EXHIBIT 10.31
▇▇▇▇▇▇'▇ ACQUISITION CORP.
INVESTOR RIGHTS AGREEMENT
DATED AS OF JUNE 6, 2002
TABLE OF CONTENTS
PAGE
SECTION 1. COVENANTS, REPRESENTATIONS AND WARRANTIES.......................................................1
SECTION 2. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES..................................................2
2A. Restrictions on Transfer........................................................................2
2B. First Refusal Right.............................................................................2
2C. Participation Rights............................................................................3
2D. Permitted Transfers.............................................................................5
2E. Termination of Restrictions.....................................................................6
SECTION 3. SALE OF THE COMPANY.............................................................................6
3A. Approved Sale...................................................................................6
3B. Required Actions................................................................................7
3C. Conditions to Stockholders' Obligations.........................................................7
3D. Rule 506 Transaction............................................................................7
3E. Expenses of Approved Sale.......................................................................8
3F. Termination.....................................................................................8
SECTION 4. LIMITED PREEMPTIVE RIGHTS.......................................................................8
4A. Offering........................................................................................8
4B. Election Notice.................................................................................9
4C. Expiration of Offering Period...................................................................9
4D. New Securities..................................................................................9
4E. Termination....................................................................................10
SECTION 5. PUBLIC OFFERING................................................................................10
SECTION 6. LEGEND.........................................................................................10
SECTION 7. TRANSFER.......................................................................................11
SECTION 8. BOARD OF DIRECTORS; VOTING.....................................................................11
8A. Composition of the Board.......................................................................11
8B. Board Meeting Expenses.........................................................................12
8C. Other Voting Matters...........................................................................12
8D. Irrevocable Proxy..............................................................................12
8E. Termination....................................................................................13
SECTION 9. DEMAND REGISTRATIONS...........................................................................13
9A. Requests for Registration......................................................................13
9B. Long-Form Registrations........................................................................13
9C. Short-Form Registrations.......................................................................13
9D. Priority on Demand Registrations...............................................................13
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9E. Restrictions on Demand ▇▇▇▇▇▇▇▇▇▇▇▇▇...........................................................▇▇
▇▇. Selection of Underwriters......................................................................14
9G. Other Registration Rights......................................................................14
9H. Demand Registration Expenses...................................................................14
SECTION 10. PIGGYBACK REGISTRATIONS........................................................................14
10A. Right to Piggyback.............................................................................14
10B. Piggyback Expenses.............................................................................15
10C. Priority on Primary Registrations..............................................................15
10D. Other Registrations............................................................................15
10E. Postponement or Withdrawal.....................................................................15
SECTION 11. HOLDBACK AGREEMENTS............................................................................15
11A. Agreement of Holders of Registrable Securities.................................................15
11B. Company Agreement..............................................................................16
SECTION 12. REGISTRATION PROCEDURES........................................................................16
SECTION 13. REGISTRATION EXPENSES..........................................................................18
13A. Company Expenses...............................................................................18
13B. Reimbursement..................................................................................19
SECTION 14. INDEMNIFICATION................................................................................19
14A. Indemnification Obligation of the Company......................................................19
14B. Indemnification of the Company.................................................................19
14C. Indemnification Procedures.....................................................................20
14D. Other Indemnification Provisions...............................................................20
SECTION 15. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS....................................................20
SECTION 16. DEFINITIONS....................................................................................21
SECTION 17. MISCELLANEOUS..................................................................................25
17A. Amendment and Waiver...........................................................................25
17B. Severability...................................................................................26
17C. Entire Agreement...............................................................................26
17D. No Inconsistent Agreements.....................................................................26
17E. Adjustments Affecting Registrable Securities...................................................26
17F. Successors and Assigns.........................................................................26
17G. Counterparts...................................................................................26
17H. Remedies.......................................................................................26
17I. Notices........................................................................................27
17J. Governing Law..................................................................................28
17K. Descriptive Headings...........................................................................28
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INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered into as of
June 6, 2002, by and among (i) ▇▇▇▇▇▇'▇ Acquisition Corp., a Delaware
corporation (the "Company"), (ii) ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III, L.P., ▇▇▇▇▇▇
▇▇▇▇▇ & Partners III-C, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-A, L.P., and
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-B, L.P., each a Delaware limited partnership
and ▇▇▇▇▇▇'▇ Acquisition LLC, a Delaware limited liability company
(collectively, "WS"), (iii) each of the Persons listed on the attached "Schedule
of Coinvestors," as supplemented from time to time by notice from WS to the
Company (collectively, the "Coinvestors"), (iv) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ (each, an "Executive" and collectively, the "Executives"), and (v) each of
the other Persons who hereafter agree to become party to and bound by this
Agreement by signing a copy of the Form of Transfer Notice and Joinder Agreement
(the "Joinder Agreement"), a copy of which is attached to this Agreement as
Exhibit A. WS and each of the Coinvestors are referred to herein collectively as
the "Investors" and individually as an "Investor". The Investors and the
Executives are referred to herein collectively as the "Stockholders" and
individually as a "Stockholder." Each capitalized term used but not otherwise
defined herein is defined in Section 16 hereof.
The Company and the Stockholders are parties to Securities Purchase
Agreements dated as of the date hereof (as amended from time to time, the
"Securities Purchase Agreements") pursuant to which the Stockholders are
purchasing from the Company, on the date hereof, shares of the Company's
Preferred Stock and Common Stock.
The Company and the Executives are parties to Executive Agreements
dated as of June 5, 2002 (as amended from time to time, the "Executive
Agreements") pursuant to which the Company is issuing to the Executives, on the
date hereof, shares of the Company's Common Stock.
The Company and the Stockholders desire to enter into this Agreement
for purposes, among others, of (i) establishing the composition of the Company's
board of directors (the "Board"), (ii) restricting the sale, assignment,
transfer, encumbrance or other disposition of the Stockholder Shares, (iii)
establishing certain registration rights, and (iv) providing for certain rights
and obligations relating to the Stockholder Shares.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
SECTION 1. COVENANTS, REPRESENTATIONS AND WARRANTIES
Each Stockholder covenants, represents and warrants that, (i) this
Agreement has been duly authorized, executed and delivered by such Stockholder
and constitutes the valid and binding obligation of such Stockholder,
enforceable in accordance with its terms, (ii) such Stockholder is the record
and beneficial owner of the shares of Company capital stock issued to such
Stockholder in the transactions contemplated by the Securities Purchase
Agreements or the Executive Agreements, as applicable, free and clear of all
liens, charges and other encumbrances, and (iii) such Stockholder has not
granted and is not a party to any proxy, voting trust or voting
agreement or any agreement which is inconsistent with, conflicts with or
violates any provision of this Agreement. No holder of Stockholder Shares shall
grant any proxy or become party to any voting trust, voting agreement or any
agreement which is inconsistent with, conflicts with or violates any provision
of this Agreement.
PROVISIONS RELATING TO TRANSFER; SALE OF THE COMPANY;
PUBLIC OFFERING; PREEMPTIVE RIGHTS
SECTION 2. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES
2A. Restrictions on Transfer. Each holder of Stockholder
Shares (other than WS (subject to Section 2C)) is, pursuant to this Agreement,
obligated not to sell, transfer, assign, pledge or otherwise directly or
indirectly dispose of (whether with or without consideration and whether
voluntarily or involuntarily or by operation of law) (a "Transfer") any interest
in any of its Stockholder Shares (other than shares acquired in the public open
market in a transaction effected on a national securities exchange or through
the NASDAQ System or the over-the-counter market), except (i) pursuant to and in
accordance with the provisions of Section 2B, Section 2C, or Section 3, (ii)
pursuant to an Exempt Transfer (as defined in Section 2D), or (iii) redemptions
of Preferred Stock in accordance with the Company's Certificate of
Incorporation; provided that in no event shall any Transfer of Stockholder
Shares pursuant to this Section 2 (except a Transfer by WS subject to Section
2C) be made for any consideration other than cash payable upon consummation of
such Transfer or in installments over time.
2B. FIRST REFUSAL RIGHT
(i) Subject to Section 2D, at least thirty (30) days prior to
any Transfer of any Stockholder Shares by a Stockholder (other than (a) any
Transfer of any Stockholder Shares by WS, (b) a Transfer by a Stockholder other
than WS pursuant to the exercise of its rights under Section 2C below or (c)
redemptions of Preferred Stock in accordance with the Company's Certificate of
Incorporation) (a "Transferring Stockholder"), such Transferring Stockholder
shall deliver a written notice (the "Sale Notice") to the Company and the other
holders of Stockholder Shares. The Sale Notice shall disclose in reasonable
detail the proposed number of each class of Stockholder Shares to be transferred
(the "Transfer Shares"), the proposed terms and conditions of the Transfer,
including the proposed price per share for each class of Stockholder Shares to
be transferred, and the identity of the prospective transferee(s). No such
Transfer shall be consummated unless such prospective transferee(s) is
reasonably acceptable to the Majority ▇▇ ▇▇▇▇▇▇, and no such Transfer shall be
consummated prior to the earlier to occur of (a) the date on which the parties
to the Transfer have been finally determined pursuant to this Section 2B and (b)
the date of expiration of the 30-day period (the "Election Period") following
the delivery to the Company and the other Stockholders of the Sale Notice
applicable to such Transfer.
(ii) The Company may elect to purchase all or any portion of
the Transfer Shares at the same price and on the same terms specified in the
Sale Notice by delivering written notice of such election to the Transferring
Stockholder and the other holders of Stockholder Shares as soon as practical but
in any event within ten (10) days after the delivery of the Sale Notice. If for
any reason the Company does not elect within such ten-day period to purchase all
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or any portion of such Transfer Shares, then unless the Majority ▇▇ ▇▇▇▇▇▇
directs otherwise by written notice to the Company, the other holders of
Stockholder Shares may elect to purchase, at the same price and on the same
terms and conditions specified in the Sale Notice, all, but not less than all,
of such Transfer Shares which the Company has not elected to purchase (the
"Available Shares") by delivering written notice of such election to the
Transferring Stockholder and the Company as soon as practical but in any event
within twenty (20) days after delivery of the Sale Notice. If the aggregate
number of shares which other holders of Stockholder Shares so elect to purchase
exceeds the number of Available Shares, the Available Shares will be allocated
among such electing holders pro rata according to the number of Stockholder
Shares on a Fully Diluted Basis owned by such electing holders. If the Company
or the other holders of Stockholder Shares have elected to purchase any Transfer
Shares pursuant to this Section 2B, such Transfer(s) shall be consummated as
soon as practical after the delivery of the election notice(s) to the
Transferring Stockholder, but in any event within fifteen (15) days after the
expiration of the Election Period. If the Company and the other holders of
Stockholder Shares, collectively, do not elect to purchase all of the Transfer
Shares, the Transferring Stockholder may, during the 90-day period following the
expiration of the Election Period (but not at any time thereafter), transfer
pursuant to this Section 2B to the transferee(s) identified in the Sale Notice
all, but not less than all, of the Transfer Shares for a cash purchase price no
less than the price specified in the Sale Notice and on other terms no more
favorable to the transferee(s) thereof than specified in the Sale Notice. Any
Transfer Shares not transferred within such 90-day period shall be subject to
the provisions of this Section in connection with any subsequent Transfer or
proposed Transfer.
(iii) For purposes of this Section 2B, Executive Stock or
Common Stock issuable upon exercise of employee stock options which have not
vested and become exercisable shall be deemed not to be Stockholder Shares
2C. PARTICIPATION RIGHTS
(i) Subject to Section 2D, at least twenty (20) days prior to
any Transfer or any series of Transfers by WS (other than Transfers by ▇▇▇▇▇▇'▇
Acquisition LLC prior to the first anniversary of the date hereof) of
Stockholder Shares which, together with any Stockholder Shares previously
Transferred by WS (other than ▇▇▇▇▇▇'▇ Acquisition LLC) represent more than an
aggregate of 15% of any class of Stockholder Shares calculated on a Fully
Diluted Basis (other than (i) a Transfer pursuant to Section 3 or (ii)
redemptions of Preferred Stock in accordance with the Company's Certificate of
Incorporation; provided that any such redemptions of Preferred Stock shall be
made ratably among the holders of the Preferred Stock based upon the aggregate
Liquidation Value of such shares held by each such holder), WS shall deliver a
written notice (the "Tag-Along Sale Notice") to the Company and each other
holder of Stockholder Shares stating the number of shares of each class of
Stockholder Shares that WS proposes to Transfer (the "Tag-Along Shares") and
describing in reasonable detail the proposed price per share and other material
terms and conditions of the proposed Transfer. Each other Stockholder who holds
shares of a class of Stockholder Shares included in the Tag-Along Shares may
elect to become a "Participating Stockholder" with respect to such proposed
Transfer of Tag-Along Shares by delivering to WS and the Company within
fifteen (15) days after delivery of the Tag-Along Sale Notice a written notice
stating that such Stockholder has elected to be a
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Participating Stockholder in respect of such Transfer, the number of shares held
by such Stockholder of each class of Stockholder Shares included in the
Tag-Along Shares and the number of shares of each such class which such
Stockholder proposes to sell in such Transfer. WS and each Participating
Stockholder who holds shares of a class of Tag-Along Shares shall be entitled to
sell in the contemplated Transfer, at the same price and on the same terms, a
number of Tag-Along Shares of such class equal to the product of (A) the
quotient determined by dividing the number of Stockholder Shares of such class
held by such Person, by the number of Stockholder Shares of such class held by
WS and all Participating Stockholders, collectively, and (B) the aggregate
number of Tag-Along Shares of such class to be sold in the contemplated
Transfer; provided that if the Tag-Along Shares include both shares of Common
Stock and shares of Preferred Stock, each Participating Stockholder shall be
entitled, and at the election of WS shall be required, to include shares of
Common Stock and Preferred Stock in the same proportion as the proportion in
which WS includes shares of Common Stock and shares of Preferred Stock in such
Transfer.
For example, if the Tag-Along Notice contemplated a sale by WS
of 100,000 shares of Common Stock constituting Stockholder
Shares (representing more than 15% of the shares of Common
Stock constituting Stockholder Share), and if WS at such time
owns 30% of all shares of Common Stock constituting
Stockholder Shares and a Participating Stockholder owns 20% of
all shares of Common Stock constituting Stockholder Shares, WS
would be entitled to sell 60,000 shares (30% / 50% x 100,000
shares) and the Participating Investor would be entitled to
sell 40,000 shares (20% / 50% x 100,000 shares).
(ii) For purposes of this Section 2C:
(a) Executive Stock or Common Stock issuable upon
exercise of employee stock options which have not vested and become
exercisable shall be deemed not to be Stockholder Shares; and
(b) in any Transfer which includes shares of Common
Stock and Preferred Stock, the price of each share of Preferred Stock
shall not be less than the sum of the Liquidation Value of such share
of Preferred Stock at such time and the price per share of Common Stock
in such Transfer.
(iii) WS will use reasonable efforts to obtain the agreement
of the prospective transferee(s) to the participation of the Participating
Stockholders in any contemplated Transfer, and shall not consummate any such
Transfer unless each Participating Stockholder is permitted to sell Stockholder
Shares which such Participating Stockholder is entitled to sell hereunder
("Participating Shares") in such Transfer in the amount and on the terms set
forth in this Section 2C (provided that if the prospective transferee declines
to allow the participation of any Participating Stockholder, as an alternative
WS may consummate the proposed Transfer so long as contemporaneously therewith
WS offers to purchase, and assuming the prompt acceptance by such Participating
Stockholder of such offer, WS purchases, the Participating Shares from such
Participating Stockholder at the price and on the other economic terms on which
such Participating Stockholder would otherwise have been entitled pursuant to
this Section 2C to sell
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such Participating Shares in such Transfer). Each Participating Stockholder
transferring Participating Shares pursuant to this Section 2C shall (x) pay the
expenses incurred by such Participating Stockholder in connection with the
Transfer as well as its Allocable Share of the expenses incurred by WS in
connection with such transfer, and (y) be obligated to join in any
indemnification or other obligations that WS agrees to provide in connection
with such transfer (except that, while each Participating Stockholder shall be
obligated to make representations and warranties as to such Stockholder's title
to and ownership of Stockholder Shares, authorization, execution and delivery of
relevant documents by such Stockholder, enforceability of relevant agreements
against such Stockholder and other matters relating to such Stockholder, to
enter into covenants in respect of the proposed Transfer of such Stockholder's
Participating Shares and to enter into indemnification obligations with respect
to the foregoing, in each case to the extent that WS is similarly obligated in
connection with its proposed Transfer of Stockholder Shares, no Stockholder
shall be obligated to enter into indemnification obligations with respect to any
of the foregoing to the extent relating to any representation or warranty by any
other Stockholder in respect of such other Stockholder or such other
Stockholder's Stockholder Shares, or with respect to performance by any other
Stockholder of any covenant). For purposes of the foregoing, a Participating
Stockholder's "Allocable Share" of expenses means that portion of such expenses
which would be borne by such Participating Stockholder if the total amount of
such expenses were allocated to WS and the Participating Stockholders (a) first,
in proportion to the number of shares of Common Stock on a Fully Diluted Basis
included by such Stockholder in such Transfer, up to an amount per share equal
to the price per share of Common Stock received by such Stockholder in such
Transfer, and (b) second, in proportion to the proceeds received by such
Stockholder in respect of the Liquidation Value of shares of Preferred Stock
sold in such Transfer.
2D. PERMITTED TRANSFERS. The restrictions set forth in
this Section 2 shall not apply to any Transfer by a Stockholder with respect to
any of the following transfers:
(i) subject to the paragraphs below, any Transfer of
Stockholder Shares by a Stockholder who is not an individual to such
Stockholder's Affiliates;
(ii) in the case of WS, any Transfer which constitutes an
in-kind distribution to its partners (or, in connection with or following any
such distribution, an in-kind distribution by the general partner of WS to its
partners);
(iii) any Transfer by ▇▇▇▇▇▇'▇ Acquisition, LLC consummated
prior to the first anniversary of the date hereof;
(iv) subject to the paragraphs below, in the case of a
Stockholder who is an individual, (A) a Transfer of Stockholder Shares pursuant
to the applicable laws of descent and distribution or (B) among such
Stockholder's Family Group;
(v) an Approved Sale;
(vi) any Transfer (including any pledge) of Executive
Stock by any Executive to the Company or any of its Subsidiaries;
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(vii) any Transfer of Executive Stock to WS pursuant to any
Executive Agreement;
(viii) any Transfer pursuant to a Public Sale; and
(ix) subject to the paragraphs below, any Transfer made
with the prior written consent of the Majority ▇▇ ▇▇▇▇▇▇, (A) if such
Stockholder is a corporation, to a successor corporation or other successor
entity as a result of a merger or consolidation with, or a sale of all or
substantially all of the assets of, such Stockholder, and (B) if such
Stockholder is a general or limited partnership, upon and pursuant to the
liquidation and dissolution of such partnership.
A transferee of Stockholder Shares pursuant to a Transfer
described in any of clauses (i), (ii), (iii), (iv), (vi), (vii) and (ix)
foregoing may be referred to herein as a "Permitted Transferee". Not less than
twenty (20) days prior to any Transfer of Stockholder Shares pursuant to the
clause (i), (ii), (iv)(B) or (ix) foregoing, the proposed transferor and
transferee will deliver a written notice to the Company, which notice will
disclose in reasonable detail the nature of the proposed Transfer and the
identity of the proposed transferee. No Transfer may be made pursuant to clause
(i) above, or to an entity pursuant to clause (iv)(B) above, of this Section 2D
unless such transferee shall have been approved in writing in advance by the
Majority ▇▇ ▇▇▇▇▇▇, which approval the Majority ▇▇ ▇▇▇▇▇▇ shall not withhold
unreasonably. In addition, notwithstanding anything to the contrary herein, the
restrictions contained in this Agreement shall continue to be applicable to the
Stockholder Shares following any Transfer to a Permitted Transferee, and no
Transfer to a Permitted Transferee may be consummated unless prior thereto the
transferor thereof shall have complied with Section 7 below. Notwithstanding the
foregoing, no Stockholder shall avoid the provisions of this Agreement by making
one or more transfers to one or more Permitted Transferees and then disposing of
all or any portion of such party's interest in any such Permitted Transferee,
and any Transfer or attempted Transfer in violation of this covenant shall be
void and otherwise subject to Section 7 below. Any Transfer permitted pursuant
to this Section 2D is referred to herein as an "Exempt Transfer"
2E. TERMINATION OF RESTRICTIONS.
The restrictions set forth in this Section 2 shall continue
with respect to each Stockholder Share until the earlier of (i) the date on
which such Stockholder Share has been transferred in a Public Sale and (ii) the
consummation of an Approved Sale. The restrictions set forth in this Section 2
shall also terminate with respect to the shares of Preferred Stock if the
Company completes an IPO (as defined in the Certificate of Incorporation) and
such shares of Preferred Stock are not redeemed or converted into shares of
Common Stock pursuant to Section 5H(iv) of the Certificate of Incorporation (as
may be amended, supplemented or otherwise modified from time to time).
SECTION 3. SALE OF THE COMPANY
3A. APPROVED SALE. If the Majority ▇▇ ▇▇▇▇▇▇ approves a
Sale of the Company (an "Approved Sale"), each holder of Stockholder Shares will
vote for, consent to and will not object or otherwise impede consummation of the
Approved Sale.
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3B. REQUIRED ACTIONS. If the Approved Sale is structured
as (i) a merger or consolidation, each holder of Stockholder Shares shall vote
its Stockholder Shares to approve such merger or consolidation, whether by
written consent or at a stockholders meeting (as requested by the Majority ▇▇
▇▇▇▇▇▇), and waive all dissenter's rights, appraisal rights and similar rights
in connection with such merger or consolidation, (ii) a sale of stock, each
holder of Stockholder Shares shall agree to sell, and shall sell, all of its
Stockholder Shares and rights to acquire Stockholder Shares on the terms and
conditions so approved, or (iii) a sale of assets, each holder of Stockholder
Shares shall vote its Stockholder Shares to approve such sale and any subsequent
liquidation of the Company or other distribution of the proceeds therefrom,
whether by written consent or at a stockholders meeting (as requested by the
Majority ▇▇ ▇▇▇▇▇▇). In furtherance of the foregoing, (a) each holder of
Stockholder Shares will take, with respect to such holder's Stockholder Shares,
all necessary or desirable actions reasonably requested by the holders of a
majority of the WS Shares in connection with the consummation of the Approved
Sale of the Company and (b) each holder of Stockholder Shares will make the same
representations, warranties, indemnities and agreements as each other holder
(subject to Sections 3C(ii) below), including without limitation, voting to
approve such transaction and executing the applicable purchase agreement, except
that (1) each holder of Stockholder Shares may be obligated to make
representations and warranties as to such Stockholder's title to and ownership
of Stockholder Shares, authorization, execution and delivery of relevant
documents by such Stockholder, enforceability of relevant agreements against
such Stockholder and other matters relating to such Stockholder, to enter into
covenants in respect of a Transfer of such Stockholder's Stockholder Shares in
connection with such Approved Sale and to enter into indemnification obligations
with respect to the foregoing, in each case to the extent that each other
Stockholder is similarly obligated, but no Stockholder shall be obligated to
enter into indemnification obligations with respect to any of the foregoing in
respect of any other Stockholder (other than a Related Stockholder to such
Stockholder) or such other Stockholder's Stockholder Shares and (2) in no event
shall any Stockholder be liable in respect of any indemnity obligations pursuant
to any Approved Sale in an aggregate amount in excess of the total consideration
payable to such Stockholder in such Approved Sale.
3C. CONDITIONS TO STOCKHOLDERS' OBLIGATIONS. The obligations
of the holders of Stockholder Shares with respect to an Approved Sale are
subject to the satisfaction of the following conditions: (i) upon the
consummation of the Approved Sale, each holder of Stockholder Shares will
receive the same form of consideration and the same portion of the aggregate
consideration that such holders of Stockholder Shares would have received if
such aggregate consideration had been distributed by the Company in complete
liquidation pursuant to the rights and preferences set forth in the Certificate
of Incorporation as in effect immediately prior to such Approved Sale; (ii) if
any holders of a class of Stockholder Shares are given an option as to the form
and amount of consideration to be received, each holder of such class of
Stockholder Shares will be given the same option; and (iii) each holder of then
currently exercisable rights to acquire shares of a class of Stockholder Shares
will be given an opportunity to exercise such rights prior to the consummation
of the Approved Sale and participate in such sale as holders of such class of
Stockholder Shares.
3D. RULE 506 TRANSACTION. If the Company or the holders
of the Company's securities enter into any negotiation or transaction for which
Rule 506 (or any similar rule then in
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effect) promulgated by the Securities Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization), the holders of Stockholder Shares will, at the request of
the Company, appoint a purchaser representative (as such term is defined in Rule
501) reasonably acceptable to the Company. If any holder of Stockholder Shares
appoints a purchaser representative designated by the Company, the Company will
pay the fees of such purchaser representative, but if any holder of Stockholder
Shares declines to appoint the purchaser representative designated by the
Company such holder will appoint another purchaser representative, and such
holder will be responsible for the fees of the purchaser representative so
appointed.
3E. EXPENSES OF APPROVED SALE. Holders of Stockholder
Shares will bear their pro rata share (as if such expenses reduced the aggregate
proceeds available for distribution as contemplated by Section 3C(i) above) of
the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the
extent such costs are incurred for the benefit of all holders of Stockholder
Shares and are not otherwise paid by the Company or the acquiring party. For
purposes of this Section 3E, costs incurred in exercising reasonable efforts to
take all necessary actions in connection with the consummation of an Approved
Sale in accordance with Section 3A shall be deemed to be for the benefit of all
holders of Stockholder Shares, except that costs incurred by any holder of
Stockholder Shares in connection with the Transfer of its own shares or
otherwise on its own behalf will not be considered costs of the transaction
hereunder and will be the responsibility of such holder.
▇▇. ▇▇▇▇▇▇▇▇▇▇▇. The rights and obligations under this
Section 3 shall terminate upon the second anniversary of the consummation of a
Public Offering.
SECTION 4. LIMITED PREEMPTIVE RIGHTS
4A. OFFERING.
If the Company issues or sells or authorizes the issuance or
sale of any New Securities (as defined below), the Company shall offer to each
Stockholder a portion of such New Securities (and if more than one class of
securities is included in the New Securities, then a portion of the amount of
each such class of securities included in the New Securities) equal to the
quotient determined by dividing (A) the number of shares of Common Stock on a
Fully Diluted Basis held by such Stockholder, by (B) the aggregate amount of
shares of Common Stock on a Fully Diluted Basis, in each case determined before
giving effect to the issuance of New Securities. Each such Stockholder shall be
entitled to purchase such New Securities at the most favorable price and on the
most favorable economic terms as such New Securities are offered and sold;
provided that if a Person participating in such purchase of New Securities is
required in connection therewith also to purchase other securities of the
Company, each Stockholder exercising its rights pursuant to this Section shall
also be required to purchase such other securities on the same economic terms
and conditions as those on which the offeree or purchaser of the New Securities
is or was required to purchase such other securities (e.g., such holder shall be
required to purchase the same types and classes of other securities, in the same
proportions relative to their purchases of New Securities and at the same unit
prices). For example, if the Company offers to sell shares of Common Stock and
requires that, as part of such
8
purchase, the offeree of such Common Stock must also purchase shares of Company
preferred stock, each Stockholder exercising rights to purchase shares of Common
Stock pursuant to this Section 4A would be obligated also to purchase the
corresponding proportionate amount of Company preferred stock at the same price
per share reflected in the Company's offer. Each Stockholder participating in
such purchase shall also be obligated to execute agreements in the form
presented to such holder by the Company, so long as such agreements (including
any representations or warranties contained therein) are substantially similar
to those to be or previously executed by other purchasers of New Securities
(without taking into consideration any rights which do not entitle such other
purchaser(s) to a higher economic return on the New Securities than the economic
return to which the Stockholders exercising rights pursuant to this Section 4A
and thereby participating in such transaction will be entitled with respect to
New Securities). The purchase price for all New Securities offered to each
Stockholder shall be payable in cash by wire transfer of immediately available
funds to an account designated by the Company.
4B. ELECTION NOTICE. In order to exercise its purchase rights
hereunder, each Stockholder must deliver a written notice (an "Election Notice")
to the Company during the fifteen (15) day period (the "Offering Period")
following such holder's receipt of an Issuance Notice from the Company. Any such
election by a Stockholder shall be irrevocable by such Stockholder during the
sixty (60) day period following expiration of the Offering Period, but shall
automatically expire at such time if the Company for any reason has failed to
consummate an issuance and sale of New Securities prior thereto. For purposes
hereof, an "Election Notice" from a Stockholder is a notice stating that such
Person has elected to purchase New Securities pursuant to this Section 4B,
including the amount of New Securities which such Stockholder has elected to
purchase. For purposes hereof, an "Offering Notice" is a written notice
describing in reasonable detail the type, class and number of New Securities,
the purchase price thereof, the payment terms and such holder's percentage
allotment.
4C. EXPIRATION OF OFFERING PERIOD. To the extent that the
Stockholders have not elected to purchase all of the New Securities being
offered, the Company may, within 90 days following the issuance of the Issuance
Notice, sell such New Securities on terms and conditions no more favorable to
the offeree of such New Securities than those offered to the Stockholders
pursuant to Section 4A. Any New Securities offered or sold by the Company after
such 90-day period must be reoffered to each holder of Investor Shares pursuant
to the terms of this Section 4.
4D. NEW SECURITIES. For purposes hereof, "New Securities"
means any equity securities of the Company, or any securities containing options
or rights to acquire Company equity securities, other than (i) any securities
which are designated by the Majority ▇▇ ▇▇▇▇▇▇ as not "New Securities", so long
as none of such securities are issued to the Majority ▇▇ ▇▇▇▇▇▇ or any Affiliate
of any of such holders, (ii) securities issued as a dividend on the then
outstanding Common Stock, (iii) securities issued pursuant to exercise,
conversion or exchange of securities or rights outstanding on the date hereof or
previously issued by the Company subject to this Section 4 (including pursuant
to an exclusion from the definition of "New Securities" in any of clauses (i)
through (viii) of this definition of "New Securities"), (iv) securities issued
as consideration for the acquisition of or investment in another company or
business (whether
9
through a purchase of securities, a merger, consolidation, purchase of assets or
otherwise), (v) securities issued in a Public Offering, (vi) issuances of Common
Stock or options to acquire Common Stock to employees, directors and consultants
of the Company or its Subsidiaries on terms approved by the Board, (vii)
securities issued as additional yield or return in respect of institutional
indebtedness for borrowed money, or (viii) issuances of Common Stock or other
equity securities of the Company upon conversion or exchange of any Preferred
Stock or of any securities issued directly or indirectly upon conversion or
exchange thereof, in each case in accordance with the Company's Certificate of
Incorporation.
4E. Termination. The rights under this Section 4 shall
terminate upon the first to occur of (i) the consummation of a Public Offering,
and (ii) the consummation of a Sale of the Company.
SECTION 5. PUBLIC OFFERING
In the event that the Board and the Majority ▇▇ ▇▇▇▇▇▇ approve
an initial Public Offering, the holders of Stockholder Shares will use
reasonable efforts to take, with respect to their Stockholder Shares, all
necessary or desirable actions in connection with the consummation of such
Public Offering. In the event that such Public Offering is an underwritten
offering and the managing underwriters advise the Company in writing that in
their opinion the existing capital structure of the Company will adversely
affect the marketability of the offering, each holder of Stockholder Shares will
consent to and vote for a recapitalization, reorganization and/or exchange of
the Stockholder Shares into securities that the managing underwriters, the Board
and the Majority ▇▇ ▇▇▇▇▇▇ find acceptable and will take all other necessary or
desirable actions in connection with the consummation of the recapitalization,
reorganization and/or exchange; provided that the resulting securities reflect
and are consistent with the rights and preferences among the outstanding classes
of securities set forth in the Certificate of Incorporation as in effect
immediately prior to such recapitalization, reorganization or exchange; and
provided further that all holders of Stockholder Shares are treated similarly in
proportion to their holdings.
SECTION 6. LEGEND
Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares as defined herein after such
Transfer) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS PURSUANT TO AN INVESTOR RIGHTS
AGREEMENT DATED AS OF JUNE 6, 2002, AMONG THE ISSUER OF SUCH
SECURITIES (THE "COMPANY") AND CERTAIN OF THE COMPANY'S
STOCKHOLDERS. A COPY OF SUCH INVESTOR RIGHTS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER
10
HEREOF UPON WRITTEN REQUEST TO THE COMPANY'S CHIEF FINANCIAL
OFFICER."
The legend set forth above shall be promptly removed from the
certificates evidencing any shares which cease to be Stockholder Shares.
SECTION 7. TRANSFER
Prior to consummating, or committing to consummate, any
Transfer of any Stockholder Shares (other than pursuant to a Public Sale or an
Approved Sale) to any Person, the holder(s) of Stockholder Shares seeking to
Transfer such Stockholder Shares shall cause the prospective transferee thereof
to execute and deliver to the Company and the Majority ▇▇ ▇▇▇▇▇▇ a Transfer
Notice and Joinder Agreement in the form attached hereto as Exhibit A pursuant
to which such transferee shall agree to be bound by the obligations of such
transferor pursuant to this Agreement affecting the Stockholder Shares so
Transferred. Any Transfer or attempted Transfer of any Stockholder Shares in
violation of the foregoing or any other provision of this Agreement shall be
void, and the Company shall not record such Transfer on its books or treat any
purported transferee of such Stockholder Shares as the owner of such shares for
any purpose.
SECTION 8. BOARD OF DIRECTORS; VOTING
8A. COMPOSITION OF THE BOARD. From and after the effectiveness
of this Agreement and until the provisions of this Section 8 cease to be
effective, each Stockholder shall vote all of his, her or its Stockholder Shares
and any other voting securities of the Company over which such Stockholder has
voting control (whether at a stockholders' meeting which has been duly called,
or if so requested by the Majority ▇▇ ▇▇▇▇▇▇, by written consent) and shall take
all other necessary or desirable actions within his, her or its control (whether
in the capacity as a stockholder, director, member of a board committee or
officer of the Company or otherwise, and including, without limitation,
attendance at meetings in person or by proxy for purposes of obtaining a quorum
and execution of written consents in lieu of meetings), and the Company shall
take all necessary and desirable actions within its control (including, without
limitation, calling special board and stockholder meetings), so that:
(i) the authorized number of directors on the Company's Board
shall be established at three directors or such greater number of directors as
the Majority WS Holders may specify from time to time by written notice to the
Company (in which case the Majority ▇▇ ▇▇▇▇▇▇ shall be entitled to designate
such additional representatives);
(ii) the following persons shall be elected to the Board:
(a) the Company's chief executive officer, who
initially shall be ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "CEO Director"); and
(b) two persons designated by the Majority ▇▇
▇▇▇▇▇▇ (collectively, the "WS Directors", and each individually, a "WS
Director"), who initially shall include Avy ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇.
11
(iii) the CEO Director ceases to be an employee of the Company
and its Subsidiaries, such person shall be removed as a director of the Company
and any of its Subsidiaries immediately upon termination of such person's
employment;
(iv) a WS Director shall be removed from the Board only upon
the written request of the Majority ▇▇ ▇▇▇▇▇▇;
(v) any vacancy on the Board or the board of directors of any
Subsidiary (a "Sub Board") shall be filled by the WS Majority Holder; and
(vi) to the extent that any Executive Committee of the Board
is created, the CEO Director shall serve on such Executive Committee so long as
he is an employee of the Company or any of its Subsidiaries.
8B. BOARD MEETING EXPENSES. The Company shall pay all
out-of-pocket expenses incurred by each director in connection with attending
regular and special meetings of the Board, any Sub Board and any committee
thereof.
8C. OTHER VOTING MATTERS. Each Stockholder hereby agrees that
such Stockholder will vote, or cause to be voted, all voting Stockholder Shares
over which such Stockholder has the power to vote or direct the voting, either
in person or by proxy, whether at a stockholders meeting, or by written consent,
in the manner in which the Majority ▇▇ ▇▇▇▇▇▇ directs in connection with (i)
approval of any amendment or amendments to the Company's Certificate of
Incorporation or bylaws, (ii) any merger, combination or consolidation of the
Company with any Independent Third Party, (iii) the sale, lease or exchange of
all or substantially all of the assets of the Company and its Subsidiaries on a
consolidated basis to an Independent Third Party, or (iv) the reorganization,
recapitalization, liquidation, dissolution or winding-up of any of the Company
and its Subsidiaries; provided, however, that no such action shall (a)
contravene the terms of this Agreement, or (b) have an adverse effect on the
rights or interests of any Stockholder in respect of any of its Stockholder
Shares that would be borne disproportionately by such Stockholder relative to
the effect of such action on the rights or interests of other Stockholders in
respect of holdings of Stockholder Shares of the same class, unless approved by
holders of a majority of the Stockholder Shares so adversely affected.
8D. IRREVOCABLE PROXY. In order to secure the obligations of
each Stockholder who now or hereafter holds any voting securities to vote such
Person's Stockholder Shares in accordance with the provisions of Section 3 and
this Section 8, each Stockholder hereby appoints ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners
Management III, L.L.C. as his or its true and lawful proxy and attorney-in-fact,
with full power of substitution, to vote all of his or its Stockholder Shares
(i) for an Approved Sale and all such other matters as expressly provided for in
Section 3A and Section 3B, (ii) for the election and/or removal of directors and
all such other matters as expressly provided for in Section 8A and (iii)
otherwise as determined by the Majority ▇▇ ▇▇▇▇▇▇ in accordance with Section 8C.
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management III, L.L.C. may exercise the irrevocable
proxy granted to it hereunder by any Stockholder at any time any such
Stockholder fails to comply with the provisions of this Agreement. The proxies
and powers granted by each such Stockholder pursuant to this Section 8D are
coupled with an interest and
12
are given to secure the performance of such Stockholder's obligations to the
Majority ▇▇ ▇▇▇▇▇▇ under this Agreement. Such proxies and powers shall be
irrevocable until termination of this Section 8 and shall survive the death,
incompetency, disability, bankruptcy or dissolution of each Stockholder and the
subsequent holders of his or its Stockholder Shares. No Stockholder shall grant
any proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this Agreement.
8E. TERMINATION. The rights and obligations of each
Stockholder, and of the Majority ▇▇ ▇▇▇▇▇▇, under this Section 8 shall terminate
upon the first anniversary of the consummation of a Public Offering.
PROVISIONS RELATING TO REGISTRATION OF STOCKHOLDER SHARES
SECTION 9. DEMAND REGISTRATIONS
9A. REQUESTS FOR REGISTRATION. At any time the holders of a
majority of the WS Registrable Securities may request registration under the
Securities Act (a "Demand Registration") of all or any portion of its
Registrable Securities on Form S-1 or any similar long-form registration
("Long-Form Registrations") or, if available, on Form S-2 or S-3 or any similar
short-form registration ("Short-Form Registrations"). Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered and the anticipated per share price range for such
offering. Within ten (10) days after receipt of any such request, the Company
will give written notice of such requested registration to all other holders of
Registrable Securities and, subject to Section 9D below, will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within fifteen (15) days after
the receipt of the Company's notice.
9B. LONG-FORM REGISTRATIONS. The holders of a majority of the
WS Registrable Securities will be entitled to request an unlimited number of
Long-Form Registrations in which the Company will pay all Registration Expenses.
9C. SHORT-FORM REGISTRATIONS. In addition to the Long-Form
Registrations provided pursuant to Section 9B, the holders of a majority of the
WS Registrable Securities will be entitled to request unlimited Short-Form
Registrations in which the Company will pay all Registration Expenses, subject
to Section 9E below. Notwithstanding any other provision of this Agreement,
Demand Registrations will be Short-Form Registrations whenever the Company is
permitted to use any applicable short form. After the Company has become subject
to the reporting requirements of the Securities Exchange Act, the Company will
use its reasonable best efforts to make Short-Form Registrations available for
the sale of Registrable Securities.
9D. PRIORITY ON DEMAND REGISTRATIONS. The Company will not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a majority of the
WS Registrable Securities. If a Demand Registration is an underwritten offering
and the managing underwriters advise the Company in writing that in their
opinion the number of Registrable
13
Securities and, if permitted hereunder, other securities requested to be
included in such offering exceeds the number of Registrable Securities and other
securities, if any, which can be sold in an orderly manner in such offering
within a price range reasonably acceptable to the holders of a majority of the
Registrable Securities initially requesting registration(such number which can
be so sold, the "Optimal Amount"), the Company will not include in such
registration securities in an amount in excess of the Optimal Amount. Further,
subject to the foregoing, the Company shall include in such registration (i)
first, the number of Registrable Securities requested to be included therein, up
to the Optimal Amount, pro rata among the respective holders thereof on the
basis of the amount of Registrable Securities owned by each such holder, and
(ii) second, if all Registrable Securities requested to be included in such
registration by the holders thereof have been so included, such other securities
in an amount such that the aggregate amount of securities included in such
registration is less than or equal to the Optimal Amount.
9E. RESTRICTIONS ON DEMAND REGISTRATIONS. The Company will not
be obligated to effect any Demand Registration within six (6) months after the
effective date of a previous Demand Registration. The Company may postpone for
up to six (6) months the filing or the effectiveness of a registration statement
for a Demand Registration if the Company's board of directors determines that
such Demand Registration would reasonably be expected to have an adverse effect
on any proposal or plan by the Company or any of its Subsidiaries to engage in
any acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction; provided that, in
such event, the holders of Registrable Securities initially requesting such
Demand Registration will be entitled to withdraw such request.
9F. SELECTION OF UNDERWRITERS. The holders of a majority of
the WS Registrable Securities will have the right to select the investment
banker(s) and manager(s) to administer the offering, subject to the Company's
approval which will not be unreasonably withheld.
9G. OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement, the Company will not grant to any Person the right to request the
Company to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, without the
prior written consent of the holders of a majority of the WS Registrable
Securities.
9H. DEMAND REGISTRATION EXPENSES. The Registration Expenses in
connection with any Demand Registration will be paid by the Company, including
the reimbursement of the holders of Registrable Securities included in such
registration for the reasonable fees and disbursements of one counsel chosen by
the holders of a majority of the Registrable Securities included in such
registration.
SECTION 10. PIGGYBACK REGISTRATIONS
10A. RIGHT TO PIGGYBACK. Whenever the Company proposes to
register any of its securities under the Securities Act (other than (i) in
connection with the Company's initial public offering of Common Stock, (ii)
pursuant to a Demand Registration (but subject to the rights of holders of
Registrable Securities to participate in Demand Registrations pursuant to
14
Section 9) or (iii) pursuant to a registration on Form S-4 or S-8 or any
successor or similar forms) and the registration form to be used may be used for
the registration of Registrable Securities (a "Piggyback Registration"), the
Company will give prompt written notice to all holders of Registrable Securities
of its intention to effect such a registration and will use its reasonable best
efforts to include in such registration all Registrable Securities with respect
to which the Company has received written requests for inclusion therein within
fifteen (15) days after the receipt of the Company's notice.
10B. PIGGYBACK EXPENSES. The Registration Expenses of the
holders of Registrable Securities will be paid by the Company in all Piggyback
Registrations.
10C. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering in an orderly manner
within a price range acceptable to the Company(such number which can be so sold,
the "Piggyback Primary Optimal Amount"), the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, up to the amount of
Registrable Securities which, when combined with the securities included in
clause (i) foregoing, is equal to the Piggyback Primary Optimal Amount and (iii)
third, if the aggregate amount of securities included in such registration
pursuant to clause (i) or clause (ii) foregoing or this clause (iii) is less
than the Piggyback Primary Optimal Amount, other securities requested to be
included in such registration.
10D. OTHER REGISTRATIONS. If the Company has previously
filed a registration statement with respect to Registrable Securities pursuant
to Section 9 or pursuant to this Section 10, and if such previous registration
has not been withdrawn or abandoned, the Company will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4 or S-8 or any successor form), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of at least six (6) months has elapsed from the effective date of
such previous registration.
10E. POSTPONEMENT OR WITHDRAWAL. Notwithstanding the
foregoing, the Company may postpone or withdraw any registration statement
referred to in this Section 10 without incurring any liability to holders of
Registrable Securities.
SECTION 11. HOLDBACK AGREEMENTS
11A. AGREEMENT OF HOLDERS OF REGISTRABLE SECURITIES. Each
holder of Registrable Securities will not effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities, options or rights convertible into or exchangeable or
exercisable for such securities, during the seven (7) days prior to and the
180-day period beginning on the effective date of any underwritten Demand
Registration or any
15
underwritten Piggyback Registration (except as part of such underwritten
registration), unless the underwriters managing the registered public offering
otherwise agree.
11B. COMPANY AGREEMENT. The Company will (i) not effect
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and during the 180-day period beginning on the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration (except as part of such underwritten registration or pursuant to
registrations on Form S-4 or S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree, and (ii) cause each
holder of shares of Common Stock, or any securities convertible into or
exchangeable or exercisable for shares of Common Stock, purchased from the
Company at any time after the date of this Agreement (other than in a registered
public offering) to agree not to effect any public sale or distribution
(including sales pursuant to Rule 144) of any such securities during such period
(except as part of such underwritten registration, if otherwise permitted),
unless the underwriters managing the registered public offering otherwise agree.
SECTION 12. REGISTRATION PROCEDURES
Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this Agreement, the
Company will 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, and pursuant thereto the Company will as expeditiously as
reasonably possible:
(i) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and thereafter use its best efforts to cause such registration statement to
become effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
the counsel selected by the holders of a majority of the Registrable Securities
initiating such registration statement copies of all such documents proposed to
be filed, which documents will be subject to review of such counsel);
(ii) notify each holder of Registrable Securities of the
effectiveness of each Registration Statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of either (i) not less than six (6) months (subject to extension pursuant to
Section 15) or, if such registration statement relates to an underwritten
offering, such longer period as in the opinion of counsel for the underwriters a
prospectus is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer or (ii) such shorter period
as will terminate when all of the securities covered by such registration
statement have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement (but in any event not before the expiration of any longer period
required under the Securities Act), and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
16
registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement; provided that the
Company shall not be obligated to maintain the effectiveness of any registration
statement for a period of more than twenty-four (24) months from the date on
which the such registration statement initially becomes effective;
(iii) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(v) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the discovery of the happening
of any event as a result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, at the request of any such
seller, the Company will prepare and furnish to such seller a reasonable number
of copies 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 fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made;
(vi) cause all such Registrable Securities to be listed on
each securities exchange or market on which similar securities issued by the
Company are then listed;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(viii) enter into such customary agreements (including
underwriting agreements in customary form) as may be requested by the
underwriters and take all such other actions as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares);
17
(ix) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(xi) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Securities included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(xii) obtain one or more comfort letters, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the Company's independent public accountants
in customary form and covering such matters of the type customarily covered by
comfort letters as the holders of a majority of the Registrable Securities being
sold reasonably request (provided that such Registrable Securities constitute at
least 10% of the securities covered by such registration statement); and
(xiii) as required by the Securities Act or by an underwriter,
provide a legal opinion of the Company's outside counsel, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information relating
to the Registrable Securities held by such seller and the intended method of
distribution of such securities as the Company may from time to time reasonably
request in writing.
SECTION 13. REGISTRATION EXPENSES
13A. COMPANY EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration
18
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the NASD
automated quotation system.
13B. REIMBURSEMENT. In connection with each Demand
Registration and each Piggyback Registration, the Company will reimburse the
holders of Registrable Securities covered by such registration for the
reasonable fees and disbursements of one counsel chosen by the holders of a
majority of the Registrable Securities included in such registration. In
connection with each Demand Registration and each Piggyback Registration, the
Company shall reimburse the holders of Registrable Securities included in such
registration for the reasonable fees and disbursements of each additional
counsel retained by any holder of Registrable Securities for the purpose of
rendering any legal opinion required by the Company or the managing
underwriter(s) to be rendered on behalf of such holder in connection with any
underwritten Demand Registration or Piggyback Registration.
SECTION 14. INDEMNIFICATION
14A. INDEMNIFICATION OBLIGATION OF THE COMPANY. The Company
agrees to indemnify and hold harmless, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses caused by (i) any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or, (ii) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except in so far as the same are caused by or contained in any
information furnished in writing to the Company by or on behalf of such holder
expressly for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the holders
of Registrable Securities.
14B. INDEMNIFICATION OF THE COMPANY. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Company in writing such
information and affidavits relating to such holder's Registrable Securities as
the Company reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, will indemnify and
hold
19
harmless the Company, its directors and officers and each other Person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses caused by (i) any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or (ii) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by or on
behalf of such holder; provided that the obligation to indemnify will be
individual to each holder and will be limited to the net amount of proceeds
received by such holder from the sale of Registrable Securities pursuant to such
registration statement.
14C. INDEMNIFICATION PROCEDURES. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that the failure to give prompt notice shall not impair any Person's
right to indemnification hereunder to the extent such failure has not adversely
affected the indemnifying party) and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
14D. OTHER INDEMNIFICATION PROVISIONS. The indemnification
provided for under this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified party or
any officer, director or controlling Person of such indemnified party and will
survive the transfer of securities. The Company and any other indemnifying party
with respect to the matters set forth in Sections 9 through 14 of this Agreement
also agree to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
SECTION 15. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any registration hereunder which
is underwritten unless such Person (i) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing underwriter(s), provided that no holder of Registrable
Securities will be required to sell more than the number of Registrable
Securities that such holder has requested the Company to include in any
registration) and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other
20
documents reasonably required under the terms of such underwriting arrangements.
Each Person that is participating in any registration hereunder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 12(v) above, such Person will forthwith discontinue
the disposition of its Registrable Securities pursuant to the registration
statement until such Person's receipt of the copies of a supplemented or amended
prospectus as contemplated by such Section 12(v). In the event the Company shall
give any such notice, the applicable time period mentioned in Section 12(ii)
during which a Registration Statement is to remain effective shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to this Section 15 to and including the date when
each seller of Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 12(v).
SECTION 16. DEFINITIONS
"Affiliate" of a Stockholder means any other Person
controlling, controlled by or under common control with the Stockholder and, in
the case of a Stockholder which is a partnership, any partner of the Stockholder
(provided that the Company shall not be deemed to be an Affiliate of any
Stockholder, nor shall any other Person be deemed to be an Affiliate of a
Stockholder solely by reason of such Stockholder's control of the Company).
"Agreement" has the meaning set forth in the Preamble.
"Approved Sale" has the meaning set forth in Section 3A.
"Available Shares" has the meaning set forth in Section 2B.
"CEO Director" has the meaning set forth in Section 8A.
"Certificate of Incorporation" means the Company's certificate
of incorporation in effect at the time as of which any determination is being
made.
"Closing" has the meaning set forth in the Securities Purchase
Agreements.
"Coinvestors" has the meaning set forth in the Preamble.
"Common Stock" means the Company's Common Stock, par value
$0.01 per share.
"Company" has the meaning set forth in the Preamble.
"Demand Registration" has the meaning set forth in Section 9A.
"Election Notice" has the meaning set forth in Section 4A.
"Election Period" has the meaning set forth in Section 2B.
21
"Executives" has the meaning set forth in the Preamble.
"Executive Agreement" has the meaning set forth in the
Preamble.
"Executive Stock" means (i) the Common Stock issued to the
Executives pursuant to the Executive Agreement, and (ii) any equity securities
issued or issuable directly or indirectly with respect to the Common Stock
referred to in clause (i) above by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, consolidation,
exchange or other reorganization.
"Exempt Transfer" has the meaning set forth in Section 2D.
"Family Group" with respect to any Stockholder, means such
Stockholder's spouse, siblings and descendants (whether or not adopted) and any
trust, family limited partnership or limited liability company that is and
remains solely for the benefit of such Stockholder and/or such Stockholder's
spouse, siblings and/or descendants.
"Fully Diluted Basis" means, in respect of any class of
Company capital stock at any time, (i) all shares of such class of stock
outstanding at such time plus (ii) all shares of such class of stock which are
issuable directly or indirectly upon conversion of all then outstanding
convertible securities or upon the exercise or exchange of all outstanding
options, warrants or other rights which are convertible into or exchangeable for
Company securities or other rights, whether or not such convertible securities,
options, warrants or other rights are then convertible, exercisable or
exchangeable; provided that Common Stock on a Fully Diluted Basis shall mean the
shares determined in accordance with the foregoing plus the shares of Preferred
Stock on a Fully Diluted Basis.
"Independent Third Party" means any Person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a Fully Diluted Basis (a "5% Owner"), who is not
controlling, controlled by or under common control with any such 5% Owner and
who is not the spouse or descendent (by birth or adoption) of any such 5% Owner
or a trust for the benefit of such 5% Owner and/or such other Persons.
"Investor" or "Investors" has the meaning set forth in the
Preamble.
"Investor Shares" means any Stockholder Shares held by the
Investors or their direct or indirect transferees.
"Issuance Notice" has the meaning set forth in Section 4A.
"Liquidation Value" with respect to any share of Preferred
Stock at any time means $29,100, as appropriately adjusted for stock splits,
stock dividends, combinations of shares and similar transactions, plus the
aggregate amount of dividends which as of such time have accrued on such share
and remain unpaid.
"Long-Form Registrations" has the meaning set forth in Section
9A.
22
"Majority ▇▇ ▇▇▇▇▇▇" at any time means the holder of a
majority of the WS Shares at such time, determined on a Fully Diluted Basis;
provided if at such time no single person holds a majority of the WS Shares,
then "Majority ▇▇ ▇▇▇▇▇▇" means any two or more Persons who then collectively
hold a majority of the WS Shares.
"New Securities" has the meaning set forth in Section 4C.
"Other Registrable Securities" means (i) any shares of Common
Stock issued to or otherwise acquired by Stockholders (other than WS) and any
shares of Common Stock issued upon conversion of any shares of Preferred Stock
issued to Stockholders (other than WS), and (ii) any equity securities issued or
issuable directly or indirectly with respect to the securities referred to in
clause (i) by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares constituting Other Registrable
Securities, such shares will cease to be Other Registrable Securities when they
have been (x) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, or (y) sold to the
public through a broker dealer or market maker pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act. For purposes of this
Agreement, a Person will be deemed to be a holder of Other Registrable
Securities whenever such Person has the right to acquire directly or indirectly
such Other Registrable Securities (upon conversion or exercise in connection
with a transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
"Participating Shares" has the meaning set forth in Section
2C.
"Participating Stockholders" has the meaning set forth in
Section 2C.
"Permitted Transferees" has the meaning set forth in Section
2D.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section
10A.
"Preferred Stock" means the Company's Preferred Stock, par
value $.01 per share.
"Public Offering" means a public offering and sale of
Stockholder Shares pursuant to an effective registration statement under the
Securities Act.
"Public Sale" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of
Rule 144 adopted under the Securities Act.
23
"Registrable Securities" means, collectively, the WS
Registrable Securities and the Other Registrable Securities. For purposes of
this Agreement, a Person will be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
"Registration Expenses" has the meaning set forth in Section
13A.
"Related Stockholder" has the meaning set forth in Section 3B.
"Sale Notice" has the meaning set forth in Section 2B.
"Sale of the Company" means the sale of the Company to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power to elect a majority of the Board (whether by merger, consolidation
or sale or transfer of the Company's capital stock) or (ii) all or substantially
all of the Company's assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental
body or agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"Short-Form Registrations" has the meaning set forth in
Section 9A.
"Share Exchange Agreement" has the meaning set forth in the
Preamble.
"Stockholder Shares" means (i) any Common Stock or Preferred
Stock held by any Stockholder as of the Closing or at any time thereafter, and
(ii) any capital stock or other equity securities issued or issuable directly or
indirectly with respect to the securities referred to in clause (i) above by way
of dividend or split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting Stockholder Shares, such shares shall cease to be
Stockholder Shares when they have been (x) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them or (y) sold to the public through a broker, dealer or market maker
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act.
"Stockholder" or "Stockholders" has the meaning set forth in
the Preamble.
"Tag-along Sale Notice" has the meaning set forth in Section
2C.
24
"Tag-Along Shares" has the meaning set forth in Section 2C.
"Transfer" has the meaning set forth in Section 2A.
"Transfer Shares" has the meaning set forth in Section 2B.
"Transferring Stockholder" has the meaning set forth in
Section 2B.
"WS Director" has the meaning set forth in Section 8A.
"WS Registrable Securities" means (i) any shares of Common
Stock issued to WS pursuant to the Securities Purchase Agreement, (ii) any
shares of Common Stock otherwise acquired by WS, (iii) any shares of Common
Stock issued or issuable upon conversion of other WS Shares, and (iv) any equity
securities issued or issuable directly or indirectly with respect to the
securities referred to in any of clauses (i) through (iii) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting WS Registrable Securities, such shares will cease
to be WS Registrable Securities when they have been (x) effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them, or (y) sold to the public through a broker dealer or
market maker pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act. For purposes of this Agreement, a Person will be deemed to
be a holder of WS Registrable Securities whenever such Person has the right to
acquire directly or indirectly such WS Registrable Securities (upon conversion
or exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected.
"WS" has the meaning set forth in the Preamble.
"WS Shares" means (i) any Stockholder Shares acquired by WS
pursuant to the Securities Purchase Agreement, (ii) any Stockholder Shares
otherwise held from time to time by WS and (iii) any securities issued or
issuable directly or indirectly with respect to the Stockholder Shares referred
to in clause (i) or (ii) by way of dividend or split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization, provided that WS Shares shall continue to be WS Shares only so
long as such shares are owned by WS or any Affiliate of WS.
Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Share Exchange Agreement.
SECTION 17. MISCELLANEOUS
17A. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company and the
Majority ▇▇ ▇▇▇▇▇▇; provided that in the event that such amendment or waiver by
its terms treats any holder or group of holders of the same class of
25
Stockholder Shares adversely relative to other holders of such class of
Stockholder Shares (which shall include, without limitation, the elimination of
a right granted to one or more holders of a class of Stockholder Shares which
right was not granted to all holders of such class under this Agreement), then
such amendment or waiver will require the consent of a majority of Stockholder
Shares of such class held by such holder or group of holders of Stockholder
Shares so adversely treated.
17B. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
17C. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document, the Securities Purchase Agreements and the documents
referenced therein embody the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
17D. NO INCONSISTENT AGREEMENTS. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
17E. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would adversely
affect the marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
17F. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Stockholder Shares or Executive Stock and the respective
successors and assigns of each of them, so long as they hold Stockholder Shares
or Executive Stock.
17G. COUNTERPARTS. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
17H. REMEDIES. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company and any Stockholder shall have
the right to injunctive relief, in addition to all
26
of its rights and remedies at law or in equity, to enforce the provisions of
this Agreement. Nothing contained in this Agreement shall be construed to confer
upon any Person who is not a signatory hereto any rights or benefits, as a third
party beneficiary or otherwise.
17I. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or received by certified
mail, return receipt requested, or sent by reputable overnight courier service
(charges prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated in the Securities Purchase Agreement and to
any subsequent holder of Stockholder Shares or Executive Stock at such address
as indicated by the Company's records or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices will be deemed to have been given hereunder (i)
when delivered personally to the recipient, (ii) one (1) business day after
being sent to the recipient by reputable overnight courier service (charges
prepaid), (iii) upon machine-generated acknowledgment of receipt after
transmittal by facsimile if so acknowledged to have been received before 5:00
p.m. on a business day at the location of receipt and otherwise on the next
following business day, provided that such notice, demand or other communication
is also deposited within 24 hours thereafter with a reputable overnight courier
service (charges prepaid) for delivery to the same Person, or (iv) five (5) days
after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. The Company's address is:
▇▇▇▇▇▇'▇ Acquisition Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to
(which shall not constitute notice to the Company)
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇.▇. ▇▇▇, Esq.
27
17J. Governing Law. THE CORPORATE LAW OF DELAWARE WILL GOVERN
ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS.
ALL OTHER ISSUES CONCERNING THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF
ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW
OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
17K. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
28
IN WITNESS WHEREOF, the parties hereto have executed this
Investor Rights Agreement on the day and year first above written.
THE COMPANY:
▇▇▇▇▇▇'▇ ACQUISITION CORP.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Its: Vice President & Secretary
----------------------------------
WS:
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS III, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS III-C, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH III-A, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH III-B, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management III, L.P.
Its: General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management III, L.L.C.
Its: General Partner
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
[END OF SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT. COUNTERPART SIGNATURE
PAGES FOR THE OTHER STOCKHOLDERS TO BE ATTACHED SEPARATELY PURSUANT TO SECTION
17G.]
29
▇▇▇▇▇▇'▇ ACQUISITION LLC
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Its: Vice President & Secretary
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
30
Stichting Pensioenfonds ABP
By: NIB CAPITAL PRIVATE EQUITY, N.V.
By: NIB CAPITAL PRIVATE EQUITY, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇
Its: Managing Partner
Stichting Pensioenfonds voor de Gezondheid,
Geestelijke en Maatschappelijke Belangen
By: NIB CAPITAL PRIVATE EQUITY, N.V.
By: NIB CAPITAL PRIVATE EQUITY, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇
Its: Managing Partner
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
31
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /S/ ▇. ▇▇▇▇▇▇
--------------------------
Its: Authorized Representative
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
32
NORWEST EQUITY PARTNERS VII, LP
By: Itasca LBO Partners VII, LLP,
its General Partner
By: /s/ Signature illegible
--------------------------
Its: Partner
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS IV
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Its: Partner
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
34
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT
35
SCHEDULE OF COINVESTORS
STOCKHOLDER SHARES
--------------------------------------
COINVESTORS COMMON STOCK PREFERRED STOCK
--------------------------------------------------------------------------------------------------------
NIB Capital Private Equity, Inc. 8,000 1,000
The Northwestern Mutual Life Insurance Company 5,333.33 666.67
Norwest Equity Partners 5,333.33 666.67
▇▇▇▇▇▇▇▇ Street Partners IV 280 35
SCHEDULE OF WS INVESTORS
STOCKHOLDER SHARES
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INVESTORS COMMON STOCK PREFERRED STOCK
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▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III, L.P. 56,132.96 7,016.62
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III-C, L.P. 486.76 60.85
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-A, L.P. 1,690.14 211.27
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-B, L.P. 1,690.14 211.27
▇▇▇▇▇▇'▇ Acquisition LLC 4,546.67 568.33
EXHIBIT A
FORM OF TRANSFER NOTICE AND JOINDER AGREEMENT
This notice is being delivered to ▇▇▇▇▇▇'▇ Acquisition Corp.,
a Delaware corporation (the "Company"), pursuant to Section 6(e) of the
Investors Rights Agreement, dated as of June __, 2002 (as amended from time to
time, the "Investor Rights Agreement"), among the Company, ▇▇▇▇▇▇ ▇▇▇▇▇ &
Partners III, L.P., a Delaware limited partnership, and certain other
stockholders of the Company who are from time to time party thereto. Capitalized
terms used herein shall have the meanings assigned to such terms in the Investor
Rights Agreement.
The undersigned hereby notifies the Company that [NAME OF
STOCKHOLDER] has transferred to the undersigned _____ Stockholder Shares (_____
shares of Common Stock and _____ shares of Preferred Stock). In connection with
such transfer, the undersigned hereby becomes a party to the Investor Rights
Agreement and agrees to be bound by the provisions of the Investor Rights
Agreement affecting such Stockholder Shares.
Any notice provided for in the Investor Rights Agreement
should be delivered to the undersigned at the address set forth below:
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Telephone:
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Facsimile:
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Dated:
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[Transferee]