Exhibit 4.7
AMENDED AND RESTATED INVESTORS' AGREEMENT
Dated as of May 13, 2005
AMONG
TEKNI-PLEX, INC.,
TEKNI-PLEX PARTNERS LLC,
MST/TP PARTNERS LLC,
DR. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
THE PREFERRED STOCKHOLDERS NAMED ON THE SIGNATURE PAGES
HERETO
AND
TEKNI-PLEX MANAGEMENT LLC
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS........................................................................................... 1
SECTION 1.01. Definitions............................................................................ 1
ARTICLE 2 CORPORATE GOVERNANCE.................................................................................. 7
SECTION 2.01. Composition of the Board............................................................... 7
SECTION 2.02. Removal................................................................................ 8
SECTION 2.03. Vacancies.............................................................................. 8
SECTION 2.04. Meetings............................................................................... 8
SECTION 2.05. Fees................................................................................... 8
SECTION 2.06. Actions by the Board................................................................... 8
SECTION 2.07. Committees............................................................................. 8
SECTION 2.08. Preferred Stockholder Representative................................................... 10
SECTION 2.09. Conflicting Charter or Bylaw Provisions................................................ 10
SECTION 2.10. Subsidiary Conformance................................................................. 10
ARTICLE 3 CERTAIN COVENANTS..................................................................................... 10
SECTION 3.01. ▇▇▇▇▇ Employment Agreement............................................................. 10
SECTION 3.02. Key Man Insurance...................................................................... 10
SECTION 3.03. Reports................................................................................ 10
ARTICLE 4 RESTRICTIONS ON TRANSFER.............................................................................. 11
SECTION 4.01. General................................................................................ 11
SECTION 4.02. Legends................................................................................ 11
ARTICLE 5 REGISTRATION RIGHTS................................................................................... 12
SECTION 5.01. Definitions............................................................................ 12
SECTION 5.02. Demand Registration.................................................................... 13
SECTION 5.03. Incidental Registration................................................................ 15
SECTION 5.04. Holdback Agreements.................................................................... 16
SECTION 5.05. Registration Procedures................................................................ 17
SECTION 5.06. Indemnification by the Corporation..................................................... 19
SECTION 5.07. Indemnification by Participating Stockholders.......................................... 20
SECTION 5.08. Conduct of Indemnification Proceedings................................................. 20
SECTION 5.09. Contribution........................................................................... 21
SECTION 5.10. Participation in Public Offering....................................................... 22
SECTION 5.11. Other Indemnification.................................................................. 22
SECTION 5.12. Rule 144 and Form S-3.................................................................. ▇▇
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▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ RIGHT........................................................................................ 23
SECTION 6.01. Purchase Right......................................................................... 23
ARTICLE 7 TRIGGER EVENT; DRAG-ALONG RIGHT....................................................................... 24
SECTION 7.01. Remedies; Voting Agreement for Corporation Sale........................................ 24
SECTION 7.02. Drag-Along Right....................................................................... 25
ARTICLE 8 MISCELLANEOUS......................................................................................... 28
SECTION 8.01. Remedies............................................................................... 28
SECTION 8.02. Binding Effect; Benefit................................................................ 28
SECTION 8.03. Assignability.......................................................................... 28
SECTION 8.04. Waivers................................................................................ 28
SECTION 8.05. Entire Agreement....................................................................... 28
SECTION 8.06. Headings............................................................................... 28
SECTION 8.07. Severability........................................................................... 28
SECTION 8.08. Amendments............................................................................. 29
SECTION 8.09. Governing Law; Submission to Jurisdiction.............................................. 29
SECTION 8.10. Waiver of Jury Trial................................................................... 29
SECTION 8.11. Counterparts; Third Party Beneficiaries................................................ 29
SECTION 8.12. Notices................................................................................ 29
SECTION 8.13. Interpretation......................................................................... 30
SECTION 8.14. Termination............................................................................ 30
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AMENDED AND RESTATED INVESTORS' AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' AGREEMENT (this "AGREEMENT") is dated
as of May 13, 2005 among Tekni-Plex, Inc., a corporation organized under the
laws of Delaware (the "CORPORATION"), Tekni-Plex Partners LLC, a limited
liability company organized under the laws of Delaware ("TP LLC"), MST/TP
Partners LLC, a limited liability company organized under the laws of Delaware
("MST"), (each of TP LLC and MST, a "LLC ENTITY", and collectively, the "LLC
ENTITIES"), Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing at
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇"), Tekni-Plex Management LLC, a
limited liability company organized under the laws of Delaware ("TEKNI-PLEX
MANAGEMENT LLC"), (each of the Corporation, the LLC Entities, ▇▇▇▇▇, ▇▇▇▇▇▇ and
Tekni-Plex Management LLC, an "INITIAL PARTY", and collectively, the "INITIAL
PARTIES"), and the Preferred Stockholders of the Corporation listed on the
signature pages hereto (collectively, the "PREFERRED STOCKHOLDERS").
W I T N E S S E T H
WHEREAS, after the consummation of a recapitalization and refinancing
pursuant to the Recapitalization Agreement dated April 12, 2000 (the
"RECAPITALIZATION AGREEMENT"), the LLC Entities owned 100% of the equity
securities of the Corporation;
WHEREAS, the Initial Parties entered into an Investors' Agreement dated
June 21, 2000 (the "INVESTORS' AGREEMENT") to govern certain of their rights,
duties and obligations after consummation of the transactions contemplated by
the Recapitalization Agreement;
WHEREAS, the Corporation has issued to the Preferred Stockholders Series A
Preferred Stock pursuant to the Preferred Stock Purchase Agreement dated May 13,
2005 ("PURCHASE AGREEMENT"); and
WHEREAS, the parties hereto desire to amend the terms of and restate the
existing Investors' Agreement to govern certain of their rights, duties and
obligations after consummation of the transactions contemplated by the Preferred
Stock Purchase Agreement and to join the Preferred Stockholders as parties
hereto;
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
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"ADVERSE CLAIM" shall have the meaning set forth in Section 8-302 of the
applicable Uniform Commercial Code.
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
Person; provided that no stockholder of the Corporation shall be deemed an
Affiliate of any other stockholder of the Corporation solely by reason of any
investment in the Corporation. For the purpose of this definition, the term
"CONTROL" (including with correlative meanings, the terms "CONTROLLING",
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), when used with respect to any
Person, means (i) 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 or (ii) the
direct or indirect beneficial ownership of at least 20% of the profits or assets
of such Person.
"AUCTION" means a process pursuant to which the Corporation shall engage
and cooperate fully with an investment banking firm of national reputation
selected by the Required Preferred Stockholders to represent the Corporation and
its stockholders in the sale of the Corporation. The investment banking firm
shall be instructed to (i) prepare appropriate marketing materials that
communicate the key investment merits, (ii) develop and implement an appropriate
marketing strategy for the sale of the Corporation, (iii) identify a broad range
of logical prospective purchasers; (iv) solicit bona fide, written proposals or
offers from prospective purchasers with respect to a transaction that results in
the sale of the Corporation for cash and on such other terms that the Board of
Directors determines in good faith, and in the exercise of reasonable judgment,
to be reasonably capable of being consummated (each a "BONA FIDE OFFER").
Promptly upon the investment banking firm's receipt of Bona Fide Offers, the
investment banking firm shall provide the Preferred Stockholders with a written
summary containing all of the material terms of each Bona Fide Offer, including
such investment bank's estimate of the present value of the aggregate cash
consideration that the stockholders of the Corporation could reasonably expect
to receive in each Bona Fide Offer, disregarding any taxes payable by the
stockholders as a result of such transaction.
"BOARD" means the board of directors of the Corporation.
"BONA FIDE OFFER" shall have the meaning set forth in the definition of
"Auction."
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"BYLAWS" means the bylaws of the Corporation, as amended from time to
time.
"CHARTER" means the Amended and Restated Certificate of Incorporation of
the Corporation, as amended from time to time.
"COMMON STOCK" means the common stock, par value $0.01 per share, of the
Corporation.
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"CORPORATION SALE" shall have the meaning ascribed to it in the Charter.
"CREDIT AGREEMENT" shall have the meaning ascribed to it in the Charter.
"DEBENTURES" shall have the meaning ascribed to it in the Charter.
"DEBT AGREEMENTS" shall have the meaning ascribed to it in the Charter.
"DISABILITY" means disability or incapacity which renders an employee
unable to perform his or her duties for a period in excess of 120 consecutive
days or a total of more than 180 days in any 12-month period.
"ERISA" means the Employee Retirement Income Security Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"FAIR MARKET VALUE" means, as of any date, as to any share of Common Stock
or Preferred Stock, the Board's good faith determination of the fair value of
such share as of the applicable reference date.
"FULLY DILUTED" means, with respect to Common Stock and without
duplication, all outstanding Common Stock and all Common Stock issuable in
respect of securities convertible into or exchangeable for Common Stock,
options, warrants and other rights to purchase or subscribe for Common Stock or
securities convertible into or exchangeable for Common Stock.
"IPO" shall have the meaning ascribed to it in the Charter.
"LIQUIDATION EVENT" shall have the meaning ascribed to it in the Charter.
"LIQUIDATION VALUE" shall have the meaning ascribed to it in the Charter.
"MAJORITY VOTING ELECTION" means the election of the Required Preferred
Stockholders after a Trigger Event to give the Series A Director six votes on
all matters considered by the Board in accordance with the Charter.
"MEMBER" shall have the meaning ascribed to it in the TP LLC Agreement and
the MST LLC Agreement.
"MST LLC AGREEMENT" means the Limited Liability Company Agreement of
MST/TP Partners LLC dated as of June 21, 2000.
"OPTIONS" means any options to subscribe for, purchase or otherwise
directly acquire Common Stock.
"PERMITTED TRANSFER" means:
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(i) a Transfer of Stock by any Stockholder who is a natural person
during his or her lifetime as a gift or gifts to (a) such Stockholder's
spouse, children (including legally adopted children and stepchildren),
spouses of children, grandchildren, spouses of grandchildren, parents or
siblings; (b) a trust for the benefit of the Stockholder and/or any of the
Persons described in clause (a); or (c) a corporation, limited partnership
or limited liability company whose sole direct and indirect equity holders
are the Stockholder and/or any of the Persons described in clause (a) or
clause (b); provided that in any of clauses (a), (b) or (c), the
Stockholder transferring such Stock retains exclusive power to exercise
all rights under this Agreement;
(ii) subject to the consent of the Required Preferred Stockholders,
a Transfer of Stock by any Stockholder to the Corporation (including,
without limitation, any pledge of Stock or Options to the Corporation);
(iii) a Transfer of Stock by a Stockholder upon death or incapacity
to such Stockholder's estate, executors, administrators and personal
representatives, and then to such Stockholder's legal representatives,
heirs or legatees (whether or not such recipients are a spouse, children,
spouses of children, grandchildren, spouses of grandchildren, parents or
siblings of such Stockholder);
(iv) a Transfer of Stock (a) by a Stockholder to any Affiliate of
such Stockholder or any of the employees, partners, members or Affiliates
of such Stockholder or any such Affiliate or (b) between any Preferred
Stockholders; or
(v) within ninety (90) days of the date of the Purchase Agreement, a
Transfer of Stock by any Stockholder controlled by Weston Presidio to any
Persons that are direct or indirect investors of the Company;
provided, however, that Options may only be transferred in accordance with the
terms of any Tekni-Plex, Inc. Stock Incentive Plan approved by the Board,
including the Series A Director; and provided further, that no Permitted
Transfer shall be effective unless and until the transferee of the Stock
executes and delivers to the Corporation and each Stockholder a counterpart of
this Agreement and agrees to be bound hereunder in the same manner and to the
same extent as the Stockholder from whom the Stock or Options were transferred.
No Permitted Transfer shall conflict with or result in any violation of a valid
and applicable judgment, order, decree, statute, law, ordinance, rule or
regulation.
"PERMITTED TRANSFEREES" means any Person who shall have acquired and who
shall hold Stock or Options pursuant to a Permitted Transfer.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PREFERRED DIVIDENDS" shall have the meaning ascribed to it in the
Charter.
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"PREFERRED STOCK" means the redeemable Series A Preferred Stock, par value
$0.01 per share, of the Corporation.
"PREFERRED STOCKHOLDER REPRESENTATIVE" shall mean the holder of Series A
Preferred Stock elected by the Required Preferred Stockholders to represent the
Preferred Stockholders under Section 4.8 of the Charter.
"PROSPECTIVE BUYER" means any Person proposing to purchase shares from a
Prospective Selling Investor.
"REQUIRED PREFERRED STOCKHOLDERS" means Preferred Stockholders owning at
least a majority of the outstanding Preferred Stock.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SERIES A DIRECTOR" shall have the meaning ascribed to it in the Charter.
"SIGNIFICANT SUBSIDIARY" shall have the meaning given to such term in Rule
1-02(w) of Regulation S-X under the Securities Act.
"STOCK" means the Common Stock or the Preferred Stock.
"STOCKHOLDER" means each Person (other than the Corporation) who is a
party to or bound by this Agreement, whether in connection with the execution
and delivery hereof as of the date hereof, pursuant to Article 4 or otherwise,
so long as such Person shall (i) own any Common Stock, (ii) own any Preferred
Stock, or (iii) have any options, warrants or other rights to purchase or
subscribe for Stock. Any Person acquiring Stock who is required by the terms of
this Agreement or any employment agreement or stock purchase, option, stock
option or other compensation plan of the Corporation to become a party hereto
shall (unless already bound hereby) execute and deliver to the Corporation an
agreement to be bound by this Agreement and shall thenceforth be a Stockholder.
Any Stockholder who ceases to own beneficially any Stock, so long as such
Stockholder does not beneficially own any Common Stock, shall cease to be bound
by the terms hereof; provided, however, that holders of Common Stock shall be
bound by the provisions of Sections 5.06, 5.07, 5.08, 5.09, and 5.11 applicable
to such Stockholder with respect to any offering of Registrable Securities
completed before the date such Stockholder ceased to own any Common Stock).
"SUBSIDIARY" means any corporation, partnership, company, firm,
association or trust of which the Corporation (i) owns directly or indirectly
more than fifty percent (50%) of the equity or beneficial interest, on a
consolidated basis, or (ii) owns directly or controls with power to vote,
directly or indirectly through one or more Subsidiaries, shares of the equity or
beneficial interest having the power to elect more than fifty percent (50%) of
the directors, trustees, managers or other officials having powers analogous to
that of directors of a corporation.
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"TP LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of Tekni-Plex Partners LLC dated as of June 21, 2000.
"TRIGGER EVENT" shall have the meaning ascribed to it in the Charter.
"UNITS" shall have the meaning ascribed to it in the TP LLC Agreement and
the MST LLC Agreement.
"WESTON PRESIDIO" shall mean Weston Presidio Service Company, LLC and
funds advised by Weston Presidio Service Company, LLC or its Affiliates.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
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Agreement Preamble
Applicable Holdback Period Section 5.04
Audit Committee Section 2.07(b)
Compensation Committee Section 2.07(a)
Corporation Preamble
▇▇▇▇▇▇ Preamble
Demand Registration Section 5.02(a)
Demand Commencement Date Section 5.01
Disadvantageous Condition Section 5.02(a)
Drag Along Sale Percentage Section 7.02
Drag Along Sellers Section 7.02(a)
Drag Along Notice Section 7.02(a)
Election Period Section 6.01(b)
Holders Section 5.02(a)(iii)
Incidental Registration Section 5.03(a)
Indemnified Party Section 5.08
Indemnifying Party Section 5.08
Information Section 3.03
Initial Parties Preamble
Inspectors Section 5.05(g)
Investors' Agreement Recitals
Key Man Insurance Section 3.02
LLC Entities Preamble
Maximum Offering Size Section 5.02(e)
MST Preamble
NASD Section 5.01
Nomination Committee Section 2.01(a)
Nominee Section 2.03(a)
Nominee Purchase Right Section 6.01(a)
Offered Securities Section 6.01(a)
Participating Seller Section 7.02(a)
Prospective Selling Investor Section 7.02
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Preferred Stockholders Preamble
Purchase Agreement Recitals
Purchase Right Section 6.01(a)
Purchase Right Notice Section 6.01(a)
Public Offering Section 5.01
Recapitalization Agreement Recitals
Records Section 5.05(g)
Registrable Securities Section 5.01
Registration Expenses Section 5.01
Representatives Section 3.03
Sale Section 7.02(a)
Second Purchase Right Section 6.01(c)
Selling Stockholder Section 5.02(a)
▇▇▇▇▇ Preamble
Tekni-Plex Management LLC Preamble
TP LLC Preamble
Transfer Section 4.01(a)
Underwritten Public Offering Section 5.02
WP Designee Section 2.01(a)
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board. (a) The Board shall consist of six
directors. One director shall be designated by Weston Presidio (the "WP
DESIGNEE," which director shall constitute the Series A Director as defined in
the Charter so long as the Preferred Stock is outstanding), two directors shall
be designated by a committee consisting of ▇▇▇▇▇ and the WP Designee (the
"NOMINATION COMMITTEE") and three directors shall be members of management of
the Corporation and shall be designated by ▇▇▇▇▇. On the date hereof, the Board
shall consist of (i) ▇▇▇▇▇▇ (as WP Designee), (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇ (designees of the Nomination Committee) and (iii) ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (designees of ▇▇▇▇▇). Notwithstanding the foregoing, Weston
Presidio (or the WP Designee, as the case may be) or ▇▇▇▇▇ shall lose their
right to designate directors under this Section 2.01(a) or be on the Nomination
Committee at such time as Weston Presidio or ▇▇▇▇▇, as applicable, (A)
beneficially owns, directly or indirectly (including through ownership of equity
interests in TP LLC), less than 20% of the outstanding Common Stock or (B) in
the case of ▇▇▇▇▇, is not actively involved in the management of the
Corporation.
(b) From and after the occurrence of a Trigger Event and so long as
Preferred Stock is outstanding, the Required Preferred Stockholders shall have
the right to increase the votes of the Series A Director in accordance with the
Charter.
(c) Each Stockholder entitled to vote for the election of directors to the
Board agrees that it will vote its Stock or execute written consents, as the
case may be, and take all other necessary action (including causing the
Corporation to call a special meeting of
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stockholders) in order to ensure that the composition of the Board is as set
forth in this Section 2.01.
SECTION 2.02. Removal. Each Stockholder agrees that if, at any time, it is
then entitled to vote for the removal of directors of the Corporation, it will
not vote any of its Stock in favor of the removal of any director who shall have
been designated or nominated pursuant to Section 2.01 unless (i) such removal
shall be for cause or (ii) the Persons entitled to designate or nominate such
director shall have consented to such removal in writing.
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 of the Board:
(a) the Person or Persons entitled under Section 2.01 to designate or
nominate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy may designate another individual (the
"NOMINEE") to fill such capacity and serve as a director of the Corporation;
(b) each Stockholder then entitled to vote for the election of the Nominee
as a director of the Corporation agrees that it will vote its Stock, or execute
a written consent, as the case may be, in order to ensure that the Nominee is
elected to the Board; and
(c) in the event a Nominee has not yet been elected to the Board as
provided in clause (b) above at the time of the next meeting of the Board, the
remaining directors may elect such Nominee to fill such vacancy, subject to
removal under Section 2.02.
SECTION 2.04. Meetings. The Board shall hold a regularly scheduled meeting
at least once every fiscal quarter.
SECTION 2.05. Fees. Each non-employee director shall be compensated for
his services as a director by receiving an annual fee of $50,000 plus reasonable
out-of-pocket expenses from the Corporation in equal quarterly installments;
provided however, that in the event a non-employee director resigns from, is
removed from or otherwise ceases to serve on, the Board on any date that is not
the anniversary of his election or appointment to the Board, his annual fee
shall be prorated based on the number of days served since the last anniversary
date.
SECTION 2.06. Actions by the Board. A quorum of the Board shall consist of
four directors; provided that so long as Preferred Stock is outstanding at least
one of such directors is the WP Designee. All actions of the Board shall require
the affirmative vote of at least a majority of the votes entitled to be cast at
a duly convened meeting of the Board at which a quorum is present or the
unanimous written consent of the Board.
SECTION 2.07. Committees. (a) The Board shall create and maintain a
compensation committee (the "COMPENSATION COMMITTEE") consisting of three
members, subject to Section 2.07(d), who shall be: (i) one non-employee director
designated by Weston Presidio, (ii) one non-employee director designated by the
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Nomination Committee, and (ii) one non-employee director designated by ▇▇▇▇▇. If
at any time, Weston Presidio, the Nomination Committee or ▇▇▇▇▇ does not have
the right to designate a sufficient number of directors to fill the Compensation
Committee, the Board may elect any director to the Compensation Committee,
subject to Section 2.07(d). No member of the Compensation Committee may vote on
issues pertaining to such member's compensation, including grants of options.
The Compensation Committee's duties shall include (i) the annual review and
approval of the compensation of the Chief Executive Officer of the Corporation
and of the President of the Corporation and (ii) the administration of the
Tekni-Plex, Inc. Stock Incentive Plan. The Compensation Committee shall exercise
such further powers as shall be delegated to it from time to time by the Board.
The Compensation Committee shall hold a regularly scheduled meeting at least
once annually.
(b) The Board shall create and maintain an audit committee (the "AUDIT
COMMITTEE") consisting of two members, subject to Section 2.07(d), who shall be:
(i) one non-employee director designated by Weston Presidio and (ii) one
non-employee director designated by ▇▇▇▇▇. One of the two members shall be a
"financial expert" as such term is defined by the SEC. If at any time, Weston
Presidio or ▇▇▇▇▇ does not have the right to designate a sufficient number of
directors to fill the Audit Committee, the Board may elect any director to the
Audit Committee, subject to Section 2.07(d). The Audit Committee shall provide
assistance to the Board in fulfilling its responsibilities relating to oversight
of the Corporation's financial reporting and internal controls. The Audit
Committee's specific duties shall include: (i) reviewing the Corporation's
annual and quarterly reports and periodic filings with the SEC, when applicable,
(ii) determining the accounting principles and practices to be followed in the
preparation of the Corporation's financial statements, (iii) determining the
scope of and procedures to be used in the Corporation's annual audit, (iv) the
appointment, compensation and oversight of work by any registered public
accounting firm employed by the Corporation for the purpose of preparing or
issuing an audit report or related work, and (v) setting procedures for the
receipt, retention and confidential treatment of complaints received by the
Corporation regarding accounting procedures or the audit report. The Audit
Committee shall exercise such additional powers as shall be delegated to it from
time to time by the Board. The Audit Committee shall hold a regularly scheduled
meeting at least once annually.
(c) The Board may create such other committees as it may determine
advisable with the consent of the WP Designee.
(d) Notwithstanding anything to the contrary in this Section 2.07, unless
the Board unanimously determines otherwise, after the occurrence of a Trigger
Event and a Majority Voting Election, the Compensation Committee, the Audit
Committee and all other authorized committees of the Board shall no longer be
designated as in Section 2.07(a) and Section 2.07(b), but shall be composed so
that the representation thereon shall be in the same proportion, as nearly as
may be possible (subject to any foreign law requirements, where applicable), as
the representation and voting power of such directors on the Board; provided,
however, that only non-employee directors shall serve on the Audit Committee or
Compensation Committee.
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SECTION 2.08. Preferred Stockholder Representative. Each Preferred
Stockholder shall vote all its shares of Preferred Stock to elect a
representative designated by Weston Presidio to be the Preferred Stockholder
Representative so long as Weston Presidio owns at least 30% of the outstanding
Preferred Stock regardless of the ownership by other Preferred Stockholders. At
all other times the Preferred Stockholder Representative shall be elected by the
Required Preferred Stockholders.
SECTION 2.09. Conflicting Charter or Bylaw Provisions. Each Stockholder
shall vote its Stock or execute written consents, as the case may be, and take
all other actions necessary, to ensure that the Corporation's Charter and Bylaws
facilitate and do not at any time conflict with any provision of this Agreement.
SECTION 2.10. Subsidiary Conformance. Notwithstanding anything to the
contrary in this Article 2, so long as Preferred Stock is outstanding the WP
Designee shall have the right, upon written request, to be elected as a member
of the board of directors of each Subsidiary of the Corporation.
ARTICLE 3
CERTAIN COVENANTS
SECTION 3.01. ▇▇▇▇▇ Employment Agreement. On the date hereof, the
Corporation has entered into an amended and restated employment agreement with
▇▇▇▇▇. The Corporation shall not thereafter amend, modify or extend such
agreement or replace such agreement with a new employment agreement with ▇▇▇▇▇
unless a majority of the Board, including the WP Designee, determines that such
amendment, modification or extension is desirable for the Corporation. The
Compensation Committee will review ▇▇▇▇▇'▇ employment agreement annually, in
accordance with then existing law, to determine whether bonuses may be
warranted.
SECTION 3.02. Key Man Insurance. The Corporation will maintain the
existing "key man insurance" policy (the "KEY MAN INSURANCE") on the life of
▇▇▇▇▇ and the beneficiary of proceeds of at least $5 million of such Key Man
Insurance shall be the Corporation.
SECTION 3.03. Reports. If the Corporation is no longer publicly filing
quarterly and annual reports in accordance with securities laws, the Corporation
shall provide to the Stockholders (i) a copy of the Corporation's quarterly
unaudited income statement, balance sheet and statement of cash flows as soon as
practicable but in any event within 45 days after the end of each quarterly
period of a Fiscal year and (ii) as soon as practicable but in any event within
90 days after the end of each Fiscal year, a copy of the Corporation's audited
income statement, balance sheet, statement of stockholder's equity and statement
of cash flows prepared in accordance with generally accepted accounting
principles and audited by independent public accounting firm of national
reputation.
In addition, if the Corporation is no longer publicly filing quarterly and
annual reports in accordance with securities laws, promptly after transmission
or occurrence (but
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in any event within 10 days), the Preferred Stockholders shall receive any
written communications by the Corporation with Stockholders or its lenders, and
any reports filed by the Corporation or its officers, directors and
representatives with any securities exchange or the SEC and notice of any event
which might have a significant effect on the Corporation's business or financial
condition or on the Preferred Stockholders' investment; provided that each
holder of Series A Preferred Stock will, at a reasonable time prior to the
required delivery of such information, provide to the Corporation the mailing
address where such information should be sent.
Each Preferred Stockholder agrees to keep the foregoing information that
such Preferred Stockholder receives pursuant to Section 3.03 (the "INFORMATION")
confidential (except as required by applicable law or legal process), except
that the Information or portions thereof may be disclosed to the directors,
officers, partners, limited partners, lenders, lender's affiliates, employees,
advisors, financing sources, affiliates, permitted assignees and agents
(collectively "REPRESENTATIVES") (it being understood that those Representatives
will be informed of the confidential nature of the Information and will agree to
be bound by the terms of this Section 3.03). The term "Information" does not
include any information which at the time of disclosure or thereafter is (i)
generally available to or known by the public (other than as a result of its
disclosure by a Preferred Stockholder or its Representatives), (ii) available to
a Preferred Stockholder on a non-confidential basis from a source other than the
Corporation or its advisors, or (iii) independently acquired or developed by a
Preferred Stockholder without violating any of its obligations under this
Section 3.03.
ARTICLE 4
RESTRICTIONS ON TRANSFER
SECTION 4.01. General. (a) Unless and until the redemption or liquidation
of all of the Preferred Stock pursuant to the terms of the Charter or unless
with the prior written consent of the Required Preferred Stockholders, each
Stockholder agrees that it will not, directly or indirectly, sell, assign,
transfer, grant a participation in, pledge or otherwise dispose of any Stock (or
solicit any offers to buy or otherwise acquire, or take a pledge of any Stock)
(as to any referenced security, a "TRANSFER") owned or controlled by such
Stockholder to any Person other than (i) a Permitted Transferee or (ii) pursuant
to Section 7.02.
(b) Any attempt to make a Transfer in violation of this Agreement shall be
null and void and the Corporation shall not, and shall cause any transfer agent
not to, give any effect in the Corporation's stock records to such attempted
Transfer.
(c) Section 4.01 shall not apply to any transfers effected in accordance
with Article 5 and Article 7.
SECTION 4.02. Legends. (a) In addition to any other legend that may be
required, each certificate for Stock that is issued to any Stockholder after the
date hereof shall bear a legend in substantially the following form:
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY
STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE
THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE AMENDED AND RESTATED INVESTORS' AGREEMENT
DATED AS OF MAY 13, 2005, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST
FROM THE CORPORATION OR ANY SUCCESSOR THERETO.
(b) If any Common Stock shall cease to be Registrable Securities under
clause (i) or clause (ii) of the definition thereof, the Corporation shall, upon
the written request of the holder thereof, issue to such holder a new
certificate evidencing such Common Stock without the first sentence of the
legend required by this Section endorsed thereon. If any Stock shall cease to be
subject to any and all restrictions on transfer set forth in this Agreement, the
Corporation shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such Stock without the second sentence of
the legend required by this Section endorsed thereon.
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Definitions. The following terms, as used in this Article,
have the following meanings:
"DEMAND COMMENCEMENT DATE" mean the date which is nine (9) months after
the consummation of the IPO.
"PUBLIC OFFERING" means any primary or secondary public offering of
Registrable Securities of the Corporation pursuant to an effective registration
statement under the Securities Act (other than in connection with an issuance of
securities (A) issuable upon exercise of employee stock options or in connection
with any employee benefit or similar plan of the Corporation approved by the
Board or (B) in connection with a direct or indirect acquisition by the
Corporation of another company).
"REGISTRATION EXPENSES" means (i) all registration and filing fees, (ii)
fees and expenses in compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Common Stock registered), (iii) printing expenses, (iv)
internal expenses of the Corporation (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (v) reasonable fees and disbursements of counsel for the
Corporation and customary fees and expenses for independent certified public
accountants retained by the Corporation (including expenses relating to any
comfort letters or costs associated with the delivery by independent certified
public accountants of any comfort letter requested pursuant to Section 5.05(h)
hereof), (vi) the reasonable fees and expenses of any special experts retained
by the Corporation in connection with the applicable registration, (vii)
reasonable fees and expenses of up to one counsel for the Stockholders
participating in the offering selected (A) by the Stockholders, in the case of
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any Demand Registration, or (B) in any other case, by the Corporation or by the
other stockholders holding the majority of Common Stock to be sold for the
account of all other stockholders in the offering, (viii) fees and expenses in
connection with any review of underwriting arrangements by the National
Association of Securities Dealers, Inc. (the "NASD"), including fees and
expenses of any "qualified independent underwriter", and (ix) fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities; but shall not include any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities, or any
out-of-pocket expenses (except as set forth in clause (vii) above) of the
Stockholders (or the agents who manage their accounts) or any fees and expenses
of underwriter's counsel.
"REGISTRABLE SECURITIES" means at any time, with respect to any
Stockholder, any Common Stock until (i) a registration statement covering such
Common Stock has been declared effective by the SEC and such Common Stock has
been disposed of pursuant to such effective registration statement, (ii) such
Common Stock is sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met or (iii) such Common Stock is otherwise transferred, the
Corporation has delivered a new certificate or other evidence of ownership for
such Common Stock not bearing the legend required pursuant to this Agreement and
such Common Stock may be resold without subsequent registration under the
Securities Act. No Common Stock owned by any stockholder of the Corporation
shall be Registrable Securities if such stockholder has not executed a
counterpart to this Agreement agreeing to be bound by the terms of this
Agreement.
"UNDERWRITTEN PUBLIC OFFERING" means a firmly underwritten Public
Offering.
SECTION 5.02. Demand Registration. (a) If at any time after the Demand
Commencement Date, the Corporation receives a written request by the
Stockholders holding at least 51% of the aggregate Registrable Securities held
by all Stockholders (any such requesting Persons, "SELLING STOCKHOLDERS") that
the Corporation effect the registration under the Securities Act of at least 51%
of the aggregate Registrable Securities held by all Stockholders, and specifying
the intended method of disposition thereof, then the Corporation shall promptly
give written notice of such requested registration (a "DEMAND REGISTRATION") at
least 10 days prior to the anticipated filing date of the registration statement
relating to such Demand Registration to all other Stockholders and thereupon
will use its reasonable best efforts to effect, as expeditiously as possible,
the registration under the Securities Act of:
(i) the Registrable Securities then held by all Stockholders;
(ii) the Common Stock proposed to be issued by the Corporation; and
(iii) all other Common Stock which any other stockholder, who is
entitled to request to be included in any registration by the Corporation
of Common Stock (all such stockholders, together with the Selling
Stockholders, the "HOLDERS"), has requested the Corporation to register in
accordance with the agreement pursuant to which such stockholder has such
rights,
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all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided that, subject to Section 5.02(d), the Corporation shall not
be obligated to effect (i) more than two Demand Registrations under this Article
5, (ii) a Demand Registration within 12 calendar months after a previous Demand
Registration or (iii) with respect to any registration statement filed, or to be
filed, pursuant to this Section, if the Corporation shall furnish to the
Stockholders of Registrable Securities that have made such request a written
notice stating that maintaining the effectiveness or commencing a filing of a
registration statement would (because of the existence of, or in anticipation
of, any acquisition or other material event or transaction the public disclosure
of which at the time would be materially prejudicial to the Corporation) be
significantly disadvantageous (a "DISADVANTAGEOUS CONDITION") to the
Corporation, the Corporation shall be entitled to cause such registration
statement to be withdrawn and the effectiveness of such registration statement
terminated, or, in the event no registration statement has yet been filed, shall
be entitled not to file any such registration statement, until such
Disadvantageous Condition no longer exists (written notice of which the
Corporation shall promptly deliver to such Stockholders). Upon receipt of any
such certification of a Disadvantageous Condition, such Stockholders shall
forthwith discontinue use of the prospectus contained in such registration
statement and, if so directed by the Corporation, each such Stockholder will
deliver to the Corporation all copies, other than permanent file copies then in
such Stockholder's possession, of the prospectus then covering such Registrable
Securities current at the time of receipt of such notice. If so requested by the
requesting Stockholders, the Corporation shall, if any registration statement
shall have been withdrawn, at such time as it is possible or, if earlier, at the
end of a 120-day period following such withdrawal, file a new registration
statement covering the Registrable Securities that were covered by such
withdrawn registration and maintain the effectiveness thereof for such time as
is required under this Agreement.
(b) The Corporation will notify as soon as practicable all the Holders to
be included in the Demand Registration of the other Holders and the number of
Registrable Securities requested to be included therein. The Selling
Stockholders requesting a registration under this Section may, at any time prior
to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Corporation revoking such request,
in which case such request, so revoked, shall be considered a Demand
Registration unless the participating Stockholders reimburse the Corporation for
all costs incurred by the Corporation in connection with such registration.
(c) The Corporation will pay all Registration Expenses in connection with
any Demand Registration.
(d) A registration requested pursuant to this Section shall not be deemed
to have been effected unless the registration statement relating thereto (A) has
become effective under the Securities Act and (B) has remained effective for a
period of at least 120 days (or such shorter period in which all Registrable
Securities of the Selling Stockholders included in such registration have
actually been sold thereunder).
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(e) If a Demand Registration involves a Public Offering and the managing
underwriter shall advise the Corporation and the Selling Stockholders that, in
its view, (i) the number of Registrable Securities requested to be included in
such registration (including any securities which the Corporation proposes to be
included which are not Registrable Securities) or (ii) the inclusion of some or
all of the Registrable Securities owned by the Holders, in any such case,
exceeds the largest number of securities which can be sold without having an
adverse effect on such offering, including the price at which such securities
can be sold (the "MAXIMUM OFFERING SIZE"), the Corporation will include in such
registration, in the priority listed below, up to the Maximum Offering Size:
(A) First, the Common Stock held by the Stockholders (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata to such Stockholders on the basis of the number of Common Stock, on a
Fully Diluted basis, held by each such Stockholder);
(B) Second, the Common Stock to be issued by the Corporation in an
amount that does not cause the offering to exceed the Maximum Offering
Size; and
(C) Third, the Common Stock held by the other stockholders
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, as agreed between the Corporation and such other
stockholders).
SECTION 5.03. Incidental Registration. (a) If the Corporation proposes to
register any Common Stock under the Securities Act (other than a registration of
Common Stock (i) issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Corporation approved
by the Board or (ii) in connection with a direct or indirect acquisition by the
Corporation of another company), whether or not for sale for its own account, it
will each such time, subject to the provisions of Section 5.03(b), give prompt
written notice -at least 10 days prior to the anticipated filing date of the
registration statement relating to such registration to each Stockholder, which
notice shall set forth such Stockholder's rights under this Section 5.03 and
shall offer such Stockholders the opportunity to include in such registration
statement such number of Registrable Securities of the same type as are proposed
to be registered as each such Stockholder may request (an "INCIDENTAL
REGISTRATION"). Upon the written request of any such Stockholder made within 5
days after the receipt of notice from the Corporation (which request shall
specify the number of Registrable Securities intended to be disposed of by such
Stockholder), the Corporation will use its reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Corporation has been so requested to register by such Stockholders, to the
extent required to permit the disposition of the Registrable Securities so to be
registered; provided that (i) if such registration involves an Underwritten
Public Offering, all such Stockholders requesting to be included in the
Corporation's registration must sell their Registrable Securities to the
underwriters selected as provided in Section 5.05(f) on the same terms and
conditions as apply to the Corporation and (ii) if, at any time after giving
written notice of its intention to register any stock pursuant to this Section
5.03(a) and
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prior to the effective date of the registration statement filed in connection
with such registration, the Corporation shall determine for any reason not to
register such securities, the Corporation shall give written notice to all such
Stockholders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (without prejudice,
however, to the rights of any Stockholder under Section 5.02). No registration
effected under this Section 5.03 shall relieve the Corporation of its
obligations to effect a Demand Registration to the extent required by Section
5.02. The Corporation will pay all Registration Expenses in connection with
Registrable Securities requested pursuant to this Section 5.03. Notwithstanding
the foregoing, the Corporation shall not be obligated to effect more than three
Incidental Registrations under this Article 5.
(b) If a registration pursuant to this Section 5.03 involves an
Underwritten Public Offering (other than in the case of an Underwritten Public
Offering requested by a Selling Stockholder in a Demand Registration, in which
case the provisions with respect to priority of inclusion in such offering set
forth in Section 5.02(e) shall apply) and the managing underwriter advises the
Corporation that, in its view, the number of shares of Common Stock which the
Corporation and the other stockholders intend to include in such registration
exceeds the Maximum Offering Size, the Corporation will include in such
registration, in the priority listed below, up to the Maximum Offering Size:
(A) First, if the registration was initiated by other stockholders
having rights to require registration of Common Stock by the Corporation,
then the Common Stock held by such other stockholders (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, as
agreed between the Corporation and such other stockholders);
(B) Second, the Common Stock to be issued by the Corporation in an
amount that does cause the offering to exceed the Maximum Offering Size;
(C) Third, the Common Stock held by the Stockholders (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata to such Stockholders on the basis of the number of shares of Common
Stock (on a Fully Diluted basis) held by each such Stockholder); and
(D) Fourth, the Common Stock held by the other stockholders
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, as agreed between the Corporation and such other
stockholders).
SECTION 5.04. Holdback Agreements. If any registration of Registrable
Securities shall be in connection with an Underwritten Public Offering, each
Stockholder agrees not to effect any public sale or distribution, including any
sale pursuant to Rule 144, or any successor provision, under the Securities Act,
of any Registrable Securities, and not to effect any such public sale or
distribution of any Common Stock or of any stock convertible into or
exchangeable or exercisable for any Common Stock (in each case, other than as
part of such Underwritten Public Offering) during the seven days prior to the
effective date of such registration statement (except as part of such
registration) or
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during the period after such effective date equal to (a) 90 days or such other
period as the lead or managing underwriters may permit or request (in the event
of any Underwritten Public Offering other than an initial public offering) or
(b) 180 days (in the event of an initial public offering) (such period, the
"APPLICABLE HOLDBACK PERIOD"); provided, however, that any release of shares
from these restrictions shall be pro rata among all Stockholders unless
otherwise permitted by the underwriters and with the consent of the Board,
including the WP Designee.
SECTION 5.05. Registration Procedures. Whenever Stockholders request that
any Registrable Securities be registered pursuant to Section 5.02 or 5.03, the
Corporation will, subject to the provisions of such Sections, use its reasonable
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Corporation will as promptly as practicable prepare and file with
the SEC a registration statement on any form for which the Corporation then
qualifies or which counsel for the Corporation shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof, and use its reasonable best efforts to cause such filed registration
statement to become and remain effective for a period of not less than 120 days.
(b) The Corporation will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
Stockholder holding Registrable Securities covered by such registration
statement and each underwriter, if any, of the Registrable Securities covered by
such registration statement copies of such registration statement as proposed to
be filed, and thereafter the Corporation will furnish to such Stockholder and
underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such Stockholder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Stockholder.
(c) After the filing of the registration statement, the Corporation will
promptly notify each Stockholder holding Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
(d) The Corporation will use its reasonable best efforts to (i) register
or qualify the Registrable Securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions in the United
States as any Stockholder holding such Registrable Securities reasonably (in
light of such Stockholder's intended plan of distribution) requests and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary
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by virtue of the business and operations of the Corporation; provided that the
Corporation will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (d), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.
(e) The Corporation will promptly notify each Stockholder holding such
Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and promptly prepare and make available to
each such Stockholder any such supplement or amendment.
(f) (i) The Stockholders holding a majority of the aggregate Registrable
Securities held by all Stockholders will have the right, in their sole
discretion, to select an underwriter or underwriters in connection with any
Public Offering resulting from the exercise by any Selling Stockholders of a
Demand Registration, which underwriter or underwriters may include any Affiliate
of any Stockholder and (ii) the Corporation will select an underwriter or
underwriters in connection with any other Public Offering. In connection with
any Public Offering, the Corporation will enter into customary agreements
(including an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to dispose of Registrable Securities
in any such Public Offering, including the engagement of a "qualified
independent underwriter" in connection with the qualification of the
underwriting arrangements with the NASD.
(g) Upon the execution of confidentiality agreements in form and substance
satisfactory to the Corporation, the Corporation will make available for
inspection by any Stockholder and any underwriter participating in any
disposition pursuant to a registration statement being filed by the Corporation
pursuant to this Section 5.05 and any attorney, accountant or other professional
retained by any such Stockholder or underwriter (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Corporation (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Corporation's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection with
such registration statement. Records that the Corporation determines, in good
faith, to be confidential and that it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction. Each
Stockholder agrees that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the Common Stock or its Affiliates unless
and until such is made generally available to the public. Each Stockholder
further agrees that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the
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Corporation and allow the Corporation, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(h) The Corporation will use its reasonable best efforts to furnish to the
managing underwriter (i) an opinion or opinions of counsel to the Corporation
and (ii) a comfort letter or comfort letters from the Corporation's independent
public accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
managing underwriter reasonably requests.
(i) The Corporation may require each such Stockholder to promptly furnish
in writing to the Corporation such information regarding the distribution of the
Registrable Securities as the Corporation may from time to time reasonably
request and such other information as may be legally required in connection with
such registration.
(j) Each such Stockholder agrees that, upon receipt of any notice from the
Corporation of the happening of any event of the kind described in Section
5.05(e), such Stockholder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Stockholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5.05(e), and, if so directed by the
Corporation, such Stockholder will deliver to the Corporation all copies, other
than any permanent file copies then in such Stockholder's possession, of all
prospectuses covering such Registrable Securities at the time of receipt of such
notice. In the event that the Corporation shall give such notice, the
Corporation shall extend the period during which such registration statement
shall be maintained effective (including the period referred to in Section
5.05(a)) by the number of days during the period from and including the date of
the giving of notice pursuant to Section 5.05(e) to the date when the
Corporation shall make available to such Stockholder a prospectus supplemented
or amended to conform with the requirements of Section 5.05(e).
SECTION 5.06. Indemnification by the Corporation. The Corporation agrees
to indemnify and hold harmless each Stockholder holding Registrable Securities
covered by a registration statement, its officers, directors, members and
agents, and each person, if any, who controls such Stockholder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the Registrable Securities
(as amended or supplemented if the Corporation shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information furnished in writing to the Corporation by such Stockholder or
on such Stockholder's behalf expressly for use therein; provided that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus,
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as the case may be, the indemnity agreement contained in this paragraph shall
not apply to the extent that any such loss, claim, damage, liability or expense
results from the fact that a current copy of the prospectus (or, in the case of
a prospectus, the prospectus as amended or supplemented) was not sent or given
to the person asserting any such loss, claim, damage, liability or expense at or
prior to the written confirmation of the sale of the Registrable Securities
concerned to such person if it is determined that the Corporation has provided
such prospectus and it was the responsibility of such Stockholder to provide
such person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Corporation also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Stockholders provided in this Section 5.06.
SECTION 5.07. Indemnification by Participating Stockholders. Each
Stockholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless (but
only to the extent of such Stockholder's net proceeds from the offering) the
Corporation, its officers, directors and agents and each Person, if any, who
controls the Corporation within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Corporation to such Stockholder, but only (i) with
respect to information furnished in writing by such Stockholder or on such
Stockholder's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or (ii) to the extent that any
loss, claim, damage, liability or expense described in Section 5.06 results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that it was the responsibility of such Stockholder to
provide such Person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. Each such Stockholder also agrees to indemnify and hold harmless
underwriters of the Registrable Securities, their officers and directors and
each Person who controls such underwriters on substantially the same basis as
that of the indemnification of the Corporation provided in this Section 5.07. As
a condition to including Registrable Securities in any registration statement
filed in accordance with Article 5 hereof, the Corporation may require that it
shall have received an undertaking reasonably satisfactory to it from any
underwriter to indemnify and hold it harmless to the extent customarily provided
by underwriters with respect to similar securities.
Section 5.08. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any
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Person in respect of which indemnity may be sought pursuant to this Article 5,
such Person (an "INDEMNIFIED PARTY") shall promptly notify the Person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying
Party is prejudiced by such failure to notify. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
such Indemnified Party representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Indemnified Parties, and
that all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if a final judgment for the
plaintiff is rendered, the Indemnifying Party shall indemnify and hold harmless
such Indemnified Parties from and against any loss or liability (to the extent
stated above) by reason of such settlement or judgment. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding and does not involve an admission of guilt.
SECTION 5.09. Contribution. If the indemnification provided for in this
Article 5 is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (i) as between the Corporation and the
Stockholders holding Registrable Securities covered by a registration statement
on the one hand and the underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Corporation and
such Stockholders on the one hand and the underwriters on the other, from the
offering of the Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault
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of the Corporation and such Stockholders on the one hand and of such
underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) as between the Corporation on the one
hand and each such Stockholder on the other, in such proportion as is
appropriate to reflect the relative fault of the Corporation and of each such
Stockholder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Corporation and such Stockholders on the one hand and such underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Corporation and such Stockholders bear to the total
underwriting discounts and commissions received by such underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Corporation and such Stockholders on the one hand and of such
underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Corporation and such Stockholders or by such underwriters. The
relative fault of the Corporation on the one hand and of each such Stockholder
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Corporation and the Stockholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.09 were determined by pro
rata allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. No
Person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. Each such Stockholder's
obligation to contribute pursuant to this Section 5.09 is several in the
proportion that the proceeds of the offering received by such Stockholder bears
to the total proceeds of the offering received by all such Stockholders and not
joint.
SECTION 5.10. Participation in Public Offering. No Person may participate
in any Public Offering hereunder unless such Person (a) agrees to sell such
Person's securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and the provisions of this Agreement in
respect of registration rights.
SECTION 5.11. Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the
Corporation and each Stockholder participating therein with respect to any
required registration or other
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qualification of securities under any federal or state law or regulation or
governmental authority other than the Securities Act.
SECTION 5.12. Rule 144 and Form S-3. Commencing as soon as practicable
after the IPO, the Corporation shall use its reasonable best efforts to ensure
that the conditions to the availability of Rule 144 set forth in paragraph (c)
thereof are satisfied.
ARTICLE 6
PURCHASE RIGHT
SECTION 6.01. Purchase Right. (a) In the event that the Corporation
proposes to issue Common Stock, or any securities convertible into Common Stock
(other than an issuance of securities (i) issuable upon exercise of employee
stock options or in connection with any employee benefit or similar plan of the
Corporation approved by the Board, including the WP Designee, (ii) in connection
with a direct or indirect acquisition by the Corporation of another company
approved by the Board, including the WP Designee or (iii) upon conversion of
securities which have previously been subject to this Section) (the "OFFERED
SECURITIES"), the Corporation shall give written notice ("PURCHASE RIGHT
NOTICE") to each Stockholder holding Common Stock and each Member holding Units
offering each an opportunity ("PURCHASE RIGHT") to purchase a portion of the
proposed issuance of the Offered Securities on terms and conditions provided
below and otherwise proposed by the Corporation. The Purchase Right shall be
subject to Section 6.01(c) below.
The Purchase Right Notice shall specify the terms and conditions relating
to such securities to be issued and of the sale of such securities, including
the price and the total number of securities to be issued, and the number of
such securities which represents such Stockholder's or Member's pro rata portion
based on such Stockholder's direct or indirect (through TP LLC or MST LLC)
ownership of Common Stock (on a Fully Diluted basis) each Stockholder or Member
has the right to purchase.
(b) Each Stockholder shall have the option for a period of 15 days from
the receipt of the Purchase Right Notice (the "ELECTION PERIOD"), to notify the
Corporation in writing whether such Stockholder elects to exercise its Purchase
Right. Any Stockholder that does not give a written notice to the Corporation
within such Election Period shall be deemed to have elected not to exercise its
Purchase Right.
(c) In the event that not all Stockholders exercise their Purchase Rights,
the Corporation shall give a second Purchase Right Notice to each Member holding
Units offering each such Member a Purchase Right. Each Member shall then have
the option for the applicable Election Period to notify the Corporation in
writing whether such Member elects to exercise its Purchase Right. Any Member
that does not give a written notice to the Corporation within such Election
Period shall be deemed to have elected not to exercise its Purchase Right.
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In the event that not all Stockholders or Members exercise their Purchase
Rights, each Stockholder or Member who elects to exercise its Purchase Right
within the Election Period shall have an additional option ("SECOND PURCHASE
RIGHT") to purchase any of the Offered Securities not yet subscribed for in the
proportion that its interests bear to all other Stockholders or Members who
exercised their Purchase Rights and who desire to acquire such remaining Offered
Securities or in such other ratio as may be agreed to by all such Stockholders
and Members. In addition, each Stockholder or Member who has exercised the
Second Purchase Right may indicate the additional number of Offered Securities
it wishes to purchase in the event that less than all remaining Offered
Securities are purchased pursuant to the Second Purchase Right, and each
Stockholder or Member who indicates such intention shall purchase the remaining
Offered Securities; provided, however, that if purchase of more than 100% of the
remaining Offered Securities are so indicated, then such purchase shall be in
the same ratio that the remaining Offered Securities a Stockholder or Member
desires to purchase bears to the total number of remaining Offered Securities
which all such other Stockholders or Members desire to purchase. The Second
Purchase Right shall be exercisable within a 15-day period following the
expiration of the most recent Election Period and shall be exercised by sending
a notice to the Corporation
Each notice by a Stockholder or Member exercising its Purchase Right, when
taken together with the Purchase Right Notice, shall constitute a valid, legally
binding and enforceable agreement for the purchase of such securities, subject
to the Corporation's election pursuant to Section 6.01(c).
(d) If all of the securities proposed to be issued by the Corporation
according to paragraph (a) hereof are not purchased by the Stockholders or
Members pursuant to their Purchase Rights in their entirety, the Corporation
shall have the right for a period of 180 days after the expiration of Election
Period to issue the remaining securities not purchased pursuant to Purchase
Rights at a price and on terms no less favorable than those specified in the
Purchase Right Notice; provided however, if the proposed purchaser of the
Offered Securities will only purchase all or none of the Offered Securities and
the Stockholders and Members do not collectively exercise their Purchase Rights
for all of the Offered Securities the Corporation may choose not to sell any
Offered Securities to the Stockholders or Members but instead to the proposed
purchaser.
(e) Any closing of the purchase of securities pursuant to this Section
6.01 shall be held at the principal office of the Corporation or at such other
place as may be agreed upon, on a business day and at a time agreed upon to
purchase such securities.
ARTICLE 7
TRIGGER EVENT; DRAG-ALONG RIGHT
SECTION 7.01. Remedies; Voting Agreement for Corporation Sale. From and
after the occurrence of a Trigger Event, the Preferred Stockholders shall be
entitled to initiate a Corporation Sale by requiring the Corporation to commence
an Auction upon the completion of which the Required Preferred Stockholders may
elect to require the
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Stockholders to vote their Stock to direct the Corporation to consummate such
Corporation Sale.
SECTION 7.02. Drag-Along Right. Each Stockholder hereby agrees, if the
Required Preferred Stockholders approve by written consent a Corporation Sale as
a result of an Auction after the occurrence of a Trigger Event, to vote its
Stock or execute written consents, as the case may be, and take all other
necessary action (including causing the Corporation to call a special meeting of
stockholders) in order to ensure that the Corporation consummates such
Corporation Sale. Each Stockholder further agrees to raise no objection against
such approved sale and, if the Corporation Sale is structured as a stock
acquisition, to sell a specified percentage (the "DRAG ALONG SALE PERCENTAGE")
of its Stock, directly or indirectly, to a Prospective Buyer in the manner and
on the terms set forth in this Section 7.02 in connection with such sale.
Preferred Stockholders approving such sale shall each be a "PROSPECTIVE SELLING
INVESTOR").
(a) Exercise. If the Required Preferred Stockholders notify the
Corporation that they elect to effect a Corporation Sale as a result of an
Auction (the "SALE") after a Trigger Event, if the Corporation Sale is
structured as a stock acquisition, the Prospective Selling Investors shall
furnish a written notice of the Sale (the "DRAG ALONG NOTICE") to each holder of
Stock at least thirty (30) days prior to the closing of the Sale. The Drag Along
Notice shall set forth the principal terms of the proposed Sale insofar as it
relates to such Stock including (i) the number and class of Stock to be acquired
from the Prospective Selling Investors, (ii) the Drag Along Sale Percentage,
(iii) the per share consideration to be received in the proposed Sale in
accordance with Section 7.02(c), (iv) the name and address of the Prospective
Buyer, and (v) the proposed date, time and place of closing of the proposed Sale
and procedures for selling the Stock to the Prospective Buyer. If the
Prospective Selling Investors consummate the proposed Sale to which reference is
made in the Drag Along Notice, each other holder of Stock (each a "PARTICIPATING
SELLER", and, together with the Prospective Selling Investors, collectively, the
"DRAG ALONG SELLERS") shall be bound and obligated to sell the Drag Along Sale
Percentage of his Stock in the proposed Sale on the same terms and conditions,
with respect to each Stock sold (subject to Section 7.02(e) in the case of
Options), as the Prospective Selling Investors shall sell each of their
Preferred Stock in the Sale (subject to Section 7.02(e) in the case of Options).
Without limiting the generality of the foregoing, if the Sale is structured as a
merger, consolidation or similar business transaction, each Participating Seller
will vote or cause to be voted all Stock that he holds or with respect to which
he has the power to direct the voting and which he is entitled to vote on such
proposed Sale in favor of such proposed Sale and will waive all appraisal and
dissenters rights and hereby grants a proxy in favor of the Prospective Selling
Investors to vote the Participating Seller's Stock in accordance with this
Section 7.02(a). Each proxy granted above in this Section 7.02(a) is
irrevocable, coupled with an interest and shall survive until the expiration of
the provisions of this Section 7.02(a). If at the end of the 180th day following
the date of the effectiveness of the Drag Along Notice the Prospective Selling
Investors have not completed the proposed Sale, the Drag Along Notice shall be
null and void, each Participating Seller shall be released from his obligation
under the Drag Along Notice and it shall be necessary for a separate Drag
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Along Notice to be furnished and the terms and provisions of this Section 7.02
separately complied with, in order to consummate such proposed Sale pursuant to
this Section 7.02.
(b) Certain Legal Requirements. In the event the consideration to be paid
in exchange for Stock in a proposed Sale pursuant to Section 7.02(a) includes
any securities, and the receipt thereof by a Participating Seller would require
under applicable law (i) the registration or qualification of such securities or
of any person as a broker or dealer or agent with respect to such securities or
(ii) the provision to any Drag Along Seller of any information regarding the
Corporation, such securities or the issuer thereof, such Participating Seller
shall not have the right to sell Stock in such proposed Sale. In such event, the
Prospective Selling Investors shall have the right, but not the obligation, to
cause to be paid to such Participating Seller in lieu thereof, against surrender
of the Stock (in accordance with Section 7.02(g) hereof) which would have
otherwise been sold by such Participating Seller to the Prospective Buyer in the
proposed Sale, an amount in cash equal to the Fair Market Value of such Stock as
of the date such securities would have been issued in exchange for such Stock.
(c) Consideration. Upon the consummation of a Sale, each Participating
Seller shall receive the same proportion of the aggregate consideration from
such Sale that such holder would have received if a Liquidation Event had
occurred and such aggregate consideration had been distributed by the
Corporation upon such Liquidation Event as set forth in the Charter and if any
Participating Sellers are given an option as to the form and amount of
consideration to be received, all Participating Sellers will be given the same
option.
(d) Further Assurances. Each Participating Seller, whether in his capacity
as a Participating Seller, stockholder, officer or director of the Corporation,
or otherwise, shall take or cause to be taken all such actions as may be
necessary or reasonably desirable in order to expeditiously consummate each Sale
pursuant to Section 7.02(a) and any related transactions, including, without
limitation, executing, acknowledging and delivering consents, assignments,
waivers and other documents or instruments; furnishing information and copies of
documents; filing applications, reports, returns, filings and other documents or
instruments with governmental authorities; and otherwise cooperating with the
Prospective Selling Investors and the Prospective Buyer; provided, however, that
Participating Sellers shall be obligated to become liable in respect of any
representations, warranties, covenants, indemnities or otherwise to the
Prospective Buyer solely to the extent provided in the immediately following
sentence. Without limiting the generality of the foregoing, each Participating
Seller agrees to execute and deliver such agreements as may be reasonably
specified by the Prospective Selling Investors to which such Prospective Selling
Investors will also be party, including, without limitation, agreements to (i)
(A) make individual representations, warranties, covenants and other agreements
as to the unencumbered title to its Stock and the power, authority and legal
right to Transfer such Stock and the absence of any Adverse Claim with respect
to such Stock and (B) be liable without limitation as to such representations,
warranties, covenants and other agreements and (ii) be liable (whether by
purchase price adjustment, indemnity payments or otherwise) in respect of
representations, warranties, covenants and agreements in respect of the
Corporation and its subsidiaries; provided, however, that the aggregate
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amount of liability described in this clause (ii) or other indemnification
liability in connection with any Sale of Stock shall be several and not joint
and several and shall be apportioned among the parties in proportion to the
amount of consideration received by each party in reverse order of the seniority
provided for in the liquidation provisions of the Charter and, in any event,
shall be limited to the consideration received by such party pursuant to the
Sale.
(e) Sale Process. The Required Preferred Shareholders shall, in their sole
discretion, decide whether or not to pursue, consummate, postpone or abandon any
proposed Corporation Sale and the terms and conditions thereof. No Prospective
Selling Investor or any Affiliate of any Prospective Selling Investor shall have
any liability to any other holder of Stock arising from, relating to or in
connection with the pursuit, consummation, postponement, abandonment or terms
and conditions of any proposed Corporation Sale except to the extent such
Prospective Selling Investor shall have failed to comply with the provisions of
this Section 7.02.
(f) Treatment of Options. Each Participating Seller agrees that to the
extent he includes Options in any Sale of Stock pursuant to Section 7.02, he
shall be deemed to have exercised, converted or exchanged such Options
immediately prior to the closing of such Sale to the extent necessary to sell
Common Stock to the Prospective Buyer, except to the extent permitted under the
terms of any such Option and agreed by the Prospective Buyer. If any
Participating Seller shall sell Options in any Sale pursuant to Section 7.02,
such Participating Seller shall receive in exchange for such Options
consideration equal to the amount (if greater than zero) determined by
multiplying (a) the purchase price per share of Common Stock received from the
Prospective Buyer in such Sale less the exercise price, if any, per share of
such Option by (b) the number of shares of Common Stock issuable upon exercise
of such Option (to the extent exercisable at the time of such Sale), subject to
reduction for any tax or other amounts required to be withheld under applicable
law.
(g) Expenses. All reasonable costs and expenses incurred by the
Prospective Selling Investors or the Corporation in connection with any proposed
Sale pursuant to this Section 7.02 (whether or not consummated), including
without limitation all attorneys fees and expenses, all accounting fees and
charges and all finders, brokerage or investment banking fees, charges or
commissions, shall be paid by the Corporation. The reasonable fees and expenses
of a single legal counsel representing any or all of the other Drag Along
Sellers in connection with any proposed Sale pursuant to this Section 7.02
(whether or not consummated) shall be paid by the Corporation. Any other costs
and expenses incurred by or on behalf of any or all of the other Drag Along
Seller in connection with any proposed Sale pursuant to this Section 7.02
(whether or not consummated) shall be borne by such Drag Along Seller(s).
(h) Closing. The closing of a Sale to which Section 7.02 applies shall
take place at such time and place as the Prospective Selling Investors shall
specify by notice to each Participating Seller. At the closing of such Sale,
each Participating Seller shall deliver the certificates evidencing the Stock to
be sold by such Participating Seller, duly endorsed, or with stock (or
equivalent) powers duly endorsed, for transfer with signature
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guaranteed, free and clear of any liens or encumbrances, with any stock (or
equivalent) transfer tax stamps affixed, against delivery of the applicable
consideration.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Remedies. Each party hereto acknowledges that it would be
impossible to measure the damages that would be suffered by the other parties if
such party fails to comply with the covenants set forth in this Agreement and
that, in the event of any such failure, the other parties will not have an
adequate remedy at law. Each party shall, therefore, be entitled in addition to
any other rights and remedies to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available without having to post
a bond. No party shall assert, as a defense to any proceeding for such equitable
relief, that the other parties have an adequate remedy at law.
SECTION 8.02. Binding Effect; Benefit. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors, legal representatives
and permitted assigns. Nothing in this Agreement, expressed or implied, shall
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.
SECTION 8.03. Assignability. This Agreement shall not be assignable by any
party hereto.
SECTION 8.04. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent, same
or different breach.
SECTION 8.05. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.
SECTION 8.06. Headings. The headings in this Agreement are inserted for
convenience of reference only and shall not be part of or control or affect the
meaning hereof.
SECTION 8.07. Severability. To the extent possible, each provision of this
Agreement shall be interpreted in a manner as to be valid, legal and
enforceable. Any determination that any provision of this Agreement or any
application thereof is invalid, illegal or unenforceable in any respect or in
any instance shall be effective only to the extent of such invalidity,
illegality or unenforceability and shall not affect the validity, legality or
enforceability of any other provision of this Agreement.
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SECTION 8.08. Amendments. This Agreement may be amended at any time only
by an instrument in writing executed by the Corporation with the approval of (i)
the Board, (ii) Stockholders holding at least 66 2/3% of the outstanding Common
Stock, and (iii) the Required Preferred Stockholders.
SECTION 8.09. Governing Law; Submission to Jurisdiction. (a) This
Agreement shall be subject to, governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to any conflicts
or choice of law provisions that would make applicable the substantive laws of
any other jurisdiction. Each of the parties hereto agrees (1) that this
Agreement involves at least $ 100,000 and (2) that this Agreement has been
entered into by the parties hereto in express reliance upon 6 Del. C. Section
2708.
(b) Each party hereby irrevocably and unconditionally agrees (1) to be
subject to the jurisdiction of the courts of the State of Delaware and the
federal courts sitting in the State of Delaware or in the County of New York in
the State of New York, and (2) to the fullest extent permitted by applicable
law, service of process may also be made on such party by prepaid certified mail
with a validated proof of mailing receipt constituting evidence of valid
service, and that service made pursuant to (2) above shall have the same legal
force and effect as if served upon said party personally within the State of
Delaware.
SECTION 8.10. Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereto.
SECTION 8.11. Counterparts; Third Party Beneficiaries. This Agreement may
be executed simultaneously in multiple counterparts, each of which shall be
deemed to be an original, but all of which shall be and constitute one and the
same instrument. No provision of this Agreement is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
SECTION 8.12. Notices. All notices, demands, solicitations of consent or
approval, and other communications made pursuant hereto or pursuant to any other
agreement among the parties, unless otherwise specified, shall be in writing and
shall be deemed to have been given and received by the recipient at the address
set forth on the signature page 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, demand,
solicitation of consent or approval or other communication shall be deemed not
to have been received until the next succeeding Business Day in the place of
receipt.
Any such notice, demand, solicitation of consent or approval or other
communication may be sent by fax transmission to the recipient at the fax number
set forth on the signature page and shall be deemed to have been received when
the sender receives a confirmation of transmission.
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Any Person who becomes a Stockholder shall provide its address and fax
number to the Corporation, which shall promptly provide such information to each
other Stockholder.
SECTION 8.13. Interpretation. When a reference is made in this Agreement
to Section or Exhibit, such reference will be to a Section of, or an Exhibit to,
this Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they will be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The terms used in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to any person are also to its
permitted successors and assigns.
SECTION 8.14. Termination. All of the provisions of this Agreement
relating to the rights and obligations of Preferred Stockholders shall terminate
upon the redemption or liquidation of the Preferred Stock in accordance with the
Charter. All other provisions of this Agreement shall terminate upon an IPO
except Articles 4, 5 and 8. Article 5 shall terminate when the Corporation shall
have satisfied its obligations to effect the Demand Registrations and Incidental
Registrations provided for therein.
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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.
TEKNI-PLEX, INC.
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Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
By:
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Name: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
SIGNATURE PAGE TO INVESTORS' AGREEMENT
TEKNI-PLEX PARTNERS LLC
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By: TEKNI-PLEX MANAGEMENT, LLC
its Manager
By:
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Name: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Person
MST/TP PARTNERS LLC
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By: TEKNI-PLEX MANAGEMENT LLC,
its Manager
By:
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Name: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Person
TEKNI-PLEX MANAGEMENT LLC
c/o Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tekni-Plex, Inc.
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By:
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Name: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Person
SIGNATURE PAGE TO INVESTORS' AGREEMENT
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DR. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
c/o Tekni-Plex, Inc.
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SIGNATURE PAGE TO INVESTORS' AGREEMENT
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c/o Weston Presidio Capital
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SIGNATURE PAGE TO INVESTORS' AGREEMENT
WESTON PRESIDIO CAPITAL IV, L.P.
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Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
By: WESTON PRESIDIO CAPITAL
MANAGEMENT IV, L.L.C.,
its General Partner
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
SIGNATURE PAGE TO INVESTORS' AGREEMENT