Exhibit 99(b)
POST-MERGER STOCKHOLDERS AGREEMENT
THIS POST-MERGER STOCKHOLDERS AGREEMENT (this "Stockholders
Agreement"), dated as of April 23, 1998, is made and entered into by and among
Specialty Teleconstructors, Inc., a Nevada corporation (the "Company"), and the
securityholders listed on the signature pages hereof.
In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions.
"Accredited Investor" means an "Accredited Investor," as defined in
Regulation D, or any successor rule then in effect.
"Advice" shall have the meaning provided in Section 3.5.
"Affiliate" means, with respect to any Person, any Person who, directly or
indirectly, controls, is controlled by or is under common control with that
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of Voting Securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Code" means the United States Bankruptcy Code
(Title XI, USC).
"Beneficial Ownership" with respect to any securities or assets shall mean
having "beneficial ownership" (as determined pursuant to Rule 13d-3 under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons who are
Affiliates of such Person (excluding officers and directors of the Company, the
Company and their controlled
1
Affiliates) who together with such Person would constitute a "group" within the
meaning of Section 13(d)(3) of the Exchange Act and in any event with respect to
Xxxxxxxx shall include securities held of record by the Xxxxxxxx Family Limited
Partnership #1.
"Xxxxxxxx" means Xxxxxxx X. Xxxxxxxx.
"Business Day" means a day other than a Saturday, a Sunday or other day on
which commercial banks located in New York are authorized or obligated to be
closed.
"Xxxxxxxxx" means Xxxxxx X. Xxxxxxxxx.
"Xxxxxxxxx Priority Shares" shall have the meaning provided
in Section 3.1.4(b).
"Closing" shall mean the date on which the transactions contemplated by
the Merger Agreement are consummated.
"Common Stock" means shares of the Common Stock, par value $0.01 per
share, of the Company, and any capital stock into which such Common Stock
thereafter may be converted or otherwise changed, including successive
conversions and changes.
"Common Stock Equivalents" means, without duplication with any other
Common Stock or Common Stock Equivalents, any rights, warrants, options,
convertible securities or indebtedness, exchangeable securities or indebtedness,
or other rights, exercisable for or convertible or exchangeable into, directly
or indirectly, Common Stock of the Company, whether at the time of issuance or
upon the passage of time or the occurrence of some future event.
"Company" shall have the meaning provided in the introductory paragraph
hereof and shall include the Company's successors by merger, consolidation or
share exchange.
"Company Sale" shall have the meaning provided in Section 4.6.
"Co-Seller" shall have the meaning provided in Section 4.2.1.
"Demand Registration" shall have the meaning provided in Section 3.1.1(a).
"Demand Request" shall have the meaning provided in Section 3.1.1(a).
2
"Designees" shall have the meaning provided in Section 2.1.1(a).
"Election Period" shall have the meaning provided in Section 4.1.1(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Excluded Registration" means a registration under the Securities Act of
(i) securities registered on Form S-8 or any similar successor form and (ii)
securities registered to effect the acquisition of or combination with another
Person.
"Existing Stockholders" means, collectively, Xxxxxxxx (individually and as
general partner of the Xxxxxxxx Family, LLC), the Xxxxxxxx Family, LLC, a
limited liability company organized under the laws of the State of Nevada, and
Xxxxxxxxx. For purposes of this Stockholders Agreement, Xxxxxxxx shall be deemed
to own personally all of the shares of Common Stock and Common Stock Equivalents
held by the Xxxxxxxx Family, LLC.
"Existing Stockholders Designee" shall have the meaning
provided in Section 2.1.1(a).
"Family Member" means, as to any natural Person, such Person's spouse,
grandparent or descendant of that grandparent, children (natural and adopted),
natural or adopted siblings, mothers and fathers-in-law, sons and
daughters-in-law, and brothers and sisters-in-law.
"Fully-Diluted Common Stock" means, at any time, the then outstanding
Common Stock of the Company plus (without duplication) all shares of Common
Stock issuable, whether at such time or upon the passage of time or the
occurrence of future events and without regard to the amount of any conversion
or exercise price, upon the exercise, conversion, or exchange of all
then-outstanding Common Stock Equivalents.
"Group" shall have the meaning given such term in Section 13(d)(3) of the
Exchange Act.
"HMC Group" means HMTF/Omni and its Affiliates and its and their
respective officers, directors, and employees (and members of their respective
families and trusts for the primary benefit of such family members) and any
Person identified as a member of the HMC Group on the signature pages hereof.
3
"HMTF" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a Texas corporation.
"HMTF Designee" shall have the meaning provided in Section 2.1.1(a).
"HMTF Group" shall have the meaning provided in Section 8.1.
"HMTF/Omni" means HMTF/Omni Partners, L.P., a Delaware limited
partnership.
"Holder" means (i) a securityholder listed on the signature pages hereof
and (ii) any direct or indirect transferee of any such securityholder who shall
become a party to this Stockholders Agreement.
"Independent Director" means a Person who is not (i) a member of the HMC
Group, (ii) an Existing Stockholder or (iii) an employee of the Company or any
of its Subsidiaries or a Family Member of any such employee.
"Inspectors" shall have the meaning provided in Section 3.4.11.
"Investment Banker" shall have the meaning provided in Section 4.6.
"Material Adverse Effect" shall have the meaning provided in Section
3.1.4(a).
"Merger Agreement" shall mean the Amended and Restated Agreement and Plan
of Merger, dated as of April 22, 1998, among the Company, OAI Acquisition Corp.,
a Delaware corporation and wholly-owned subsidiary of the Company, OmniAmerica,
OmniAmerica, Inc., a Delaware corporation and wholly-owned subsidiary of
OmniAmerica, HMTF/Omni and Omni/HSW Acquisition, Inc., a Delaware corporation.
"NASD" means National Association of Securities Dealers, Inc.
"NASDAQ" shall have the meaning provided in Section 3.4.13.
"OmniAmerica" means OmniAmerica Holdings Corporation, a Delaware
corporation.
"Participation Offer" shall have the meaning provided in Section 4.2.1.
4
"Person" or "person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Preferred Stock" means shares of stock of the Company which have a
preference as to dividends or distribution upon liquidation or dissolution of
the Company, and any capital stock into which such preferred stock thereafter
may be changed.
"Prohibited Actions" shall have the meaning provided in Section 8.2.2.
"Records" shall have the meaning provided in Section 3.4.11.
"Registrable Shares" means at any time the Common Stock of the Company
owned by the Holders, whether owned on the date hereof or acquired hereafter;
provided, however, that Registrable Shares shall not include any shares (i) the
sale of which has been registered pursuant to the Securities Act and which
shares have been sold pursuant to such registration, (ii) which have been sold
to the public pursuant to Rule 144 or 144A of the SEC under the Securities Act
or (iii) which are eligible for sale under Rule 144(k) of the SEC under the
Securities Act.
"Registration Expenses" shall have the meaning provided in Section 3.6.
"Regulation D" means Regulation D promulgated under the Securities Act by
the SEC.
"Requesting Holders" shall have the meaning provided in Section 3.1.5.
"Required Filing Date" shall have the meaning provided in Section
3.1.1(b).
"Required Holders" means Holders who then own beneficially more than
66-2/3% of the aggregate number of shares of Common Stock subject to this
Stockholders Agreement.
"SEC" means the Securities and Exchange Commission as from time to time
constituted and created under the Exchange Act, or, if at any time after the
execution of this instrument such Securities and Exchange Commission is not
existing and performing the duties now assigned to it under the Exchange Act,
then the Person performing such duties at such time.
"Securities" means the Common Stock.
5
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Seller Affiliates" shall have the meaning provided in Section 3.7.1.
"Stockholders Agreement" means this Post-Merger Stockholders Agreement, as
the same may be amended from time to time.
"Subsidiary" of any Person means (i) a corporation a majority of whose
outstanding shares of capital stock or other equity interests with voting power,
under ordinary circumstances, to elect directors, is at the time, directly or
indirectly, owned by such Person, by one or more subsidiaries of such Person or
by such Person and one or more subsidiaries of such Person, and (ii) any other
Person (other than a corporation) in which such Person, a subsidiary of such
Person or such Person and one or more subsidiaries of such Person, directly or
indirectly, at the date of determination thereof, has (x) at least a majority
ownership interest or (y) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
"Suspension Event" shall have the meaning provided in Section 3.5.
"Suspension Notice" shall have the meaning provided in Section 3.5.
"Tag Seller Group" shall have the meaning provided in Section 4.2.1.
"Third Party Offer" shall have the meaning provided in Section 8.2.5.
"Total Voting Power" shall have the meaning provided in Section 8.2.3.
"Transfer" means any disposition of any Security or any interest therein
that would constitute a "sale" thereof within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning provided in Section 5.3.
"Transferor" shall have the meaning provided in Section 4.1.1(a).
6
"Transferor Shares" shall have the meaning provided in Section 4.1.2.
"Voting Securities" means Common Stock, Common Stock Equivalents, and
securities of the Company generally conveying the right to vote with holders of
Common Stock in the election of directors or any securities convertible into or
exchangeable or exercisable for any such securities, or warrants, contractual
rights or other rights of any kind to acquire any such securities.
SECTION 1.2 Rules of Construction.
Unless the context otherwise requires
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in
the plural include the singular;
(4) provisions apply to successive events and transactions;
and
(5) "herein," "hereof" and other words of similar import
refer to this Stockholders Agreement as a whole and not to any
particular Article, Section or other subdivision. ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
SECTION 2.1 Board of Directors.
2.1.1 Board Representation.
(a) At all times during the term hereof, subject to Section 2.1.3, the
Board of Directors of the Company shall consist of eight members (plus such
number of directors as may be elected from time to time pursuant to the terms of
any Preferred Stock that may be issued and outstanding from time to time in
accordance with the provisions of Article 6 hereof). Subject to Section 2.1.3,
HMTF shall be entitled to designate to the Board of Directors of the Company (i)
four individuals as long as the HMC Group owns, in the aggregate, at least 50%
of the number of shares of Common Stock owned by HMTF/Omni at the Closing;
provided, however, that one of the four individuals designated by HMTF shall be
an Independent Director, (ii) two individuals as
7
long as the HMC Group owns, in the aggregate, at least 25% but less than 50% of
the number of shares of Common Stock owned by HMTF/Omni at the Closing and (iii)
one individual as long as the HMC Group owns, in the aggregate, at least 10% but
less than 25% of the number of shares of Common Stock owned by HMTF/Omni at the
Closing (such designees being referred to herein individually as an "HMTF
Designee" and collectively as the "HMTF Designees"). Subject to Section 2.1.3,
the Existing Stockholders shall be entitled to designate to the Board of
Directors of the Company (i) four individuals as long as (A) the Existing
Stockholders own, in the aggregate, at least 50% of the number of shares of
Common Stock owned by them at the Closing and (B) Xxxxxxxx owns at least 50% of
the number of shares of Common Stock owned by him at the Closing; provided,
however, that one of the four individuals designated by the Existing
Stockholders shall be an Independent Director, (ii) three individuals as long as
(A) the Existing Stockholders own, in the aggregate, at least 49% of the number
of shares of Common Stock owned by them at the Closing and (B) Xxxxxxxx owns at
least 50% of the number of shares of Common Stock owned by him at the Closing,
(iii) two individuals as long as the Existing Stockholders own, in the
aggregate, at least 25% but less than 49% of the number of shares of Common
Stock owned by them at the Closing and (iv) one individual as long as the
Existing Stockholders own, in the aggregate, at least 10% but less than 25% of
the number of shares of Common Stock owned by them at the Closing (such
designees being referred to herein individually as an "Existing Stockholders
Designee" and collectively as the "Existing Stockholders Designees", and
together with the HMTF Designees, as the "Designees"). The Holders agree that
they will cause an individual designated by HMTF from the HMTF Designees to be
elected as Chairman of the Board of the Company. Each Holder shall vote his or
its shares of Common Stock at any regular or special meeting of stockholders of
the Company or in any written consent executed in lieu of such a meeting of
stockholders and shall take all other actions necessary to give effect to the
agreements contained in this Stockholders Agreement (including, without
limitation, the election of Persons designated by HMTF or the Existing
Stockholders to be elected as directors as described in the preceding sentences)
and to ensure that the articles of incorporation and bylaws of the Company as in
effect immediately following the date hereof do not, at any time hereafter,
conflict in any respect with the provisions of this Stockholders Agreement. In
order to effectuate the provisions of this Section 2, each Holder hereby agrees
that when any action or vote is required to be taken by such Holder pursuant to
this Stockholders Agreement, such Holder shall use his or its best efforts to
call, or cause the appropriate officers and directors of the Company to call, a
special or annual meeting of stockholders of the Company
8
or execute or cause to be executed a consent in writing in lieu of any such
meetings pursuant to the applicable provisions of the Nevada Revised Statutes,
as amended from time to time, or any successor statutes.
(b) The Holders acknowledge that Section 4.03 of the Amended and Restated
Articles of Incorporation of the Company provides for staggered terms of the
directors, with directors serving in Class 1, Class 2, or Class 3. The Holders
agree that until the first annual meeting of stockholders following the date
hereof, the Designees shall be classified as follows: Class 1 --one HMTF
Designee, one Existing Stockholders Designee and one Independent Director
designated by HMTF; Class 2 -- one HMTF Designee, one Existing Stockholders
Designee and one Independent Director designated by the Existing Stockholders;
and Class 3 --one HMTF Designee and one Existing Stockholders Designee.
2.1.2 Vacancies. If, prior to his election to the Board of Directors of
the Company pursuant to Section 2.1.1 hereof, any Designee shall be unable or
unwilling to serve as a director of the Company, the Holder or Holders who
designated such Designee shall be entitled to designate a replacement who shall
then be a Designee for purposes of this Section 2. If, following an election to
the Board of Directors of the Company pursuant to Section 2.1.1 hereof, any
Designee shall resign or be removed or be unable to serve for any reason prior
to the expiration of his term as a director of the Company, the Person who
designated such director pursuant to Section 2.1.1 shall, within 30 days of such
event, notify the Board of Directors of the Company in writing of a replacement
Designee, and either (i) the Holders shall vote their shares of Common Stock, at
any regular meeting or special meeting at which the filling of positions on the
Board of Directors of the Company is legally permitted or in any written consent
executed in lieu of such a meeting of stockholders, and shall take all such
other actions necessary to ensure the election to the Board of Directors of the
Company of such replacement Designee to fill the unexpired term of the Designee
who such replacement Designee is replacing or (ii) the Board of Directors shall
elect or appoint such replacement Designee to fill the unexpired term of the
Designee who such replacement Designee is replacing. If HMTF requests that any
HMTF Designee, or the Existing Stockholders request that any Existing
Stockholders Designee, be removed as a director (with or without cause), by
written notice thereof to the Company, then the Company shall take all actions
necessary to effect, and each of the Holders shall vote all his or its capital
stock in favor of, such removal upon such request.
9
2.1.3 Termination of Rights. The right of HMTF to designate directors
under Section 2.1.1, and the obligation of the Holders to vote their shares for
the HMTF Designees, shall terminate upon the first to occur of (i) the
termination or expiration of this Stockholders Agreement or this Article 2, (ii)
such time as HMTF elects in writing to terminate its rights under this Article
2, or (iii) such time as the HMC Group ceases to own, in the aggregate, at least
10% of the number of shares of Common Stock owned by HMTF/Omni at the Closing.
The right of the Existing Stockholders to designate directors under Section
2.1.1, and the obligation of the Holders to vote their shares for the Existing
Stockholders Designees, shall terminate upon the first to occur of (i) the
termination or expiration of this Stockholders Agreement or this Article 2, (ii)
such time as a majority in interest of the Existing Stockholders elect in
writing to terminate their rights under this Article 2, or (iii) such time as
the Existing Stockholders cease to own, in the aggregate, at least 10% of the
number of shares of Common Stock owned by the Existing Stockholders at the
Closing.
2.1.4 Costs and Expenses. The Company will pay all reasonable
out-of-pocket expenses incurred by Designees in connection with their
participation in meetings of the Board of Directors (and committees thereof) of
the Company and the Boards of Directors (and committees thereof) of the
Subsidiaries of the Company.
2.1.5 Calculation of Share Numbers. For purposes of this Article 2 only,
any calculation of the number of shares of Common Stock owned by a Holder shall
be determined by the Board of Directors of the Company, as follows: (i) "owned"
shall mean Beneficial Ownership and (ii) each calculation shall be equitably
adjusted for subsequent stock splits, reverse stock splits, stock combinations,
recapitalizations, stock dividends and the like.
SECTION 2.2 Other Activities of the Holders; Fiduciary Duties.
It is understood and accepted that the Holders and their Affiliates have
interests in other business ventures which may be in conflict with the
activities of the Company and its Subsidiaries and that, subject to applicable
law, nothing in this Stockholders Agreement shall limit the current or future
business activities of the Holders whether or not such activities are
competitive with those of the Company and its Subsidiaries. Nothing in this
Stockholders Agreement, express or implied, shall relieve any officer or
director of the Company or any of its Subsidiaries, or any Holder, of any
fiduciary or other duties or obligations they may have to the Company's
stockholders.
10
ARTICLE 3
REGISTRATION RIGHTS
SECTION 3.1 Demand Registration.
3.1.1 Request for Registration.
(a) Subject to Section 3.1.6, at any time, (i) members of the HMC Group
owning 35% or more of the aggregate number of Registrable Shares then owned by
the HMC Group or (ii) Existing Stockholders owning 35% or more of the aggregate
number of Registrable Shares then owned by the Existing Stockholders may request
the Company, in writing (a "Demand Request"), to effect the registration under
the Securities Act of all or part of its or their Registrable Shares (a "Demand
Registration").
(b) Each Demand Request shall specify the number of Registrable Shares
proposed to be sold. Subject to Section 3.1.6, the Company shall file the Demand
Registration (including by means of a shelf registration pursuant to Rule 415
under the Securities Act if so requested by the HMC Group in such Demand Request
(but, in the case of a shelf registration, only (i) if the Company is then
eligible to use such a shelf registration and if Form S-2 or Form S-3 (or any
successor form) is then available to the Company and (ii) if such Demand Request
is made by the HMC Group on a date that is at least three years after the
Closing)) within 90 days after receiving a Demand Request (the "Required Filing
Date") and shall use all commercially reasonable efforts to cause the same to be
declared effective by the SEC as promptly as practicable after such filing;
provided, that the Company need effect only three Demand Registrations at the
request of the HMC Group and an aggregate of three Demand Registrations at the
request of the Existing Stockholders; provided, no such Holders will be entitled
to make such a request while any other registration statement (other than a
shelf registration statement) is on file with the Commission prior to its
becoming effective or within 90 days after such registration statement has been
declared effective, or, in the case of a shelf registration, until 90 days after
such shelf registration ceases to be effective. No Holder can request a Demand
Registration within 270 days following the termination of a prior shelf
registration that was the result of such Holder's Demand Request.
3.1.2 Effective Registration and Expenses. A registration will not count
as a Demand Registration until it has become effective and, with respect to
registrations other than shelf registrations, all Registrable Shares covered by
such registration statement have been disposed of in accordance with
11
the intended methods of disposition (unless the Requesting Holders withdraw all
their Registrable Shares and the Company has performed its obligations hereunder
in all material respects, in which case such demand will count as a Demand
Registration unless the Requesting Holders pay all Registration Expenses (as
hereinafter defined) in connection with such withdrawn registration); provided,
that if, (i) after it has become effective, an offering of Registrable Shares
pursuant to a registration is interfered with by any stop order, injunction, or
other order or requirement of the SEC or other governmental agency or court
(other than an order, injunction, or other requirement resulting from a
misstatement or omission of the Holder making such Demand Request) or (ii) the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, such
registration will be deemed not to have been effected and will not count as a
Demand Registration; provided, further, that the Company shall not be required
to maintain a shelf registration after 270 days from the date of effectiveness.
3.1.3 Selection of Underwriters. The offering of Registrable Shares
pursuant to a Demand Registration shall be in the form of a "firm commitment"
underwritten offering. The Requesting Holders (as hereinafter defined) of a
majority of the Registrable Shares to be registered in a Demand Registration
shall select the investment banking firm or firms to manage the underwritten
offering; provided, that such selection shall be subject to the consent of the
Company, which consent shall not be unreasonably withheld. Notwithstanding the
prior sentence, no "shelf" registration will be required to be in the form of an
underwritten offering.
3.1.4 Priority on Demand Registrations.
(a) No securities to be sold for the account of any Person (including the
Company) other than the HMC Group shall be included in a Demand Registration in
which the HMC Group has requested inclusion, irrespective of the identity of the
party making the Demand Request, unless the managing underwriter or underwriters
shall advise the Company or the HMC Group in writing that the inclusion of such
securities will not materially and adversely affect the price or success of the
offering (a "Material Adverse Effect"). Furthermore, in the event the managing
underwriter or underwriters shall advise the Company or the HMC Group that even
after exclusion of all securities of other Persons pursuant to the immediately
preceding sentence, the amount of Registrable Shares proposed to be included in
such Demand Registration by the HMC Group is sufficiently large to cause a
Material Adverse Effect, the Registrable Shares of the
12
HMC Group to be included in such Demand Registration shall equal the number of
shares which the Company is so advised can be sold in such offering without a
Material Adverse Effect and such Registrable Shares shall be allocated pro rata
among the members of the HMC Group on the basis of the number of Registrable
Shares requested to be included by each such Holder. If any Registrable Shares
of any Holder requested to be registered pursuant to a Demand Request under
Section 3.1.1 are excluded from a Demand Registration pursuant to this Section
3.1.4, such Holder having Registrable Shares so excluded shall have the right to
withdraw all, but not less than all, such Registrable Shares from such
registration and such registration will not count as a Demand Registration with
respect to such Holder.
(b) Notwithstanding Section 3.1.4(a) above, Xxxxxxxxx shall have the right
to sell in a Demand Registration under this Article 3 all or any portion of the
Xxxxxxxxx Priority Shares on a pari passu basis with the HMC Group, calculated
pro rata on the basis of the number of Registrable Shares owned by each party.
In the event that Xxxxxxxxx requests inclusion of the Xxxxxxxxx Priority Shares
in a Demand Registration in which the HMC Group participates and the managing
underwriter or underwriters advises the Company or the HMC Group that the
inclusion of such securities likely will result in a Material Adverse Effect so
that it becomes necessary to reduce the number of Registrable Shares to be
registered, in no event shall the number of Xxxxxxxxx Priority Shares to be sold
in such registration be reduced to fewer than 150,000 shares, irrespective of
the other provisions hereof, unless the number of Registrable Shares to be sold
by the HMC Group in such offering is also reduced to fewer than 150,000 shares,
in which event each of the HMC Group, on the one hand, and Xxxxxxxxx, on the
other hand, will suffer equivalent share-for-share reduction thereafter to the
extent necessary to reach the number of Registrable Shares that can be sold in
such offering without a Material Adverse Effect. At such time as the Xxxxxxxxx
Priority Shares have been disposed of pursuant to an effective registration
statement, Xxxxxxxxx'x rights pursuant to this Section 3.1.4(b) shall terminate.
For purposes hereof, "Xxxxxxxxx Priority Shares" shall mean a number of shares
of Common Stock equal to 10% of the number of shares of Common Stock owned of
record by Xxxxxxxxx at the Closing. As used in this Section 3.1.4, any reference
to the number of shares of Common Stock owned by Xxxxxxxxx shall be deemed to
include subsequent equitable adjustments as necessary to reflect stock splits,
reverse stock splits, stock combinations, recapitalizations, stock dividends and
the like.
(c) In the event that the managing underwriter or underwriters shall
advise the Company or the HMC Group in writing
13
that the inclusion of additional Registrable Shares in a Demand Registration by
the Requesting Holders will not have a Material Adverse Effect, the Requesting
Holders shall be permitted to include in such registration that number of
Registrable Shares that in the view of the managing underwriter in the aggregate
does not create a Material Adverse Effect. In the event that the managing
underwriter or underwriters shall advise the Company or the HMC Group in writing
that the maximum number of Registrable Shares requested to be included by the
Requesting Holders (other than the HMC Group and Xxxxxxxxx, to the extent of his
rights under Section 3.1.4(b)) likely will have a Material Adverse Effect, such
Requesting Holders will be permitted to include that number of Registrable
Shares that, in the view (expressed in writing) of the managing underwriter or
underwriters, will not result in a Material Adverse Effect, pro rata among such
Requesting Holders on the basis of the number of Registrable Shares requested to
be included in such registration by each such Requesting Holder.
3.1.5 Rights of Nonrequesting Holders. Upon receipt of any Demand Request,
the Company shall promptly (but in any event within 10 days) give written notice
of such proposed Demand Registration to all other Holders entitled to
registration rights under this Section 3.1, who shall have the right,
exercisable by written notice to the Company within 20 days of their receipt of
the Company's notice, to elect to include in such Demand Registration such
portion of their Registrable Shares as they may request. All Holders requesting
to have their Registrable Shares included in a Demand Registration in accordance
with the preceding sentence shall be deemed to be "Requesting Holders" for
purposes of this Section 3.1; provided, if any member of the HMC Group or any of
the Existing Stockholders participates as a Requesting Holder in a Demand
Registration such Holder's participation shall be counted as a Demand Request of
the HMC Group or the Existing Stockholders, respectively.
3.1.6 Deferral of Filing. The Company may defer the filing (but not the
preparation) of a registration statement required by Section 3.1 until a date
not later than 180 days after the Required Filing Date (or, if longer, 180 days
after the effective date of the registration statement contemplated by clause
(ii) below) if (i) at the time the Company receives the Demand Request, the
Company or any of its Subsidiaries is engaged in confidential negotiations or
other confidential business activities, disclosure of which would be required in
such registration statement (but would not be required if such registration
statement were not filed), and the Board of Directors of the Company determines
in good faith that such disclosure would be materially detrimental to the
Company and its
14
stockholders or would have a material adverse effect on any such confidential
negotiations or other confidential business activities, or (ii) prior to
receiving the Demand Request, the Board of Directors had determined to effect a
registered underwritten public offering of the Company's securities for the
Company's account and the Company had taken substantial steps (including, but
not limited to, selecting a managing underwriter for such offering) and is
proceeding with reasonable diligence to effect such offering. A deferral of the
filing of a registration statement pursuant to this Section 3.1.6 shall be
lifted, and the requested registration statement shall be filed forthwith, but
no later than 90 days thereafter, if, in the case of a deferral pursuant to
clause (i) of the preceding sentence, the negotiations or other activities are
disclosed or terminated, or, in the case of a deferral pursuant to clause (ii)
of the preceding sentence, the proposed registration for the Company's account
is abandoned. In order to defer the filing of a registration statement pursuant
to this Section 3.1.6, the Company shall promptly (but in any event within 10
Business Days), upon determining to seek such deferral, deliver to each
Requesting Holder a certificate signed by an executive officer of the Company
stating that the Company is deferring such filing pursuant to this Section 3.1.6
and a general statement of the reason for such deferral (but only to the extent
such general statement is in compliance with applicable securities laws) and an
approximation of the anticipated delay. Within 20 days after receiving such
certificate, the holders of a majority of the Registrable Shares held by the
Requesting Holders and for which registration was previously requested may
withdraw such Demand Request by giving notice to the Company; if withdrawn, the
Demand Request shall be deemed not to have been made for all purposes of this
Stockholders Agreement. The Company may defer the filing of a particular
registration statement pursuant to this Section 3.1.6 only once.
SECTION 3.2 Piggyback Registrations.
3.2.1 Right to Piggyback. Each time the Company proposes to register any
of its equity securities of the same class (other than pursuant to an Excluded
Registration or a Demand Registration) under the Securities Act for sale to the
public (whether for the account of the Company or the account of any
securityholder of the Company) and the form of registration statement to be used
permits the registration of Registrable Shares, the Company shall give prompt
written notice to each Holder of Registrable Shares (which notice shall be given
not less than 30 days prior to the effective date of the Company's registration
statement), which notice shall offer each such Holder the opportunity to include
any or all of its or his
15
Registrable Shares in such registration statement, subject to the limitations
contained in Section 3.2.2 hereof. Each Holder who desires to have its or his
Registrable Shares included in such registration statement shall so advise the
Company in writing (stating the number of Registrable Shares desired to be
registered) within 20 days after the date of such notice from the Company. Any
Holder shall have the right to withdraw such Holder's request for inclusion of
such Holder's Registrable Shares in any registration statement pursuant to this
Section 3.2.1 by giving written notice to the Company of such withdrawal.
Subject to Section 3.2.2 below, the Company shall include in such registration
statement all such Registrable Shares so requested to be included therein;
provided, however, that the Company may at any time withdraw or cease proceeding
with any such registration if it shall at the same time withdraw or cease
proceeding with the registration of all other equity securities originally
proposed to be registered.
3.2.2 Priority on Registrations. If the managing underwriter advises the
Company that the inclusion of Registrable Shares would cause a Material Adverse
Effect, the Company will be obligated to include in such registration statement
the Registrable Shares of the Holders in sequence, in accordance with the
following:
(a) in the case of an offering by the Company for its own account, (A)
first, any and all securities for sale by the Company, (B) second, Registrable
Shares requested to be included in such registration by the HMC Group, pro rata
based on the ratio which such requested Registrable Shares from each Holder who
is a member of the HMC Group bears to the total number of Registrable Shares
requested to be included in such registration statement by Holders who are
members of the HMC Group, (C) third, Registrable Shares requested to be included
in such registration by the other Holders, pro rata based on the ratio which
such requested Registrable Shares bears to the total number of Registrable
Shares requested to be included in such registration statement by such Holders,
and (D) fourth, securities requested to be included in such registration
statement pursuant to any other registration rights that may have been, or may
hereafter be, granted by the Company, pro rata based on the ratio which such
requested securities bears to the total number of securities requested to be
included in such registration statement by all other Persons;
(b) in the case of an offering by the Company for the account of any of
its securityholders (other than the Holders) of any class of equity security
pursuant to the exercise of demand registration rights by such securityholders,
(A) first,
16
securities requested to be registered by any such securityholder pursuant to the
exercise of such demand registration rights and Registrable Shares requested to
be included in such registration by the HMC Group, pro rata based on the ratio
which such requested securities bears to the total number of securities
requested to be included in such registration statement by the Persons
exercising such demand and the HMC Group, (B) second, Registrable Shares
requested to be registered by the other Holders, pro rata based on the ratio
which such requested Registrable Shares bears to the total number of Registrable
Shares requested to be registered by such Holders, and (C) third, securities for
the account of the Company. If as a result of the provisions of this Section
3.2.2 any Holder shall not be entitled to include all Registrable Shares in a
registration that such Holder has requested to be so included, such Holder may
withdraw such Holder's request to include Registrable Shares in such
registration statement; and
(c) notwithstanding the other provisions of this Section 3.2.2, the
provisions of Section 3.1.4(b) shall apply as to the Xxxxxxxxx Priority Shares.
No Person may participate in any registration statement hereunder unless
such Person (i) agrees to sell such person's Registrable Shares on the basis
provided in any underwriting arrangements approved by the Company and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, and other documents reasonably required under the terms
of such underwriting arrangements; provided, however, that no such Person shall
be required to make any representations or warranties in connection with any
such registration other than representations and warranties as to (i) such
Person's ownership of his or its Registrable Shares to be sold or transferred
free and clear of all liens, claims, and encumbrances, (ii) such Person's power
and authority to effect such transfer, and (iii) such matters pertaining to
compliance with securities laws as may be reasonably requested; provided,
further, that the obligation of such Person to indemnify pursuant to any such
underwriting arrangements shall be several, not joint and several, among such
Persons selling Registrable Shares, and the liability of each such Person will
be in proportion to, and provided further that such liability will be limited
to, the net amount received by such Person from the sale of his or its
Registrable Shares pursuant to such registration.
3.3 Holdback Agreement. Unless the managing underwriter otherwise agrees,
(i) each of the Holders agrees, (ii) the Company agrees, and (iii) each Holder
and the Company agrees to use his or its commercially reasonable efforts to
cause its
17
controlled Affiliates to agree, not to effect any public sale or private offer
or distribution of any Common Stock or Common Stock Equivalents during the ten
Business Days prior to the effectiveness under the Securities Act of any
underwritten registration and during such time period after the effectiveness
under the Securities Act of any underwritten registration (not to exceed 180
days) (except, if applicable, as part of such underwritten registration) as the
Company and the managing underwriter may agree.
3.4 Registration Procedures. Whenever any Holder has requested that any
Registrable Shares be registered pursuant to this Stockholders Agreement, the
Company will use its commercially reasonable efforts to effect the registration
and the sale of such Registrable Shares in accordance with the intended method
of disposition thereof, and pursuant thereto the Company will as expeditiously
as possible:
3.4.1 Prepare and file with the SEC a registration statement on any
appropriate form (subject to Section 3.1.1(b)) under the Securities Act with
respect to such Registrable Shares and use its commercially reasonable efforts
to cause such registration statement to become effective;
3.4.2 Prepare and file with the SEC such amendments, post-effective
amendments, and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 30 days (or such lesser period
as is necessary for the underwriters in an underwritten offering to sell unsold
allotments);
3.4.3 Furnish to each Holder of Registrable Shares and the underwriters of
the securities being registered such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus), any
documents incorporated by reference therein and such other documents as such
Holder or underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by such Holder or the sale of such
securities by such underwriters (it being understood that, subject to Section
3.5 and the requirements of the Securities Act and applicable state securities
laws, the Company consents to the use of the prospectus and any amendment or
supplement thereto by each Holder and the underwriters in connection with the
offering and sale of the Registrable Shares covered by the registration
statement of which such prospectus, amendment or supplement is a part);
18
3.4.4 Use its commercially reasonable efforts to register or qualify (to
the extent required by law) such Registrable Shares under such other securities
or blue sky laws of such jurisdictions as the managing underwriter reasonably
requests; use its commercially reasonable efforts to keep each such registration
or qualification (or exemption therefrom) effective during the period in which
such registration statement is required to be kept effective; and do any and all
other acts and things which may be reasonably necessary or advisable to enable
each Holder to consummate the disposition of the Registrable Shares owned by
such Holder in such jurisdictions; provided, however, that the Company will not
be required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph or (ii)
consent to general service of process in any such jurisdiction;
3.4.5 Advise each Holder of such Registrable Shares who is a selling
securityholder in such registration, promptly after the Company shall receive
notice or obtain knowledge thereof, (i) of the issuance of any stop order by the
SEC suspending the effectiveness of such registration statement or (ii) of the
initiation or threatening of any proceeding for such purpose and promptly use
its commercially reasonable best efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such stop
order should be issued;
3.4.6 Promptly notify each Holder who is a selling securityholder in such
registration and each underwriter and (if requested by any such Person) confirm
such notice in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to a registration
statement or any post-effective amendment, when the same has become effective,
(ii) of the issuance by any state securities or other regulatory authority of
any order suspending the qualification or exemption from qualification of any of
the Registrable Shares under state securities or "blue sky" laws or the
initiation of any proceedings for that purpose, and (iii) of the happening of
any event which makes any statement made in a registration statement or related
prospectus untrue in any material respect or which requires the making of any
changes in such registration statement, prospectus or documents so that they
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, as promptly as practicable thereafter, prepare and
file with the SEC and furnish a supplement or amendment to such prospectus so
that, as thereafter deliverable to the purchasers of such Registrable Shares,
such prospectus will not contain any untrue statement of
19
a material fact or omit a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
3.4.7 Make generally available to the Company's securityholders an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act no later than 30 days after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after the
effective date of a registration statement, which earnings statement shall cover
said 12-month period, and which requirement will be deemed to be satisfied if
the Company timely files complete and accurate information on Forms 10-Q, 10-K
and 8-K under the Exchange Act and otherwise complies with Rule 158 under the
Securities Act;
3.4.8 If requested by the managing underwriter or any Holder promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or any Holder of securities registered
in such registration reasonably requests to be included therein, including,
without limitation, with respect to the Registrable Shares being sold by such
Holder thereunder, the purchase price being paid therefor by the underwriters
and with respect to any other terms of the underwritten offering of the
Registrable Shares to be sold in such offering, and promptly make all required
filings of such prospectus supplement or post-effective amendment;
3.4.9 As promptly as practicable after filing with the SEC of any document
which is incorporated by reference into a registration statement (in the form in
which it was incorporated), deliver a copy of each such document to each Holder
of securities registered in such registration;
3.4.10 Cooperate with the Holders of securities registered in such
registration and the managing underwriter to facilitate the timely preparation
and delivery of certificates (which shall not bear any restrictive legends
unless required under applicable law) representing securities sold under any
registration statement, and enable such securities to be in such denominations
and registered in such names as the managing underwriter or such Holders of
securities registered in such registration may request and keep available and
make available to the Company's transfer agent prior to the effectiveness of
such registration statement a supply of such certificates;
3.4.11 Promptly make available for inspection by any Holder of securities
registered in such registration, any underwriter participating in any
disposition pursuant to any
20
registration statement, and any attorney, accountant or other agent or
representative retained by any such Holder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, that, unless the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in the registration
statement or the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, the Company shall not be
required to provide any information under this subparagraph if (i) the Company
believes, after consultation with counsel for the Company, that to do so would
cause the Company to forfeit an attorney-client privilege that was applicable to
such information or (ii) if either (A) the Company has requested and been
granted from the SEC confidential treatment of such information contained in any
filing with the SEC or documents provided supplementally or otherwise or (B) the
Company reasonably determines in good faith that such Records are confidential
and so notifies the Inspectors in writing unless prior to furnishing any such
information with respect to (i) or (ii) such Holder of Registrable Shares
requesting such information agrees to enter into a confidentiality agreement in
customary form and subject to customary exceptions; and provided, further, that
each such Holder of Registrable Shares agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company at its expense, to undertake
appropriate action and to prevent disclosure of the Records deemed confidential;
3.4.12 Furnish to each Holder selling securities in such registration and
underwriter a signed counterpart of (i) an opinion or opinions of counsel to the
Company, and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such matters
of the type customarily covered by opinions or comfort letters, as the case may
be, as the Holders selling securities in such registration or managing
underwriter reasonably requests;
3.4.13 Cause the Registrable Shares included in any registration statement
to be (i) listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed, or (ii) authorized to be
quoted and/or listed (to the extent applicable) on the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") or the National Market
System of NASDAQ if the Registrable Shares so qualify;
21
3.4.14 Provide a CUSIP number for the Registrable Shares included in any
registration statement not later than the effective date of such registration
statement;
3.4.15 Cooperate with each Holder selling securities in such registration
and each underwriter participating in the disposition of such Registrable Shares
and their respective counsel in connection with any filings required to be made
with the NASD;
3.4.16 During the period when the prospectus is required to be delivered
under the Securities Act, promptly file all documents required to be filed with
the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;
3.4.17 Notify each Holder selling securities in such registration promptly
of any request by the SEC for the amending or supplementing of such registration
statement or prospectus or for additional information;
3.4.18 Prepare and file with the SEC promptly any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel for the Company or the managing underwriter, are required in
connection with the distribution of the Registrable Shares; and
3.4.19 Enter into such agreements (including underwriting agreements in
the managing underwriter's customary form) as are customary in connection with
an underwritten registration.
3.5 Suspension of Dispositions. Each Holder agrees by acquisition of any
Registrable Shares that, upon receipt of any notice (a "Suspension Notice") from
the Company of the happening of any event of the kind described in Sections
3.4.5(i) or 3.4.6(iii) (a "Suspension Event"), such Holder will forthwith
discontinue disposition of Registrable Shares until such Holder's receipt of the
copies of the supplemented or amended prospectus, or until it is advised in
writing (the "Advice") by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus, and, if so directed by the
Company, such Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Shares current at the time of receipt of the
Suspension Notice. In the event the Company shall give any Suspension Notice,
the time
22
period regarding the effectiveness of registration statements set forth in
Section 3.4.2 hereof shall be extended by the number of days during the period
from and including the date of the giving of the Suspension Notice to and
including the date when each seller of Registrable Shares covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus or the Advice. The Company shall use its commercially
reasonable efforts and take such actions as are reasonably necessary to render
the Advice as promptly as practicable following the conclusion of the Suspension
Event. The Company shall suspend the use of any shelf registration statement
during a Suspension Event and shall so notify any Holders having securities
registered thereunder in accordance with this Section 3.5.
3.6 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Article 3, including, without limitation,
all registration and filing fees, all fees and expenses associated with filings
required to be made with the NASD (including, if applicable, the fees and
expenses of any "qualified independent underwriter" as such term is defined in
Rule 2720(b)(15) of the NASD Conduct Rules and of its counsel), as may be
required by the rules and regulations of the NASD, 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 Shares), rating agency fees, printing expenses (including expenses
of printing certificates for the Registrable Shares in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses if the
printing of prospectuses is reasonably requested by a Holder of Registrable
Shares), messenger and delivery expenses, the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the fees and expenses incurred
in connection with any listing of the Registrable Shares, fees and expenses of
counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), Securities Act liability insurance (if the
Company elects to obtain such insurance), the fees and expenses of any special
experts retained by the Company in connection with such registration, and the
fees and expenses of other Persons retained by the Company and reasonable fees
and expenses of one firm of counsel for the sellers (which shall be selected by
the Holders of a majority of the Registrable Shares being included in any
particular registration statement) (all such expenses being herein called
"Registration Expenses") will be borne by the Company whether or not any
registration statement becomes effective; provided that
23
in no event shall Registration Expenses include any underwriting discounts,
commissions, or fees attributable to the sale of the Registrable Shares or any
counsel, accountants, or other Persons retained or employed by the Holders.
3.7 Indemnification.
3.7.1 The Company agrees to indemnify and reimburse, to the fullest extent
permitted by law, each Holder of Registrable Shares, and each of its employees,
advisors, agents, representatives, partners, officers, and directors and each
Person who controls such Holder (within the meaning of the Securities Act or the
Exchange Act) and any agent or investment advisor thereof (collectively, the
"Seller Affiliates") (i) against any and all losses, claims, damages,
liabilities, and expenses, joint or several (including, without limitation,
attorneys' fees and disbursements except as limited by Section 3.7.3) based
upon, arising out of, related to or resulting from any untrue or alleged untrue
statement of a material fact contained in any registration statement,
prospectus, or preliminary prospectus or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
against any and all loss, liability, claim, damage, and expenses whatsoever
(including reasonable fees and disbursements of counsel), as incurred, to the
extent of the aggregate amount paid in connection with the settlement or
disposition of any litigation or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon,
arising out of, related to or resulting from any such untrue statement or
omission or alleged untrue statement or omission, and (iii) against any and all
costs and expenses (including reasonable fees and disbursements of counsel) as
may be reasonably incurred in investigating, preparing, or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
untrue statement or omission, to the extent that any such expense or cost is not
paid under subparagraph (i) or (ii) above; except insofar as the same are made
in reliance upon and in strict conformity with information furnished in writing
to the Company by such Holder or any Seller Affiliate expressly for use therein
or arise from such Holder's or any Seller Affiliate's failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished such Holder or Seller Affiliate with a
sufficient number of copies of the same. The reimbursements required by this
Section 3.7.1 will be made by
24
periodic payments during the course of the investigation or defense, as and when
bills are received or expenses incurred.
3.7.2 In connection with any registration statement in which a
Holder of Registrable Shares is participating, each such Holder will furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the fullest extent permitted by law, each such Holder will
indemnify the Company and its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act or the Exchange
Act) against any and all losses, claims, damages, liabilities, and expenses
(including, without limitation, reasonable attorneys' fees and disbursements
except as limited by Section 3.7.3) resulting from any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement, prospectus, or any preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is contained in any information or
affidavit so furnished in writing by such Holder or any of its Seller Affiliates
expressly for inclusion in the registration statement; provided that the
obligation to indemnify will be several, not joint and several, among such
Holders of Registrable Shares, and the liability of each such Holder of
Registrable Shares will be in proportion to, and provided further, that such
liability will be limited to, the net amount received by such Holder from the
sale of Registrable Shares pursuant to such registration statement; provided,
however, that such Holder of Registrable Shares shall not be liable in any such
case to the extent that prior to the filing of any such registration statement
or prospectus or amendment thereof or supplement thereto, such Holder has
furnished in writing to the Company information expressly for use in such
registration statement or prospectus or any amendment thereof or supplement
thereto which corrected or made not misleading information previously furnished
to the Company.
3.7.3 Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give such notice
shall not limit the rights of such Person unless such failure materially
prejudices the ability of the indemnifying party to defend such claim) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit
25
such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, however, that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (A)
the indemnifying party has agreed to pay such fees or expenses, or (B) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person. If such defense is not
assumed by the indemnifying party as permitted hereunder, the indemnifying party
will not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent will not be unreasonably withheld).
If such defense is assumed by the indemnifying party pursuant to the provisions
hereof, such indemnifying party shall not settle or otherwise compromise the
applicable claim unless (X) such settlement or compromise contains a full and
unconditional release of the indemnified party or (Y) the indemnified party
otherwise consents in writing. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim and one additional local counsel
in each jurisdiction involved, as necessary, unless, in the reasonable judgment
of any indemnified party, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the
reasonable fees and disbursements of such additional counsel or counsels.
3.7.4 Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 3.7.1 or Section 3.7.2 are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities, or expenses (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified
26
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 3.7.4 were determined by pro rata allocation (even if the Holders or any
underwriters or all of them were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in this Section 3.7.4. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities, or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or, except as provided in
Section 3.7.3, defending any such action or claim. Notwithstanding the
provisions of this Section 3.7.4, no Holder shall be required to contribute an
amount greater than the dollar amount by which the proceeds received by such
Holder with respect to the sale of any Registrable Shares exceeds the amount of
damages which such Holder has otherwise been required to pay by reason of such
statement or omission. 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 Holders' obligations in this Section 3.7.4 to contribute
shall be several, and not joint, in proportion to the amount of Registrable
Shares registered by them. If indemnification is available under this Section
3.7, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Section 3.7.1 and Section 3.7.2 without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 3.7.4.
3.7.5 The indemnification and contribution provided for under this
Stockholders Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director, or controlling Person of such indemnified party and will survive the
transfer of Securities and the termination of this Stockholders Agreement.
3.7.6 The Company hereby agrees that it will not enter into, grant, assume
obligations under, or otherwise permit to exist any registration rights of any
Person or Persons except as expressly set forth herein unless (i) such
registration rights are not inconsistent or in conflict with the registration
rights granted in this Article 3 and (ii) the Person or Persons receiving the
benefits of such registration rights acknowledge in writing that such
registration rights are subject to the terms and provisions of the registration
rights granted herein.
27
ARTICLE 4
TRANSFERS OF SECURITIES
SECTION 4.1 Right of First Offer.
4.1.1 Sale of Shares of Common Stock.
(a) If the HMC Group (taken as a whole) or either of the Existing
Stockholders (each, a "Transferor") proposes to Transfer for value 90% or more
of the number of shares of Common Stock then owned by the Transferor to any
third party, in one transaction or a series of related transactions (other than
sales to the public pursuant to an effective registration statement or sales to
the public pursuant to Rule 144 under the Securities Act), the Transferor shall
first give written notice to the Company of such desire, setting forth the terms
and conditions of the proposed sale and the price at which the Transferor
desires to sell. The Company shall thereupon, within ten (10) Business Days
following its receipt of the foregoing notice (the "Election Period"), notify
the Transferor in writing of its election to either (i) acquire the Common Stock
proposed to be sold by the Transferor, in which event the Company shall be
obligated to acquire such stock upon the same terms and conditions contained in
such notice, subject to a definitive written agreement between the parties, or
(ii) not to acquire such interests. Failure to respond to the Transferor with
regard to a notice of a proposed sale prior to the expiration of the Election
Period shall be deemed to be an election not to acquire the capital stock of the
Transferor.
(b) If the Transferor satisfies all of the foregoing conditions and the
Company has not given notice of its intention to purchase the Common Stock of
the Transferor to be transferred, the Transferor may, upon the expiration of the
Election Period and subject to Section 4.2, transfer such Common Stock to any
other Person at a purchase price equal to or higher than the price set forth in
the notice given the Company and otherwise upon the same terms and conditions
contained in the election notice.
4.1.2 Procedure for Sale. In the event the Company elects pursuant to this
Section 4.1 to purchase the Common Stock proposed to be sold by the Transferor,
the closing of the purchase by the Company of the shares of such Common Stock
held by the Transferor shall take place at the principal place of business of
the Company no later than 30 days after the date such notice of election is made
in accordance with the terms hereof.
28
At the closing, the Company will pay the purchase price for the shares to the
Transferor by wire transfer of immediately available funds upon the Transferor's
delivery to the Company of valid certificates evidencing the shares of Common
Stock being purchased pursuant to such sale (the "Transferor Shares"). Such
certificates will be duly endorsed for transfer to the Company, and upon
delivery of such certificates to the Company, the Transferor will be deemed to
represent and warrant to the Company that the Transferor Shares are owned by
such Transferor free and clear of all liens, adverse claims, and other
encumbrances other than as provided in this Stockholders Agreement.
4.1.3 Time to Purchase. At any time pursuant to which the Company elects
to purchase under this Section 4.1 the shares of Common Stock held by a
Transferor, it shall have 30 days to arrange financing for and take any steps
necessary to comply with applicable law in order to consummate such purchase. If
the Company does not consummate such purchase within such 30-day period, it
shall have no liability to any of the Holders as a result of such failure, but
all rights of the Company under this Section 4.1 to purchase the shares of
Common Stock held by such Transferor shall thereafter terminate and be of no
further force or effect.
SECTION 4.2 Tag Along Rights.
4.2.1 Applicability. In the event (i) any member of the HMC Group or any
one of the Existing Stockholders desires to effect a Transfer, (ii) such party
has offered its shares of Common Stock to the Company pursuant to Section 4.1
and (iii) the Company has determined not to or has failed to consummate the
purchase of such party's shares of Common Stock, then at least 30 days prior to
such Transfer, the party or parties desiring to effect the Transfer shall make
an offer (the "Participation Offer") to each non-selling Holder (each, a
"Co-Seller") to include in the proposed Transfer a portion of such Co-Seller's
Common Stock which represents the same percentage of such Co-Seller's
Fully-Diluted Common Stock as the shares proposed to be sold in the Transfer by
such member of the HMC Group or such Existing Stockholder (as the case may be,
the "Tag Seller Group") represent of the Tag Seller Group's aggregate
Fully-Diluted Common Stock; provided that, if a member of the HMC Group is the
Tag Seller Group and the consideration to be received by such member of the HMC
Group includes any securities, only Co-Sellers who have certified to the
reasonable satisfaction of HMTF that they are Accredited Investors shall be
entitled to participate in such Transfer, unless the transferee consents
otherwise.
29
4.2.2 Terms of Participation Offer. The Participation Offer shall describe
the terms and conditions of the proposed Transfer and shall be conditioned upon
(i) the consummation of the transactions contemplated in the Participation Offer
with the transferee named therein, and (ii) each Co-Seller's execution and
delivery of all agreements and other documents that members of the Tag Seller
Group are required to execute and deliver in connection with such Transfer
(provided that the Co-Seller shall not be required to make any representations
or warranties in connection with such sale or transfer other than
representations and warranties as to (A) such Co-Seller's ownership of his or
its Common Stock to be sold or transferred free and clear of all liens, claims,
and encumbrances, (B) such Co-Seller's power and authority to effect such
transfer and (C) such matters pertaining to compliance with securities laws as
the transferee may reasonably require). If any Co-Seller shall accept the
Participation Offer, the Tag Seller Group shall reduce, to the extent necessary,
the number of shares of Common Stock it otherwise would have sold in the
proposed transfer so as to permit those Co-Sellers who have accepted the
Participation Offer to sell the number of shares of Common Stock that they are
entitled to sell under this Section 4.2, and the Tag Seller Group and such
Co-Sellers shall transfer the number of shares of Common Stock specified in the
Participation Offer to the proposed transferee in accordance with the terms of
such transfer as set forth in the Participation Offer.
SECTION 4.3 Certain Events Not Deemed Transfers.
In no event shall any (i) exchange, reclassification, or other conversion
of shares into any cash, securities, or other property pursuant to a merger or
consolidation of the Company or any Subsidiary with, or any sale or transfer by
the Company or any Subsidiary of all or substantially all its assets to, any
Person, or (ii) statutory share exchange involving, or recapitalization of, the
Company or any Subsidiary in which holders of Common Stock are treated
substantially the same or (iii) transfer by a Holder pursuant to an effective
registration statement pursuant to Section 4.1 or Section 4.2 hereof, or (iv)
transfer by a Holder pursuant to Rule 144 under the Securities Act, constitute a
Transfer of shares of Common Stock by the HMC Group or the Existing Stockholders
for purposes of Section 4.1 or Section 4.2. In addition, Sections 4.1 and 4.2
hereof shall not apply to any transfer, sale, or disposition of shares of Common
Stock solely among members of (i) the HMC Group as a group or (ii) the Existing
Stockholders as a group.
30
SECTION 4.4 Transfer and Exchange.
When Securities are presented to the Company with a request to register
the transfer of such Securities or to exchange such Securities for Securities of
other authorized denominations, the Company shall register the transfer or make
the exchange as requested if the requirements of this Stockholders Agreement for
such transaction are met; provided, however, that the Securities surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company, duly
executed by the Holder thereof or its attorney and duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith.
SECTION 4.5 Replacement Securities.
If a mutilated Security is surrendered to the Company or if the Holder of
a Security claims and submits an affidavit or other evidence, satisfactory to
the Company, to the effect that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue a replacement Security if the
Company's requirements are met. If required by the Company, such Holder must
provide an indemnity bond, or other form of indemnity, sufficient in the
judgment of the Company to protect the Company against any loss which may be
suffered. The Company may charge such Holder for its reasonable out-of-pocket
expenses in replacing a Security which has been mutilated, lost, destroyed or
wrongfully taken.
SECTION 4.6 Sale of the Company.
If due to market conditions between Closing and the fifth anniversary of
Closing, the HMC Group shall not have successfully completed, on or before the
fifth anniversary of the Closing, a sale of all of the shares of Common Stock
owned by HMTF/Omni at the Closing, then at any time after such fifth anniversary
until the sixth anniversary of the Closing, the HMC Group may propose a sale of
the Company by means of the sale of all or substantially all of the equity
securities of the Company or all or substantially all of the assets of the
Company or in any manner otherwise advised (a "Company Sale") pursuant to an
auction process managed by an investment banking firm of recognized national
standing (an "Investment Banker") selected by HMTF. In the event of a proposal
for a Company Sale, each of the Holders party hereto agrees that HMTF and the
Investment Banker shall be entitled, so long as they act in good faith, to
manage
31
exclusively the sale process for such Company Sale and to take all such acts on
behalf of the Holders selling in such transaction as they deem necessary,
appropriate or advisable. Each of the parties hereto further agrees to cooperate
in good faith in consummating the Company Sale and to use commercially
reasonable efforts to cause to be done all things that are necessary or
appropriate to consummate the Company Sale as proposed (including, without
limitation, the voting of any Common Stock or other voting capital stock of the
Company to approve such Company Sale).
ARTICLE 5
LIMITATION ON TRANSFERS
SECTION 5.1 Restrictions on Transfer.
The Securities shall not be Transferred or otherwise conveyed, assigned or
hypothecated before satisfaction of (i) the conditions specified in this Section
5.1 and Sections 5.2 and 5.3, which conditions are intended to ensure compliance
with the provisions of the Securities Act with respect to the Transfer of any
Security and (ii) if applicable, Article 4 hereof. Any purported Transfer in
violation of this Article 5 and/or, if applicable, Article 4 hereof shall be
void ab initio and of no force or effect. Other than (i) Transfers subject to
Section 4.1 hereof or (ii) Transfers to the public pursuant to an effective
registration statement or sales to the public pursuant to Rule 144 under the
Securities Act or an effective registration statement, each Holder will cause
any proposed transferee of any Security or any interest therein held by it to
agree in writing to take and hold such securities subject to the provisions and
upon the conditions specified in this Stockholders Agreement.
SECTION 5.2 Restrictive Legends.
5.2.1 Securities Act Legend. Except as otherwise provided in Section 5.4
hereof, each Security held by a Holder, and each Security issued to any
subsequent transferee of such Security, shall be stamped or otherwise imprinted
with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT
TO THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED,
32
EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH
ACT, OR (iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
5.2.2 Other Legends. Except as otherwise permitted by the last sentence of
Section 5.1, each Security issued to each Holder or a subsequent transferee
shall include a legend in substantially the following form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING AND OTHER
TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT DATED AS
OF APRIL 23, 1998, A COPY OF WHICH MAY BE OBTAINED FROM SPECIALTY
TELECONSTRUCTORS, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES.
SECTION 5.3 Notice of Proposed Transfers.
Prior to any Transfer or attempted Transfer of any Security, the Holder of
such Security shall (i) give ten days' prior written notice (a "Transfer
Notice") to the Company of such Holder's intention to effect such Transfer,
describing the manner and circumstances of the proposed Transfer, and (ii)
either (A) provide to the Company an opinion reasonably satisfactory to the
Company from counsel to such Holder who shall be reasonably satisfactory to the
Company (or supply such other evidence reasonably satisfactory to the Company)
that the proposed Transfer of such Security may be effected without registration
under the Securities Act, or (B) certify in writing to the Company that the
Holder reasonably believes the sale meets all of the conditions set forth in
Rule 144A(d) promulgated under the Securities Act (and any successor rules and
regulations thereto) required in order to effect a Transfer pursuant to Rule
144A. After receipt of the Transfer Notice and opinion (if required), the
Company shall, within five days thereof, so notify the Holder of such Security
and such Holder shall thereupon be entitled to Transfer such Security in
accordance with the terms of the Transfer Notice subject to such Holder's
compliance with the other provisions hereof. Each Security issued upon such
Transfer shall bear the restrictive legend set forth in Section 5.2.1, unless in
the opinion of such counsel such legend is not required in order to ensure
compliance with the Securities Act, and Section 5.2.2, if applicable. The Holder
of the Security giving the Transfer Notice shall not be entitled to Transfer
such Security until receipt of the notice from the Company under this Section
5.3.
33
SECTION 5.4 Termination of Certain Restrictions.
Notwithstanding the foregoing provisions of this Article 5, (i) the
restrictions imposed by Section 5.1 upon the transferability of the Securities
and the legend requirements of Sections 5.2.1 and 5.2.2 shall terminate as to
any Security when and so long as such Security shall have been effectively
registered under the Securities Act and disposed of pursuant thereto and (ii)
the legend requirements of Section 5.2.1 shall terminate when the Company shall
have received an opinion of counsel reasonably satisfactory to it that such
Security may be transferred without registration thereof under the Securities
Act and that such legends may be removed. Whenever the restrictions imposed by
Sections 5.2.1 and/or 5.2.2 shall terminate as to any Security, the Holder
thereof shall be entitled to receive from the Company, at the Company's expense,
a new Security not bearing the restrictive legend set forth in Section 5.2.1
and/or 5.2.2.
ARTICLE 6
CERTAIN TRANSACTIONS
SECTION 6.1 Transactions Requiring Consent of the Designees.
6.1.1 Majority Vote. Without the affirmative vote of a majority of both
the HMTF Designees, on the one hand, and the Existing Stockholders Designees, on
the other hand, (i) the Company shall not, and the Company shall not permit any
of its Subsidiaries to, enter into any of the following:
(a) any acquisition of any other business or assets involving an aggregate
purchase price (including debt assumed) in excess of $5,000,000 (whether paid in
cash or securities);
(b) the sale or other disposition (including by way of a merger,
consolidation, statutory share exchange, lease or sale/leaseback transaction) of
assets, in any one transaction or series of related transactions, which
constitute all or substantially all of the assets of the Company and its
Subsidiaries considered as a whole, other than to a wholly-owned Subsidiary of
the Company;
(c) any debt financing involving more than $10,000,000;
(d) the issuance or sale of shares constituting more than 20% of the
voting securities of the Company or any Subsidiary of the Company to any Person
or Group (other than any issuance or sale to the Company or any wholly-owned
Subsidiary of the
34
Company) or the issuance or sale of any shares of Preferred Stock of the
Company;
(e) any merger or consolidation or business combination between the
Company or a Subsidiary and any other entity (other than a wholly-owned
Subsidiary of the Company), or any other recapitalization transaction or stock
repurchase or redemption, or any statutory share exchange;
(f) the sale or other disposition (including by way of a merger,
consolidation, statutory share exchange, lease or sale/leaseback transaction) of
any operating division of the Company (whether or not incorporated as a separate
Subsidiary), in any one transaction or series of related transactions, other
than to a wholly-owned Subsidiary of the Company;
(g) any liquidation or dissolution of the Company;
(h) approval of an annual consolidated budget for the Company and its
Subsidiaries; or
(i) the filing of a voluntary petition under the Bankruptcy Code or any
state insolvency statute, the appointment of a receiver or trustee, or agreement
to the filing of an involuntary petition under the Bankruptcy Code.
ARTICLE 7
AFFILIATE TRANSACTIONS
The Company shall not enter into any material transaction (including,
without limitation, agreements which are standard in the industry) with any
director or significant stockholder of the Company or any Affiliate thereof
unless such transaction (a) has been approved by the Independent Directors in
accordance with the requirements of applicable law and (b) is on an arm's-length
basis on terms no less favorable to the Company than could be obtained in a
transaction with an independent third party. This Article 7 shall not apply to
the exercise of the Option (as defined therein) pursuant to that certain
Management and Option Agreement, dated the date hereof, among the Company,
HSW/Omni Acquisition, Inc. and HMTF/Omni. Furthermore, notwithstanding the prior
provisions of this Article 7, the Company shall not exercise its rights under
Section 4.1 hereof without the consent of a majority of the directors who are
not HMTF Designees, if the HMC Group is the Transferor, or the Existing
Stockholders Designees, if an Existing Stockholder is the Transferor.
35
ARTICLE 8
STANDSTILL ARRANGEMENTS
SECTION 8.1 Share Ownership of HMTF Group.
Except as set forth on Schedule A hereto, the HMTF Group does not own any
Voting Securities. As used in this Article 8, "HMTF Group" means (i) HMTF/Omni,
(ii) HMTF, (iii) Xxxx X. Xxxxxx, (iv) Xxxxxxx X. Xxxxxx and (v) Xxxxxx X. Xxxxx.
SECTION 8.2 Standstill Arrangements.
8.2.1 Acquisition of Additional Voting Securities. Each member of the HMTF
Group hereby covenants and agrees that prior to the termination of this
Stockholders Agreement, such member will not, directly or indirectly (through
controlled Affiliates or otherwise), purchase or cause to be purchased or
otherwise acquire (other than (i) pursuant to a stock split, stock dividend,
recapitalization, reorganization or similar Company action applicable to all
Company stockholders holding the security in respect of which such action is
taken or (ii) from another member of the HMTF Group in accordance with the terms
hereof) or make any proposal to or agree to acquire, or become or agree to
become the Beneficial Owner of, any Voting Securities in addition to the Common
Stock such Person owns on the date hereof.
8.2.2 Prohibited Actions.
Each member of the HMTF Group hereby agrees that, prior to the
termination of this Stockholders Agreement, such member of the HMTF Group will
not, directly or indirectly, solicit, request, advise, or encourage others to
take any of the following actions (collectively, the "Prohibited Actions"):
(a) form, join in or in any other way participate in a "partnership,
limited partnership, syndicate or other group" within the meaning of Section
13(d)(3) of the Exchange Act with respect to Voting Securities or deposit any
Voting Securities in a voting trust or similar arrangement or subject any Voting
Securities to any voting agreement or pooling arrangement, other than solely
with one or more Affiliates of HMTF/Omni with respect to the Common Stock owned
on the date hereof or pursuant to this Stockholders Agreement;
(b) solicit proxies or written consents of stockholders with respect to
Voting Securities under any circumstances, or make any "solicitation" of any
"proxy" to vote any Voting Securities, or become a "participant" in any election
contest
36
with respect to the Company (as such terms are defined or used in Rules 14a-1
and 14a-11 under the Exchange Act) or seek to advise or influence any Person
with respect to the voting of any Voting Securities;
(c) seek to call, or to request the call of, a special meeting of the
stockholders of the Company or seek to make, or make, a stockholder proposal at
any meeting of the stockholders of the Company with the purpose or intent of
affecting control of the Company;
(d) commence, or announce any intention to commence, any tender offer for
any Voting Securities;
(e) publicly make a proposal or bid with respect to, or announce publicly
any intention or desire to make any proposal or bid with respect to, (i) the
acquisition of all or substantially all of the assets of the Company or of the
assets or stock of any of its Subsidiaries or of all or any portion of the
outstanding Voting Securities, or (ii) any merger, consolidation, statutory
share exchange, other business combination, restructuring, recapitalization,
liquidation or other extraordinary transaction involving the Company or any of
its Subsidiaries;
(f) act to seek control of the Board of Directors of the Company;
provided, however, that (1) this clause shall not be interpreted to preclude any
director designated by HMTF from exercising such director's fiduciary duties
under applicable law and (2) no member of the HMTF Group shall be in violation
of this Section 8.2.2 as a result of exercising or enforcing or seeking to
enforce such member's rights pursuant to this Agreement;
(g) initiate any action, suit or proceeding against the Company or any
Subsidiary of the Company, the Board of Directors of the Company, or the
officers of the Company in their capacity as such, other than an action, suit or
proceeding to enforce the rights of the members of the HMTF Group under this
Agreement;
(h) arrange, or in any way participate in, any financing for any
transaction referred to in Section 8.2.2(a) through (g) above; or
(i) make public, directly or indirectly (including by disclosure to any
journalist or other representative of the media): (i) any request, or otherwise
seek (in any fashion that would require public disclosure by the Company,
HMTF/Omni or their respective Affiliates) to obtain any waiver or amendment of
any provision of this Article 8 or (ii) the taking of any action restricted by
this Article 8.
37
8.2.3 Exclusions from the Standstill Arrangements. Notwithstanding
anything in this Stockholders Agreement to the contrary (including Sections
8.2.1 and 8.2.2 hereof), nothing in this Stockholders Agreement shall prohibit
(a) purchases of Voting Securities that do not result in the HMTF Group
Beneficially Owning Voting Securities that possess, as of the time of
determination, in excess of 49.9% (as calculated with respect to convertible,
exchangeable or exercisable securities of the Company by reference to the
maximum number of votes to which a holder of such security is entitled to cast
in either a converted or unconverted, exchanged or unexchanged, or exercised or
unexercised basis, as the case may be, currently or at any time in the future)
of the total number of votes (the "Total Voting Power") that could be cast in
the election of directors of the Company at such time, (b) purchases of Voting
Securities or the taking of Prohibited Actions that have been previously
approved in writing by the Company as specifically expressed in a vote adopted
by the Board of Directors of the Company or, after the date hereof, previously
approved in writing by the Company as specifically expressed in a vote adopted
by a majority of the directors of the Company that are not HMTF Designees, (c)
any member of the HMTF Group's compliance with the applicable provisions of the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder, and (d) the exercise by a member of the HMTF Group of its rights
pursuant to this Stockholders Agreement.
8.2.4 Notification of the Company. Each member of the HMTF Group hereby
covenants and agrees that such Person will promptly notify the Company when and
if such Person receives any oral or written request of such Person or any of its
Affiliates to participate in any of the transactions or actions referred to in
Sections 8.2.2(a) through (i).
8.2.5 Rights of HMTF Group. Notwithstanding any other provision of this
Article 8, (a) no member of the HMTF Group shall be in violation of this Article
8 by virtue of the fact that such Person approached the Board of Directors of
the Company, or any member thereof, with respect to any action addressed in
Section 8.2.2 of this Article 8. Further, nothing contained in this Article 8,
express or implied, shall be construed to prevent any member of the Board of
Directors of the Company from complying with any fiduciary or other duties or
obligations such party may have to the Company's stockholders. Furthermore, the
prohibitions set forth in Sections 8.2.1 and 8.2.2 shall not apply in the event
that the Company receives a Third Party Offer that a majority of the Existing
Stockholder Designees sitting on the Board of Directors has not rejected within
twenty Business Days following receipt thereof. As used
38
in this Stockholders Agreement, "Third Party Offer" shall mean a noncollusive
bona fide proposal or offer from any Person other than a member of the HMTF
Group or an Affiliate thereof relating to the direct or indirect acquisition or
purchase of material operating assets or Voting Securities by way of sale,
merger, consolidation, business combination, liquidation, dissolution,
recapitalization or any similar transaction for a specified consideration or
consideration within a specified range.
ARTICLE 9
TERMINATION
The provisions of this Agreement shall terminate on the earlier of April
23, 2008 or the sale contemplated by Section 4.6. Notwithstanding the prior
sentence, the provisions of Section 3.7 hereof shall survive the termination of
this Agreement indefinitely. In addition, the provisions of Section 4.1 hereof
shall terminate when either of the Existing Stockholders, on the one hand, or
the HMC Group, on the other hand, Beneficially Own less than 10% of the number
of shares of Common Stock issued and outstanding on the date of determination.
The provisions of Section 4.6 hereof shall terminate when the HMC Group
Beneficially Owns less than 50% of the number of shares of Common Stock issued
on the Closing Date.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows (or at such other address as may be
substituted by notice given as herein provided):
39
If to the Company:
Specialty Teleconstructors, Inc.
00000 Xxxxx Xxxxxxx 00 Xxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
Attn: President
Copies to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
Xxxxx, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxx, Xx.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
If to any Holder, at its address listed on the signature pages hereof, and
in the case of any notices required under Article 4 to be sent to a Holder
who is an Existing Stockholder, a copy shall be sent to Xxxxxxx X. Xxxxxx,
Xxxxxx & Xxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000-0000
(Fax (000) 000-0000).
Any notice or communication hereunder shall be deemed to have been given
or made as of the date so delivered if personally delivered; when answered back,
if telexed; when receipt is acknowledged, if telecopied; and five calendar days
after mailing if sent by registered or certified mail (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
40
SECTION 10.2 Entire Agreement.
This Stockholders Agreement (together with any schedules or exhibits
hereto) sets forth the entire agreement and understanding of the parties hereto
with respect to the transactions contemplated hereby, and supersedes all other
prior agreements, arrangements and understandings related to the subject matter
hereof (including without limitation any demand or piggyback registration rights
granted to Xxxxxxxxx). No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto with respect to the subject matter hereof which is not embodied in this
Stockholders Agreement, and no party hereto shall be bound by or liable for any
alleged understanding, promise, inducement, statement, representation, warranty,
covenant or condition not so set forth with respect to the subject matter
hereof.
SECTION 10.3 Governing Law; Jurisdiction.
THIS STOCKHOLDERS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
SECTION 10.4 Successors and Assigns.
Whether or not an express assignment has been made pursuant to the
provisions of this Stockholders Agreement, provisions of this Stockholders
Agreement that are for the Holders' benefit as the holders of any Securities are
also for the benefit of, and enforceable by, all subsequent holders of
Securities, except as otherwise expressly provided herein. This Stockholders
Agreement shall be binding upon the Company, each Holder, and their respective
heirs, devisees, successors and assigns.
SECTION 10.5 Duplicate Originals.
All parties may sign any number of copies of this Stockholders Agreement.
Each signed copy shall be an original, but all of them together shall represent
the same agreement.
SECTION 10.6 Severability.
In case any provision in this Stockholders Agreement shall be held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and the
remaining provisions shall not in any way be affected or impaired thereby.
41
SECTION 10.7 No Waivers; Amendments.
10.7.1 No failure or delay on the part of the Company or any Holder in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Holder at law or in equity or otherwise.
10.7.2 Any provision of this Stockholders Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Company and the Required Holders; provided, that no such amendment or waiver
shall, (i) unless signed by all of the Holders, amend the provisions of Section
2 or any definition used herein, (ii) unless signed by all of the Holders
affected, (A) amend the provisions of this Section 10.7.2 or any definition used
therein or (B) change the number of Holders which shall be required for the
Holders or any of them to take any action under this Section 10.7.2 or any other
provision of this Stockholders Agreement and (iii) unless signed by Holders who
then Beneficially Own more than 85% of the aggregate number of shares of Common
Stock subject to this Stockholders Agreement, amend the provisions of Sections
4.1, 4.2, 5.1 or 8. Furthermore, unless signed by a majority of the HMTF
Designees, on the one hand, and the Existing Stockholders Designees, on the
other hand, no amendment shall be effective as to Section 6.1 or any definition
used therein, and each Holder, on behalf of itself and such Holder's transferees
hereunder, delegates to such Persons the right to so amend such provision.
SECTION 10.8 Actions of Existing Stockholders.
Any action required to be taken or right which is exercisable by the
Existing Stockholders hereunder, other than pursuant to Section 3.1.1.(a), may
be taken by Budagher in his sole and absolute discretion on behalf of all
Existing Stockholders, and Xxxxxxxx shall have no liability to Xxxxxxxxx or any
other Person with respect to any such action or any such right exercised.
SECTION 10.9 Nominees for Beneficial Owners.
In the event that any Registrable Shares are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at its election in
writing delivered to the Company, be treated as the Holder of such Registrable
Shares for purposes
42
of any request or other action by any Holder or Holders of Registrable Shares
pursuant to this Stockholders Agreement or any determination of any number or
percentage of Registrable Shares held by any Holder or Holders of Registrable
Shares contemplated by this Stockholders Agreement. If the beneficial owner of
any Registrable Shares so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Shares.
SECTION 10.10 Calculation of Percentage Interests in Registrable Shares.
For purposes of this Stockholders Agreement, all references to a
percentage of the Registrable Shares shall be calculated based upon the number
of shares of Registrable Shares outstanding at the time such calculation is
made.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
43
SIGNATURES TO STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Stockholders
Agreement to be duly executed, all as of the date first written above.
SPECIALTY TELECONSTRUCTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxx
President
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
HMTF/OMNI PARTNERS, L.P.
By: HM3/OmniAmerica Partners, LLC, its General
Partner
/s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
Vice President, Secretary and Treasurer
Address: c/o Hicks, Muse, Xxxx & Xxxxx
Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
Attention: Xxxxxxxx X.
Xxxxxx, Xx.
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------
XXXXXXX X. XXXXXXXX
Address: 0000 Xxxxxxx Xxx., #0
Xxxxxx, Xxxxx 00000
XXXXXXXX FAMILY, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx, general manager
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------
XXXXXX X. XXXXXXXXX
Address: 0000 Xxxxxx Xxxx Xxx.
Xxxxxxxx, Xxxxxx 00000
Mailing
Address: X.X. Xxx 00000
Xxxxxxxx, Xxxxxx 00000
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
HICKS, MUSE, XXXX & XXXXX INCORPORATED
/s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
Senior Vice President
Address: c/o Hicks, Muse, Xxxx &
Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
Attention: Xxxxxxxx X.
Xxxxxx, Xx.
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
/s/ Xxxxxx X. Xxxxx
---------------------------
XXXXXX X. XXXXX
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
/s/ Xxxxxxx X. Xxxxxx
----------------------------
XXXXXXX X. XXXXXX
Address: 0000 X. Xxxxx Xxxx.
Xxxx Xxxxx, XX 00000
SIGNATURES TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
/s/ Xxxx X. Xxxxxx
-----------------------------
XXXX X. XXXXXX
Address: 0000 X. Xxxxx Xxxx.
Xxxx Xxxxx, XX 00000
SCHEDULE A
Xxxx X. Xxxxxx -- 17,000 shares
