings, both oral
and written, among the parties hereto with respect to the subject matter hereof
and thereof.
Section 7.10. Termination. This Agreement shall terminate upon the written
election of FP; provided that in the event this Agreement has not terminated
prior to a Qualified Public Offering, Section 4.03 hereof shall terminate upon
such Qualified Public Offering.
Section 7.11. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 7.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ULTRA CLEAN HOLDINGS, INC.
By: _______________________
Name:
Title:
FP-ULTRA CLEAN, L.L.C.
By: _______________________
Name:
Title:
Signature Page to Securityholders' Agreement
MANAGEMENT SHAREHOLDER:
__________________________
[Name]
Address for Notices:
Signature Page to Securityholders' Agreement
EXHIBIT A
JOINDER TO SECURITYHOLDERS' AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the date
written below by the undersigned (the "JOINING PARTY") in accordance with the
Securityholders' Agreement dated as of November 26, 2002 (the "SECURITYHOLDERS'
AGREEMENT") among Ultra Clean Holdings, Inc., FP-Ultra Clean, L.L.C., and
certain other persons listed on the signature page thereof, as the same may be
amended from time to time. Capitalized terms used, but not defined, herein shall
have the meaning ascribed to such terms in the Securityholders' Agreement.
The Joining Party hereby acknowledges, agrees and confirms that, by its
execution of this Joinder Agreement, the Joining Party shall be deemed to be a
party to the Securityholders' Agreement as of the date hereof and shall have all
of the rights and obligations of a "Shareholder" and a "Securityholder", as
applicable, thereunder as if it had executed the Securityholders' Agreement. The
Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Securityholders'
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as
of the date written below.
Date: ___________ ___, ______
[NAME OF JOINING PARTY]
By: _____________________
Name:
Title:
Address for Notices: