Exhibit 4.02
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AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
Dated as of August 30, 2000
and as amended and restated on December 14, 2001
By and Among
KINETICS HOLDINGS CORPORATION
and
THE STOCKHOLDERS SIGNATORY HERETO
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TABLE OF CONTENTS
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ARTICLE I
CERTAIN DEFINITIONS.......................................................................2
Section 1.1 Certain Definitions..........................................................2
ARTICLE II
TRANSFER OF EQUITY SECURITIES ...........................................................11
Section 2.1 Restrictions................................................................11
Section 2.2 Permitted Transfers.........................................................12
Section 2.3 Right of First Refusal......................................................16
Section 2.4 Sales by DBCP Subject to Tag-Along Rights...................................17
Section 2.5 Grant to Selling Group of Drag-Along Rights.................................19
Section 2.6 Sale of the Business........................................................21
Section 2.7 Grant of Preemptive Rights to Stockholders..................................23
ARTICLE III
REGISTRATION RIGHTS......................................................................24
Section 3.1 Required Registration.......................................................24
Section 3.2 Incidental Registration.....................................................26
Section 3.3 Registration Procedures.....................................................27
Section 3.4 Preparation; Reasonable Investigation.......................................31
Section 3.5 Rights of Requesting Holders................................................31
Section 3.6 Registration Expenses.......................................................31
Section 3.7 Indemnification; Contribution...............................................31
Section 3.8 Holdback Agreements; Registration Rights to Others..........................33
Section 3.9 Availability of Information.................................................34
ARTICLE IV
BOARD OF DIRECTORS OF THE COMPANY........................................................34
Section 4.1 Board of Directors..........................................................34
Section 4.2 Major Management Decisions; ▇▇▇▇▇▇▇ Consent.................................36
(i)
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ARTICLE V
OTHER COVENANTS OF COMPANY...............................................................36
Section 5.1 Financial Statements and Other Information..................................36
Section 5.2 Board Observation Rights....................................................37
Section 5.3 Director and Officer Insurance..............................................38
ARTICLE VI
MISCELLANEOUS............................................................................38
Section 6.1 Entire Agreement............................................................38
Section 6.2 Captions....................................................................38
Section 6.3 Counterparts................................................................38
Section 6.4 Notices.....................................................................38
Section 6.5 Successors and Assigns......................................................41
Section 6.6 GOVERNING LAW...............................................................41
Section 6.7 Submission to Jurisdiction..................................................41
Section 6.8 Benefits Only to Parties....................................................42
Section 6.9 Termination; Survival of Benefits...........................................42
Section 6.10 Publicity..................................................................42
Section 6.11 Confidentiality............................................................43
Section 6.12 Expenses...................................................................43
Section 6.13 Amendments; Waivers........................................................43
Section 6.14 Reserved...................................................................44
Section 6.15 Other Business.............................................................44
SCHEDULE I Senior Warrantholders
SCHEDULE II Other Financial Investors
SCHEDULE III 2001 Investors
SCHEDULE IV Management Shareholders
SCHEDULE V Equity Securities Held by Stockholders
(ii)
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this "Agreement"), dated
as of August 30, 2000 and as amended and restated on December 14, 2001, by and
among Kinetics Holdings Corporation, a Delaware corporation (the "Company"), DB
Capital Investors, L.P., a Delaware limited partnership ("DBCP"), ▇▇▇▇▇▇▇
Capital III, L.P., a Delaware limited partnership ("▇▇▇▇▇▇▇"), United States
Filter Corporation, a Delaware corporation ("USF"), the Senior Warrantholders,
as listed on Schedule I attached hereto, the Other Financial Investors, as
listed on Schedule II attached hereto, the 2001 Investors, as listed on Schedule
III attached hereto, (DBCP, ▇▇▇▇▇▇▇, USF, the Senior Warrantholders, the Other
Financial Investors and the 2001 Investors, collectively, the "Financial
Investors"), the Management Stockholders, as listed on Schedule IV attached
hereto, Intervivos Trust Dated 10/76 ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ UA 1976
("▇▇▇▇▇▇▇") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual residing in Miami, Florida
("Mandaric" and, together with the Financial Investors, the Management
Stockholders and ▇▇▇▇▇▇▇, the "Stockholders"). References herein to the "date
hereof" or similar references to the date of this Agreement are to December 14,
2001.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Kinetics Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of the Company ("Kinetics"), and USF entered into a
Stock Purchase Agreement, dated as of July 18, 2000 (the "Purchase Agreement"),
pursuant to which Kinetics agreed to acquire (the "Acquisition") from (i) USF
all of the issued and outstanding capital stock of each of The Kinetics Group,
Inc., a Delaware corporation ("KGI"), FTS Systems, Inc., a New York corporation,
WHE Bio-Systems, an Ontario corporation and Newpulse Kinetics Pte Ltd., an
Australian corporation, and (ii) North West Water Holding GmbH, a German limited
liability company and an indirect wholly-owned subsidiary of USF, (x) certain
real and personal property which is used by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ GmbH, a German
limited liability company ("RFG") and (y) all of the issued and outstanding
capital stock of each of RFG and Clean Room Technologies, Inc., a New York
corporation;
WHEREAS, the 2001 Investors are purchasing Equity Securities of the
Company (the "2001 Investment") pursuant to the terms of a Stock Purchase
Agreement dated as of December 14, 2001 (the "Stock Purchase Agreement");
WHEREAS, the non-voting Class B Common Stock of the Company is being
reclassified as voting Class A Common Stock, and the Class A Common Stock is
being renamed Common Stock;
WHEREAS, upon the consummation of the 2001 Investment, the
Stockholders shall own Equity Securities and Notes in the amounts set forth in
Schedule V attached hereto;
WHEREAS, the Company has adopted the Kinetics Holdings Corporation
2000 Stock Option Plan (as amended from time to time, the "Management Equity
Incentive Plan") for
certain members of management and key employees of the Company as part of the
compensation and incentive arrangements for such members of management and key
employees;
WHEREAS, the Company and the Stockholders, other than the 2001
Investors, have previously entered into a Shareholders Agreement dated August
30, 2000, as amended by the First Amendment to the Shareholders Agreement dated
as of February 23, 2001 and the Second Amendment to the Shareholders Agreement
dated as of May 30, 2001; and
WHEREAS, the Company and the Stockholders each desire to enter into
this Agreement to, inter alia, regulate and limit certain rights relating to the
Equity Securities and Notes and to limit the sale, assignment, transfer,
encumbrance or other disposition of such Equity Securities and Notes and to
provide for the consistent and uniform management of the Company as set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"2001 Investment" shall have the meaning set forth in the second
recital of this Agreement.
"2001 Investors" shall mean the parties listed on Schedule III
attached hereto.
"2001 Investors Filing Date" shall have the meaning set forth in
Section 3.1(a) of this Agreement.
"Acquisition" shall have the meaning set forth in the first recital
of this Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Applicable Law" shall mean, with respect to any Person, all
provisions of laws, statutes, ordinances, rules, regulations, permits or
certificates of any Governmental Authority applicable to such Person or any of
its assets or property, and all judgments, injunctions, orders and decrees of
all courts, arbitrators or Governmental Authorities in proceedings or actions in
which such Person is a party or by which any of its assets or properties are
bound.
"▇▇▇▇▇▇▇" shall have the meaning set forth in the preamble to this
Agreement.
"▇▇▇▇▇▇▇ Group" shall have the meaning set forth in Section 2.3(b) of
this Agreement.
"▇▇▇▇▇▇▇ Investor Group" shall mean, collectively, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
and Mandaric.
"Board" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day except a Saturday, a Sunday and any
day which in New York, New York shall be a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close.
"Class A Common Stock" shall mean the voting Class A Common Stock of
the Company, $0.01 par value per share.
"Class B Common Stock" shall mean the non-voting Class B Common Stock
of the Company, $0.01 par value per share.
"Closing Date" shall have the meaning set forth in the Purchase
Agreement.
"Common Stock" shall mean Common Stock of the Company, $0.01 par
value per share.
"Common Stock Equivalents" shall mean, at any time, (i) with respect
to each share of Common Stock issued and outstanding (other than Common Stock
issued upon the exercise of Incentive Securities), one (1), (ii) with respect to
each share of Series A Preferred Stock issued and outstanding, an amount equal
to the number of shares of Common Stock into or for which such share of Series A
Preferred Stock may be converted at such time, and (iii) with respect to any
other Equity Security which is then exercisable, exchangeable or convertible at
an exercise price equal to or less than the fair market value of their Common
Stock at such time, an amount equal to the number of shares of Common Stock, if
any, into or for which such Equity Security may be exercised, exchanged or
converted at such time.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Credit Documents" shall mean the following and all documents entered
into in connection therewith: (i) the Credit Agreement, dated as of August 30,
2000, among Kinetics, KGI, the subsidiary guarantors party thereto from time to
time, the Lenders party thereto from time to time, Bank One, N.A., as
Administrative Agent and as Collateral Agent for the secured
parties, Bankers Trust Company, as Syndication Agent, The Bank of Nova Scotia,
as Documentation Agent, Deutsche Bank Securities, Inc., as Lead Arranger and
Book Manager, and Banc One Capital Markets, Inc., as Co-Arranger, as amended
(the "Senior Credit Agreement"), (ii) the Securities Purchase Agreement, dated
as of August 30, 2000, by and among KGI, Kinetics, the Company, the subsidiary
guarantors party thereto from time to time, ▇. ▇. ▇▇▇▇▇▇▇ Mezzanine Fund, L.P.,
a Delaware limited partnership, ▇. ▇. ▇▇▇▇▇▇▇ Market Value Fund, L.P., a
Delaware limited partnership, The Northwestern Mutual Life Insurance Company, a
Wisconsin corporation, Albion Alliance Mezzanine Fund, L.P., a Delaware limited
partnership, Albion Alliance Mezzanine Fund II, L.P., a Delaware limited
partnership, and Deutsche Bank Securities Inc., a Delaware corporation as
amended (the "Senior Subordinated Credit Agreement"), (iii) any amendment,
restatement, extension, replacement, supplement, restructuring or other
modification or refinancing from time to time of the Senior Credit Agreement or,
as the case may be, the Senior Subordinated Credit Agreement (in whole or in
part without limitation as to terms, extensions of maturities, increasing the
amount of borrowings or other conditions or covenants), and (iv) all documents
entered into in connection with any of the documents referred to in clauses (i)
through (iii).
"▇▇▇▇▇▇▇" shall have the meaning set forth in the preamble to this
Agreement.
"DBCP" shall have the meaning set forth in the preamble to this
Agreement.
"DBCP Group" shall have the meaning set forth in Section 2.3(b) of
this Agreement.
"DBSI" shall mean Deutsche Bank Securities Inc., a Delaware
corporation.
"Debt" shall have the meaning given to the term "Indebtedness" in the
Senior Credit Agreement.
"Demand Notice" shall have the meaning set forth in Section 3.1(b) of
this Agreement.
"Equity Securities" shall mean all shares of capital stock of the
Company, all securities at any time convertible into or exchangeable for shares
of capital stock of the Company, and all options, warrants, and other rights to
purchase or otherwise acquire from the Company shares of such capital stock, or
securities convertible into or exchangeable for shares of such capital stock;
provided that the Incentive Securities shall be deemed not to be "Equity
Securities".
"Excess New Securities" shall have the meaning set forth in Section
2.7(a) of this Agreement.
"Excess Transferable Securities" shall have the meaning set forth in
Section 2.4(b) of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Financial Investors" shall have the meaning set forth in the
preamble to this Agreement.
"First Note" shall have the meaning set forth in the Purchase
Agreement.
"First Note Warrants" shall have the meaning set forth in the Junior
Warrant Agreement.
"Fully-Diluted Basis" shall mean and include, as applied to the
calculation of the total number of shares of Common Stock outstanding at any
time, (i) all shares of Common Stock outstanding at the time of determination,
(ii) all shares of Common Stock issuable upon conversion of the Series A
Preferred Stock which are outstanding at the time of determination, and (iii)
without duplication, all shares of Common Stock issuable upon the exercise,
exchange or conversion of Equity Securities which are outstanding at the time of
determination and then so exercisable, exchangeable or convertible at an
exercise or conversion price equal to or less than the fair market value of the
Common Stock at such time; provided however that the determination of
Fully-Diluted Basis shall not include or take into account any Incentive
Securities issued solely to the Company's (or any of its Subsidiaries')
employees, officers or directors pursuant to stock option or ownership plans or
programs or any stock issuance arrangements adopted by the Company representing
up to an aggregate of fifteen percent (15%) of the Company's total common equity
determined as of the date hereof consistent with the other provisions of this
definition, but assuming that all outstanding Equity Securities are immediately
exercisable for or convertible into Common Stock at a price less than or equal
to the fair market value of the Common Stock.
"Governmental Authority" shall mean any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States of
America or any foreign country.
"Gryphon" means, collectively, Gryphon Partners II, L.P., a Delaware
limited partnership, and Gryphon Partners II-A, L.P., a Delaware limited
partnership, and any references to Stockholder, Financial Investor, 2001
Investor, and any similar reference herein to holders of Equity Securities or
Common Stock Equivalents shall, with respect to Gryphon, include both Gryphon
Partners II, L.P. and Gryphon Partners II-A, L.P. together, and the Equity
Securities or Common Stock Equivalents held by such entities shall be counted
together and aggregated for all purposes under this Agreement.
"Holders' Counsel" shall have the meaning set forth in the definition
of "Registration Expenses".
"Incentive Securities" shall mean (i) all Stock Options and (ii) all
shares of Common Stock issued upon the exercise of Stock Options.
"Incidental Registration" shall have the meaning set forth in Section
3.2(a) of this Agreement.
"Junior Warrant Agreement" shall mean the Warrant Agreement, dated as
of August 30, 2000, by and between the Company and USF.
"Junior Warrant Securities" shall mean, collectively, any Junior
Warrants, any Common Stock issued upon the exercise of any such Junior Warrants.
"Junior Warrants" shall mean the First Note Warrants and the Second
Note Warrants.
"KGI" shall have the meaning set forth in the first recital of this
Agreement.
"Kinetics" shall have the meaning set forth in the first recital of
this Agreement.
"Magnolia" shall mean Magnolia Tree, LLC, a Delaware limited
liability company.
"Magnolia Pledge Agreement" shall mean that certain pledge agreement,
dated as of June 4, 2001, made by Magnolia in favor of the Company.
"Management Equity Incentive Plan" shall have the meaning set forth
in the fourth recital of this Agreement.
"Management Stockholders" shall mean the parties listed on Schedule
IV attached hereto.
"Mandaric" shall have the meaning set forth in the preamble to this
Agreement.
"NASDAQ" shall mean The Nasdaq Stock Market, Inc.
"New Securities" shall mean any Equity Securities or other securities
of the Company, whether authorized now or in the future, and any rights, options
or warrants to purchase any Equity Securities ("Options"), and securities of any
type whatsoever (including, without limitation, (x) debt obligations which are
convertible into Equity Securities, such other securities or Options and (y)
contractual rights to receive payments, such as "phantom" stock or stock
appreciation rights, where the amount thereof is determined by reference to fair
market or equity value of the Company or any Equity Securities), including any
which may become convertible into or exchangeable for any Equity Securities,
such other securities or Options; provided that "New Securities" shall not
include (i) shares of Common Stock issued upon the exercise of any of the
Warrants, (ii) shares of Common Stock issued by the Company on the Closing Date
(and shares of Common Stock issued upon the direct or indirect conversion or
exercise of any securities issued by the Company on or prior to the Closing
Date), (iii) shares of Common Stock (including shares issuable upon the exercise
or exchange of warrants or options to acquire shares of Common Stock) issued
solely to the Company's (or any of its Subsidiaries') employees, consultants or
directors pursuant to a stock option or ownership plan or program or any stock
issuance arrangement adopted by the Board, representing not more than an
aggregate of fifteen percent (15%) of the Company's total common equity
determined on a Fully-Diluted Basis (giving effect to the proviso contained in
such definition) as of the date hereof, (iv) shares
of Class A Common Stock issued upon the conversion of shares of Class B Common
Stock, (v) Equity Securities issued as consideration in any merger or
recapitalization of the Company or Kinetics, (vi) Equity Securities issued as
consideration for the acquisition of another Person or all or substantially all
of the assets of another Person, (vii) any issuance of Equity Securities to any
Person which is determined by the Board to be strategically beneficial to the
Company or any of its Subsidiaries, (viii) shares of Common Stock to be issued
by the Company in connection with any public offering of Common Stock, (ix)
Equity Securities issued as part of any debt financing transaction, so long as
such Equity Securities do not represent more than 17.5% of the total value of
such debt financing transaction and (x) shares of Series A Preferred Stock (and
shares of Common Stock issued upon the direct or indirect conversion or exercise
of the Series A Preferred Stock) issued pursuant to the Stock Purchase
Agreement; provided that the securities issued pursuant to clauses (vii) and
(ix) are not issued to DBCP or any of its Affiliates.
"New Securities Price" shall have the meaning set forth in Section
2.7(a) of this Agreement.
"Non-Qualified Person" shall mean any Person who is (i) directly or
indirectly engaged in any business which the Board determines, in good faith, to
be competing with any business of the Company or any of its Subsidiaries
(provided that the passive investment by a financial investor of (x) one percent
(1%) or less of any class of securities of any Person whose securities are
registered under the Exchange Act or (y) three percent (3%) or less of any class
of securities of any other Person shall not be deemed to be a competing interest
for purposes of this clause (i)), (ii) an adverse party in any significant (as
determined in good faith by the Board) legal or arbitration proceeding with the
Company or any of its Subsidiaries, and (iii) other than for purposes of Section
2.2(a)(iii)(x), an Affiliate of any Person described in clauses (i) or (ii). For
purposes of this definition, a financial investor shall have made a "passive
investment" in another Person if such financial investor does not (x) actively
manage the business or affairs of such Person, (y) have the right to nominate or
appoint one or more directors to the board of directors of such Person, or (z)
have a board observation right with respect to meetings of the board of
directors of such Person.
"Note Shares" shall have the meaning set forth in the Second Note.
"Note Warrants Exercise Date" shall have the meaning set forth in the
Junior Warrant Agreement.
"Notes" shall mean, collectively, the First Note and the Second Note.
"Offered Securities" shall have the meaning set forth in Section
2.3(a) of this Agreement.
"Options" shall have the meaning set forth in the definition of New
Securities.
"Other Financial Investors" shall mean the parties listed on Schedule
II attached hereto.
"Other Stockholders" shall have the meaning set forth in Section
2.4(a) of this Agreement.
"Participant" shall have the meaning set forth in Section 2.4(b) of
this Agreement.
"Permitted Transfer" shall have the meaning set forth in Section
2.2(a) of this Agreement.
"Permitted Transferee" shall have the meaning set forth in Section
2.2(a) of this Agreement.
"Person" or "Persons" shall mean any individual, general partnership,
limited partnership, limited liability company, limited liability partnership,
joint venture, firm, corporation, association, trust, or other enterprise or any
governmental or political subdivision or any agency, department or
instrumentality thereof.
"Preemptive Exercise Notice" shall have the meaning set forth in
Section 2.7(a) of this Agreement.
"Preemptive Notice" shall have the meaning set forth in Section
2.7(a) of this Agreement.
"Preferred Stock" shall mean Series A Preferred Stock of the Company,
par value $0.01 per share, and any other series of Preferred Stock authorized or
designated by the Board.
"Public Offering" shall mean a widely distributed sale of Common
Stock in an underwritten public offering pursuant to an effective registration
statement filed with the SEC.
"Purchase Agreement" shall have the meaning set forth in the first
recital of this Agreement.
"Qualified Public Offering" shall mean a Public Offering which yields
at least $100,000,000 of gross proceeds to the Company.
"Registrable Securities" shall mean, at any time:
(i) any shares of Common Stock and any shares of Common
Stock issued or issuable upon exercise, exchange or conversion of any
Equity Securities; and
(ii) any securities issued or issuable in respect of
shares of Common Stock (including, without limitation, by way of
stock dividend, stock split, distribution, exchange, combination,
merger, recapitalization, reorganization or otherwise).
As to any particular Registrable Securities once issued, such
Registrable Securities shall cease to be Registrable Securities:
(i) when a registration statement with respect to the sale
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;
(ii) when such securities shall have been distributed by
the holder thereof to the public pursuant to Rule 144 under the
Securities Act (or any successor provision); or
(iii) when such securities shall have ceased to be
outstanding.
"Registration" shall mean each Required Registration and each
Incidental Registration.
"Registration Expenses" shall mean, with respect to the Company, all
expenses incident to the Company's performance of or compliance with Article III
including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), expenses of printing certificates for the
Registrable Securities in a form eligible for deposit with the Depository Trust
Company, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), and fees and disbursements of counsel for the
Company and its independent certified public accountants (including the expenses
of any management review, cold comfort letters or any special audits required by
or incident to such performance and compliance), securities acts liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, fees and expenses of other Persons retained by the Company,
the fees and expenses of one (1) counsel (the "Holders' Counsel") for the
holders of Registrable Securities to be included in the relevant Registration,
selected by the holders of a majority of the Registrable Securities to be
included in such Registration (except that, where a Registration is a Required
Registration, such selection may only be made by Stockholders holding a majority
of the Registrable Securities set forth in the relevant Demand Request); but not
including any underwriting fees, discounts or commissions attributable to the
sale of securities or fees and expenses of counsel representing the holders of
Registrable Securities included in such Registration (other than the Holders'
Counsel and applicable local counsel) incurred in connection with the sale of
Registrable Securities.
"Required Registration" shall have the meaning set forth in Section
3.1(a) of this Agreement.
"Requisite Holders" shall mean, at any time, and with respect to any
registration and related public offering, the holders of at least a majority of
the Registrable Securities proposed to be included in such Public Offering
before giving effect to any cut-back provisions contained herein.
"Response Deadline" shall have the meaning set forth in Section
2.4(b) of this Agreement.
"RFG" shall have the meaning set forth in the first recital of this
Agreement.
"▇▇▇▇▇" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇, an individual residing in Palo Alto,
California.
"Sale Notice" shall have the meaning set forth in Section 2.3(a) of
this Agreement.
"Sale of the Business" shall mean any transaction or series of
transactions (whether structured as a stock sale, merger, consolidation,
reorganization, asset sale or otherwise), which results in the sale or transfer
of more than a majority of the assets of the Company and its Subsidiaries
(determined based on value) or of beneficial ownership or control of a majority
of the capital stock of the Company or Kinetics to a Person other than DBCP or
any of its Affiliates.
"SEC" shall mean, at any time, the Securities and Exchange Commission
or any other federal agency at such time administering the Securities Act.
"Second Note" shall have the meaning set forth in the Purchase
Agreement and shall also include any shares of Common Stock issued upon the
conversion of the Second Note in accordance with its terms.
"Second Note Warrants" shall have the meaning set forth in the Junior
Warrant Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Selling Group" shall have the meaning set forth in Section 2.5(a) of
this Agreement.
"Senior Credit Agreement" shall have the meaning set forth in the
definition of "Credit Documents".
"Senior Subordinated Credit Agreement" shall have the meaning set
forth in the definition of "Credit Documents".
"Senior Subordinated Indebtedness" shall mean the indebtedness of
Kinetics incurred pursuant to the Senior Subordinated Credit Agreement.
"Senior Warrant Arranger" shall mean Whitney.
"Senior Warrantholder Filing Date" shall have the meaning set forth
in Section 3.1(a) of this Agreement.
"Senior Warrantholder Observer" shall have the meaning set forth in
Section 5.2(a) of this Agreement.
"Senior Warrantholders" shall mean the parties listed on Schedule I
attached hereto.
"Senior Warrant Pledge" shall have the meaning set forth in Section
2.2(a)(xiv).
"Senior Warrants" shall mean, collectively, the warrants issued to
the Senior Warrantholders pursuant to the Senior Subordinated Credit Agreement.
"Series A Preferred Stock" shall mean the voting Series A Preferred
Stock of the Company, $0.01 par value per share.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing in
Woodside, California.
"▇▇▇▇▇▇▇ Pledge Agreement" shall mean that certain pledge agreement,
dated as of June 4, 2001, made by ▇▇▇▇▇▇▇ in favor of the Company.
"State of Michigan" shall mean the State Treasury department of the
State of Michigan, custodian of the Michigan Public Schools Employees'
Retirement System, State Employees' Retirement System and Michigan State Police
Retirement System.
"State of Michigan Observer" shall have the meaning set forth in
Section 5.2(b) of this Agreement.
"Stock Options" shall mean all options to purchase Common Stock
granted to non-management members of the board of directors, members of
management and key employees of the Company pursuant to the Management Equity
Incentive Plan or any successor or similar plan.
"Stockholder" shall have the meaning set forth in the preamble to
this Agreement and any other Person that becomes a Stockholder pursuant to
Section 2.2(b) of this Agreement.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at such time.
"TIAA" shall have the meaning set forth in Section 5.2(c) of this
Agreement.
"TIAA Observer" shall have the meaning set forth in Section 5.2(c) of
this Agreement.
"Transfer" shall have the meaning set forth in Section 2.1(a) of this
Agreement.
"Transfer Notice" shall have the meaning set forth in Section 2.4(a)
of this Agreement.
"USF" shall have the meaning set forth in the preamble to this
Agreement.
"USF Holding Period" shall mean the period beginning on August 30,
2000 and ending on the date which is the Note Warrants Exercise Date.
"USF Noncompetition Agreement" shall mean the Non-Competition
Agreement, dated as of August 30, 2000, by and between Kinetics and Vivendi
Environment S.A., a societe anonyme organized under the laws of France.
"Voting Stock" shall mean, collectively, the Common Stock and the
Series A Preferred Stock.
"Warrants" shall mean, collectively, the Junior Warrants and the
Senior Warrants.
"Whitney" shall mean, collectively, ▇. ▇. ▇▇▇▇▇▇▇ Mezzanine Fund,
L.P., a Delaware limited partnership, and any successor thereof and ▇. ▇.
▇▇▇▇▇▇▇ Market Value Fund, L.P., a Delaware limited partnership, and any
successor thereof.
ARTICLE II
TRANSFER OF EQUITY SECURITIES
Section 2.1 Restrictions. (a) No Stockholder shall, directly or
indirectly, sell, assign, pledge or in any manner transfer any Equity Securities
or all or any portion of the First Note, or any right or interest therein to any
Person (each such action, a "Transfer") (y) during the period beginning on the
date hereof and ending on August 30, 2002, except pursuant to a Permitted
Transfer set forth in any of Sections 2.2(a)(i), 2.2(a)(ii), 2.2(a)(iii),
2.2(a)(iv)(x), 2.2(a)(vi)(y), 2.2(a)(vii), 2.2(a)(ix), 2.2(a)(x), 2.2(a)(xi),
2.2(a)(xiii), 2.2(a)(xiv), 2.2(a)(xv) or 2.2(a)(xvi) hereof and (z) at any time
after August 30, 2002, except pursuant to a Permitted Transfer.
(b) From and after the date hereof, all certificates or other
instruments representing Equity Securities issued after the date hereof held by
any of the Stockholders shall bear a legend which shall substantially state as
follows:
"The securities represented by this certificate are subject to
the Amended and Restated Shareholders Agreement of the issuer
amended and restated as of December 14, 2001, as the same may
be amended from time to time, pursuant to the terms of which
the transfer of such securities is restricted. Such agreement
also provides for various other limitations and obligations,
and all of the terms thereof are incorporated by reference
herein. A copy of such agreement will be furnished without
charge by the issuer to the holder hereof upon written
request."
(c) In addition to the legend required by Section 2.1(b) above, all
certificates representing Equity Securities held by any of the Stockholders
shall bear a legend which shall substantially state as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any state securities laws and may not be offered for sale,
sold, pledged, transferred or otherwise disposed of until the
holder hereof provides evidence reasonably satisfactory to the
issuer (which, in the discretion of the issuer, may include an
opinion of counsel reasonably satisfactory to the issuer) that
such offer, sale, pledge, transfer or other disposition will
not violate applicable federal or state securities laws."
(d) The Company agrees that it will not cause or permit any Transfer
of any Equity Securities to be made on its books unless such Transfer is
permitted by this Agreement and has been made in accordance with the terms
hereof.
(e) Each Stockholder agrees that it will not effect any Transfer of
Equity Securities unless such Transfer is made (i) pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption from
the registration requirements of the Securities Act or pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act and (ii) in accordance with any
applicable securities laws of any state of the United States.
Section 2.2 Permitted Transfers. (a) Subject to the limitations set
forth in Section 2.1(a) of this Agreement, a Stockholder may at any time effect
any of the following Transfers (each a "Permitted Transfer," and each transferee
of such Stockholder in respect of such Transfer, a "Permitted Transferee"):
(i) any Transfer of any or all Equity Securities held by a
Stockholder who is an individual following such Stockholder's death
by will or intestacy to such Stockholder's legal representative, heir
or legatee;
(ii) any Transfer of any or all Equity Securities held by
a Stockholder who is an individual as a gift or gifts during such
Stockholder's lifetime to such Stockholder's spouse, children,
grandchildren or a trust or other legal entity for the benefit of
such Stockholder or any of the foregoing;
(iii) any Transfer of any or all Equity Securities or all
or any portion of the First Note by a Financial Investor to any
Affiliate of such Person; provided that the transferee of any such
Financial Investor is a Person who (x) is not a Non-Qualified Person,
and (y) is a "qualified institutional buyer" or an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act); and, provided further that any such Affiliate shall
Transfer such Equity Securities or First Note to the Stockholder from
whom the Equity Securities or First Note were originally received or
acquired within five (5) days after ceasing to be an Affiliate of
such Stockholder;
(iv) any Transfer by DBCP (y) so long as Section 2.4 is
complied with, or (z) upon any liquidation or any other distribution
to the partners or any other holder of a beneficial interest of DBCP;
provided that in the case of clause (y) and clause (z), such Person
is a "qualified institutional buyer" or an "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act);
(v) any Transfer by ▇▇▇▇▇▇▇ upon any liquidation or any
other distribution to the partners or any other holder of a
beneficial interest of ▇▇▇▇▇▇▇; provided that, in each case, such
Person is a "qualified institutional buyer" or an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act);
(vi) any Transfer of any or all Equity Securities held by
a Stockholder to any Person which is made pursuant to (x) Section
2.4, (y) Section 2.5 or (z) Section 2.6;
(vii) any Transfer by USF during the USF Holding Period of
the First Note Warrants or, as the case may be, the Second Note
Warrants, in each case in connection with any sale of the First Note
or, as the case may be, the Second Note, to any Person who (x) is not
a Non-Qualified Person, and (y) is a "qualified institutional buyer"
or an "accredited investor" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act);
(viii) any Transfer of Junior Warrant Securities or the
Note Shares by USF which is made pursuant to the exercise by USF of
its "put" rights as set forth in the Junior Warrant Agreement or, as
the case may be, the Second Note;
(ix) any Transfer of Senior Warrants by Highbridge
International LLC to Goldentree High Yield Opportunities I, L.P.
prior to thirty (30) days after the date of this Agreement;
(x) any Transfer by (w) USF of the First Note Warrants,
the Second Note Warrants, the First Note or the Second Note held by
USF after the termination of the USF Holding Period to any Person who
(A) is not a Non-Qualified Person and (B) is a "qualified
institutional buyer" or an "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act), (x) the Senior
Warrantholders of Senior Warrants representing the right to purchase
not less than one hundred seventy-five thousand (175,000) shares of
Common Stock and/or shares of Common Stock issued upon the exercise
of such Warrants (in each case as such amount shall be adjusted for
stock splits, stock dividends and reverse stock splits) in any single
transaction to any Person who (A) is not a Non-Qualified Person and
(B) is a "qualified institutional buyer" or an "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), or (y) the Senior Warrantholders of Senior Warrants in
connection with a transfer of notes evidencing Senior Subordinated
Indebtedness to any Person who (A) is not a Non-Qualified Person and
(B) is a "qualified institutional buyer" or an "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act); provided that the Senior Warrants so transferred shall
represent the right to purchase not less than such number of shares
of Common Stock as is equal to (A) the total number of shares of
Common Stock purchasable under the relevant Senior Warrant on the
date hereof times (B) a fraction, the numerator of which is equal to
the principal amount of the notes proposed to be transferred and the
denominator of which is equal to the original principal amount of
such notes, times (C) seventy five percent (75%), but in no event
less than one hundred seventy-five thousand (175,000) shares of
Common Stock (as such amount shall be adjusted for stock splits,
stock dividends and reverse stock splits);
(xi) any Transfer of any or all Equity Securities held by
a Stockholder which is made pursuant to Article III or pursuant to an
effective registration statement filed pursuant to the Securities Act
or, at any time after the initial Public Offering of the Company,
pursuant to Rule 144 under the Securities Act in an unsolicited
brokerage transaction to the public;
(xii) any Transfer not described in any of clauses (i)
through (xi) above or (xiii) through (xvii) below if permitted by a
majority of the members of the Board who are not officers, directors
or employees of, or partners in, the Person that proposes such
Transfer;
(xiii) any Transfer of any or all of the Equity Securities
held by the State of Michigan to any successor or additional trustee
or custodian of the assets of the State of Michigan as may be duly
appointed and qualified under the laws of such State; provided that
if such Transfer occurs within the first two (2) years after August
30, 2000, such Transfer is at a price per share less than or equal to
the price per share the State of Michigan paid for such Equity
Securities on the Closing Date;
(xiv) any Transfer of Senior Warrants constituting a
pledge, hypothecation, encumbrance or security interest of or in any
or all such Senior Warrants held by a Senior Warrantholder to its
lender (a "Senior Warrants Pledge"); provided that foreclosure by
such lender pursuant to such pledge, hypothecation, encumbrance or
security interest shall not, in and of itself, be a Permitted
Transfer pursuant to this clause (xiv); and provided further that any
right of any grantee or recipient of such pledge, hypothecation,
encumbrance or security interest shall be expressly subject to the
provisions of this Agreement;
(xv) a Transfer of Equity Securities by Magnolia pursuant
to the Magnolia Pledge Agreement;
(xvi) a Transfer of Equity Securities by ▇▇▇▇▇▇▇ pursuant
to the ▇▇▇▇▇▇▇ Pledge Agreement; and
(xvii) any Transfer by Gryphon upon any liquidation or any
other distribution to the partners or any other holder of a
beneficial interest of Gryphon; provided that, in each case, such
Person is a "qualified institutional buyer" or an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act).
(b) In any Transfer referred to above in Section 2.2(a) (other than
clauses (iv)(y) (to the extent such Transfer is made as part of a transaction
which is a Sale of the
Business), (vi)(y), (vi)(z) and (xi) thereof), the Permitted Transferee shall
agree in writing to be bound by all the provisions of this Agreement and shall
execute and deliver to the Company a counterpart to this Agreement. Each
Permitted Transferee (other than a Permitted Transferee who received the
relevant Equity Securities in a Transfer pursuant to Section 2.2(a)(iv)(y) (to
the extent such Transfer is made as part of a transaction which is a Sale of the
Business), Section 2.2(a)(vi)(y), Section 2.2(a)(vi)(z) or Section 2.2(a)(xi))
shall hold such shares of Equity Securities subject to the provisions of this
Agreement as a "Stockholder" hereunder as if such Permitted Transferee were an
original signatory hereto and shall be deemed to be a party to this Agreement.
(c) In any Transfer, in its capacity as such, by a Management
Stockholder, a Senior Warrantholder or USF to a Permitted Transferee who is
subject to Section 2.2(b), such Permitted Transferee shall thereafter be a
"Management Stockholder," "Senior Warrantholder" or, as the case may be, "USF"
for purposes of this Agreement; provided that this provision shall not apply to
the right of USF (i) not to participate in any non-competition arrangements or
agreements pursuant to Section 2.4(b), Section 2.5(b) or Section 2.6(b) and (ii)
not to be subject to the provisions of Section 6.11 with respect to non-public
information received by it prior to August 30, 2000, in each case to the extent
such Permitted Transferee is not an Affiliate of USF. In any Transfer by DBCP
or, as the case may be, ▇▇▇▇▇▇▇ to a Permitted Transferee which is made (i)
pursuant to Section 2.2(a)(iii), Section 2.2(a)(iv)(y), Section 2.2(a)(iv)(z)
or, as the case may be, Section 2.2(a)(v), or (ii) as part of a transaction
which is a Sale of the Business, such Permitted Transferee shall thereafter be
referred to collectively with DBCP (so long as DBCP holds any Equity Securities
after such Transfer) as "DBCP" or, as the case may be, referred to collectively
with ▇▇▇▇▇▇▇ (so long as ▇▇▇▇▇▇▇ holds any Equity Securities after such
Transfer) as "▇▇▇▇▇▇▇". Any employee or director of the Company or any of its
Subsidiaries who holds Incentive Securities or any other recipient of Incentive
Securities issued pursuant to the Management Equity Incentive Plan or any
successor or similar plan, shall, if requested, agree in writing to be bound by
all the provisions of this Agreement and shall execute and deliver to the
Company a counterpart of this Agreement and shall be deemed to be a "Management
Stockholder" for the purposes of this Agreement.
Section 2.3 Right of First Refusal. (a) At any time prior to (i) a
Transfer by USF pursuant to Section 2.2(a)(vii) or Section 2.2(a)(x) to any
Person of Equity Securities or all or any portion of the First Note held by it
from time to time, (ii) a Transfer to the pledgee or any other Person under a
Senior Warrant Pledge pursuant to a foreclosure of such Senior Warrant Pledge,
or (iii) a Transfer by any Senior Warrantholder pursuant to Section 2.2(a)(x)(x)
to any Person of Senior Warrants and/or shares of Common Stock issued upon the
exercise of such Warrants, USF, such pledgee, or, as the case may be, such
Senior Warrantholder shall give written notice (the "Sale Notice") to the
Company, DBCP and the ▇▇▇▇▇▇▇ Investor Group. The Sale Notice shall (x) disclose
in reasonable detail the identity of the prospective Transferee(s), the number
and type of Equity Securities and/or the amount of the First Note to be
Transferred (collectively, the "Offered Securities"), and the terms and
conditions of the proposed Transfer, (y) have attached to it a copy of the bona
fide written offer pursuant to which the proposed Transfer is to be consummated
and (z) confirm that the offer to purchase such Offered Securities is
irrevocable for a period of at least thirty (30) days. Subject to Sections
2.3(b) and (c), USF, such pledgee or, as the case may be, such Senior
Warrantholder shall not consummate any
Transfer until thirty (30) days after the Sale Notice has been given to the
Company, DBCP and the ▇▇▇▇▇▇▇ Investor Group.
(b) The Company may elect to purchase all, or any portion, of the
Offered Securities to be Transferred upon the same terms and conditions as those
set forth in the Sale Notice by delivering a written notice of such election to
USF, such pledgee or, as the case may be, such Senior Warrantholder and to DBCP
and the ▇▇▇▇▇▇▇ Investor Group within ten (10) days after the Sale Notice has
been delivered to the Company. If the Company has not elected to purchase all of
the Offered Securities to be Transferred, DBCP or its designees (the "DBCP
Group") and the ▇▇▇▇▇▇▇ Investor Group or its designees (the "▇▇▇▇▇▇▇ Group")
may elect to purchase their respective pro rata shares (based on Common Stock
Equivalents owned) of all or any portion of the Offered Securities not purchased
by the Company upon the same terms and conditions as those set forth in the Sale
Notice by giving written notice of such election to USF, such pledgee or, as the
case may be, such Senior Warrantholder within twenty (20) days after the Sale
Notice has been delivered to DBCP and the ▇▇▇▇▇▇▇ Investor Group.
(c) If the Company, the DBCP Group and the ▇▇▇▇▇▇▇ Group have not
collectively given notice pursuant to Section 2.3(b) to purchase all of the
Offered Securities specified in the Sale Notice, USF, such pledgee or, as the
case may be, such Senior Warrantholder shall be entitled to Transfer, during the
sixty (60) day period beginning on the earlier of (i) the date that is
twenty-one (21) days after the date USF, such pledgee or, as the case may be,
such Senior Warrantholder delivered the Sale Notice and (ii) the date on which
USF, such pledgee or, as the case may be, such Senior Warrantholder has been
advised by the Company, the DBCP Group and/or the ▇▇▇▇▇▇▇ Group that they have
collectively elected to purchase less than all of the Offered Securities, all of
the Offered Securities, to any Person who (x) is not a Non-Qualified Person, and
(y) is a "qualified institutional buyer" or an "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) at a price and on
terms no more favorable to the Transferee(s) thereof than those specified in the
Sale Notice and the bona fide written offer attached thereto. If the Offered
Securities are not so Transferred during such sixty (60) day period, they shall
again be subject to the provisions of this Section 2.3 upon a subsequent
proposed Transfer by USF, such pledgee or, as the case may be, such Senior
Warrantholder.
(d) If the Company, the DBCP Group and/or the ▇▇▇▇▇▇▇ Group have
agreed to purchase all of the Offered Securities pursuant to Section 2.3(b), the
closing of such purchase shall occur within ten (10) Business Days from the date
the Company, the DBCP Group and/or the ▇▇▇▇▇▇▇ Group have notified USF, such
pledgee or, as the case may be, such Senior Warrantholder of their intention to
purchase all of the Offered Securities.
Section 2.4 Sales by DBCP Subject to Tag-Along Rights. (a) In the
event that DBCP proposes to effect a Transfer (other than a Permitted Transfer
described in Section 2.2(a)(iii), Section 2.2(a)(iv)(z), or Section 2.2(a)(xi)),
DBCP shall promptly give written notice (the "Transfer Notice") to the Company,
the ▇▇▇▇▇▇▇ Investor Group, the Senior Warrantholders and each other Stockholder
owning at least one and one half percent (1.5%) (and any other Stockholder
owning 1.5% of the Common Stock Equivalents as of the date hereof, who shall own
less than 1.5% of the Common Stock Equivalents on any such date as a direct
result of the sale of Common Stock Equivalents by the Company in an equity
financing after the date hereof
in excess of $15,000,000) of the then outstanding Common Stock Equivalents (each
such Stockholder, together with the ▇▇▇▇▇▇▇ Investor Group and the Senior
Warrantholders, the "Other Stockholders") at least twenty (20) days prior to the
closing of such Transfer. The Transfer Notice shall (i) describe in reasonable
detail the proposed Transfer including, without limitation, the class and number
of shares of Equity Securities to be sold, the identity of the prospective
transferee, the number of Common Stock Equivalents represented thereby, the
purchase price of each such share of Equity Securities to be sold and the date
such proposed sale is expected to be consummated and (ii) have attached thereto
an executed copy of the agreement pursuant to which the proposed Transfer is to
be consummated.
(b) Each of the Other Stockholders shall have the right, exercisable
upon delivery of an irrevocable written notice to DBCP within ten (10) Business
Days after receipt of the Transfer Notice (the "Response Deadline"), to
participate in such proposed Transfer on the same terms and conditions that
apply to DBCP as set forth in the Transfer Notice including, without limitation,
the same price, the making of all representations and warranties and the
granting of all indemnifications and the execution of all agreements (including
participating in any escrow arrangements) to the extent of their respective "pro
rata portion"; provided that (x) the indemnification obligation of DBCP and each
Participant (as defined below) provided to the proposed transferee with respect
to the breach of any representation or warranty concerning the Company (other
than the breach of those representations and warranties that are not subject to
any "cap" as provided for in the sale agreement) shall be limited to the gross
proceeds received by each such Stockholder in connection with the Transfer and
(y) the liability of each Participant to the proposed transferee for the failure
of such Transfer to be consummated shall be limited to the last arms-length
purchase price paid for the shares of Common Stock proposed to be sold pursuant
to this Section 2.4, if the reason for the failure of such proposed Transfer to
be consummated does not in any manner result from a breach by such Participant
of any of its obligations or representations and warranties; and, provided
further that USF shall not be required to become party to any non-competition
arrangement or agreement. Each Other Stockholder electing to participate in the
Transfer described in the Transfer Notice (each, a "Participant") shall indicate
in its notice of election to DBCP the number of Common Stock Equivalents it
desires to Transfer up to the maximum amount allowed. DBCP and each Other
Stockholder shall be entitled to Transfer a number of Common Stock Equivalents
equal to the amount obtained when the amount of Common Stock Equivalents to be
Transferred, as set forth in the Transfer Notice, is multiplied by a fraction,
the numerator of which is the number of Common Stock Equivalents held by such
Stockholder immediately prior to the Transfer proposed in the Transfer Notice
and the denominator of which is the total number of Common Stock Equivalents
held by DBCP and all Other Stockholders immediately prior to the Transfer
proposed in the Transfer Notice. In the event that any Other Stockholder elected
to not participate in such Transfer or any Participant elected to Transfer less
than the maximum number of Common Stock Equivalents it was eligible to Transfer
pursuant to the immediately preceding sentence (the total number of Common Stock
Equivalents that such Other Stockholder or, as the case may be, Participant has
declined to Transfer are referred to collectively as "Excess Transferable
Securities"), then DBCP and, as the case may be, each Participant who indicated
in its notice of election that it desired to Transfer the maximum number of
Common Stock Equivalents it was eligible to Transfer pursuant to the immediately
preceding sentence shall be
entitled to sell an additional number of Common Stock Equivalents equal to the
amount obtained when the amount of Excess Transferable Shares is multiplied by a
fraction, the numerator of which is the number of Common Stock Equivalents held
by DBCP or, as the case may be, such Participant immediately prior to the
Transfer proposed in the Transfer Notice and the denominator of which is the
total number of Common Stock Equivalents held by DBCP and all such Participants
immediately prior to the Transfer proposed in the Transfer Notice. No holder of
Equity Securities (other than shares of Common Stock) shall be entitled to sell
Equity Securities (other than shares of Common Stock) pursuant to this Section
2.4, but shall be permitted to convert or exercise its applicable portion of
such Equity Securities which are then so exercisable or convertible (including
the Preferred Stock, Junior Warrants and the Second Note if they are or would
become exercisable or, as the case may be, convertible in accordance with the
Company's Restated Certificate of Incorporation, the terms of the Junior Warrant
Agreement or, as the case may be, the Second Note immediately after the
consummation of the transactions contemplated by this Section 2.4) for Common
Stock concurrently with, and subject to, the consummation of the proposed
Transfer.
(c) Each Participant shall effect its participation in the Transfer
by delivering to DBCP at least three (3) Business Days prior to the date
scheduled for such Transfer as set forth in the Transfer Notice, one or more
certificates or other instruments, as applicable, in proper form for transfer,
which represent the number of Common Stock Equivalents which such Participant is
entitled to Transfer in accordance with Section 2.4(b). Such certificate or
certificates or other instruments, as applicable, shall be delivered by DBCP to
such Permitted Transferee on the date scheduled for such Transfer in
consummation of the Transfer pursuant to the terms and conditions specified in
the Transfer Notice and such Permitted Transferee shall remit to each such
Participant its pro rata portion of the net sale proceeds (taking into account
any transaction costs and expenses incurred by DBCP in connection with such
Transfer including, without limitation, the fees described in Section 2.4(d)) to
which such Participant is entitled by reason of its participation in such sale.
For purposes of Section 2.4(b) and this Section 2.4(c), "pro rata portion" shall
mean for each Participant a fraction, the numerator of which is the number of
Common Stock Equivalents to be Transferred by such Participant pursuant to this
Section 2.4 and the denominator of which is the total number of Common Stock
Equivalents to be Transferred pursuant to this Section 2.4.
(d) It is understood and agreed that in consideration of investment
banking services provided by an investment banking group (which may consist of
or include DBCP or any of its Affiliates) a reasonable fee may be paid in an
amount that is customary and equivalent to a fee arrangement negotiated on an
"arms-length" basis.
(e) The exercise or non-exercise of the rights of any of the Other
Stockholders hereunder to participate in one or more Transfers of Equity
Securities made by DBCP shall not adversely affect their rights to participate
in subsequent Transfers of Equity Securities subject to this Section 2.4.
(f) Notwithstanding anything contained in this Section 2.4 to the
contrary, there shall be no liability on the part of DBCP (or any of its
Affiliates and Permitted Transferees)
to any Other Stockholder in the event no Common Stock Equivalents are sold even
if the provisions of this Section 2.4 have been triggered.
(g) For purposes of this Section 2.4, the computation of Common Stock
Equivalents shall include Equity Securities that would become Common Stock
Equivalents in accordance with their terms immediately after the consummation of
the transactions contemplated by this Section 2.4.
Section 2.5 Grant to Selling Group of Drag-Along Rights. (a) At any
time at the written request of DBCP and one or more of (x) ▇▇▇▇▇▇▇ and (y)
Management Stockholders holding a majority of the Equity Securities held by all
Management Stockholders, who, together with DBCP, collectively own at least
forty percent (40%) of the Common Stock Equivalents at such time (the "Selling
Group"), each other Stockholder agrees to vote all of its shares of Common Stock
and Preferred Stock, at a special or annual meeting of Stockholders or by
written consent in lieu of a meeting, and shall sell the "pro rata portion" of
its Equity Securities along with the Selling Group in connection with a Sale of
the Business. In order to effect the foregoing covenant, each other Stockholder
hereby grants to the Selling Group with respect to all of such Stockholder's
shares of Common Stock and Preferred Stock, an irrevocable proxy (which is
deemed to be coupled with an interest) for the term of this Agreement with
respect to any stockholder vote or action by written consent solely to effect
such Sale of the Business in compliance with this Section 2.5.
(b) The Company and the other Stockholders each hereby agree to
reasonably cooperate (including by waiving any appraisal rights to which such
Stockholder may be entitled under Applicable Law and each such Stockholder does
hereby waive all such appraisal rights) with the Selling Group and the purchaser
in any such Sale of the Business and, to execute and deliver all documents
(including purchase agreements) and instruments as the Selling Group and such
purchaser reasonably request to effect such Sale of the Business including,
without limitation, the making of all representations and warranties (provided
that the Senior Warrantholders, USF, the Other Financial Investors and the 2001
Investors shall only be required to make representations and warranties
concerning their respective existence and authority to participate in such Sale
of the Business, their ownership of their respective Equity Securities and their
ability to Transfer such Equity Securities free and clear of all liens and other
encumbrances and, unless there is a reasonable basis to believe that such
representations and warranties would not be true, the enforceability of terms
pursuant to which such Sale of the Business is to be conducted against them and
the compliance of such Sale of the Business under laws applicable to them and
all agreements to which they or their assets may be subject) and the granting of
all indemnifications and the execution of all agreements (including
participating in any escrow arrangements) to the extent of their respective "pro
rata portion"; provided that the indemnification obligation of DBCP and each
other Stockholder provided to the proposed transferee with respect to the breach
of any representation or warranty concerning the Company (other than the breach
of those representations and warranties that are not subject to any "cap" as
provided for in the sale agreement) shall be limited to the gross proceeds
received by each such Stockholder in connection with such Sale of the Business;
provided further that USF shall not be required to become party to any
non-competition arrangement or agreement; and provided further that no Financial
Investor holding less than five percent (5%) of the then outstanding Common
Stock Equivalents shall be required to become party to any non-competition
arrangement or agreement if (i) such Financial Investor would be in violation of
such non-competition arrangement or agreement upon its execution due to other
investments held by such Financial Investor on the date of such Sale of the
Business or (ii) the execution of such non-competition arrangement or agreement
would unreasonably impede the ability of such Financial Investor to make future
non-controlling equity investments in accordance with its investment policies
and procedures. The Selling Group agrees that upon such Sale of the Business
each Stockholder shall receive its "pro rata portion" of the net proceeds
(taking into account (x) the exercise or conversion price of any Equity Security
to be Transferred and (y) any transaction costs and expenses incurred by the
Selling Group in connection with such Sale of the Business including, without
limitation, the fees described in Section 2.5(c)) and, except as otherwise set
forth in this Section 2.5(b), such sale shall be on the same terms and
conditions as afforded to the Selling Group. For purposes of Sections 2.5(a) and
(b), "pro rata portion" shall mean for each Stockholder a fraction, the
numerator of which is the number of Common Stock Equivalents held by such
Stockholder immediately prior to such Sale of the Business and the denominator
of which is the total number of Common Stock Equivalents outstanding immediately
prior to such Sale of the Business that are held by parties bound by this
Agreement or who otherwise participate in such Sale of the Business transaction.
For purposes of this Section 2.5(b), the computation of Common Stock Equivalents
shall include Equity Securities that would become Common Stock Equivalents in
accordance with their terms immediately after the consummation of the
transactions contemplated by this Section 2.5. Notwithstanding anything to the
contrary in this Section 2.5, the holders of Series A Preferred Stock shall not
be obligated to participate, vote in favor of or consent to any Sale of the
Business transaction in compliance with this Section 2.5 unless the terms and
conditions of such transaction provide that the holders of Series A Preferred
Stock shall receive an amount that is equal to or greater than the liquidation
preference applicable to the Series A Preferred Stock, as set forth in the
Company's Restated Certificate of Incorporation.
(c) It is understood and agreed that in consideration of investment
banking services provided by an investment banking group (which may consist of
or include DBCP or any of its Affiliates) a reasonable fee may be paid in an
amount that is customary and equivalent to a fee arrangement negotiated on an
"arms-length" basis.
(d) Notwithstanding anything contained in this Section 2.5 to the
contrary, there shall be no liability on the part of the Selling Group (or their
respective Affiliates and Permitted Transferees) to any other Stockholder in the
event no Equity Securities are sold even if the provisions of this Section 2.5
have been triggered.
(e) Notwithstanding any other provision contained in this Agreement,
USF shall not be bound by, and shall not have any obligations under, this
Section 2.5 after USF has delivered to the Company a "Put Notice" pursuant to
the terms of the Second Note and/or the Junior Warrant Agreement to exercise its
put rights thereunder with respect to any shares of Common Stock.
Section 2.6 Sale of the Business. (a) Unless both DBCP and ▇▇▇▇▇▇▇
disagree, DBCP and ▇▇▇▇▇▇▇ shall cause the Board to call a special meeting of
Stockholders to be held on
August 30, 2006 or to distribute a written consent in lieu of a meeting for the
purpose of effecting a Sale of the Business, and each Stockholder agrees to vote
all of its shares of Common Stock and Preferred Stock at such special meeting of
Stockholders or by written consent in lieu of a meeting and shall sell the "pro
rata portion" of its Equity Securities in connection with such Sale of the
Business. In order to effect the foregoing covenant, each other Stockholder
hereby grants to DBCP (if DBCP initially voted in favor of calling such special
meeting of Stockholders to effect such Sale of the Business) or, as the case may
be, ▇▇▇▇▇▇▇ (if DBCP did not initially vote in favor of calling such special
meeting of Stockholders to effect such Sale of the Business and ▇▇▇▇▇▇▇ voted in
favor of calling such special meeting of Stockholders to effect such Sale of the
Business) with respect to all of such Stockholder's shares of Common Stock and
Preferred Stock an irrevocable proxy (which is deemed to be coupled with an
interest) for the term of this Agreement with respect to any stockholder vote or
action by written consent solely to effect such Sale of the Business in
compliance with this Section 2.6.
(b) The Company and the other Stockholders each hereby agree to
reasonably cooperate (including by waiving any appraisal rights to which such
Stockholder may be entitled under Applicable Law and each such Stockholder does
hereby waive all such appraisal rights) with DBCP or, as the case may be,
▇▇▇▇▇▇▇ and the purchaser in any such Sale of the Business and to execute and
deliver all documents (including purchase agreements) and instruments as DBCP,
or as the case may be, ▇▇▇▇▇▇▇ and such purchaser reasonably request to effect
such Sale of the Business including, without limitation, the making of all
representations and warranties (provided that the Senior Warrantholders, USF,
the Other Financial Investors and the 2001 Investors shall only be required to
make representations and warranties concerning their respective existence and
authority to participate in such Sale of the Business, their ownership of their
respective Equity Securities and their ability to Transfer such Equity
Securities free and clear of all liens and other encumbrances and, unless there
is a reasonable basis to believe that such representations and warranties would
not be true, the enforceability of terms pursuant to which such Sale of the
Business is to be conducted against them and the compliance of such Sale of the
Business under laws applicable to them and all agreements to which they or their
assets may be subject) and the granting of all indemnifications and the
execution of all agreements (including participating in any escrow arrangements)
to the extent of their respective "pro rata portion"; provided that the
indemnification obligation of DBCP or, as the case may be, ▇▇▇▇▇▇▇ and each
other Stockholder provided to the proposed transferee with respect to the breach
of any representation or warranty concerning the Company (other than the breach
of those representations and warranties that are not subject to any "cap" as
provided for in the sale agreement) shall be limited to the gross proceeds
received by each such Stockholder in connection with such Sale of the Business;
provided further that USF shall not be required to become party to any
non-competition arrangement or agreement; and provided further that no Financial
Investor holding less than five percent (5%) of the then outstanding Common
Stock Equivalents shall be required to become party to any non-competition
arrangement or agreement if (i) such Financial Investor would be in violation of
such non-competition arrangement or agreement upon its execution due to other
investments held by such Financial Investor on the date of such Sale of the
Business or (ii) the execution of such non-competition arrangement or agreement
would unreasonably impede the ability of such Financial Investor to make future
non-controlling equity investments in accordance with its investment policies
and procedures.
DBCP, or as the case may be, ▇▇▇▇▇▇▇ agrees that upon such Sale of the Business
each Stockholder shall receive its "pro rata portion" of the net proceeds
(taking into account (x) the exercise or conversion price of any Equity Security
to be Transferred and (y) any transaction costs and expenses incurred by DBCP,
or as the case may be, ▇▇▇▇▇▇▇, in connection with such Sale of the Business
including, without limitation, the fees described in Section 2.6(c)) and, except
as otherwise set forth in this Section 2.6(b), such sale shall be on the same
terms and conditions as afforded to DBCP or, as the case may be, ▇▇▇▇▇▇▇. For
purposes of Sections 2.6(a) and (b), "pro rata portion" shall mean for each
Stockholder a fraction, the numerator of which is the number of Common Stock
Equivalents held by such Stockholder immediately prior to such Sale of the
Business and the denominator of which is the total number of Common Stock
Equivalents outstanding immediately prior to such Sale of the Business that are
held by parties bound by this Agreement or who otherwise participate in such
Sale of the Business transaction. For purposes of this Section 2.6(b), the
computation of Common Stock Equivalents shall include Equity Securities that
would become Common Stock Equivalents in accordance with their terms immediately
after the consummation of the transactions contemplated by this Section 2.6.
Notwithstanding anything to the contrary in this Section 2.6, the holders of
Series A Preferred Stock shall not be obligated to participate, vote in favor of
or consent to any Sale of the Business transaction in compliance with this
Section 2.6 unless the terms and conditions of such transaction provide that the
holders of Series A Preferred Stock shall receive an amount that is equal to or
greater than the liquidation preference applicable to the Series A Preferred
Stock, as set forth in the Company's Restated Certificate of Incorporation.
(c) It is understood and agreed that in consideration of investment
banking services provided by an investment banking group (which may consist of
any one or more of or include DBCP, ▇▇▇▇▇▇▇ or any of their respective
Affiliates) a reasonable fee may be paid in an amount that is customary and
equivalent to a fee arrangement negotiated on an "arms-length" basis.
(d) Notwithstanding anything contained in this Section 2.6 to the
contrary, there shall be no liability on the part of DBCP or, as the case may
be, ▇▇▇▇▇▇▇ (or their respective Affiliates and Permitted Transferees) to any
other Stockholder in the event no Equity Securities are sold even if the
provisions of this Section 2.6 have been triggered.
(e) Notwithstanding any other provision contained in this Agreement,
USF shall not be bound by, and shall not have any obligations under, this
Section 2.6 after USF has delivered to the Company a "Put Notice" pursuant to
the terms of the Second Note and/or the Junior Warrant Agreement to exercise its
put rights thereunder with respect to any shares of Common Stock.
Section 2.7 Grant of Preemptive Rights to Stockholders. (a) In the
event that, at any time, the Company shall decide to undertake an issuance of
New Securities, the Company shall at such time deliver to the ▇▇▇▇▇▇▇ Investor
Group, the Senior Warrantholders and each other Stockholder (other than USF)
holding at such time Common Stock Equivalents representing not less than one
percent (1%) (and any other Stockholder owning 1% of the Common Stock
Equivalents as of the date hereof, who shall own less than 1% of the Common
Stock Equivalents on any such date as a direct result of the sale of Common
Stock Equivalents by the Company in
an equity financing after the date hereof in excess of $15,000,000) of all
Common Stock Equivalents, written notice of the Company's decision, describing
the amount, type and terms (including the exercise price and expiration date
thereof in the case of any Options) of such New Securities, the purchase price
per New Security (the "New Securities Price") to be paid by the purchasers of
such New Securities and the other terms upon which the Company has decided to
issue the New Securities including, without limitation, the expected timing of
such issuance which will in no event be more than sixty (60) days or less than
thirty (30) days after the date upon which such notice is given (the "Preemptive
Notice"). Each such Stockholder (other than USF) shall have fifteen (15) days
from the date on which it receives the Preemptive Notice to agree by written
notice to the Company (a "Preemptive Exercise Notice") to purchase up to its
proportional share of such New Securities at the New Securities Price and upon
the general terms specified in the Preemptive Notice by giving written notice to
the Company and stating therein the quantity of New Securities to be purchased
by any such Stockholder. In the event that in connection with such a proposed
issuance of New Securities, such Stockholder shall for any reason fail or refuse
to give such written notice to the Company within such fifteen (15) day period,
such Stockholder shall, for all purposes of this Section 2.7, be deemed to have
refused (in that particular instance only) to purchase any of such New
Securities and to have waived (in that particular instance only) all of its
rights under this Section 2.7 to purchase any of such New Securities. For
purposes of this Section 2.7, a Stockholder's "proportional share" shall mean,
at any time, the quotient obtained by dividing the number of Common Stock
Equivalents held by such Stockholder at such time by the aggregate number of
Common Stock Equivalents held by all Stockholders entitled to preemptive rights
under this Section 2.7(a) at such time. In the event that any such Stockholder
does not elect to purchase all of its respective proportional share, the New
Securities which were available for purchase by such non-electing Stockholders
(the "Excess New Securities") shall automatically be deemed to be accepted for
purchase by such Stockholders who indicated in their Preemptive Exercise Notice
a desire to participate in the purchase of New Securities in excess of their
proportional share. Unless otherwise agreed by all such Stockholders
participating in the purchase, each Stockholder who indicated to purchase more
than its proportional share shall purchase a number of Excess New Securities
equal to the lesser of (i) the number of Excess New Securities indicated in the
Preemptive Exercise Notice, if any, and (ii) an amount equal to the product of
(x) the number of Excess New Securities and (y) a fraction, the numerator of
which is the number of Common Stock Equivalents held at such time by such
Stockholder and the denominator of which is the aggregate number of Common Stock
Equivalents held at such time by all Stockholders who participate in the
purchase of Excess New Securities.
(b) In the event and to the extent that, subsequent to the procedure
set forth in Section 2.7(a), any New Securities to be issued by the Company are
not subject to an agreement by and between the Company and any Stockholder to
purchase such New Securities, the Company shall be free to issue such New
Securities to any Person, provided that (i) the price per New Security at which
such New Securities are being issued to and purchased by such Person is not less
than the New Securities Price and (ii) the other terms and conditions pursuant
to which such Person purchases such New Securities are substantially equivalent
to the terms set forth in the Preemptive Notice. Any New Securities not issued
or sold within one hundred eighty (180) days after the date of the Preemptive
Notice shall again be subject to the provision of this Section 2.7.
ARTICLE III
REGISTRATION RIGHTS
Section 3.1 Required Registration. (a) If the Company shall be
requested in writing, which writing shall specify the Registrable Securities to
be sold and the intended method of disposition thereof (a "Demand Request"), at
any time after the date which is (i) one hundred eighty (180) days after the
date the registration statement filed in connection with the initial Public
Offering was declared effective, by DBCP or, as the case may be, ▇▇▇▇▇▇▇; (ii)
the two (2) year anniversary (the "Senior Warrantholder Filing Date") of the
date the registration statement filed in connection with the initial Public
Offering of the Company was declared effective, by the Senior Warrantholders
holding a majority of then outstanding shares of Common Stock issued or issuable
upon the exercise of the Senior Warrants; or (iii) the two (2) year anniversary
(the "2001 Investors Filing Date") of the date the registration statement filed
in connection with the initial Public Offering of the Company was declared
effective, by the 2001 Investors holding a majority of then outstanding shares
of Common Stock issued or issuable upon conversion of the Series A Preferred
Stock, to effect a registration under the Securities Act of Registrable
Securities held by such Stockholders (each, a "Required Registration"), then the
Company shall promptly use its reasonable efforts to effect such Required
Registration; provided that each of DBCP and ▇▇▇▇▇▇▇ may only make one (1)
Demand Request for a "long-form" Required Registration and one (1) Demand
Request for a "short form" Required Registration; provided further that each of
DBCP and ▇▇▇▇▇▇▇ in lieu of the Demand Request for a "long form" Required
Registration, each of DBCP and ▇▇▇▇▇▇▇ may instead elect to have an additional
"short form" Required Registration; provided further that the Senior
Warrantholders may not make a Demand Request for a "long-form" required
registration and may only make (1) Demand Request for a "short form" Required
Registration and only if, at any time after the Senior Warrantholder Filing
Date, each Senior Warrantholder is unable to sell all of its shares of Common
Stock issued or issuable upon the exercise of the Senior Warrants pursuant to
Rule 144 under the Securities Act free of the volume restrictions thereof;
provided further that the 2001 Investors may not make a Demand Request for a
"long-form" required registration and may only make (2) Demand Requests for a
"short form" Required Registration and only if, at any time after the 2001
Investor Filing Date, each 2001 Investor is unable to sell all of its shares of
Common Stock issued pursuant to Rule 144 under the Securities Act free of the
volume restrictions thereof; and provided further that the Company shall not be
required to comply with more than one (1) Demand Request during any twelve (12)
month period.
(b) Piggyback Rights. Upon receipt by the Company of any Demand
Request, the Company shall deliver a written notice (a "Demand Notice") to each
Stockholder who did not make such Demand Request stating that the Company
intends to comply with a Demand Request and informing each such Stockholder of
its right to include Registrable Securities in such Required Registration.
Within ten (10) Business Days after receipt of a Demand Notice, each such
Stockholder shall have the right to request in writing that the Company include
all or a specific portion of the Registrable Securities held by such Stockholder
in such Required Registration.
(c) Postponement. The Company may postpone any Required Registration
for a reasonable period of time, not to exceed one hundred eighty (180) days, if
the Board determines in good faith that such Required Registration would (i)
require the disclosure of a material transaction or other matter and such
disclosure would be disadvantageous to the Company or (ii) adversely affect a
material financing, acquisition, disposition of assets or stock, merger or other
transaction to which the Company may enter into; provided that the Company may
postpone a Required Registration only once during any twelve (12) month period.
(d) Time for Filing and Effectiveness. On or before the date which is
sixty (60) days after the Demand Request, the Company shall file with the SEC
the Required Registration with respect to all Registrable Securities to be so
registered, and shall use its reasonable efforts to cause such Required
Registration to become effective as promptly as practicable after the filing
thereof, but in no event later than the day which is one hundred twenty (120)
days after the date of the Demand Request.
(e) Selection of Underwriters. In the event that the Registrable
Securities to be registered pursuant to a Required Registration are to be
disposed of in an underwritten Public Offering, the underwriters of such Public
Offering shall be one or more underwriting firms of nationally recognized
standing selected by the Company and reasonably acceptable to the Stockholders
holding a majority of the Registrable Securities to be included in such Required
Registration.
(f) Priority on Required Registrations. In the event that, in the
case of any Required Registration, the managing underwriter for the Public
Offering contemplated by Section 3.1(e) shall advise the Company in writing
(with a copy to each holder of Registrable Securities requesting sale) that, in
such underwriter's opinion, the amount of securities requested to be included in
such Required Registration would adversely affect the Public Offering and sale
(including pricing) of such Registrable Securities (such writing to state the
basis of such opinion and the approximate number of Registrable Securities that
may be included in such Public Offering without such effect), the Company will
include in such Required Registration the number of Registrable Securities that
the Company is so advised can be sold in such Public Offering in the following
amounts:
(i) first, (x) all Registrable Securities requested to be
sold by DBCP, the ▇▇▇▇▇▇▇ Investor Group and the 2001 Investors (but
only with respect to the shares of Common Stock issuable upon
conversion of the Preferred Stock and only up to the percentage of
Registrable Securities sold by DBCP and the ▇▇▇▇▇▇▇ Investor Group of
the Registrable Securities owned by DBCP and ▇▇▇▇▇▇▇ Investor Group)
in the event such demand request was initiated by DBCP or ▇▇▇▇▇▇▇,
(y) all Registrable Securities requested to be sold by the 2001
Investors in the event such Demand Request was initiated by the 2001
Investors and (z) subject to Section 3.1(h) below, all Registrable
Securities requested to be sold by Senior Warrantholders
participating in such registration that are shares of Common Stock
issued upon the exercise of the Senior Warrants, pro rata among such
Stockholders on the basis of the number of Registrable Securities
requested to be sold by such Stockholders pursuant to this Section
3.1;
(ii) second, all Registrable Securities requested to be
sold by all other holders of Registrable Securities pursuant to this
Section 3.1 pro rata among such holders on the basis of the number of
Registrable Securities requested to be registered by such holders;
provided however that if such managing underwriter shall advise the
Company that, in such underwriter's opinion, the inclusion of
Registrable Securities held by Management Stockholders would
adversely affect the Public Offering and sale (including pricing) of
such securities, then the number of Registrable Securities held by
such Management Stockholders to be included in such Public Offering
may be disproportionately reduced to avoid such adverse result; and
(iii) third, securities proposed to be sold by the Company
for its own account.
(g) Additional Demand Requests. In the event that the Company
postpones any Required Registration in accordance with Section 3.1(c) by more
than sixty (60) days, the Demand Request pursuant to which such Required
Registration was to have been made may be withdrawn by the Stockholder who
initiated such Demand Request and shall not be deemed to be a Demand Request
pursuant to Section 3.1(a).
(h) Senior Warrantholder Required Registration. Notwithstanding
anything to the contrary contained in this Section 3.1, if the Senior
Warrantholders make a Demand Request pursuant to Section 3.1(a) for less than
all of the remaining shares of Common Stock issued or issuable upon the exercise
of the Senior Warrants held by all Senior Warrantholders, then any shares of
Common Stock issued or issuable upon the exercise of the Senior Warrants by the
Senior Warrantholders shall, in any subsequent Required Registration, be subject
to Section 3.1(f)(ii) and not Section 3.1(f)(i). In addition to the foregoing,
the Senior Warrantholders shall only be allowed to include in such Required
Registration shares of Common Stock issued in connection with the exercise of
the Senior Warrants.
Section 3.2 Incidental Registration.
(a) Filing of Registration Statement. If the Company proposes to
register any of its securities (x) for its own account in its initial Public
Offering and includes in such registration any securities to be sold for the
account of any other Person; or (y) for its own account or for the account of
any other Person at any time after its initial Public Offering (other than a
Required Registration) (any such proposed registration being an "Incidental
Registration") under the Securities Act (other than pursuant to a registration
statement on Form S-4 or Form S-8 or any successor forms thereto or Section 3.1
hereof), for sale to the public in a Public Offering, it will at each such time
give prompt written notice to all Stockholders of its intention to do so, which
notice shall be given at least thirty (30) days prior to the date that a
registration statement relating to such registration is proposed to be filed
with the SEC. Upon the written request of any Stockholder to include Registrable
Securities held by it under such registration statement (which request shall (i)
be made within fifteen (15) days after the receipt of any such notice, and (ii)
specify the Registrable Securities intended to be included by such holder), the
Company will use its reasonable efforts to effect the registration of all
Registrable Securities that the Company has been so requested to register by
such Stockholder; provided however that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason to terminate such registration statement and not
to register such securities, the Company may, at its election, give written
notice of such determination to each such holder and, thereupon, shall be
relieved of its obligation to register any Registrable Securities of such
Persons in connection with such registration.
(b) Selection of Underwriters. Notice of the Company's intention to
register such securities shall designate the proposed underwriters of such
Public Offering (which shall be one or more underwriting firms of nationally
recognized standing) and shall contain the Company's agreement to use its
reasonable efforts, if requested to do so, to arrange for such underwriters to
include in such underwriting the Registrable Securities that the Company has
been so requested to sell pursuant to this Section 3.2, it being understood that
the holders of Registrable Securities shall have no right to select different
underwriters for the disposition of their Registrable Securities.
(c) Priority on Incidental Registrations. If the managing underwriter
for the Public Offering contemplated by this Section 3.2 shall advise the
Company in writing that, in such underwriter's opinion, the number of securities
requested to be included in such Incidental Registration would adversely affect
the Public Offering and sale (including pricing) of such securities (such
writing to state the basis of such opinion and the approximate number of
securities that may be included in such Public Offering without such effect),
the Company shall include in such Incidental Registration the number of
securities that the Company is so advised can be sold in such Public Offering,
in the following amounts and order of priority:
(i) first, securities proposed to be sold by the Company
for its own account and any securities proposed to be offered by the
Company for the account of such other Person who has exercised its
demand registration rights, as the case may be; provided that such
Person is not a Stockholders that owns 10% or more of the Common
Stock Equivalents of the Company or an Affiliate of such Stockholder,
in which case such Stockholder's or Affiliate's priority shall be
governed by clause (ii) below; provided further that for the purposes
of this Section 3.2, any underwriter acting in its capacity as such
shall not be deemed an affiliate of a Stockholder;
(ii) second, the Registrable Securities requested to be
registered by Stockholders pro rata among such Stockholders on the
basis of the number of Registrable Securities requested to be sold by
such Stockholders pursuant to this Section 3.2; provided however that
if such managing underwriter shall advise the Company that, in such
underwriter's opinion, the inclusion of Registrable Securities held
by Management Stockholders would adversely affect the Public Offering
and sale (including pricing) of such securities, then the number of
Registrable Securities held by such Management Stockholders to be
included in such Public Offering may be disproportionately reduced to
avoid such adverse result; and
(iii) third, pro rata among all other Registrable
Securities.
Section 3.3 Registration Procedures. The Company will use its
reasonable efforts to effect each Required Registration pursuant to Section 3.1
and each Incidental Registration pursuant to Section 3.2, and to cooperate with
the sale of such Registrable Securities in accordance with the intended method
of disposition thereof as quickly as possible, and the Company will as
expeditiously as possible:
(a) subject, in the case of an Incidental Registration, to the
proviso to Section 3.2(a), prepare and file with the SEC the registration
statement and use its reasonable efforts to cause the Registration to become
effective; provided however that, to the extent practicable, at least ten (10)
Business Days prior to filing any registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to the holders of
the Registrable Securities covered by such registration statement and their
counsel, copies of all such documents proposed to be filed and any such holder
shall have the opportunity to comment on any information pertaining solely to
such holder and its plan of distribution that is contained therein and the
Company shall make the corrections reasonably requested by such holder with
respect to such information prior to filing any such registration statement or
amendment;
(b) subject, in the case of an Incidental Registration, to the
proviso to Section 3.2(a), prepare and file with the SEC such amendments and
post-effective amendments to any registration statement and any prospectus used
in connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement and cause the
prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act;
(c) furnish, upon request, to each holder of Registrable Securities
to be included in such Registration and the underwriter or underwriters, if any,
without charge, one signed copy of the registration statement and any
post-effective amendment thereto, and such number of conformed copies thereof
and such number of copies of the prospectus (including each preliminary
prospectus and each prospectus filed under Rule 424 under the Securities Act),
any amendments or supplements thereto and any documents incorporated by
reference therein, as such holder or underwriter may reasonably request in order
to facilitate the disposition of the Registrable Securities being sold by such
holder (it being understood that the Company consents to the use of the
prospectus and any amendment or supplement thereto by each holder of Registrable
Securities covered by such registration statement and the underwriter or
underwriters, if any, in connection with the Public Offering and sale of the
Registrable Securities covered by the prospectus or any amendment or supplement
thereto);
(d) notify each holder of the Registrable Securities to be included
in such Registration and the underwriter or underwriters, if any:
(i) of any stop order or other order suspending the
effectiveness of any registration statement, issued or threatened by
the SEC in connection therewith, and take all
reasonable actions required to prevent the entry of such stop order
or to remove it or obtain withdrawal of it at the earliest possible
moment if entered;
(ii) when such registration statement or any prospectus
used in connection therewith, or any amendment or supplement thereto,
has been filed and, with respect to such registration statement or
any post-effective amendment thereto, when the same has become
effective;
(iii) of any written request by the SEC for amendments or
supplements to such registration statement or prospectus; and
(iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable securities or
blue sky laws of any jurisdiction;
(e) if requested by the managing underwriter or underwriters or any
holder of Registrable Securities to be included in such Registration in
connection with any sale pursuant to a registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information relating to such underwriting as the managing underwriter or
underwriters or such holder reasonably requests to be included therein; 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;
(f) on or prior to the date on which a Registration is declared
effective, use its reasonable efforts to register or qualify, and cooperate with
the holders of Registrable Securities to be included in such Registration, the
underwriter or underwriters, if any, and their counsel in connection with the
registration or qualification of the Registrable Securities covered by such
Registration, for offer and sale under the securities or "blue sky" laws of each
state and other jurisdiction of the United States as any such holder or
underwriter reasonably requests in writing; use its reasonable efforts to keep
each such registration or qualification effective, including through new
filings, or amendments or renewals, during the period such registration
statement is required to be kept effective; and do any and all other acts or
things necessary or advisable to enable the disposition of the Registrable
Securities in all such jurisdictions reasonably requested to be covered by such
Registration; provided however that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action which would subject it to general service of process in
any such jurisdiction where it is not then so subject;
(g) in connection with any sale pursuant to a Registration, cooperate
with the holders of Registrable Securities to be included in such Registration
and the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing securities to be sold under such Registration, and enable such
securities to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such holders may request;
(h) use its reasonable efforts to cause the Registrable Securities to
be registered with or approved by such other governmental agencies or
authorities within the United States and having jurisdiction over the Company or
any Subsidiary as may be necessary to enable the seller or sellers thereof or
the underwriter or underwriters, if any, to consummate the disposition of such
securities;
(i) use its reasonable efforts to obtain:
(A) at the time of effectiveness of each Registration, a
"cold comfort letter" from the Company's independent certified public
accountants covering such matters of the type customarily covered by
"cold comfort letters" as the holders of a majority of the
Registrable Securities to be included in such Registration and the
underwriters reasonably request; and
(B) at the time of any underwritten sale pursuant to the
registration statement, a "bring-down comfort letter," dated as of
the date of such sale, from the Company's independent certified
public accountants covering such matters of the type customarily
covered by "bring-down comfort letters" as the Requisite Holders and
the underwriters reasonably request;
(j) use its reasonable efforts to obtain, at the time of
effectiveness of each Registration and at the time of any sale pursuant to each
Registration, an opinion or opinions addressed to the holders of the Registrable
Securities to be included in such Registration and the underwriter or
underwriters, if any, in customary form and scope from counsel for the Company
(who may be its internal counsel);
(k) notify each seller of Registrable Securities covered by such
Registration, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and promptly prepare and file with the SEC and furnish
to such seller or holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers or prospective purchasers of such 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 under which
they are made;
(l) otherwise comply with all applicable rules and regulations of the
SEC, and make generally available to its security holders (as contemplated by
Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve (12) month period beginning with the first month of
the Company's first fiscal quarter commencing after the effective date of the
registration statement, which statement shall cover said twelve (12) month
period;
(m) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by each Registration from and after a
date not later than the effective date of such Registration;
(n) use its reasonable efforts to cause all Registrable Securities
covered by each Registration to be listed subject to notice of issuance, prior
to the date of first sale of such Registrable Securities pursuant to such
Registration, on each securities exchange on which the Common Stock are then
listed, and admitted to trading on NASDAQ, if the Common Stock or any such other
securities of the Company are then admitted to trading on NASDAQ; and
(o) enter into such agreements (including underwriting agreements in
customary form) and take such other actions as the Requisite Holders shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities.
The Company may require each holder of Registrable Securities that
will be included in such Registration to furnish the Company with such
information in respect of such holder as the Company may reasonably request in
writing and as is required by Applicable Law.
Section 3.4 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act, the Company shall give, upon
reasonable notice and during normal business hours, the holders of such
Registrable Securities so registered, their underwriters, if any, and their
respective counsel and accountants access to its books and records and an
opportunity to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such holders' or such underwriters' to
conduct a reasonable investigation within the meaning of Section 11(b)(3) of the
Securities Act.
Section 3.5 Rights of Requesting Holders. Each holder of Registrable
Securities to be included in a Registration which makes a written request
therefor in Section 3.1 or 3.2, as the case may be, shall have the right to
receive within thirty (30) days of receipt by the Company of such request copies
of the information, notices and other documents described in Section 3.3(l) and
Section 3.3(o).
Section 3.6 Registration Expenses. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities, including, without limitation, any such registration not effected by
the Company.
Section 3.7 Indemnification; Contribution. (a) The Company shall
indemnify, to the fullest extent permitted by law, each holder of Registrable
Securities, its officers, directors, partners, employees and agents, if any, and
each Person, if any, who controls such holder within the meaning of Section 15
of the Securities Act, against all losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses (under the Securities Act or common
law or otherwise), joint or several, resulting from any violation by the Company
of the provisions of the Securities Act or any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus (and as amended or supplemented if amended or
supplemented) or any preliminary prospectus or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus, in
light of the circumstances under which they were made) not misleading, except to
the extent that such losses, claims, damages, liabilities (or proceedings in
respect thereof) or expenses are caused by any untrue statement or alleged
untrue statement contained in or by any omission or alleged omission from
information concerning any holder of Registrable Securities furnished in writing
to the Company by such holder expressly for use therein. If the Public Offering
pursuant to any registration statement provided for under this Article III is
made through underwriters, no action or failure to act on the part of such
underwriters (whether or not such underwriter is an Affiliate of any holder of
Registrable Securities) shall affect the obligations of the Company to indemnify
any holder of Registrable Securities or any other Person pursuant to the
preceding sentence. If the Public Offering pursuant to any registration
statement provided for under this Article III is made through underwriters, the
Company agrees to enter into an underwriting agreement in customary form with
such underwriters and the Company agrees to indemnify such underwriters, their
officers, directors, employees and agents, if any, and each Person, if any, who
controls such underwriters within the meaning of Section 15 of the Securities
Act to the same extent as herein before provided with respect to the
indemnification of the holders of Registrable Securities; provided that the
Company shall not be required to indemnify any such underwriter, or any officer,
director or employee of such underwriter or any Person who controls such
underwriter within the meaning of Section 15 of the Securities Act, to the
extent that the loss, claim, damage, liability (or proceedings in respect
thereof) or expense for which indemnification is claimed results from such
underwriter's failure to send or give a copy of an amended or supplemented final
prospectus to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such amended or supplemented final
prospectus prior to such written confirmation and the underwriter was provided
with such amended or supplemented final prospectus.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder, severally and not
jointly, shall indemnify, to the fullest extent permitted by law, the Company,
each underwriter and their respective officers, directors, employees and agents,
if any, and each Person, if any, who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages, liabilities (or proceedings in respect thereof) and expenses
resulting from any untrue statement or alleged untrue statement of a material
fact, or any omission or alleged omission of a material fact required to be
stated in the registration statement or prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or necessary to make the statements
therein (in the case of any prospectus, in light of the circumstances under
which they were made) not misleading, but only to the extent that such untrue
statement is contained in or such omission is from information so concerning a
holder furnished in writing by such holder expressly for use therein; provided
that such holder's obligations hereunder shall be limited to an amount equal to
the net proceeds to such holder of the Registrable Securities sold pursuant to
such registration statement.
(c) Any Person entitled to indemnification under the provisions of
this Section 3.7 shall (i) give prompt notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, permit
such indemnifying party to assume the defense of such claim, with counsel
reasonably satisfactory to the indemnified party; and if such defense is so
assumed, such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement attributes liability to the
indemnified party and such indemnifying party shall not be subject to any
liability for any settlement made without its consent (which shall not be
unreasonably withheld); and any underwriting agreement entered into with respect
to any registration statement provided for under this Article III shall so
provide. In the event an indemnifying party shall not be entitled, or elects
not, to assume the defense of a claim, such indemnifying party shall not be
obligated to pay the fees and expenses of more than one counsel or firm of
counsel for all parties indemnified by such indemnifying party in respect of
such claim, unless in the reasonable judgment of any such indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties in respect to such claim.
(d) If for any reason the foregoing indemnity is unavailable, then
the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other or (ii) if the allocation provided by clause (i) above is not
permitted by Applicable Law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other but also the relative fault of
the indemnifying party and the indemnified party as well as any other relevant
equitable considerations. Notwithstanding the foregoing, no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount such holder would have been required to pay to an indemnified party
if the indemnity under Section 3.7(b) was available. 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. The obligation of any Person to
contribute pursuant to this Section 3.8 shall be several and not joint.
(e) An indemnifying party shall make payments of all amounts required
to be made pursuant to the foregoing provisions of this Section 3.7 to or for
the account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due or payable.
(f) The indemnity and contribution agreements contained in this
Section 3.7 shall remain in full force and effect regardless of any
investigation made by or on behalf of a participating holder of Registrable
Securities, its officers, directors, agents or any Person, if any, who controls
such holder as aforesaid, and shall survive the Transfer of Equity Securities by
such holder and the termination of this Agreement for any reason.
Section 3.8 Holdback Agreements; Registration Rights to Others. In
the event and to the extent requested by the managing underwriter or, if the
Registrable Securities are not being disposed of in an underwritten Public
Offering, if requested by the Company, each Stockholder agrees not to sell, make
any short sale of, grant any option for the purchase of, or otherwise dispose of
any securities (other than a Transfer by USF pursuant to Section 2.2(a)(viii)
hereof, which Transfer shall be subject to the holdback provisions of the Junior
Warrant Agreement or, as the case may be, the Second Note) other than those
Registrable Securities included in such Registration pursuant to Section 3.1(a),
3.1(b) or 3.2(a) for the thirty (30) days prior to and the one hundred eighty
(180) days after the effectiveness of the registration statement pursuant to
which such Public Offering shall be made (or such shorter period of time as is
sufficient and appropriate, in the opinion of the managing underwriter or, as
the case may be, the Company in order to complete the sale and distribution of
the securities included in such Public Offering); provided that the limitations
contained in this Section 3.8 shall not apply to the extent a Stockholder is
prohibited by Applicable Law from so withholding such securities from sale
during such period; provided, further, that in the event that the underwriters
or the Company, as the case may be, release DBCP or any member of the ▇▇▇▇▇▇▇
Group from the restrictions set forth in this Section 3.8, each of the holders
of Series A Preferred Stock shall be similarly released with respect to the
percentage of securities that is equal to the percentage of securities as to
which DBCP or any such member of the ▇▇▇▇▇▇▇ Group, as the case may be, was
released (as determined by dividing the number of securities released by the
aggregate number of securities held by such holder).
Section 3.9 Availability of Information. Following the Company's
initial Public Offering, the Company shall comply with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act and will comply with
all other public information reporting requirements of the SEC as from time to
time in effect, and cooperate with Stockholders who are holders of Registrable
Securities, so as to permit disposition of the Registrable Securities pursuant
to an exemption from the Securities Act for the sale of any Registrable
Securities (including, without limitation, the current public information
requirements of Rule 144(c) and Rule 144A under the Securities Act). The Company
shall also cooperate with each Stockholder who is a holder of any Registrable
Securities in supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption from the
Securities Act for the sale of any Registrable Securities.
ARTICLE IV
BOARD OF DIRECTORS OF THE COMPANY
Section 4.1 Board of Directors. (a) Each Stockholder of Voting Stock
agrees to vote, at any time and from time to time, all of the shares of Voting
Stock held by such Stockholder and all other shares of Voting Stock over which
he or it has voting control and shall take all other necessary or desirable
action within his or its control (whether in his or its capacity as a
stockholder, director or officer of the Company or otherwise), and the Company
shall take all necessary or desirable action within its control, in order to
elect and maintain an eleven (11)
member Board, which shall include: (i) three directors designated by DBCP, (ii)
two additional directors (who may be independent directors) designated from time
to time by DBCP, (iii) three directors designated by ▇▇▇▇▇▇▇, (iv) two directors
who are members of senior management of the Company designated from time to time
by Stockholders owning a majority of Common Stock Equivalents held by all
Stockholders and (v) one director designated by Gryphon, who shall initially be
▇▇▇▇ ▇▇▇. Notwithstanding the foregoing, in the event that, at any time (x)
there exists an uncured default under either of the Notes or the Junior Warrant
Agreement or (y) the Company is relying on Sections 9(d)(i) or (ii) of the
Junior Warrant Agreement or Sections 3(p)(i) or (ii) of the Second Note with
respect to its payment obligations under the "put" provision contained in the
Junior Warrant Agreement or, as the case may be, the Second Note, USF shall not
be required to vote its shares of Voting Stock in favor of the Board set forth
in the immediately preceding sentence.
(b) In the event that any director designated by DBCP, ▇▇▇▇▇▇▇,
Gryphon or, as the case may be, the Stockholders for any reason ceases to serve
as a director during his or her term of office, the resulting vacancy on the
Board shall be filled by a director designated by DBCP, ▇▇▇▇▇▇▇, Gryphon or, as
the case may be, the Stockholders.
(c) So long as DBCP, ▇▇▇▇▇▇▇, Gryphon or, as the case may be, the
Stockholders are entitled to designate directors pursuant to Section 4.1(a), the
removal of any director designated by DBCP, ▇▇▇▇▇▇▇, Gryphon or, as the case may
be, the Stockholders may be only at the written request of DBCP, ▇▇▇▇▇▇▇,
Gryphon or, as the case may be, the Stockholders.
(d) All decisions and determinations relating to the compensation,
responsibilities and other employment matters of (i) any officer of the Company
or Kinetics or (ii) any employee of the Company or Kinetics or any of their
respective Subsidiaries earning in excess of $175,000 per annum, including,
without limitation, decisions whether to hire or terminate the employment of any
such Person, shall be made by a majority of the members of the Board.
(e) As consideration for their agreement to serve as members of the
Board, the Company may pay to each member of the Board who is not an employee of
the Company or any of its Subsidiaries an annual fee, in an amount determined
from time to time by the Board, and shall reimburse each member of the Board for
its reasonable, documented out of pocket expenses in connection with attending
meetings of the Board.
(f) Notwithstanding anything in the by-laws or certificate of
incorporation of the Company to the contrary, any action taken by the Board
shall only be effective if (i) taken at a duly convened meeting (including
telephonic meetings), (ii) a director designated by DBCP who is an employee of
DBCP or an employee of an Affiliate of DBCP voted in favor of such action or
resolution and (iii) at least a majority of all directors (or such greater
number as shall be required by the by-laws, certificate of incorporation or
Applicable Law) vote in favor of such action or resolution. For purposes of this
Section 4.1(f), a "duly convened meeting" shall be any meeting (including a
telephonic meeting) (x) called in accordance with the by-laws of the Company,
(y) in which a director designated by DBCP who is an employee of DBCP or an
employee of an
Affiliate of DBCP participates and (z) in which a director designated by ▇▇▇▇▇▇▇
who is an employee of ▇▇▇▇▇▇▇ or an employee of an Affiliate of ▇▇▇▇▇▇▇
participates; provided that if none of the directors designated by ▇▇▇▇▇▇▇
attends or participates in such meeting after receiving notice of such meeting
in accordance with the by-laws of the Company, the Company shall reschedule such
meeting at a later date and send notice to the directors designated by ▇▇▇▇▇▇▇
of such rescheduled meeting and, if after receiving such notice of such
rescheduled meeting none of the directors designated by ▇▇▇▇▇▇▇ attends or
participates in such rescheduled meeting, then such rescheduled meeting shall be
a "duly convened meeting" for purposes of this Section 4.1(f) notwithstanding
the failure of any such ▇▇▇▇▇▇▇ director to attend or participate in such
meeting.
Section 4.2 Major Management Decisions; ▇▇▇▇▇▇▇ Consent. The
following acts, expenditures, decisions and obligations made or incurred by the
Company or any Subsidiary of the Company shall require the prior approval of the
Board and ▇▇▇▇▇▇▇ (it being understood that approval by a majority of the
members of the Board designated by ▇▇▇▇▇▇▇ at a meeting or by written consent
shall constitute the approval of ▇▇▇▇▇▇▇ for the purposes of this Section 4.2):
(a) the acquisition of any Person (whether by consolidation, merger
or similar combination of the Company or any of its Subsidiaries, with or into
such Person) which increases the consolidated gross assets of the Company
(computed on a book basis) or annualized consolidated gross revenue of the
Company by more than twenty percent (20%);
(b) the sale, conveyance, transfer or other disposition of any type,
in one transaction or in a series of related transactions, by the Company or any
of its Subsidiaries, of any assets or property (other than inventory in the
ordinary course of business) that constitute more than twenty percent (20%) of
the consolidated gross assets of the Company (computed on a book basis) or
contribute more than twenty percent (20%) to the annualized consolidated gross
revenue of the Company; and
(c) the Company or any of its Subsidiaries entering into any line of
business that is unrelated to the business of the Company or any of its
Subsidiaries on the date hereof.
ARTICLE V
OTHER COVENANTS OF COMPANY
Section 5.1 Financial Statements and Other Information. The Company
shall, at any time, deliver to (i) the ▇▇▇▇▇▇▇ Investor Group, (ii) each other
Stockholder holding at such time one percent (1%) or more of the Equity
Securities (and any other Stockholder owning 1% of the Common Stock Equivalents
as of the date hereof, who shall own less than 1% of the Common Stock
Equivalents on any such date as a direct result of the sale of Common Stock
Equivalents by the Company in an equity financing after the date hereof in
excess of $15,000,000), and (iii) the Senior Warrant Arranger (who may
distribute the relevant information to any Senior Warrantholder) so long as the
Senior Warrantholders on such date collectively hold at least fifty percent
(50%) of the Equity Securities collectively held by them on the date hereof:
(a) within forty five (45) days after the end of each fiscal month of
the Company other than the last such month of any fiscal quarter of the Company,
consolidated statements of earnings, stockholders' equity and cash flows of the
Company for such fiscal month and consolidated balance sheets of the Company as
of the end of such fiscal month, certified by the chief financial officer or
controller of the Company;
(b) within forty five (45) days after the end of each of the first
three quarterly accounting periods in each fiscal year, consolidated statements
of earnings, stockholders' equity and cash flows of the Company for such fiscal
quarter and consolidated balance sheets of the Company as of the end of such
fiscal quarter, certified by the chief financial officer or controller of the
Company;
(c) within one hundred twenty (120) days after the end of each fiscal
year, audited consolidated statements of earnings, stockholders' equity and cash
flows of the Company for such fiscal year, and consolidated balance sheets of
the Company as of the end of such fiscal year accompanied by the opinion of a
nationally recognized independent accounting firm selected by the Company; and
(d) within sixty (60) days after the commencement of each fiscal year
of the Company, a consolidated annual budget of the Company and its Subsidiaries
for such fiscal year (such annual budget to include, without limitation,
budgeted statements of earnings and sources and uses of cash and balance sheets)
accompanied by a certificate of the chief financial officer or controller of the
Company to the effect that, to the best of his or her knowledge, such budget is
a reasonable estimate for the period covered thereby.
Section 5.2 Board Observation Rights. (a) So long as the Senior
Warrantholders on such date hold at least a majority of the Common Stock
Equivalents issued to them on August 30, 2000 pursuant to the Senior
Subordinated Credit Agreement, the Senior Warrantholders shall be entitled to
designate one (1) observer (the "Senior Warrantholder Observer") to attend, as a
non-voting observer, all meetings (including participation in telephonic
meetings) of the Board. The Senior Warrantholder Observer shall be designated
from time to time by (i) Whitney so long as it holds at least $20 million of
Senior Subordinated Indebtedness, or (ii) the holders of a majority of the
Common Stock Equivalents issued under the Senior Subordinated Credit Agreement
if Whitney does not hold at least $20 million of Senior Subordinated
Indebtedness. The Senior Warrantholder Observer shall be a Person who is
reasonably acceptable to DBCP.
(b) So long as the State of Michigan holds at least a majority of the
Common Stock Equivalents issued to it on August 30, 2000, the State of Michigan
shall be entitled to designate one (1) observer (the "State of Michigan
Observer") to attend, as a non-voting observer, all meetings (including
participation in telephonic meetings) of the Board. The State of Michigan
Observer shall be a Person who is reasonably acceptable to DBCP.
(c) So long as the Teachers Insurance and Annuity Association of
America ("TIAA") holds at least a majority of the Common Stock Equivalents
issued to it on December 14, 2001, the TIAA shall be entitled to designate one
(1) observer (the "TIAA Observer") to attend, as a non-voting observer, all
meetings (including participation in telephonic meetings) of
the Board. ▇▇▇▇▇▇▇ shall have the right, in its reasonable discretion and upon
prior written notice to TIAA, to require TIAA to substitute another Person as
the TIAA Observer for a Person previously designated by TIAA as the TIAA
Observer.
(d) The Company shall provide the Senior Warrantholder Observer, the
State of Michigan Observer and TIAA Observer with (i) notice of all meetings of
the Board and (ii) all information delivered to the members of the Board prior
to such meetings at the same time such notice and information is delivered to
the members of the Board. Notwithstanding the foregoing, the Company shall be
entitled to (x) excuse (i) the Senior Warrantholder Observer from any portion of
a Board meeting when the Board discusses any matters directly relating to the
Senior Credit Agreement and/or the Senior Subordinated Credit Agreement or, as
the case may be, the Notes and (ii) the Senior Warrantholder Observer, the State
of Michigan Observer and/or TIAA Observer from any portion of a Board meeting if
their participation in such meeting would affect the attorney/client privilege
of the Company and its legal advisors and (y) withhold information from the
Senior Warrantholder Observer, the State of Michigan Observer and/or TIAA
Observer delivered to the Board prior to a meeting of the Board if the Company
believes there is a reasonable likelihood that the receipt of such information
by (i) the Senior Warrantholder Observer would create a conflict of interest for
the Senior Warrantholder Observer or (ii) the Senior Warrantholder Observer,
State of Michigan Observer Observer and/or TIAA Observer would affect the
attorney/client privilege of the Company and its legal advisors.
Section 5.3 Director and Officer Insurance. The Company shall
purchase and maintain customary directors' and officers' indemnification
insurance coverage for each of its directors and officers.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior arrangements or understandings (whether written or
oral) with respect thereto, except to the extent such matters are otherwise
specifically addressed in the Stock Purchase Agreement, the Purchase Agreement,
the USF Noncompetition Agreement, the Credit Documents, the Notes, the Senior
Warrants or the Junior Warrant Agreement.
Section 6.2 Captions. The Article and Section captions used herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 6.3 Counterparts. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by the parties hereto
and each such executed counterpart shall be deemed to be an original instrument.
Section 6.4 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be validly given,
made or served, if in writing and delivered by personal delivery, overnight
courier, telecopier or registered or certified mail, return-receipt requested
and postage prepaid addressed as follows:
If to the Company, to:
Kinetics Holdings Corporation
c/o DB Capital Partners
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
Kinetics Holdings Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to its counsel:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to DBCP, to:
DB Capital Investors, L.P.
c/o DB Capital Partners
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇ Capital III, L.P.
c/▇ ▇▇▇▇▇▇▇ Capital
Four Embarcadero Center, Suite 3640
San Francisco, CA 94111
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to its counsel:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Gryphon, to:
Gryphon Partners II, L.P.
c/o Gryphon Investors
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to its counsel:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to USF, to:
United States Filter Corporation
▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to its counsel:
O'Melveny & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇, to:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Treehouse Ltd.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Mandaric, to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
NationsBank Tower
▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and if to any of the Senior Warrantholders, any of the Other Financial
Investors, any 2001 Investor or any of the Management Stockholders, to the
addresses set forth opposite each of their names on Schedule I, Schedule II,
Schedule III or Schedule IV, respectively, attached hereto, or to such other
address as any such party hereto may, from time to time, designate in writing to
all other parties hereto, and any such communication shall be deemed to be
given, made or served as of the date so delivered or, in the case of any
communication delivered by mail, as of the date so received.
Section 6.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Company, the Stockholders and their
respective successors, assigns and Permitted Transferees. Any or all of the
rights of a Stockholder under this Agreement may be assigned or otherwise
conveyed by any Stockholder only in connection with a Transfer of Equity
Securities which is in compliance with this Agreement or if such assignment is
otherwise agreed to by the Board.
Section 6.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO SUCH STATE'S CHOICE OF LAW PROVISIONS.
Section 6.7 Submission to Jurisdiction. (a) Each of the parties
hereto hereby irrevocably acknowledges and consents that any legal action or
proceeding brought with respect to any of the obligations arising under or
relating to this Agreement may be brought in the courts of the State of New
York, County of New York, or if it has or can acquire jurisdiction in the
United States District Court for the Southern District of New York, as the party
bringing such action or proceeding may elect, and each of the parties hereto
hereby irrevocably submits to and accepts with regard to any such action or
proceeding, for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each
party hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such party, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Agreement or the transactions
contemplated hereby brought in any of the aforesaid courts, that any such court
lacks jurisdiction over such party. Each party irrevocably consents to the
service of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such party, at its
address for notices set forth in Section 6.4, such service to become effective
ten (10) days after such mailing. Each party hereby irrevocably waives any
objection to such service of process and further irrevocably waives and agrees
not to plead or claim in any action or proceeding commenced hereunder or under
any other documents contemplated hereby that service of process was in any way
invalid or ineffective. Subject to Section 6.7(b), the foregoing shall not limit
the rights of any party to serve process in any other manner permitted by law.
The foregoing consents to jurisdiction shall not constitute general consents to
service of process in the State of New York for any purpose except as provided
above and shall not be deemed to confer rights on any Person other than the
respective parties to this Agreement.
(b) Each of the parties hereto hereby waives any right it may have
under the laws of any jurisdiction to commence by publication any legal action
or proceeding with respect to this Agreement. To the fullest extent permitted by
Applicable Law, each of the parties hereto hereby irrevocably waives the
objection which it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
of the courts referred to in Section 6.7(a) and hereby further irrevocably
waives and agrees not to plead or claim that any such court is not a convenient
forum for any such suit, action or proceeding.
(c) The parties hereto agree that any judgment obtained by any party
hereto or its successors or assigns in any action, suit or proceeding referred
to above may, in the discretion of such party (or its successors or assigns), be
enforced in any jurisdiction, to the extent permitted by applicable law.
(d) The parties hereto agree that the remedy at law for any breach of
this Agreement may be inadequate and that should any dispute arise concerning
any matter hereunder, this Agreement shall be enforceable in a court of equity
by an injunction or a decree of specific performance. Such remedies shall,
however, be cumulative and nonexclusive, and shall be in addition to any other
remedies which the parties hereto may have.
(e) Notwithstanding the foregoing provisions of this Section 6.7, the
State of Michigan shall not be deemed to have made any particular irrevocable
submission to jurisdiction, waiver or, as the case may be, consent in the event
that the State of Michigan has delivered to the Company prior to the date hereof
a certificate of an officer of its plan administrator stating that any such
irrevocable submission to jurisdiction, waiver or consent, as the case may be,
would constitute a violation of applicable law or regulation.
Section 6.8 Benefits Only to Parties. Nothing expressed by or
mentioned in this Agreement is intended or shall be construed to give any
Person, other than persons indemnified pursuant to Section 3.7, the parties
hereto and their respective successors or assigns and Permitted Transferees, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns and
Permitted Transferees, and for the benefit of no other Person.
Section 6.9 Termination; Survival of Benefits. This Agreement shall
terminate upon the closing of a Qualified Public Offering; provided however that
the rights and obligations of the Stockholders and the Company under Article III
shall survive any such termination.
Section 6.10 Publicity. Except as otherwise required by Applicable
Law none of the parties hereto shall issue or cause to be issued any press
release or make or cause to be made any other public statement in each case
relating to or connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior written consent of DBCP, ▇▇▇▇▇▇▇
and the Company to the contents and the manner of presentation and publication
thereof.
Section 6.11 Confidentiality. Each of the parties hereto hereby
agrees that throughout the term of this Agreement it shall keep (and shall cause
its directors, officers, general and limited partners, employees,
representatives and outside advisors and its Affiliates to keep) all non-public
information received as a Stockholder relating to the Company (including any
such information received prior to the date hereof; provided that, in the case
of USF, such information received by it prior to August 30, 2000 shall, without
prejudice to the rights of Kinetics under the USF Noncompetition Agreement, not
be subject to this Section 6.11) confidential except information which (a)
becomes known to such Stockholder from a source, other than the Company, its
directors, officers, employees, representatives or outside advisors, which
source is not obligated to the Company to keep such information confidential or
(b) becomes generally available to the public through no breach of this
Agreement by any party hereto. Each of the parties hereto agrees that (i) such
non-public information may be communicated to the directors, officers, general
and limited partners, employees, representatives, outside advisors and
Affiliates of any of the parties and (ii) it will cause its directors, officers,
general and limited partners, employees, representatives, outside advisors or
Affiliates to keep such non-public information confidential and will not, and
will cause its directors, officers, general and limited partners, employees,
representatives, outside advisors and Affiliates not to, use such non-public
information to either to compete with the Company or to conduct itself in a
manner inconsistent with the antitrust laws of the United States or any state.
Notwithstanding the foregoing, a party hereto may disclose non-public
information if required to do so upon request for disclosure pursuant to a
federal or state freedom of information statute or by a court of competent
jurisdiction or by any governmental agency; provided however that prompt notice
of such required disclosure be given to the Company and DBCP prior to the making
of such disclosure so that the Company and/or DBCP may seek a protective order
or other appropriate remedy. In the event that such protective order or other
remedy is not obtained, the party hereto required to disclose the non-public
information will disclose only that portion which such party is advised by
opinion of counsel is legally
required to be disclosed and will request that confidential treatment be
accorded such portion of the non-public information.
Section 6.12 Expenses. The Company shall reimburse each of the
respective members of its Board who are not employees of the Company and the
Senior Warrantholder Observer for their travel and reasonable out-of-pocket
expenses incurred in connection with their serving on the Board or, as the case
may be, attending Board meetings as an observer. Employees of the Company who
incur expenses in connection with their attendance of meetings of the Board in
the performance of their duties shall also be reimbursed in accordance with the
Company's usual expense reimbursement policies.
Section 6.13 Amendments; Waivers. No provision of this Agreement may
be amended, modified or waived without the prior written consent of the holders
of more than two-thirds of the Common Stock Equivalents then outstanding;
provided however that no amendment or modification to, or deletion of, Section
6.9 of this Agreement or this Section 6.13 shall be effective unless unanimously
approved by all of the Stockholders, and provided further that no amendment,
modification or waiver shall adversely affect the rights or obligations of any
Stockholder (x) contained in Section 2.4 and Article III hereof, (y) contained
in any other provision of this Agreement in a manner different from any other
Stockholder, or (z) specifically granted to such Stockholder but not to all
other Stockholders, in each case without such Stockholder's prior written
consent. Notwithstanding the foregoing, the addition of parties to this
Agreement in accordance with its terms shall not be deemed to be an amendment,
modification or waiver requiring the consent of any Stockholder.
Section 6.14 Reserved
Section 6.15 Other Business. DBCP, ▇▇▇▇▇▇▇, Gryphon and any of their
respective Affiliates may engage in or possess an interest in any other business
venture of any kind, nature or description, independently or with others,
whether or not such ventures are competitive with the Company, notwithstanding
that representatives of DBCP, ▇▇▇▇▇▇▇, Gryphon or any of their respective
Affiliates are serving on the Board of the Company. Nothing in this Agreement
shall be deemed to prohibit DBCP, ▇▇▇▇▇▇▇, Gryphon or any of their respective
Affiliates from dealing, or otherwise engaging in business, with Persons
transacting business with the Company. Neither the Company nor any Stockholder
shall have any rights or obligations by virtue of this Agreement or the
Acquisition, in or to any independent venture of DBCP, ▇▇▇▇▇▇▇, Gryphon or any
of their respective Affiliates, or the income or profits or losses or
distributions derived therefrom, and such ventures shall not be deemed wrongful
or improper even if competitive with the business of the Company.
* * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
KINETICS HOLDINGS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO
[Stockholders Agreement signature page]
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P.,
its general partner
By: DB Capital Partners, Inc.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name:
Title:
[Stockholders Agreement signature page]
▇▇▇▇▇▇▇ CAPITAL III L.P.
By: ▇▇▇▇▇▇▇ Brothers III LLC,
its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Partner
[Stockholders Agreement signature page]
UNITED STATES FILTER CORPORATION
By:
------------------------------
Name:
Title:
[Stockholders Agreement signature page]
▇. ▇. ▇▇▇▇▇▇▇ MEZZANINE FUND, L.P.
By: ▇▇▇▇▇▇▇ ▇▇, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Carribino
-------------------------------------
Name:
Title:
▇. ▇. ▇▇▇▇▇▇▇ MARKET VALUE FUND, L.P.
By: Whitney Market Value GP, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Carribino
-------------------------------------
Name:
Title:
▇. ▇. ▇▇▇▇▇▇▇ ▇▇, L.P.
By: Whitney Equity Partners, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Carribino
-------------------------------------
Name:
Title:
[Stockholders Agreement signature page]
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Its Authorized Representative
[Stockholders Agreement signature page]
ALBION ALLIANCE MEZZANINE FUND, L.P.
By: Albion Alliance LLC,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
ALBION ALLIANCE MEZZANINE FUND II, L.P.
By: AA MEZZ II GP, LLC,
its general partner
By: Albion Alliance, LLC, its sole member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
[Stockholders Agreement signature page]
GOLDENTREE HIGH YIELD
OPPORTUNITIES I, L.P.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
GOLDENTREE HIGH YIELD PARTNERS, L.P.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
DEUTSCHE BANK SHARPS ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
[Stockholders Agreement signature page]
STATE TREASURER OF THE STATE OF MICHIGAN,
CUSTODIAN OF THE MICHIGAN PUBLIC SCHOOLS
EMPLOYEES' RETIREMENT SYSTEM, STATE
EMPLOYEES' RETIREMENT SYSTEM AND MICHIGAN
STATE POLICE RETIREMENT SYSTEM
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Administrator
Title: Alternative Instruments Division
[Stockholders Agreement signature page]
CENTURY PARK CAPITAL PARTNERS, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Partner
[Stockholders Agreement signature page]
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
[Stockholders Agreement signature page]
GRYPHON PARTNERS II, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Partner
GRYPHON PARTNERS II-A, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Partner
[Stockholders Agreement signature page]
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
[Stockholders Agreement signature page]
INTERVIVOS TRUST DATED 10/76 ▇▇▇▇▇ AND
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ UA 1976
By:
-------------------------------------
Name:
Title: Trustee
[Stockholders Agreement signature page]
1999 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ REVOCABLE TRUST
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Trustee
[Stockholders Agreement signature page]
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
[Stockholders Agreement signature page]
MAGNOLIA TREE, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
[Stockholders Agreement signature page]
Schedule I
SENIOR WARRANTHOLDERS
Warrantholder Notice Address
------------- --------------
▇. ▇. ▇▇▇▇▇▇▇ Mezzanine Fund, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇ Market Value Fund, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ ▇▇, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Northwestern Mutual Life Insurance Company ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Securities Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Albion Alliance Mezzanine Fund, L.P. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Albion Alliance Mezzanine Fund II, L.P. 1345 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Goldentree High Yield Opportunities I, L.P. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Goldentree High Yield Partners, L.P. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Deutsche Bank Sharps ▇▇▇▇▇▇ Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Schedule II
OTHER FINANCIAL INVESTORS
Stockholder Notice Address
----------- --------------
State Treasurer of the State of U.S. Mail:
Michigan, custodian of the Michigan Treasury Building
Public Schools Employees' Retirement P.O. Box 15128
System, State Employees' Retirement ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
System and Michigan State Police Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Retirement System Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Overnight Mail:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Century Park Capital Partners, L.P. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ c/▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇.▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule III
2001 INVESTORS
Stockholder Notice Address
----------- --------------
Gryphon Partners II, L.P. c/o Gryphon Investors
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Teachers Insurance and Annuity Association of America TIAA-CREF
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
DB Capital Investors, L.P. DB Capital Investors, L.P.
c/o DB Capital Partners
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ Capital III ▇.▇. ▇▇▇▇▇▇▇ Capital III, L.P.
c/▇ ▇▇▇▇▇▇▇ Capital
Four Embarcadero Center, Suite 3640
San Francisco, CA 94111
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Century Park Capital Partners, L.P. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Northwestern Mutual Life Insurance ▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant General Counsel
The Northwestern Mutual Life Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
fax: ▇▇▇-▇▇▇-▇▇▇▇
Schedule IV
MANAGEMENT SHAREHOLDERS
Name Notice Address
---- --------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Eschau ▇▇▇▇▇ GMBH
Eschau-Hobbach
Germany D-6963
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Indistrial Zon
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Cables ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name Notice Address
---- --------------
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
dtd Aug. 31, 1999 ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ Land ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name Notice Address
---- --------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇ TEN ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Family Trust u/t/a 2/10/1988 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name Notice Address
---- --------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Magnolia Tree, LLC ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Schedule V
EQUITY SECURITIES HELD BY STOCKHOLDERS
Shares of Warrants to
Shares of Series A Purchase
Common Stock Preferred Stock Common Stock Notes
------------ --------------- ------------ ---------
DB Capital Investors, L.P. 41,775,086 3,128,044
▇▇▇▇▇▇▇ Capital III L.P. 25,000,000 1,777,173
United States Filter Corporation 4,737,308 8,333,333
▇. ▇. ▇▇▇▇▇▇▇ Mezzanine Fund, L.P. 1,187,461
▇. ▇. ▇▇▇▇▇▇▇ Market Value Fund, L.P. 237,492
▇. ▇. ▇▇▇▇▇▇▇ ▇▇, L.P. 1,000,000
The Northwestern Mutual Life Insurance
Company 999,999 392,199 949,979
Albion Alliance Mezzanine Fund, L.P. 159,999 227,992
Albion Alliance Mezzanine Fund II, L.P. 340,001 484,485
Deutsche Bank Securities Inc. 0 0
State Treasurer of the State of Michigan,
custodian of the Michigan Public Schools
Employees' Retirement System, State Employees'
Retirement System and Michigan State Police
Retirement System 6,666,667
Century Park Capital Partners, L.P. 1,666,667 1,582,278
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 33,333
Gryphon Partners II, L.P. 8,869,785
Gryphon Partners II-A, L.P. 623,886
Teachers Insurance and Annuity
Association of America 3,333,333
Intervivos Trust Dated 10/76 ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ UA 1976 83,333
1999 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Revocable Trust 5,000,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,666,666
Goldentree High Yield Opportunities I, L.P. 126,668 180,495
Shares of Warrants to
Shares of Series A Purchase
Common Stock Preferred Stock Common Stock Notes
------------ --------------- ------------ ---------
Goldentree High Yield Partners, L.P. 25,000 35,623
Deutsche Bank Sharps ▇▇▇▇▇▇ Inc. 15,000 21,374
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 83,330
▇▇▇▇▇▇ ▇▇▇▇▇ 16,660
▇▇▇▇▇▇ ▇▇▇▇ 83,330
▇▇▇▇▇▇▇ Cables 16,660
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 33,330
▇▇▇ ▇▇▇▇▇▇▇ 25,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇▇ 80,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 83,330
▇▇▇▇▇▇ ▇▇▇▇▇ 33,330
▇▇▇▇ ▇▇▇▇▇▇ 166,660
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇▇▇ 116,660
The ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust
dtd Aug. 31, 1999 1,659,070
▇▇▇▇ ▇▇▇▇▇▇ 16,660
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 166,660
▇▇▇▇▇ ▇▇▇▇▇ 166,660
▇▇▇▇ ▇▇ ▇▇▇▇ 33,330
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇▇ Land 16,660
▇▇▇▇▇▇▇ ▇▇▇▇▇ 16,660
▇▇▇ ▇▇▇▇▇▇▇▇ 33,330
▇▇▇ ▇▇▇▇▇▇ 25,000
▇▇▇▇▇ ▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 33,330
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 16,660
▇▇ ▇'▇▇▇▇▇ 33,330
▇▇▇▇▇▇ ▇▇▇ 116,660
Shares of Warrants to
Shares of Series A Purchase
Common Stock Preferred Stock Common Stock Notes
------------ --------------- ------------ ---------
▇▇▇ ▇▇▇▇▇▇▇ 60,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 83,330
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇, as JT TEN 16,660
▇▇▇▇▇▇▇ Family Trust u/t/a 2/10/1988 83,330
▇▇▇▇▇▇ ▇▇▇▇▇ 166,660
▇▇▇▇ ▇▇▇▇▇▇ 16,660
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇ 0
▇▇▇▇ ▇▇▇▇▇▇▇▇ 66,660
▇▇▇▇ ▇▇▇▇▇▇▇▇ 53,330
▇▇▇▇▇▇▇ ▇▇▇▇▇ 33,330
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇▇ 83,330
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 16,660
▇▇▇▇ ▇▇▇▇▇▇ 16,660
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇ 33,330
▇▇▇▇ ▇▇▇▇▇▇ 60,000
▇▇▇▇ ▇▇▇▇ 66,660
Magnolia Tree, LLC 3,977,229
