EXHIBIT 99.2
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STOCKHOLDERS AGREEMENT
DATED AS OF
APRIL 29, 2002
BY AND AMONG
TELESPECTRUM WORLDWIDE INC.,
THE STOCKHOLDERS SIGNATORY HERETO,
THE MANAGEMENT AGENT
AND
THE ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms ...................................... 2
Section 1.2 Other Definitional Provisions .............................. 7
ARTICLE II
CORPORATE MATTERS
Section 2.1 Reimbursement of Expenses .................................. 7
Section 2.2 D&O Liability Insurance .................................... 7
ARTICLE III
VOTING AGREEMENTS
Section 3.1 Board Nominees ............................................. 8
Section 3.2 Consent to Election of Initial Directors ................... 8
Section 3.3 Voting ..................................................... 8
Section 3.4 Determination of Board Nominees ............................ 8
Section 3.5 Irrevocable Proxy .......................................... 9
Section 3.6 Credit Agreement Determinations Not Affected ............... 10
Section 3.7 Group Filing ............................................... 10
ARTICLE IV
TRANSFERS OF SHARES
Section 4.1 Transfer Restrictions ...................................... 11
Section 4.2 Tag-along/Drag-along Rights and Obligations ................ 12
Section 4.3 Condition of Transfer ...................................... 14
Section 4.4 Stock Ledger and Transfer Records .......................... 15
Section 4.5 Restrictive Legends15
ARTICLE V
REGISTRATION RIGHTS
Section 5.1 Demand Registration ........................................ 16
Section 5.2 Incidental Registrations ................................... 17
Section 5.3 Priority ................................................... 18
Section 5.4 Registration Procedures .................................... 19
Section 5.5 Information Supplied ....................................... 22
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 5.6 Restrictions on Disposition ................................ 22
Section 5.7 Indemnification ............................................ 22
Section 5.8 Required Reports ........................................... 25
Section 5.9 Selection of Counsel ....................................... 25
Section 5.10 Suspension/Postponement of Registration .................... 25
Section 5.11 Holdback Agreement ......................................... 26
Section 5.12 Participation in Underwritten Registrations ................ 26
Section 5.13 Expenses ................................................... 26
Section 5.14 No Inconsistent Agreements ................................. 26
ARTICLE VI
MISCELLANEOUS
Section 6.1 Administrative Agent ....................................... 26
Section 6.2 Termination ................................................ 27
Section 6.3 Amendments and Waivers ..................................... 28
Section 6.4 Successors, Assigns and Transferees; Management Stockholder 28
Section 6.5 Notices .................................................... 29
Section 6.6 Further Assurances ......................................... 29
Section 6.7 Entire Agreement ........................................... 29
Section 6.8 Delays or Omissions ........................................ 29
Section 6.9 Governing Law; Jurisdiction; Waiver of Jury Trial .......... 29
Section 6.10 Severability ............................................... 30
Section 6.11 Effective Date ............................................. 30
Section 6.12 Enforcement ................................................ 30
Section 6.13 Titles and Subtitles ....................................... 30
Section 6.14 No Recourse ................................................ 30
Section 6.15 Counterparts; Facsimile Signatures ......................... 30
Section 6.16 No Third Party Beneficiaries ............................... 30
Exhibits
Exhibit A Form of Stock Option Plan
Exhibit B Form of Agreement to be Bound
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TELESPECTRUM WORLDWIDE INC.
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT") is entered as of
April 29, 2002, among TELESPECTRUM WORLDWIDE INC., a Delaware corporation (the
"COMPANY"), J. ▇▇▇▇▇ ▇▇▇▇▇▇, as Management Agent, BNP Paribas, as Administrative
Agent, J. ▇▇▇▇▇ ▇▇▇▇▇▇, as a Management Stockholder, each of the PREFERRED
STOCKHOLDERS of the Company whose name appears on the signature pages hereof,
and each other employee of the Company who becomes a party hereto upon receipt
of any Common Stock or any options ("OPTIONS") to acquire Common Stock (such
individuals are referred to herein as "MANAGEMENT STOCKHOLDERS"). Each Preferred
Stockholder, each Management Stockholder and any other Person who shall become a
party to this Agreement is sometimes hereinafter referred to as a "STOCKHOLDER."
R E C I T A L S
WHEREAS, the Company and the Preferred Stockholders have entered
into a Preferred Stock Issuance and Restructuring Agreement, dated as of the
date hereof (the "Preferred Stock Issuance and Restructuring Agreement"),
pursuant to which the Preferred Stockholders will receive, among other things,
40,000 newly issued shares of Series A Preferred Stock (the "Series A Preferred
Stock"), in consideration for and in satisfaction of indebtedness in the amount
of $40 million currently owing to the Preferred Stockholders by the Company
under the Existing Credit Agreement (defined below) and 90,000 newly issued
shares of Series B Convertible Preferred Stock (the "Series B Preferred Stock"),
in consideration for and in satisfaction of indebtedness in excess of $65
million currently owing to the Preferred Stockholders by the Company under the
Existing Credit Agreement;
WHEREAS, on the date hereof, a portion of the Series B Preferred
Stock will convert into Common Stock (as hereinafter defined);
WHEREAS, simultaneously and in connection with the issuance of such
90,000 shares of Series B Preferred Stock and 40,000 shares of Series A
Preferred Stock, the Preferred Stockholders have agreed to amend and restate the
terms of the existing Amended and Restated Credit Agreement dated as of April
16, 2001 between the Company, the Lenders signatory thereto and BNP Paribas, as
administrative agent for and representative of the Lenders (as amended through
the date hereof and as such agreement or any provision thereof may have
otherwise been amended, restated, supplemented, waived or otherwise modified
from time to time prior to the date hereof, the "Existing Credit Agreement") and
to enter into a Second Amended and Restated Credit Agreement, of even date
herewith, among the Company, the Preferred Stockholders, as the initial lenders,
and the Administrative Agent (as the same may be amended, restated, supplemented
or modified from time to time in accordance with the terms thereof, the "Credit
Agreement"); and
WHEREAS, the Stockholders desire to enter into certain arrangements
among themselves relating to the ownership, voting and disposition of the Series
A Preferred Stock, the Series B Preferred
Stock, the Common Stock issued upon conversion the Series B Preferred Stock (the
"Conversion Shares") and any other Common Stock acquired by the Stockholders and
any Options or Common Stock acquired by any Management Stockholder, and the
Stockholders and the Company desire to enter into certain arrangements relating
to the Company, to be effective as of the date hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which are hereby acknowledged by the parties hereto, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. As used herein, the following
terms shall have the following meanings:
"Additional Seller" has the meaning assigned to such term in Section
4.2(b).
"Administrative Agent" has the meaning assigned to such term in
Section 6.1.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (which may include, but is not limited to,
all directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Approved Preferred Stockholder Nominee" has the meaning assigned to
such term in Section 3.4.
"Approved Management Nominee" has the meaning assigned to such term
in Section 3.4.
"beneficial owner" or "beneficially own" has the meaning given such
term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
Series B Preferred Stock, Common Stock or other Voting Securities of the Company
shall be calculated in accordance with the provisions of such Rule; provided,
however, that for purposes of determining beneficial ownership, (i) a Person
shall be deemed to be the beneficial owner of any security which may be acquired
by such Person whether within 60 days or thereafter, upon the conversion,
exchange or exercise of any warrants, options, rights or other securities and
(ii) no Person shall be deemed to beneficially own any security solely as a
result of such Person's execution of this Agreement.
"Board" means the Board of Directors of the Company.
"Business Day" means for all purposes any day other than a Saturday,
Sunday or legal holiday on which banks in New York, New York, are open for the
conduct of their commercial banking business.
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"Buyer" has the meaning assigned to such term in Section 4.2(b).
"Bylaws" means the Bylaws of the Company, as in effect on the date
hereof and as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof, the terms of the Certificate
of Incorporation and the terms of this Agreement.
"Capital Stock" means, with respect to any Person at any time, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock, partnership
interests (whether general or limited) or equivalent ownership interests in or
issued by such Person, and with respect to the Company includes, without
limitation, any and all shares of Common Stock, Series A Preferred Stock and
Series B Preferred Stock.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as in effect on the date hereof and as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof and the terms of this Agreement.
"Charter Amendment" means the amendment to the Company's Certificate
of Incorporation which provides for an increase in the Company's authorized
capital from 200,000,000 shares of Common Stock to 900,000,000 shares of Common
Stock.
"Claims" has the meaning assigned to such term in Section 5.7(a).
"Closing" has the meaning assigned to such term in the Preferred
Stock Issuance and Restructuring Agreement.
"Closing Date" means the Closing Date under the Preferred Stock
Issuance and Restructuring Agreement.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"Credit Agreement" has the meaning assigned to such term in the
Recitals to this Agreement.
"Conversion Shares" has the meaning assigned to such term in the
Recitals to this Agreement.
"Demand Registration" has the meaning assigned to such term in
Section 5.1(a).
"Director" means any member of the Board.
"Drag-along Notice" has the meaning assigned to such term in Section
4.2(d).
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"Equity Securities" of a Person means any capital stock or other
equity interest, or other securities convertible into or exercisable or
exchangeable for capital stock or any other rights, warrants or options to
acquire any of the foregoing securities or to participate in the equity of such
Person, such as stock appreciation rights.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Existing Credit Agreement" has the meaning assigned to such term in
the Recitals to this Agreement.
"Group" has the meaning assigned to such term in Section 13(d)(3) of
the Exchange Act.
"Holder" means a Stockholder or a holder of Registrable Securities
(including any direct or indirect Transferees of a Stockholder) entitled to the
rights, and bound by the obligations, under this Agreement in accordance with
Section 4.3.
"Indemnified Party" has the meaning assigned to such term in Section
5.7(a).
"Indemnifying Party" means any Person who provides indemnity to an
Indemnified Party.
"Initiating Holders" has the meaning assigned to such term in
Section 5.1(a).
"Irrevocable Proxy" has the meaning assigned to such term in Section
3.5(b).
"Lender" has the meaning set forth in the Credit Agreement.
"Losses" has the meaning assigned to such term in Section 6.1.
"Management Agent" has the meaning assigned to such term in Section
3.4(b).
"Management Nominees" has the meaning assigned to such term in
Section 3.1.
"Management Stockholders" has the meaning assigned to such term in
the Preamble.
"NASD" means the National Association of Securities Dealers, Inc.
"NYSE" means the New York Stock Exchange.
"Offeree" has the meaning assigned to such term in Section 4.2(b).
"Options" has the meaning assigned to such term in the Preamble.
"Other Holders" means Persons other than Holders who, by virtue of
agreements with the Company, are entitled to include their securities in certain
registrations hereunder.
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"Other Securities" means securities of the Company, other than
Registrable Securities which, by virtue of agreements between Other Holders and
the Company, are entitled to be included in certain registrations hereunder.
"Percentage Interest" has the meaning assigned to such term in
Section 4.1(b).
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof.
"Preferred Stockholder Nominees" has the meaning assigned to such
term in Section 3.1.
"Preferred Stockholder" means a stockholder who was issued Series A
Preferred Stock and Series B Preferred Stock pursuant to the Preferred Stock
Issuance and Restructuring Agreement.
"Preferred Stock Issuance and Restructuring Agreement" has the
meaning assigned to such term in the Recitals to this Agreement.
"Principal Officers" has the meaning assigned to such term in
Section 3.4(b).
"Proxy Shares" has the meaning assigned to such term in Section
3.5(a).
"Public Transfer" means a Transfer (i) in a public offering pursuant
to an effective registration statement or (ii) in accordance with Rule 144 (or
any successor provision) promulgated by the SEC under the Securities Act.
"Registrable Securities" means any of the following securities held
by any Holder: (i) Common Stock, and (ii) any securities issued in respect
thereof, or in substitution therefor, in connection with any stock split,
dividend or combination, or any reclassification, recapitalization, merger,
consolidation, exchange or other similar reorganization. As to any particular
Registrable Securities, once issued, such Registrable Securities shall cease to
be Registrable Securities when (a) a registration statement with respect to the
sale by the Holder of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (b) such securities shall have been
distributed to the public pursuant to Rule 144 (or any successor provision)
promulgated by the SEC under the Securities Act, or (c) such securities shall
have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with Article V of this Agreement, including (a) all
SEC and securities exchange or NASD registration and filing fees (including, if
applicable, the fees and expenses of any "qualified independent underwriter," as
such term is defined in the bylaws of the NASD, and of its counsel), (b) all
fees and expenses of complying with securities or blue sky laws (including fees
and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (c) all printing, messenger and
delivery expenses, (d) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities
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exchange or the NASD pursuant to Section 5.4(h)(i) and all rating agency fees
related to the offering, (e) the fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or incident to such
performance and compliance, (f) the reasonable fees and disbursements of one
counsel selected pursuant to Section 5.9, (g) any fees and disbursements of
underwriters customarily paid by the issuers or sellers of securities, including
liability insurance if the Company so desires or if the underwriters so require,
and the reasonable fees and expenses of any special experts retained in
connection with the requested registration, but excluding underwriting discounts
and commissions and transfer taxes, if any, and (h) expenses incurred in
connection with any road show.
"SEC" means the U.S. Securities and Exchange Commission or any other
federal agency then administering the Securities Act or the Exchange Act and
other federal securities laws.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Seller" has the meaning assigned to such term in Section 4.2(a).
"Seller's Notice" has the meaning assigned to such term in Section
4.2(b).
"Series A Certificate of Designations" means the Certificate of
Designations of Series A Preferred Stock of the Company, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Series B Certificate of Designations" means the Certificate of
Designations of Series B Convertible Preferred Stock of the Company, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Series A Preferred Stock" has the meaning assigned to such term in
the Recitals to this Agreement.
"Series B Preferred Stock" has the meaning assigned to such term in
the Recitals to this Agreement.
"Stock Option Plan" means the Telespectrum Worldwide Inc. 2002 Stock
Incentive Plan, substantially in the form of Exhibit A attached hereto.
"Stockholder" has the meaning assigned to such term in the Preamble.
"Subsidiary" means (i) any corporation of which a majority of the
securities entitled to vote generally in the election of directors thereof, at
the time as of which any determination is being made, are owned by another
entity, either directly or indirectly, and (ii) any joint venture, general or
limited partnership, limited liability company or other legal entity in which an
entity is the record or beneficial owner, directly or indirectly, of a majority
of the voting interests or the general partner.
6
"Tag-along Notice" has the meaning assigned to such term in Section
4.2(b).
"Term Loans" has the meaning assigned to such term in the Credit
Agreement.
"Transfer" or "Transferred" means, directly or indirectly, to sell,
transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either
voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition of, any shares of
Equity Securities beneficially owned by a Person or any interest in any shares
of Equity Securities beneficially owned by a Person.
"Transferee" means any Person to whom a Stockholder Transfers Equity
Securities of the Company in accordance with the terms hereof.
"Vested Options" has the meaning assigned to such term in Section
4.2(a).
Section 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Article and
Section references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II
CORPORATE MATTERS
Section 2.1 Reimbursement of Expenses. The Company shall reimburse
the Directors for their reasonable out-of-pocket expenses incurred by them for
the purpose of attending meetings of the Board or committees thereof.
Section 2.2 D&O Liability Insurance. To the extent available on
commercially reasonable terms, the Company shall procure and maintain in effect
directors and officers insurance for its Directors in respect of all liabilities
arising from or relating to their services as members of the Board of the
Company or of any Subsidiary of the Company (and such policy shall cover all
persons who were Directors or officers of the Company immediately prior to the
Closing). Such insurance shall be on such terms and in such amounts as are
customarily maintained by comparable publicly-held corporations and shall be
maintained at all times that the Stockholders have the right to designate
directors hereunder and as to each Director and officer covered by this
provision for a period of six years after such person ceases to be a Director or
officer (including any period of "tail coverage").
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ARTICLE III
VOTING AGREEMENTS
Section 3.1 Board Nominees. The Stockholders agree to vote all
shares hold by them and take such other actions within their control to provide
that the Board at all times consists of not less than five (5) Directors, a
majority of which shall be nominated by the Preferred Stockholders (the
"Preferred Stockholder Nominees") in accordance with Section 3.4 below and two
(2) of which shall be nominated by the Management Stockholders in accordance
with Section 3.4 below (the "Management Nominees"); provided that one of the
Management Nominees must be the Chief Executive Officer of the Company.
Section 3.2 Consent to Election of Initial Directors. As a condition
to the closing under the Preferred Stock Issuance and Restructuring Agreement,
the Board shall have been set at five Directors with (1) the following persons
duly approved and serving as Directors of the Company (such persons, the
"Initial Preferred Stockholder Nominees"): ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and (2) the following persons duly appointed and serving as Directors
of the Company (such persons, the "Initial Management Nominees"): J. ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; to serve in each case until the next annual
meeting of stockholders of the Company and until their respective successors
shall be duly elected and qualified.
Section 3.3 Voting. Each of the Preferred Stockholders agrees to
vote, or act by written consent with respect to, any Series B Preferred Stock or
Common Stock beneficially owned by it, at each annual or special meeting of the
Preferred Stockholders or Common Stockholders and to take all actions by written
consent in lieu of any such meeting and such other actions within their control
as are necessary:
(i) to elect to the Board any Approved Preferred Stockholder
Nominees (as determined in accordance with Section 3.4 below);
(ii) to elect to the Board any Approved Management Nominees
(as determined in accordance with Section 3.4 below);
(iii) to have the Board consist of not less than five (5)
Directors;
(iv) in the event that a vacancy in the number of Directors is
created at any time by the death, disability, retirement, resignation or removal
(with or without cause) of any Director, to cause such vacancy to be filled by
(A) an Approved Management Nominee, in the event that the Director to be
replaced was a Management Nominee or (B) an Approved Preferred Stockholder
Nominee, in the event that the Director to be replaced was a Preferred
Stockholder Nominee;
(v) to approve the Charter Amendment; and
(vi) to cause the Stock Option Plan to be adopted as promptly
as practicable after approval and filing of the Charter Amendment.
Section 3.4 Determination of Board Nominees.
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(a) At any time that the Preferred Stockholders are entitled to
designate a Preferred Stockholder Nominee, the Administrative Agent shall
consult with the Preferred Stockholders in order to select one or more Preferred
Stockholder Nominees; provided that, to the extent consultation with all of the
Preferred Stockholders would subject such process to Section 14 of the Exchange
Act, the Administrative Agent may limit the number of Preferred Stockholders
with whom it consults; provided further, that no person who is an employee of
any Preferred Stockholder may be a Preferred Stockholder Nominee. Any Preferred
Stockholder Nominee that is approved by 51% of the Preferred Stockholders
consulted pursuant to the preceding sentence shall be an "Approved Preferred
Stockholder Nominee."
(b) At any time that the Management Stockholders are entitled to
designate a Management Nominee, such Management Nominee shall be designated by a
majority vote of the Company's Chief Executive Officer, President, Chief
Financial Officer and each Executive Vice President (collectively, the
"Principal Officers") at the time such designation is to be made. J. ▇▇▇▇▇
▇▇▇▇▇▇ is hereby designated as the initial agent for the Management Stockholders
(such person, together with any successor serving in such capacity, the
"Management Agent") for purposes of notifying the Administrative Agent of the
identity of any Management Nominee (an "Approved Management Nominee") and
Administrative Agent shall be entitled to rely on any such notification;
provided that the Management Nominees on the Board shall at all times be the
Chief Executive Officer of the Company and one other qualified individual
designated in accordance herewith. In addition to the foregoing, at any time
that there are no Management Stockholders party hereto, the Management Agent
shall be entitled to make all decisions to be made by Management Stockholders
hereunder. The Principal Officers shall collectively have the right from time to
time to remove the Management Agent and designate a new Management Agent and, in
such event, shall promptly notify Company and Administrative Agent thereof;
provided that in the event that the Management Agent ceases to be an employee of
the Company, the Principal Stockholders shall immediately remove the Management
Agent and designate a new Management Agent and if such removal and designation
is not effected within 5 Business Days of a request by the Company, the Board
shall be entitled to remove the Management Agent and designate a new Management
Agent. No removal of the Management Agent shall be effective until the Company
shall receive notice thereof and the name of the successor Management Agent.
Section 3.5 Irrevocable Proxy.
(a) Each Preferred Stockholder hereby irrevocably appoints the
Administrative Agent, with full power of substitution, as its attorney and proxy
to attend meetings, vote, give and execute consents and in all other ways act in
its place with respect to its shares of Series B Preferred Stock, its Conversion
Shares and all other shares Common Stock now or hereafter beneficially owned by
such Preferred Stockholder (the shares of Series B Preferred Stock and Common
Stock held by any Preferred Stockholder being hereinafter referred to as such
Preferred Stockholder's "Proxy Shares") but only with respect to the matters
covered by, and in accordance with, Section 3.3 hereof.
(b) Each Preferred Stockholder hereby authorizes the Administrative
Agent to (i) identify, as of each applicable record date, the Proxy Shares, and
(ii) notify the Company's transfer agent, inspector of elections and other
organizations, persons or officials involved in the
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administration or processing of proxies with respect to the subject vote, of the
existence of this irrevocable proxy under this Section 3.5 (this "Irrevocable
Proxy"), the number of shares with respect to the subject election to which this
Irrevocable Proxy will apply and the record owner of such Proxy Shares, and all
such organizations, persons and officials are authorized and directed to rely on
such notification.
(c) Each Preferred Stockholder further agrees that it shall not
Transfer to any of its Affiliates any interest in the Series B Preferred Stock
or Common Stock or any security which represents a derivative interest therein
unless prior to such acquisition the Administrative Agent is notified of such
intention to Transfer and if requested an irrevocable proxy in the form of this
Section 3.5 is executed and delivered to the Company by such Affiliate.
(d) Each Preferred Stockholder agrees to fully cooperate with the
Administrative Agent to give full effect to the intentions of this Section 3.5
by executing such documents and taking such actions as are reasonably requested
by the Administrative Agent for such purpose.
(e) Each Preferred Stockholder hereby affirms that this Irrevocable
Proxy is coupled with an interest and shall be irrevocable. It is further
understood by each Preferred Stockholder that this Irrevocable Proxy by such
Preferred Stockholder may be exercised by the Administrative Agent in accordance
with the terms hereof, for the period beginning the date hereof and ending, with
respect to the Series B Preferred Stock, upon its conversion into Common Stock
and, with respect to the Conversion Shares or other shares of Common Stock, upon
a Public Transfer of such Shares.
(f) THIS IRREVOCABLE PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND
BE ENFORCEABLE AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE SHARES (OTHER
THAN PURSUANT TO A PUBLIC TRANSFER).
Section 3.6 Credit Agreement Determinations Not Affected. Neither
the voting agreements contained in Sections 3.2 and 3.3 of this Agreement nor
the proxy granted in Section 3.5 hereof shall be applicable to or bind any
Preferred Stockholder in such holder's capacity as a Lender under the Credit
Agreement with respect to any determination, vote or consent relating to a
requested or proposed waiver, amendment, restatement or other modification
thereof.
Section 3.7 Group Filing.
(a) Each Preferred Stockholder acknowledges that under the Exchange
Act as presently in effect, such Preferred Stockholder is the beneficial owner
of the Conversion Shares issuable in respect of such Preferred Stockholder's
Series B Preferred Stock. Each Preferred Stockholder hereby agrees that any
Schedule 13D required to be filed by reason of such beneficial ownership of the
Conversion Shares (or any other shares of Common Stock owned by such Preferred
Stockholder) and any amendments thereto shall be filed on behalf of the
Preferred Stockholders as a Group by the Administrative Agent pursuant to and in
accordance with the provisions of Rule 13d-1(k)(1) under the Exchange Act. Each
Preferred Stockholder further agrees to be responsible for the completeness and
accuracy of the information concerning itself
10
contained in any Schedule 13D or any amendment thereto, it being understood that
no Preferred Stockholder shall be responsible for the completeness or accuracy
of the information concerning any other Preferred Stockholder in such Schedule
13D or any amendment unless it knows or has reason to believe that the
information concerning such other Preferred Stockholder is inaccurate. The
initial Schedule 13D and any required amendments shall be prepared by the
Administrative Agent and shall be distributed to all Preferred Stockholders for
review and comment prior to the filing thereof. Each Preferred Stockholder
agrees to promptly notify the Administrative Agent of any information that would
require the filing of an amendment to the Schedule 13D including, without
limitation, any increase in such Preferred Stockholder's beneficial ownership of
Common Stock and any material change in any other information required by
Schedule 13D.
(b) Each Preferred Stockholder hereby appoints the Administrative
Agent as its agent and attorney-in-fact to execute and file with the SEC and the
NYSE or such other securities exchange on which the Common Stock may be listed
from time to time, and to deliver to the Company, a Statement on Schedule 13D
under the Exchange Act, and one or more amendments thereto, with respect to the
Common Stock of the Company.
(c) Notwithstanding anything contained in Sections 3.7(a) and 3.7(b)
to the contrary, any Preferred Stockholder may file its own Schedule 13D
pursuant to Rule 13d-1(k)(2) under the Exchange Act in lieu of participating in
such Group filing of Schedule 13D, provided that (i) such Preferred Stockholder
gives written notice of its decision not to participate in the group filing to
all of the other Preferred Stockholders at least ten (10) Business Days prior to
the filing of its own Schedule 13D, (ii) such notice is accompanied by a copy of
a Schedule 13D in the form proposed to be filed by such Preferred Stockholder,
and (iii) such Preferred Stockholder complies with its filing obligations under
Section 13D of the Exchange Act including, if applicable, identification of any
Group pursuant to Rule 13d-1(k)(2) under the Exchange Act.
ARTICLE IV
TRANSFERS OF SHARES
Section 4.1 Transfer Restrictions.
(a) General. No Stockholder shall Transfer any of its shares of
Series A Preferred Stock, Series B Preferred Stock or Common Stock, except in
compliance with the Securities Act, applicable state securities laws and this
Agreement. Any attempt to Transfer any shares of Series A Preferred Stock,
Series B Preferred Stock or Common Stock in a transaction not in compliance with
this Agreement shall be null and void and the Company shall not, and shall
ensure that any transfer agent shall not, register upon its books any Transfer
of such shares to any Person except a Transfer in accordance with this
Agreement.
(b) Pro Rata Transfers. Until such time as all obligations under the
Credit Agreement are repaid, in the event that a Preferred Stockholder desires
to Transfer (other than to an Affiliate) shares of any of its Series A Preferred
Stock, Series B Preferred Stock or Common Stock, such Preferred Stockholder and
its Affiliates must also Transfer the Percentage Interest in all other classes
of stock held by such Preferred Stockholder and its Affiliates as well as the
Percentage Interest in the Term Loans held by such Preferred Stockholder and its
Affiliates under the Credit Agreement to such Transferee. As used herein,
"Percentage Interest" shall mean
11
the number of shares of the class of stock proposed to be Transferred divided by
the aggregate number of shares of such class of stock held by the Preferred
Stockholder and its Affiliates.
(c) Transfers of Preferred Stock. In addition to Section 4.1(a) and
(b), no Preferred Stockholder shall Transfer any of its shares of Series A or
Series B Preferred Stock other than in compliance with Section 4.3.
(d) Transfers of Common Stock by Preferred Stockholders. In addition
to Section 4.1(a) and (b), no Preferred Stockholder shall Transfer any of its
Common Stock except (i) in compliance with the provisions of Section 4.2, (ii)
subject to compliance with Section 4.3, to an Affiliate or (iii) in a Public
Transfer.
(e) Transfers By Management Stockholders. Each Management
Stockholder acknowledges and agrees that his or her Options are subject to
certain restrictions on Transfer set forth in the Stock Option Plan and the
option agreement entered into by Company and such Management Investor. In
addition to Section 4.1(a), no Management Stockholder shall Transfer any of its
shares of Common Stock other than in compliance with Section 4.3 hereof.
Section 4.2 Tag-along/Drag-along Rights and Obligations.
(a) A Preferred Stockholder (for purposes of this Section 4.2, the
"Seller") shall not Transfer (other than pursuant to Section 4.1(d)(ii) or
(iii)) any of its shares of Common Stock to any Person (for purposes of this
Section 4.2, the "Buyer") without: (1) an agreement from the Buyer that it will
purchase all shares of Common Stock and/or vested Options or Options that will
vest upon consummation of such Transfer (in each case, "Vested Options") of any
or all other Stockholders who desire (or who, pursuant to Section 4.2(d), may
become obligated) to sell; provided any Buyer's agreement to purchase such
securities may be subject to the condition that the securities acquired by Buyer
are all of the outstanding shares of Common Stock and Vested Options held by the
Stockholders; or (2) offering the other Preferred Stockholders the right to sell
their "pro rata portion" of the shares of Common Stock to be Transferred by the
Seller; provided that, if the Seller is proposing to sell at least 50.1% of the
outstanding Common Stock then held by all Preferred Stockholders, such offer
must also be made to the Management Stockholders. As used herein, "pro rata
portion" shall mean, for each Stockholder (other than the Seller), a fraction,
the numerator of which is the number of shares of Common Stock and Vested
Options held by such Stockholder immediately prior to the proposed Transfer and
the denominator of which is the total number of shares of Common Stock and
Vested Options outstanding immediately prior to the proposed Transfer. In the
event that Vested Options are to be Transferred, such Vested Options shall be
Transferred on the same terms that the shares of Common Stock are to be
transferred subject to a deduction of the exercise price and any required
withholding taxes with respect to the shares of Common Stock for which such
Vested Option are exercisable. Notwithstanding anything to the contrary herein,
until such time as all obligations under the Credit Agreement are repaid, as a
condition to any Buyer purchasing Common Stock from a Preferred Stockholder
pursuant to this Section 4.2, such Buyer must agree to purchase from such
Preferred Stockholder and each other Preferred Stockholder that is selling
pursuant to this Section 4.2, each Preferred Stockholder's Percentage Interest
in its Series A Preferred Stock, Series B Preferred Stock and Term Loans under
the Credit Agreement.
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(b) If a Preferred Stockholder proposes to Transfer any of its
shares of Common Stock pursuant to Section 4.2(a), the Seller shall send a
notice (a "Seller's Notice") to the Administrative Agent and all other
Stockholders entitled to receive such notice (each such Stockholder, an
"Offeree") in accordance with the provisions of Section 6.5 hereof (except that
such notice shall be sent only by facsimile transmission, personal delivery or
overnight courier). The Seller's Notice shall (A) identify the Buyer, (B)
provide the price and a description of all other material terms of the proposed
sale and (C) (i) in the case of a Transfer pursuant to Section 4.2(a)(1), state
that each Offeree has the right (and could become obligated), pursuant to this
Section 4.2, to sell all (but not less than all) of its Common Stock and Vested
Options to the Buyer upon the terms set forth in the Seller's Notice or (ii) in
the case of a Transfer pursuant to Section 4.2(a)(2), state that each Offeree
has the right to sell its pro rata portion of the shares of Common Stock to be
Transferred upon the terms set forth in the Seller's Notice. Not later than ten
(10) Business Days following the date of the Seller's Notice, each Offeree shall
send a notice (a "Tag-along Notice") to the Seller, with a copy to the
Administrative Agent, stating whether such Offeree agrees to sell all, or its
pro rata portion, as applicable, of its shares of Common Stock and/or Vested
Options to the Buyer on the terms set forth in the Seller's Notice (any such
Offeree sending a Tag-along Notice with such agreement to sell being an
"Additional Seller"). Any such agreement to sell contained in a Tag-along Notice
shall be final and binding on the Additional Seller, and may be revoked only
upon the Buyer's breach of its agreement to purchase the Common Stock and/or
Vested Options. Any Offeree who fails to send a Tag-along Notice in response to
a Seller's Notice shall be deemed to have elected not to sell all, or its pro
rata portion, as applicable, of its shares of Common Stock and/or Vested Options
to the Buyer, subject, however to the provisions of paragraph (d) of this
Section 4.2.
(c) If the Transfer is being made pursuant to (i) Section 4.2(a)(1)
(and the Buyer has not imposed the condition that it receive all Common Stock
and Vested Options held by the Stockholders) and Seller shall not have received
Tag-along Notices from Additional Sellers whose shares of Common Stock and
Vested Options, together with the Seller's shares of Common Stock, constitute,
in the aggregate, at least 50.1% of the Common Stock and Vested Options then
outstanding or (ii) Section 4.2(a)(2), then, in each case, the Seller, the Buyer
and the Additional Sellers shall be free to consummate the purchase and sale of
the Common Stock and Vested Options in accordance with paragraph (e) of this
Section 4.2.
(d) In the case of a Transfer pursuant to Section 4.2(a)(1) in which
the Seller shall receive Tag-along Notices from Additional Sellers whose Common
Stock and Vested Options, together with the Seller's shares of Common Stock
constitute, in the aggregate, at least 50.1% of the Common Stock and Vested
Options then outstanding, the Seller and the Buyer may send a second notice (a
"Drag-along Notice") to each Stockholder who declined to sell all of its shares
of Common Stock and Vested Options to the Buyer in response to the Seller's
Notice or who did not issue a Tag-along Notice in response to such Seller's
Notice, with a copy to the Administrative Agent. The Drag-along Notice shall
state that holders of not less than 50.1% of the Common Stock and Vested Options
then outstanding have agreed to sell their shares of Common Stock and Vested
Options to the Buyer, that the Buyer has agreed to purchase such securities and
that, by virtue of such agreements to sell and to purchase, all Stockholders are
obligated by this Section 4.2 to sell all of their shares of Common Stock and
Vested Options to the Buyer, at the price and on the other terms set forth in
the original Seller's Notice. The Drag-along Notice shall also set forth the
date, time and place of the closing of the Buyer's purchase of
13
the Common Stock from all of the Stockholders, which shall be not less than 10
Business Days nor more than 20 Business Days from the date of the Drag-along
Notice.
(e) On the closing date specified in the Drag-along Notice (or, if
the purchase and sale are being closed pursuant to paragraph (c) of this Section
4.2, on such closing date as shall be fixed by the Buyer, the Seller and the
Additional Sellers), the Buyer shall purchase, and the selling Stockholders
shall sell, the shares of Common Stock and Vested Options to be purchased and
sold pursuant to this Section 4.2. Any such closing shall be subject to the
conditions set forth in Section 4.1(a) and in Section 4.3, and may be subject to
such additional conditions (including, without limitation, the delivery of share
certificates, duly endorsed for transfer or with executed stock powers annexed)
as customarily accompany purchases and sales of shares.
(f) Upon the termination or cancellation of the purchase and sale of
any or all shares of Common Stock and Vested Options, the Common Stock and
Vested Options that were the subject of such terminated transaction shall
continue to be subject to the provisions of this Section 4.2.
(g) Participations. Nothing in Section 4.1 or this Section 4.2 shall
limit the ability of a Preferred Stockholder to create and sell participation
interests in the Company's indebtedness to it under the Credit Agreement,
provided that such participation interest shall not entitle the purchaser to
become a Transferee of any Series A Preferred Stock, Series B Preferred Stock or
Common Stock and, in the absence of a Transfer in accordance with this
Agreement, neither the Company nor any Preferred Stockholder shall be obligated
to recognize any claim by the holder of such participation interest with respect
to the Series A Preferred Stock, the Series B Preferred Stock, the Common Stock
or under this Agreement.
Section 4.3 Condition of Transfer. Any Transferee of a Stockholder
(other than a Transferee in a Public Transfer) and any Transferee of less than
all of the outstanding Common Stock and Vested Options held by Stockholders
pursuant to Section 4.2 shall, unless this Agreement expressly provides
otherwise, hold such Transferred shares of Common Stock and/or Vested Options
subject to all of the provisions of this Agreement and shall make no further
Transfers except as permitted in this Agreement. As a condition precedent to any
such Transfer of shares, the Transferee shall execute an agreement to be bound
substantially in the form of Exhibit B hereto whereby such Transferee shall
agree to become a party to and be bound by all of the provisions of this
Agreement including, without limitation, the Irrevocable Proxy set forth in
Section 3.5 (in the case of a Transferee of a Preferred Stockholder) and the
power of attorney set forth in Section 3.7 (in the case of a Transferee of a
Preferred Stockholder) and, thereafter, references to the Management
Stockholders shall be deemed to include any individual Transferee of any
Management Stockholder (other than a Transferee in a Public Transfer) and any
Transferee pursuant to Section 4.2 (to the extent of the Common Stock and/or
Vested Options purchased from a Management Stockholder thereunder) and
references to the Preferred Stockholders shall be deemed to include any
individual Transferee of any Preferred Stockholder (other than a Transferee in a
Public Transfer) and any Transferees pursuant to Section 4.2 (to the extent of
the Common Stock purchased from a Preferred Stockholder thereunder). Any
Transfer of shares not in compliance with this Agreement shall be void and of no
effect whatsoever.
14
Section 4.4 Stock Ledger and Transfer Records. The Company shall
keep or cause to be kept at its principal office or with a transfer agent, a
register in which the Company shall provide for the registration of the Series A
Preferred Stock, Series B Preferred Stock and Common Stock and the Transfer of
the Series A Preferred Stock, Series B Preferred Stock and Common Stock. Upon
(i) surrender for registration of Transfer of any certificate for Series A
Preferred Stock, Series B Preferred Stock or Common Stock at the office of the
Company designated for that purpose, duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company, duly executed by the
holder thereof or his attorney duly authorized in writing and (ii) evidence of
compliance with the provisions of this Agreement, the Company shall execute and
deliver, in the name of the designated Transferee or Transferees, one or more
new certificates evidencing the Transferred shares of Series A Preferred Stock,
Series B Preferred Stock or Common Stock. The Company shall keep a complete
record of any Transfers permitted hereunder and shall notify the Administrative
Agent and the other Stockholders pursuant to the provisions of Section 6.5
within two (2) Business Days of any such Transfer. Any Stockholder that
Transfers any Series A Preferred Stock, Series B Preferred Stock or Common Stock
shall notify the Company and, with respect to any Preferred Stockholder, the
Administrative Agent in accordance with the provisions of Section 6.5 within two
(2) Business Days of any such Transfer.
Section 4.5 Restrictive Legends.
(a) Each certificate representing shares of Series A Preferred
Stock, Series B Preferred Stock or Common Stock held by a Preferred Stockholder
shall be stamped or otherwise imprinted with a legend in substantially the
following form, which legend shall be removed upon termination of this Agreement
or at such time as such shares are transferred in a Public Transfer:
THE VOTING, SALE, TRANSFER OR OTHER DISPOSITION OF THE SHARES
EVIDENCED BY THIS CERTIFICATE IS RESTRICTED BY THE PROVISIONS OF A
STOCKHOLDERS AGREEMENT (THE "AGREEMENT"), DATED AS OF APRIL 29, 2002, AND
AN IRREVOCABLE PROXY SET FORTH THEREIN. TRANSFEREES OF THE SHARES ARE
BOUND BY THE TERMS OF THE AGREEMENT, A COPY OF WHICH MAY BE INSPECTED AT
THE PRINCIPAL OFFICE OF THE COMPANY OR OBTAINED FROM THE COMPANY AT NO
CHARGE. ALL OF THE PROVISIONS OF THE AGREEMENT ARE HEREBY INCORPORATED BY
REFERENCE IN THIS CERTIFICATE.
(b) Each certificate representing shares of Common Stock held by a
Management Stockholder shall be stamped or otherwise imprinted with a legend in
substantially the following form, which legend shall be removed upon termination
of this Agreement or at such time as such shares are transferred in a Public
Transfer, in substantially the following form:
THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SHARES EVIDENCED BY
THIS CERTIFICATE IS RESTRICTED BY THE PROVISIONS OF A STOCKHOLDERS
AGREEMENT (THE "AGREEMENT"), DATED AS OF APRIL 29, 2002. TRANSFEREES OF
THE SHARES ARE BOUND BY THE TERMS OF THE AGREEMENT, A COPY
15
OF WHICH MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY OR
OBTAINED FROM THE COMPANY AT NO CHARGE. ALL OF THE PROVISIONS OF THE
AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE IN THIS CERTIFICATE.
(c) Each certificate representing shares of Series A Preferred
Stock, Series B Preferred Stock or Common Stock held by a Stockholder that are
not subject to an effective registration statement also shall be stamped or
otherwise imprinted with a legend in substantially the following form, which
legend shall be removed at such time as such shares are transferred in a Public
Transfer:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
SUCH SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OR (2) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
(d) Such certificates also may be stamped or otherwise imprinted
with any legend required by any other agreement between the Company and the
Stockholders, or among the Stockholders.
ARTICLE V
REGISTRATION RIGHTS
Section 5.1 Demand Registration.
(a) Request for Registration. Subject to 5.1(b), at any time on or
after the date which is one year following the date of this Agreement, any
Preferred Stockholder or Preferred Stockholders holding Common Stock
representing not less than 10% of the aggregate Registrable Securities (the
"Initiating Holders") may make a written request for registration under the
Securities Act of all or part of its or their Registrable Securities (a "Demand
Registration"). Such request will specify the number of shares of Registrable
Securities proposed to be sold and will also specify the intended method of
disposition thereof.
(b) Limitations. Notwithstanding anything to the contrary herein:
(1) The Company will not be required to prepare and file
pursuant to this Section 5.1 more than 3 registration
statements at the request of the Preferred Stockholders;
(2) The Company will not be required to prepare and file a
registration statement pursuant to this Section 5.1 during the
period from the date of filing a registration statement of the
Company involving an underwritten
16
offering of any equity securities to the date that is the
earlier of (a) the date of the withdrawal of such registration
statement or of the request to file the registration statement
by the security holder requesting the registration and (b) the
date that is 180 days following the effective date of such
registration statement;
(3) The Company will not be required to prepare and file and,
if filed, will be entitled to withdraw a registration
statement including Registrable Securities with an aggregate
value of less than $5,000,000;
(4) The number of Registrable Securities included in any
registration under this Section 5.1 may be reduced pursuant to
Section 5.3 hereof; and
(5) A registration may be suspended or postponed under the
circumstances described in Section 5.10 hereof.
(c) Effective Registration. A registration will not count as a
Demand Registration until it has become effective.
(d) Underwritten Offering. If the Initiating Holders so elect, the
offering of Registrable Securities pursuant to such Demand Registration shall be
in the form of an underwritten offering. The Company shall select one or more
nationally recognized firms of investment bankers to act as the managing
underwriter or underwriters in connection with such offering and shall select
any additional managers to be used in connection with the offering.
Section 5.2 Incidental Registrations.
(a) Subject to Section 5.3, if the Company at any time proposes to
register Equity Securities under the Securities Act (other than a registration
on Form S-4 or S-8, or any successor or other forms promulgated for similar
purposes), whether or not for sale for its own account, in a manner which would
permit registration of Registrable Securities for sale to the public under the
Securities Act, it will, at each such time, give prompt written notice to all
Holders of its intention to do so and of such Holders' rights under this Article
V. Upon the written request of any such Holder made within 20 days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder), the Company will use its
reasonable best efforts to effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the Holders thereof; provided, that (a) if, at any time after giving written
notice of its intention to register any securities, the Company shall determine
for any reason not to proceed with the proposed registration of the securities
to be sold by it, the Company may, at its election, give written notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), and (b) if such registration involves an underwritten offering, all
Holders requesting that their Registrable Securities be included in the
registration must sell their Registrable Securities to the underwriters selected
by the Company or the selling security holders requesting such registration, as
the case may be, on the same terms and conditions as apply to the Company or
such selling shareholders,
17
with such differences, including any with respect to indemnification and
liability insurance, as may be customary or appropriate in combined primary and
secondary offerings. If a registration requested pursuant to this Section
involves an underwritten public offering, any Holder requesting to be included
in such registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register all or any part of such securities in connection with such
registration.
Section 5.3 Priority. If a registration pursuant to Section 5.1 or
5.2 involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of Registrable Securities
requested to be included in such registration would be likely to have an adverse
effect on the price, timing or distribution of the securities to be offered in
such offering as contemplated by the Company or, if applicable, the Initiating
Holders hereunder or the Other Holders requesting such registration, as the case
may be, then
(1) with respect to a Demand Registration pursuant to Section
5.1 hereof, the Company shall include in such registration
Registrable Securities in an amount which the Company is so
advised can be sold in such offering, (a) first, Registrable
Securities requested to be included by the Initiating Holders
and all other Preferred Stockholders, pro rata based on the
number of Registrable Securities requested to be included in
such registration, (b) second, Registrable Securities
requested to be included by Management Stockholders exercising
their rights pursuant to Section 5.2 and (c) third, Other
Securities requested to be included by Other Holders, pro rata
based on the number of Other Securities requested to be
included in such registration;
(2) with respect to a registration that does not constitute a
Demand Registration pursuant to Section 5.1 hereof and is a
primary registration on behalf of the Company, the Company
shall include in such registration, securities in an amount
which the Company is so advised can be sold in such offering,
(a) first, securities proposed to be registered by the
Company, (b) second, Registrable Securities requested be
included by Stockholders exercising their rights pursuant to
Section 5.2, pro rata based on the number of Registrable
Securities requested to be included in such registration and
(c) third, Other Securities requested to be included by Other
Holders, pro rata based on the number of Other Securities
requested to be included in such registration; and
(3) with respect to a registration that does not constitute a
Demand Registration pursuant to Section 5.1 hereof and is a
secondary registration on behalf of Other Holders, the Company
shall include in such registration, securities in an amount
which the Company is so advised can be sold in such offering,
the Registrable Securities requested be included by
Stockholders exercising their rights pursuant to Section 5.2
and Other Securities requested to be included by Other
Holders, pro rata based on the number of Registrable
Securities requested to be included by the Requesting Holders
and the number of Other Securities proposed to be
18
registered by the Other Holders; provided that, Stockholders
holding more than 50% of the outstanding Common Stock held by
all Stockholders may agree to grant the Other Holders priority
in a registration initiated by Other Holders.
Section 5.4 Registration Procedures.
If and whenever the Company is required to use its reasonable best
efforts to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Agreement, the Company will promptly:
(a) use reasonable best efforts to prepare and file with the SEC a
registration statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use reasonable
best efforts to cause such filed registration statement to become and remain
effective until the earlier of (1) 180 days from the date such registration
statement to become effective (provided that, such 180-day period shall be
increased by the number of days that any Holder shall have been required by
Section 5.10 to refrain from disposing under the registration any of the
Registrable Securities owned by such Holder) or (2) the date on which the sale
of Registrable Securities has been completed.
(b) prepare and file with the SEC 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 the period
specified in Section 5.4(a) (or any longer period required by the registration
rights relating to the Other Securities included in the registration statement,
as the case may be), and to comply with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement; provided, that before filing a registration statement or
prospectus, or any amendments or supplements thereto in accordance with Sections
5.4(a) or (b), the Company will furnish to counsel selected pursuant to Section
5.9 hereof copies of all documents proposed to be filed, which documents will be
subject to the review of such counsel;
(c) furnish to each seller of such Registrable Securities such
number of copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits filed therewith,
including any documents incorporated by reference), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities by such
seller;
(d) use its reasonable best efforts to register or qualify such
Registrable Securities covered by such registration under the securities or blue
sky laws of such jurisdictions as each seller shall reasonably request, 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
19
jurisdictions of the Registrable Securities owned by such seller, except that
the Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction where, but for the
requirements of this subsection (d), it would not be obligated to be so
qualified, to subject itself to material taxation in any such jurisdiction or to
consent to general service of process in any such jurisdiction;
(e) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such Registrable
Securities;
(f) notify each seller of any such Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus (which, in the case of
a registration statement on Form S-3, may be in the form of a Form 8-K or other
periodic report under the Exchange Act) as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(g) otherwise comply with all applicable rules and regulations of
the SEC, and make available to its security holders, as soon as reasonably
practicable (but not more than 18 months) after the effective date of the
registration statement, an earnings statement which shall satisfy the provisions
of Section 11(a) of the Securities Act;
(h) (i) use reasonable best efforts to list such Registrable
Securities on any securities exchange or quotation system on which the Common
Stock is then listed if such Registrable Securities are not already so listed
and if such listing is then permitted under the rules of such exchange; and (ii)
use reasonable best efforts to provide a transfer agent and registrar for such
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement;
(i) enter into such customary agreements (including an underwriting
agreement in customary form), which may include indemnification provisions in
favor of underwriters and other Persons in addition to, or in substitution for
the provisions of Section 5.7 hereof, and take such other actions as sellers of
a majority of shares of such Registrable Securities or the underwriters, if any,
reasonably requested in order to expedite or facilitate the disposition of such
Registrable Securities;
(j) obtain a "cold comfort" letter or letters from the Company's
independent public accounts in customary form and covering matters of the type
customarily covered by
20
"cold comfort" letters as the seller or sellers of a majority of shares of such
Registrable Securities shall reasonably request;
(k) make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(l) notify counsel (selected pursuant to Section 5.9 hereof) for the
Holders of Registrable Securities included in such registration statement and
the managing underwriter or agent, immediately, and confirm the notice in
writing (i) when the registration statement, or any post-effective amendment to
the registration statement, shall have become effective, or any supplement to
the prospectus or any amendment to the prospectus shall have been filed, (ii) of
the receipt of any comments from the SEC, (iii) of any request of the SEC to
amend the registration statement or amend or supplement the prospectus or for
additional information, and (iv) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the registration statement for offering or
sale in any jurisdiction, or of the institution or threatening of any
proceedings for any of such purposes;
(m) with respect to a Demand Registration pursuant to Section 5.1
hereof, make every reasonable effort to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order as soon as
practicable;
(n) if requested by the managing underwriter or agent or any Holder
of Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;
(o) cooperate with the Holders of Registrable Securities covered by
the registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or agent, if any, or such Holders may
request;
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(p) obtain for delivery to the Holders of Registrable Securities
being registered and to the underwriter or agent an opinion or opinions from
counsel for the Company in customary form and in form, substance and scope
reasonably satisfactory to such Holders, underwriters or agents and their
counsel;
(q) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NYSE or any other securities exchange or quotation system on
which the Registrable Securities are now or hereafter may be listed;
(r) use its reasonable best efforts to make available the executive
officers of the Company to participate with the Holders of Registrable
Securities and any underwriters in any "road shows" or other selling efforts
that may be reasonably requested by the Holders in connection with the methods
of distribution for the Registrable Securities; and
(s) with respect to a Demand Registration pursuant to Section 5.1
hereof, use its reasonable best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by the
registration statement contemplated hereby.
Section 5.5 Information Supplied.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information regarding such seller required by the Securities Act in connection
with the registration of securities in secondary offerings and relating to the
registration and the distribution of such securities as the Company may from
time to time reasonably request.
Section 5.6 Restrictions on Disposition.
Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 5.4(f), such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 5.4(f), and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the period
mentioned in Section 5.4(b) shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 5.4(f) and 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 5.4(f).
Section 5.7 Indemnification.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to Section 5.1 or 5.2, the Company
shall, and it hereby does, indemnify
22
and hold harmless, to the extent permitted by law, the seller of any Registrable
Securities covered by such registration statement, each Affiliate of such seller
and their respective directors, officers, members or general and limited
partners (and any director, officer, and controlling Person of any of the
foregoing), each Person who participates as an underwriter in the offering or
sale of such securities and each other Person, if any, who controls such seller
or any such underwriter within the meaning of the Securities Act (each an
"Indemnified Party" and collectively, the "Indemnified Parties"), against any
and all losses, claims, damages or liabilities, joint or several, actions or
proceedings (whether commenced or threatened) in respect thereof ("Claims") and
expenses (including reasonable attorney's fees and reasonable expenses of
investigation) to which such Indemnified Party may become subject under the
Securities Act, common law or otherwise, insofar as such Claims or expenses
arise out of, relate to or are based upon (a) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, or (b) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in light of the circumstances under which
they were made) not misleading; provided, that the Company shall not be liable
to any Indemnified Party in any such case to the extent that any such Claim or
expense arises out of, relates to or is based solely upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information relating to a Seller furnished to the Company by or behalf
of such seller specifically stating that it is for use in the preparation
thereof. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Indemnified Party and shall survive
the Transfer of securities by any seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 5.1 or 5.2 herein, that the Company shall have received an undertaking
reasonably satisfactory to it from the prospective seller of such Registrable
Securities or any underwriter to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 5.7(a)) the Company and all other
prospective sellers or any underwriter, as the case may be, with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such untrue
statement or alleged untrue statement or omission or alleged omission was made
solely in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such seller or underwriter specifically stating
that it is for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any of the prospective sellers, or any of their
respective Affiliates, directors, officers or controlling Persons and shall
survive the Transfer of securities by any seller. In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.
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(c) Promptly after receipt by an Indemnified Party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 5.7, such
Indemnified Party will, if a claim in respect thereof is to be made against an
Indemnifying Party, give written notice to the latter of the commencement of
such action or proceeding; provided, that the failure of the Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under Section 5.7, except to the extent that the Indemnifying
Party is materially prejudiced by such failure to give notice. In case any such
action or proceeding is brought against an Indemnified Party, unless in such
Indemnified Party's reasonable judgment a conflict of interest between such
Indemnified and Indemnifying Parties may exist in respect of such action or
proceeding (in which case the Indemnified Party shall have the right to assume
or continue its own defense and the Indemnifying Party shall be liable for any
reasonable expenses therefor, but in no event will bear the expenses for more
than one firm of counsel for all Indemnified Parties in each jurisdiction who
shall be approved by the majority of the participating Holders in the
registration in respect of which such indemnification is sought), the
Indemnifying Party will be entitled to participate in and to assume the defense
thereof (at its expense), jointly with any other Indemnifying Party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such Indemnified Party, and after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof, except in
the case of a conflict of interest as aforesaid, the Indemnifying Party will not
be liable to such Indemnified Party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof, other than
reasonable costs of investigation, and shall have no liability for any
settlement made by the Indemnified Party without the consent of the Indemnifying
Party, such consent not to be unreasonably withheld. No Indemnifying Party will
settle any action or proceeding or consent to the entry of any judgment without
the prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, unless such settlement or judgment (i) includes as an
unconditional term thereof the giving by the claimant or plaintiff of a release
to such Indemnified Party from all liability in respect of such action or
proceeding, and (ii) does not involve the imposition of equitable remedies or
the imposition of any obligations on such Indemnified Party and does not
otherwise adversely affect such Indemnified Party, other than as a result of the
imposition of financial obligations for which such Indemnified Party will be
indemnified hereunder.
(d) (i) If the indemnification provided for in this Section 5.7 from
the Indemnifying Party is unavailable to an Indemnified Party hereunder in
respect of any Claim or expenses referred to herein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Claim or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such Claim or expenses, as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party under this Section 5.7(d) as a result of the
24
Claim and expenses referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with any
action or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in Section 5.7(d)(i). No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(e) Indemnification similar to that specified in this Section 5.7
(with appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or other
qualification of securities under any applicable law or with any governmental
authority other than as required by the Securities Act.
(f) The obligations of the parties under this Section 5.7 shall be
in addition to any liability which any party may otherwise have to any other
party.
Section 5.8 Required Reports. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act (or, if the Company is not required to file such reports, it will,
upon the request of any Holder, make publicly available such information), and
it will take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable such Holder to sell shares of
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
Section 5.9 Selection of Counsel. In connection with any
registration of Registrable Securities pursuant to Sections 5.1 or 5.2 hereof,
the Holders of a majority of the Registrable Securities covered by any such
registration may select one counsel to represent all Holders of Registrable
Securities covered by such registration; provided, however, that in the event
that the counsel selected as provided above is also acting as counsel to the
Company in connection with such registration, the remaining Holders shall be
entitled to select one additional counsel to represent all such remaining
Holders.
Section 5.10 Suspension/Postponement of Registration.
Notwithstanding anything in this Agreement to the contrary, the Company may upon
notice to the Holders (a) postpone effecting a registration under this
Agreement, or (b) require the Holders to refrain from disposing of Registrable
Securities under a registration statement. The Company may postpone effecting a
registration or apply limitations on dispositions under such registration if (1)
the Company in good faith determines that such registration or disposition would
materially impede, delay or interfere with any material financing, offer or sale
of other equity securities or debt securities of the Company, acquisition,
disposition or other material transaction by the Company or any of its material
subsidiaries or (2) the Company in good faith determines that it is in
possession of material non-public information the disclosure of which during the
period specified
25
in such notice the Company reasonably believes would not be in the best
interests of the Company; provided that the Company may not take any action
pursuant to this Section 5.10 for a period of time in excess of 180 days in any
one year period.
Section 5.11 Holdback Agreement. If any registration hereunder shall
be in connection with an underwritten public offering, each Holder agrees not to
effect any public sale or distribution, including any sale pursuant to Rule 144
under the Securities Act, of any Equity Securities of the Company (in each case,
other than as part of such underwritten public offering), within seven days
before, and during the 180-day period beginning on, the effective date of such
registration (except as part of such registration), and the Company hereby also
agrees and agrees to use commercially reasonable efforts to have each Other
Holder of any Equity Security of the Company purchased from the Company (at any
time other than in a public offering) to so agree.
Section 5.12 Participation in Underwritten Registrations. No Holder
may participate in any underwritten registration hereunder unless such Holder
agrees to enter into and sell its securities on the basis provided in any
underwriting agreement entered into pursuant to Section 5.4(i); provided that
(i) such Holder will not be required to make any representations or warranties
except those which relate solely to itself and its intended plan of distribution
and (ii) the liability of such Holder to any underwriter under such underwriting
agreement will be limited to liability arising from misstatements in, or
omissions from, written information regarding such Holder provided by or on
behalf of such Holder for inclusion in the prospectus.
Section 5.13 Expenses. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to Section 5.1 or 5.2.
Section 5.14 No Inconsistent Agreements. Without the consent of a
majority of the Holders, the Company represents and warrants that it will not
enter into, or cause or permit any of its Subsidiaries to enter into, any
agreement which conflicts with or limits or prohibits the exercise of the rights
granted to the Holders of Registrable Securities in this Article V.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Administrative Agent.
(a) Each Preferred Stockholder hereby appoints and authorizes the
BNP Paribas, as administrative agent (the "Administrative Agent"), to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
provided that, the Administrative Agent shall not be required to take any action
that exposes the Administrative Agent to personal liability or that is contrary
to this Agreement or applicable law.
(b) Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement, except for
its or their own gross negligence or willful misconduct. Each Preferred
Stockholder severally agrees to indemnify the Administrative Agent
26
from and against such Preferred Stockholder's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and
expenses of counsel) that may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement
(collectively, the "Indemnified Costs"); provided, however, that no Preferred
Stockholder shall be liable for any portion of such Indemnified Costs resulting
from the Administrative Agent's gross negligence or willful misconduct as found
in a final, non-appealable judgment by a court of competent jurisdiction. For
purposes of this Section 6.1, the Preferred Stockholder's respective ratable
shares of any amount shall be determined, at any time, according to the sum of
the aggregate principal amount of the Term Loans outstanding at such time and
owing to the respective Preferred Stockholders. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 6.1 applies whether any such investigation, litigation or
proceeding is brought by the Administrative Agent, any Preferred Stockholder or
a third party. The failure of any Preferred Stockholder to reimburse the
Administrative Agent promptly upon demand for its ratable share of any amount
required to be paid by the Preferred Stockholder to the Administrative Agent as
provided herein shall not relieve any other Preferred Stockholder of its
obligation hereunder to reimburse the Administrative Agent for its ratable share
of such amount, but no Preferred Stockholder shall be responsible for the
failure of any other Preferred Stockholder to reimburse the Administrative Agent
for such other Preferred Stockholder's ratable share of such amount.
(c) The Administrative Agent may resign at any time by giving
written notice to the Preferred Stockholders, and may be removed at any time
with or without cause by Preferred Stockholders holding at least 66 ?% of the
Pro Rata Shares (as defined in the Credit Agreement) of all Preferred
Stockholders. Upon any such resignation or removal, the Preferred Stockholders
holding at least 66 ?% of the Pro Rata Shares (as defined in the Credit
Agreement) of all Preferred Stockholders, shall have the right to appoint a
successor Administrative Agent. If no such successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment, within 30 days
after such retiring Administrative Agent's giving notice of resignation or the
removal of such retiring Administrative Agent, then such retiring or removed
Administrative Agent may, on behalf of the Preferred Stockholders, appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the law of the United States or of any State hereof and having a combined
capital and surplus of at least $250,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall succeed to and become vested
with the rights and duties of the retiring or removed Administrative Agent
hereunder, and such retiring or removed Administrative Agent shall be discharged
from its duties hereunder.
(d) This Section 6.1 shall survive termination of this Agreement.
Section 6.2 Termination. Section 2.1 of this Agreement shall
terminate at such time as the shares of Common Stock subject to the voting
agreement in Article III constitute less than 50% of the outstanding shares of
Common Stock. Section 2.2 shall terminate upon expiration of the period
specified therein for the maintenance of liability insurance. The voting
agreements in Article III of this Agreement shall terminate with respect to any
share of Common
27
Stock, at such time as such share is Transferred in a Public Transfer and shall
terminate with respect to all Common Stock and Series B Preferred Stock at such
time as the shares of Common Stock and Series B Preferred Stock subject to such
voting agreement constitute less than 50% of the outstanding shares of Capital
Stock entitled to vote on all matters to be voted on by holders of Common Stock.
Article IV (other than any restrictions on Transfer imposed by the Securities
Act or state securities or "blue sky" laws) shall terminate as to any share of
Common Stock at such time as such share is Transferred in a Public Transfer and
as to all shares of Common Stock and Preferred Stock and all Options at such
time as the shares of Common Stock and Series B Preferred Stock held by the
Stockholders constitute less than 50% of the outstanding shares of Capital Stock
entitled to vote on all matters to be voted on by holders of Common Stock.
Article V of this Agreement (other than Section 5.7 thereof) shall terminate at
such time as there shall be no Registrable Securities outstanding. In addition
to the foregoing, this Agreement shall terminate upon a sale of all the
outstanding shares of Common Stock held by the Stockholders and, with respect to
any Stockholder, this Agreement shall terminate with respect to such Stockholder
at such time as it no longer holds any Series A Preferred Stock, Series B
Preferred Stock or Common Stock. Nothing herein shall relieve any party from any
liability for the breach of any of the agreements set forth in this Agreement.
Section 6.3 Amendments and Waivers. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or any Holder unless such modification,
amendment or waiver is approved in writing by the Company, the Administrative
Agent and holders of at least 51% of the Common Stock then held by the
Stockholders, except that any such action which adversely affects the Management
Stockholders disproportionately as a class compared to other Stockholders must
be approved by holders of at least 51% of the Common Stock and Vested Options
held by all Management Stockholders or, if there are no Management Stockholders
at the time, by the Management Agent. The failure of any party to enforce any of
the provisions of this Agreement shall in no way be construed as a waiver of
such provisions and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
Section 6.4 Successors, Assigns and Transferees; Management
Stockholder.
(a) This Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns. This Agreement may not be assigned by any party hereto (except as
described in the next sentence) without the prior written consent of the other
parties. Any Stockholder may assign its rights and obligations hereunder in
accordance with the Transfer provisions of Article IV.
(b) Any employee of the Company who receives Options will be
required by the terms thereof to become a party to this Agreement. Following
delivery to Company of an agreement in writing to become a party to and be bound
by all of the provisions of this Agreement applicable to Management
Stockholders, such employee shall become a party hereto and all references
herein to Management Stockholders shall be deemed to include such employee.
28
Section 6.5 Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day; (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) one (1)
business day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent, with respect to the Company and the Stockholders,
to their respective addresses specified in the Credit Agreement (or at such
other address as any such party may specify by like notice) and, with respect to
any other Holder, to the address of such Holder as shown in the stock record
books of the Company (or at such other address as any such Holder may specify to
all of the above by like notice).
Section 6.6 Further Assurances. At any time or from time to time
after the date hereof, the parties agree to cooperate with each other, and at
the request of any other party, to execute and deliver any further instruments
or documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder.
Section 6.7 Entire Agreement. Except as otherwise expressly set
forth herein, this Agreement, the Preferred Stock Issuance and Restructuring
Agreement, the Series A Certificate of Designations, the Series B Certificate of
Designations and the Stock Option Plan 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, that may have related
to the subject matter hereof in any way.
Section 6.8 Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach, default or
noncompliance under this Agreement or any waiver on such party's part of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, by law, or otherwise afforded to any
party, shall be cumulative and not alternative.
Section 6.9 Governing Law; Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed in all respects by the laws of the State of
Delaware. The parties hereto hereby submit to the non-exclusive jurisdiction of
the courts of the State of New York for the purpose of any suit, proceeding or
judgment arising under or with respect to this Agreement. Each of the parties
hereto hereby irrevocably and unconditionally waives trial by jury in any legal
action or proceeding in relation to this Agreement and for any counterclaim
therein.
29
Section 6.10 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 any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 6.11 Effective Date. This Agreement shall become effective
immediately upon the Closing.
Section 6.12 Enforcement. Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.
Section 6.13 Titles and Subtitles. The titles of the Sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
Section 6.14 No Recourse. Notwithstanding anything that may be
expressed or implied in this Agreement, the Company and each Holder covenant,
agree and acknowledge that no recourse under this Agreement or any documents or
instruments delivered in connection with this Agreement shall be had against any
current or future director, officer, employee, general or limited partner,
member, attorney or advisors of any Stockholder, the Company or of any Affiliate
or permitted assignee thereof, whether by the enforcement of any assessment or
by any legal or equitable proceeding, or by virtue of any statute, regulation or
other applicable law, it being expressly agreed and acknowledged that no
personal liability whatsoever shall attach to, be imposed on or otherwise be
incurred by any current or future director, officer, agent, employee, partner,
member, attorney or advisor of any Stockholder, the Company or of any Affiliate
or permitted assignee thereof, as such for any obligation of any Stockholder or
the Company under this Agreement or any documents or instruments delivered in
connection with this Agreement for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 6.15 Counterparts; Facsimile Signatures. This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument. This Agreement may be
executed by facsimile signature(s).
Section 6.16 No Third Party Beneficiaries. This Agreement is not
intended to confer upon any persons other than the parties hereto any rights or
remedies hereunder other than the rights granted to the Principal Officers
pursuant to Section 3.4(b) hereof and, with respect to Section 2.2 only, the
Company's officers and directors immediately prior to the Closing Date and those
Directors appointed hereunder.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date set forth in the first paragraph hereof.
THE COMPANY: TELESPECTRUM WORLDWIDE INC.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________________
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
THE MANAGEMENT AGENT: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________________
J. ▇▇▇▇▇ ▇▇▇▇▇▇
THE PREFERRED STOCKHOLDERS: BNP PARIBAS (F/K/A BANQUE NATIONALE DE
PARIS),
as a Preferred Stockholder and as Administrative
Agent
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
___________________________________________
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
___________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Managing Director
S-1
ENDEAVOR, LLC,
as a Preferred Stockholder
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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FLEET NATIONAL BANK (F/K/A BANKBOSTON, N.A.),
as a Preferred Stockholder
By: /s/ G. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________________
Name: G. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST,
as a Preferred Stockholder
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
___________________________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
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▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND,
as a Preferred Stockholder
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Director
S-5
▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST,
as a Preferred Stockholder
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
TBH-I, L.P., as a Preferred Stockholder
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇ FARGO BANK, N.A., as a Preferred
Stockholder
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
S-6
FIRST SOURCE LOAN OBLIGATIONS TRUST,
as a Preferred Stockholder
By: First Source Financial, Inc., its Servicer
and Administrator
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
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ENDURANCE CLO I, LTD, as a Lender
By: ING Capital Advisors, LLC
As Portfolio Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
KZH ING-2 LLC, as a Preferred Stockholder
By: /s/ ▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇ ▇▇▇
Title: Authorized Agent
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KZH ING-3 LLC, as a Preferred Stockholder
By: /s/ ▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇ ▇▇▇
Title: Authorized Agent
ARCHIMEDES FUNDING, L.L.C. , as a
Preferred Stockholder
By: ING Capital Advisors, LLC,
as Collateral Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
ARCHIMEDES FUNDING II, L.L.C., as a
Preferred Stockholder
By: ING Capital Advisors, LLC,
as Collateral Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
FIRST DOMINION FUNDING III, as a
Preferred Stockholder
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
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THE MANAGEMENT STOCKHOLDERS:
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇
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