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EXHIBIT 10.2.2
FIRST AMENDMENT
TO
SHAREHOLDERS' AGREEMENT
THIS FIRST AMENDMENT TO SHAREHOLDERS' AGREEMENT dated as of May 31,
2000 (this "Amendment") is made by and among MDMI Holdings, Inc., a Colorado
corporation formerly named Medical Device Manufacturing, Inc. (the "Company"),
KRG Capital Fund I, L.P., a Delaware limited partnership ("KRG Fund I"), KRG
Capital Fund I (PA), L.P., a Delaware limited partnership ("KRG (PA)"), KRG
Capital Fund I (FF), L.P., a Delaware limited partnership ("KRG (FF)"), KRG
Co-Investment, LLC, a Delaware limited liability company ("KRG Co-Investment"
and, together with ▇▇▇ ▇▇▇▇ ▇, ▇▇▇ (▇▇) ▇▇▇ ▇▇▇ (▇▇), "▇▇▇"), 7:22 Investors,
LLC, a Colorado limited liability company ("7:22"), ▇▇▇▇ ▇▇▇▇▇▇▇ ("▇. ▇▇▇▇▇▇▇"),
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇"), The ELP Trust, a Colorado trust ("ELP"), The CRP
Trust, a Colorado Trust ("CRP" and together with ELP, Levy, ▇. ▇▇▇▇▇▇▇ and 7:22
the "Pollocks"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ("Archambault"). KRG, the Pollocks and
Archambault are collectively referred to herein as the "Majority Holders."
WHEREAS, the Company, KRG (as successor to KRG Capital Partners, LLC, a
Delaware limited liability company), the Pollocks and Archambault are parties to
that certain Shareholders' Agreement, dated July 6, 1999 (the "Original
Agreement"), together with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, First Analysis
Corporation and its affiliated investment funds, Infrastructure and
Environmental Private Equity Fund III, L.P. and Environmental and Information
Technology Private Fund III, a civil partnership with limitation of liability
established under the laws of the Federal Republic of Germany, CMS Companies and
any affiliated investment fund to which it may assign all or part of its
interest in the Company, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ and such other investors
as from time to time have become a party to the Original Agreement in accordance
with its terms.
WHEREAS, in conjunction with the acquisition of UTI Corporation, a
Pennsylvania corporation ("UTI"), by the Company pursuant to that certain Share
Purchase Agreement dated as of the date hereof by and among the Company, UTI and
the shareholders of UTI (the "UTI Purchase Agreement"), the Company will be
issuing additional Equity Securities (as defined in the Original Agreement) to
certain Invited Investors (as defined in the Original Agreement) and taking
certain other actions as contemplated thereby;
WHEREAS, the Original Agreement may, in accordance with its terms, be
amended upon the written consent of a majority in interest of the Holders (as
defined in the Original Agreement); and
WHEREAS, the Majority Holders, representing a majority in interest of
the Holders, have concluded that it is in the best interest of the Company and
its shareholders generally to amend the terms of the Original Agreement as set
forth herein.
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NOW, THEREFORE, in consideration of the premises and the mutual
promises set forth in this Agreement, the parties agree as follows:
AGREEMENT
1. Capitalized terms not defined herein shall have the meanings
attributed to such terms in the Original Agreement.
2. Clause (iv) of the definition of "New Securities" in Section 1(e) of
the Original Agreement shall be amended in its entirety to read as follows:
"(iv) securities issued in connection with obtaining
debt financing from a recognized financial institution, whether issued
to a lender, guarantor or other person if such issuance is approved by
the Board; provided, however, that the foregoing securities shall be
deemed "New Securities" for purposes of the preemptive rights pursuant
to Section 4 hereof of such Holders (and only such Holders) that have
acquired Equity Securities in connection with providing debt financing
to the Company or its subsidiaries;"
3. Section 1 shall be amended to include the following new subsection
(g):
"(g) Qualified Public Offering. The term "Qualified
Public Offering" shall mean a firm commitment underwritten initial
public offering of Equity Securities of the Company that is effected
pursuant to a registration statement filed and declared effective by
the Securities and Exchange Commission under the Securities Act of
1933, as amended, and the rules and regulations thereunder, resulting
in gross proceeds to the Company of not less than $50,000,000 and a
price per share of Common Stock or equivalent thereof (adjusting to
take account for any stock split, combination or similar action on the
part of the Company subsequent to the date hereof) of not less than
$32.00."
4. Section 2 of the Original Agreement shall be amended in its entirety
to read as follows:
"2. Prohibited Transfers. Each Holder shall not sell, assign,
transfer, pledge, hypothecate, mortgage, encumber or otherwise dispose
of, including without limitation, transfers pursuant to the laws of
testate or intestate succession, marital dissolution, legal separation
or otherwise by operation of law ("Transfer") all or any shares of
Equity Securities he currently owns or hereafter acquires ("Shares")
except as expressly provided in this Agreement; provided, however, that
(i) each Holder may Transfer all or any of its Shares by way of gift to
any member of his or her family or to any trust for the benefit of any
such family member of the Holder (ii) each Holder may Transfer all or
any of its Shares to an Affiliate, (iii) each Holder may Transfer all
or any of its Shares pursuant to Rule 144 (or any successor provision)
under the Securities Act of 1933, as amended, six months subsequent to
an initial public offering of the Company that is not a Qualified
Public Offering, (iv) each of the entities comprising KRG may transfer
all or any of its Shares to its limited partners or members, as the
case may be, (v) Birmingham Fire
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Insurance Company of Pennsylvania ("Birmingham") may transfer all or
any of its Shares to any private investment fund sponsored by American
International Group, Inc. ("AIG") or managed by a direct or indirect
subsidiary of AIG, as the case may be and (vi) DLJ Investment Partners
II, L.P., DLJ Investment Funding II, Inc., DLJ ESC II L.P. and DLJ
Investment Partners, L.P. (collectively, "DLJ"), may Transfer all or
any of its Shares in conjunction with the Transfer of senior notes of
the Company or senior subordinated notes of Medical Device
Manufacturing, Inc., a wholly owned subsidiary of the Company (such
notes being collectively referred to as the "Notes," and each such
transfer being a "Note Transfer"), provided such Note Transfer (A) is
first approved by any KRG designee to the Board (as more fully
described in Section 8.1(c)(i)) or (B) occurs subsequent to the fifth
anniversary of the date hereof; and provided, further, that any such
transferee of a Holder shall agree in writing with the parties to this
Agreement, as a condition to such transfer, to be bound by all of the
provisions of this Agreement (each a "Permitted Transfer"). As used
herein, the word "family" shall include any spouse, lineal ancestor or
descendant, brother or sister."
5. Section 3(h) of the Original Agreement shall be deleted in its
entirety.
6. Section 4(a) of the Original Agreement shall be amended to delete
the third and final sentence thereof in its entirety.
7. Section 6(a) of the Original Agreement shall be amended by the
addition of the following language to the end of the last sentence thereof:
"; provided, however, that in connection with any such transaction (x)
each Holder shall not be required to make any representations or
warranties except those relating to (i) its own due organization and
execution and delivery of the relevant agreement, (ii) the
enforceability of the relevant agreement against it and absence of
conflicts with agreements and laws applicable to it and (iii) its
ownership of securities being sold by it, (y) the Holders shall not be
required to provide any post-closing indemnities except as provided in
clause (z) below and (z) in the event that a portion of the purchase
price is placed in escrow to support purchase price adjustment
obligations post-closing (including indemnification for breaches of
representations or warranties relating to the Company and its
subsidiaries), the Holders will have a pro rata portion of their
purchase price placed in such escrow to be utilized to pay any such
indemnification obligations."
8. Section 7 of the Original Agreement shall be amended in its entirety
to read as follows:
"2. Legend. Each existing or replacement certificate for
Shares now owned by the Holders shall bear the following legend upon
its face:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE TRANSFER,
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ENCUMBRANCE, PLEDGE, ASSIGNMENT OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
CONDITIONS AND RESTRICTIONS SPECIFIED IN (1) A SUBSCRIPTION
AGREEMENT, DATED AS OF , BY AND BETWEEN THE COMPANY AND A
CERTAIN INVESTOR AND (2) A SHAREHOLDERS' AGREEMENT, DATED AS
OF JUNE 6, 1999, BY AND AMONG THE COMPANY AND CERTAIN
SHAREHOLDERS, AS THE SAME IS AMENDED AS OF THE DATE HEREOF,
AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF
SUCH SECURITIES UNTIL SUCH CONDITIONS AND RESTRICTIONS HAVE
BEEN FULFILLED OR LIFTED WITH RESPECT TO SUCH TRANSFER. A COPY
OF THE CONDITIONS OR AGREEMENTS REFERENCED ABOVE MAY BE
OBTAINED BY THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY."
Each of the undersigned parties agrees that the Company may
instruct its transfer agent to impose transfer restrictions on the
shares represented by certificates bearing the legend referred to in
this Section 7 to enforce the provisions of this Agreement and the
Company agrees to promptly do so. The legend shall be removed or
modified upon termination of the conditions or restrictions set forth
therein."
9. Clause (i) of Section 8(c) of the Original Agreement shall be
amended in its entirety to read as follows:
"(i) The Board of Directors of the Company (the
"Board") shall initially be comprised of eleven directors. During the
term of this Agreement and at any special or annual meeting of the
Holders at which directors are to be elected to the Board, (A) KRG
shall be entitled to designate three directors to sit on the Board; (B)
the Pollocks shall be entitled to designate one director to sit on the
Board; (C) DLJ shall be entitled to designate one director to sit on
the Board; (D) Birmingham shall be entitled to designate one director
to sit on the Board; (E) the Chief Executive Officer of the Company
shall be designated as a director to sit on the Board, who shall
initially as the date hereof be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇; (F) the investors
listed on Schedule I other than KRG, the Pollocks, DLJ and Birmingham
shall be entitled to designate two directors to sit on the Board; and
(G) the remaining directors shall be designated by a majority vote of
the directors. The rights granted with respect to the Holders pursuant
to subclauses (A), (B), (C) and (D) of this Section 8(c)(i) shall
continue with respect to such Holders until such time as the applicable
Holders own less than 3.5% of the Company's outstanding Common Stock on
a fully diluted and fully converted basis (excluding unvested options);
notwithstanding anything in this Section 8.1(c)(i) to the contrary, in
the event any Holders lose their director designation rights in
accordance herewith, they shall be entitled to participate in the
designation of directors pursuant to subclause (F) of this Section
8(c)(i).
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Notwithstanding the foregoing, the right of DLJ to designate one
director to the Board pursuant to subclause (C) of this Section 8(c)(i)
shall continue for as long as DLJ continues to hold at least 25% of the
aggregate principal amount of Notes originally acquired by DLJ on the
date of issuance.
(ii) Any Holder that (x) does not have the power to
designate one or more directors to sit on the Board in accordance with
subclauses (A), (B), (C) or (D) of clause (i) of this Section 8.1(c)(i)
and (y) owns at least 3.5% of the Company's outstanding Common Stock on
a fully diluted and fully converted basis (excluding unvested options)
shall have the right to (1) appoint an observer to the Board who shall
be entitled to all notices and documentary information distributed to,
and to attend all meetings of, the Board generally but shall have no
voting or similar rights with respect thereto, (2) meet with, upon
reasonable prior notice and request, and discuss during normal business
hours the business and operations of the Company with the Company's
senior officers and representatives of the Company's lead equity
sponsor, in each case at locations convenient to the parties thereto
and (3) receive such other information relating to the Company
(including industry analysis and other strategic information in the
possession of the Company) as it may reasonably request, providing that
such information shall be subject in each case to confidentiality
requirements as the Company deems reasonably necessary. Any observer
rights exercised hereunder shall be at the cost and expense of the
Holder exercising such rights other than with respect to the provision
of notices and informational materials, and no observer shall be
entitled to any form of compensation or per diem.
(iii) All Holders shall be entitled to receive those
quarterly and annual financial reports of the Company provided to the
Company's senior lender within 15 days of the distribution of any such
report to such senior lender. Additionally, any Holder that owns at
least 2.5% of the Company's outstanding Common Stock on a fully diluted
and fully converted basis (excluding unvested options) shall have the
right to receive upon request all documentary information provided to
members of the Board generally."
10. Section 8 shall be amended to include the following new subsection
(g):
"(g) Issuance of Options. Notwithstanding anything in
this Agreement to the contrary, the Company may not issue options under
its stock option plans to officers, directors and employees that
exceed, in the aggregate, 10% of the then outstanding shares of Common
Stock on a fully diluted and converted basis without the prior approval
of a majority in interest of the Holders."
11. Section 11 of the Original Agreement shall be amended in its
entirety to read as follows:
"11. Term. This Agreement shall terminate upon the earlier of
(i) immediately before (and conditioned upon) the closing of a
Qualified Public Offering or (ii) immediately before (and conditioned
upon) the closing of the merger of the Company
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with and into a company that is publicly traded on a nationally
recognized stock exchange or over-the-counter market and the Company is
not the surviving entity."
12. Section 17 of the Original Agreement shall be amended in its
entirety to read as follows:
"17. Amendments and Waivers. Any term of this Agreement may be
amended and the observance thereof may be waived (either generally or
in a particular instance and either retroactively or prospectively),
only with the written consent of a majority in interest of the
Holders; provided, however, that any amendment of this Agreement that
shall adversely impact any Holders of a series of Equity Securities in
a manner different from other Holders shall require the written
consent of 66 2/3% in interest of the Holders of the series of Equity
Securities so adversely affected. Any amendment or waiver effected in
accordance with this Section 17 shall be binding upon the Company and
the Holders."
13. Entire Agreement. The Original Agreement, as amended by this
Amendment, contains the entire understanding of the parties with respect to the
subject matter hereof, supersedes all other agreements between or among any of
the parties with respect to the subject matter hereof and cannot be altered or
otherwise amended except pursuant the terms of Section 17 of the Original
Agreement as amended by this Amendment. This Agreement shall be interpreted
under the laws of the State of Colorado without reference to its principles of
conflicts of laws.
14. Further Instruments and Actions. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Amendment. The parties further agree
to cooperate affirmatively with the Company, to the extent reasonably requested
by the Company to enforce rights and obligations to this Amendment.
15. Severability. In case any provision of this Amendment shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
16. Counterparts; Facsimile Signatures. This Amendment may be executed
in counterparts, both of which need not contain the signatures of more than one
party, but both such counterparts taken together will constitute one and the
same Amendment. This Amendment may be executed and delivered by facsimile
transmission.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Amendment has been duly executed effective as
of the date and year first written above.
COMPANY
MDMI HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & Chief Executive Officer
MAJORITY HOLDERS
KRG CAPITAL FUND I, L.P.
By: KRG Capital Partners, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
KRG CAPITAL FUND I (FF), L.P.
By: KRG Capital Partners, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
KRG CAPITAL FUND I (PA), L.P.
By: KRG Capital Partners, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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KRG CO-INVESTMENT, L.L.C.
By: ▇▇▇▇▇▇ Management Company
Its: Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
7:22 INVESTORS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Manager
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇ Levy
THE ELP TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Trustee
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THE CRP TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Trustee
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