EXHIBIT 4.4
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GMH HOLDINGS, INC.
STOCKHOLDERS' AGREEMENT
_____________________________________
TABLE OF CONTENTS
SECTION PAGE
1. Definitions 3
2. Representations of the Stockholders; Indemnity 10
3. Restrictions on Transfers of Securities 11
(a) General Restrictions 11
(b) Restrictions on Stockholder Groups 13
4. Permitted Transfers of Securities 14
(a) A Stockholder Transfers 14
(b) B Stockholder Transfers 16
5. Transfers to the Corporation 18
6. Offer of Securities 19
7. Transfers with Respect to Employee Stockholders 21
8. Closing of Transfers 23
9. Come Along 25
(a) Come Along 25
(b) Warrants 27
10. Election of Directors and Other Voting Requirements 27
(a) Voting for Directors 27
(b) Nominations 27
(c) Vacancies 28
(d) Removal of Directors 28
(e) Written Consent 28
(f) Directors Expenses 29
(g) Special Election Matters 29
(h) Committees of the Board 30
(i) GMH Board 30
(j) Equitable's Rights 30
11. Special Voting Requirements 31
(a) Required Stockholder Approval While
Series A Preferred Share are Outstanding 31
(b) Required Stockholder Approval After
Series A Preferred Shares are Redeemed 34
12. Share and Warrant Certificates 36
(a) Restrictive Endorsement 36
(b) Replacement Certificates 37
13. No Default 37
14. Preemptive Rights 37
15. Registration Rights . . . . . . . . . . . . . . . . . 40
16. Miscellaneous 40
(a) Notices 40
(b) Termination; Amendment 41
(c) Waiver 41
(d) Counterparts 42
(e) Governing Law 42
(f) Benefit and Binding Effect 42
(g) Further Assurances 43
(h) Specific Performance 43
(i) Voting Percentages 44
Exhibit A Schedule of Stockholders
Exhibit B Registration Rights
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT dated as of December 21, 1995, by and
among GMH Holdings, Inc., a Delaware corporation (the "Company"), and each
other party executing this Agreement or a counterpart hereof (hereinafter
referred to collectively as "Stockholders" and individually as a
"Stockholder").
W I T N E S S E T H:
WHEREAS, the Company is authorized to issue an aggregate of 4,375,000
shares of Class A Common Stock, par value $.001 per share (the "Class A
Common Shares"), of which 1,656,250 Class A Common Shares are currently
issued and outstanding, 787,500 shares of Class B Common Stock, par value
$.001 per share (the "Class B Common Shares"), none of which Class B Common
Shares are currently issued and outstanding, 2,150,000 shares of Class C
Common Stock, par value $.001 per share (the "Class C Common Shares" and
together with the Class A Common Shares and the Class B Common Shares, the
"Common Shares"), none of which Class C Common Shares are currently issued
and outstanding, 8,000,000 shares of Series A Redeemable Preferred Stock,
par value $.001 per share (the "Series A Preferred Shares"), all of which
Series A Preferred Shares are currently issued and outstanding, and
2,150,000 shares of Series B Convertible Preferred Stock, par value, $.001
per share (the "Series B Preferred Shares"), all of which Series B
Preferred Shares are currently issued and outstanding (the Class A Common
Shares, Class B Common Shares, Class C Common Shares, Series A Preferred
Shares and Series B Preferred Shares are collectively referred to as the
"Shares"); and
WHEREAS, each Stockholder is the record and beneficial owner of the number
of Class A Common Shares, Class B Common Shares, Class C Common Shares, Series A
Preferred Shares and Series B Preferred Shares appearing opposite his or its
name on Exhibit A attached hereto, free and clear of all options, liens,
encumbrances or charges of any kind, except this Agreement; and
WHEREAS, the Company has issued to The Equitable Life Assurance Society of
the United States and to certain principals of Larkspur Capital Corporation
warrants dated the date hereof to purchase an aggregate of 568,750 Class A
Common Shares or Class B Common Shares at a price of $.01 per share (the
"Warrants"); and
WHEREAS, the parties deem it in the best interests of the Company to
provide for continuity in the control and operation of the Company and to
restrict the transfer of the Shares (including the Common Shares issuable upon
conversion of the Series B Preferred Shares or upon exercise of the Warrants),
as herein provided;
NOW, THEREFORE, in consideration of the agreements and mutual covenants
contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, terms defined in the preamble and recitals
hereto shall have the respective meanings specified therein, and the following
terms shall have the following meanings:
"A STOCKHOLDER" shall mean (i) any Stockholder that is designated one
of the Group A Stockholders in Exhibit A to this Agreement and (ii) any Person
who acquires Securities after the date hereof and is designated as an A
Stockholder in accordance with the provisions of this Agreement.
"ACT" shall mean the Securities Act of 1933, as amended.
"AFFILIATE", as applied to any Person, means any other person,
directly or indirectly controlling, controlled by, or under common control with
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise, and in all events, GMH shall be deemed to be an
Affiliate of the Company.
"B STOCKHOLDER" shall mean (i) any Stockholder that is designated one
of the Group B Stockholders in Exhibit A to this Agreement and (ii) any Person
who acquires Securities after the date hereof and is designated as a B
Stockholder in accordance with the provisions of this Agreement.
"BULLDOG" shall mean Bulldog Holdings LLC, a New York limited
liability company.
"BUSINESS DAY" shall mean any day other than a Saturday or a Sunday or
a day on which commercial banking institutions in the City of New York are
authorized to close.
"CAUSE" shall mean, with respect to any Employee Stockholder, any of
the following: (a) any deliberate or intentional act or omission by the Employee
Stockholder with the intent of causing damage to the Company's or GMH's
relationships with its lenders, suppliers or customers; (b) any fraud,
misappropriation or embezzlement by the Employee Stockholder involving
properties, assets or funds of the Company or of GMH; (c) a conviction of the
Employee Stockholder, or plea of NOLO CONTENDERE by the Employee Stockholder, to
any crime or offense involving monies or other property of the Company or GMH or
any other felony or criminal act involving moral turpitude; (d) any usurpation
by the Employee Stockholder of a corporate opportunity of the Company or GMH or
the Employee Stockholder's willful and continual neglect of or willful and
continual failure to perform any of his material duties, responsibilities or
obligations as an employee of the Company or GMH, but only after notice of such
usurpation, neglect or failure is delivered to the Employee Stockholder and the
Employee Stockholder fails or refuses to remedy such usurpation, neglect or
failure to the reasonable satisfaction of the Board of Directors of the Company
or GMH, as applicable, within thirty (30) days after the receipt of such notice;
provided, that any act or omission taken by the Employee Stockholder in good
faith and in the reasonable belief that such action or omission was in the best
interests of the Company or GMH
shall not constitute "Cause"; or (e) the violation by the Employee Stockholder
of Section 7 of his Employment Agreement or of any other non-competition
agreement or covenant binding upon the Employee Stockholder.
"CERTIFICATE OF INCORPORATION" shall mean the Company's Certificate of
Incorporation, as amended or restated from time to time.
"CO-SALE TRANSFER" shall mean any sale by any Stockholder of such
number of the Voting Shares held by such Stockholder in a bona fide, arms-length
transaction to any Person who is not then either a party to this Agreement or a
Related Transferee of such Stockholder, as the case may be, which results in
such Person owning in excess of 10% of the then issued and outstanding Voting
Shares.
"EMPLOYEE STOCKHOLDER" shall mean any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, as Trustee, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇.
"EQUITABLE" shall mean The Equitable Life Assurance Society of the
United States, a New York insurance company.
"FUNDAMENTAL CHANGE" shall have the meaning set forth in Section 11(b)
hereof.
"GMH" shall mean, prior to the Merger, GMH Acquisition Corp., a
Delaware corporation, and after the Merger, General Manufactured Housing, Inc.,
a Georgia corporation.
"GROUP A OFFEREES" shall mean Bulldog, RFE, Michigan and Sterling.
"INVESTORS RIGHTS AGREEMENT" shall mean that certain Investors Rights
Agreement dated as of the date hereof between and among the RFE Group, Bulldog,
Equitable and the Company.
"MERGER" shall mean the merger of GMH Acquisition Corp. with and into
General Manufactured Housing, Inc., with General Manufactured Housing, Inc. as
the surviving corporation.
"MICHIGAN" shall mean the State Treasurer of the State of Michigan,
Custodian of the Michigan Public School Employees' Retirement System, State
Employees Retirement System, Michigan State Police Retirement System and the
Michigan Judges' Retirement System.
"NON-SELLING STOCKHOLDER GROUP" shall mean the following Employee
Stockholders: ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
"PERSON" shall mean a natural person, corporation, limited
partnership, general partnership, joint stock company, limited liability
company, limited liability partnership, joint venture, association, company,
trust, bank, trust company, and trust, business trust or other organization,
whether or not a legal entity, or a government or agency or any political
subdivision thereof.
"PUT DATE" shall mean the date which is the eighth (8th) anniversary
of the date hereof.
"PUT RIGHTS" shall mean the rights granted by the Company to the RFE
Group and Equitable pursuant to Section 1.1 of the Investors Rights Agreement.
"RELATED TRANSFEREES" shall mean, (i) with respect to each Stockholder
who is a natural person, such Stockholder's spouse, any lineal descendant
(whether by birth or adoption), and trusts for the benefit of his spouse or
lineal descendants (whether by birth or adoption), and, upon the death,
disability or incompetence of such Stockholder, his estate or personal
representative and (ii) with respect to any Stockholder who is not a natural
person, the Affiliates of such Stockholder, any partner of any Stockholder which
is a partnership and any successor trustee of any Stockholder which is a
trustee.
"RFE" shall mean RFE Investment Partners V, L.P., a Delaware limited
partnership.
"RFE GROUP" shall mean RFE, Michigan and Sterling.
"SECURITIES" shall mean and include (i) all Class A Common Shares,
Class B Common Shares, Class C Common Shares, Series A Preferred Shares, Series
B Preferred Shares and Warrants owned, of record or beneficially, by any
Stockholder, (ii) all Class A Common Shares, Class B Common Shares, Class C
Common Shares, Series A Preferred Shares, Series B Preferred Shares and Warrants
hereafter acquired, directly or indirectly, by any Stockholder, including the
Common Shares issuable upon conversion of the Series B Preferred Shares or upon
exercise of any Warrant, and (iii) all other Securities of the Company acquired
by any Stockholder by way of dividend or upon an increase, reduction,
substitution or reclassification of stock of the Company or upon any
reorganization of the Company.
"SECURITIES ACTS" shall mean any applicable statute, rule, regulation
or administrative or regulatory requirement applicable to the transfer of
securities of the Company, including the Act, and the rules and regulations
promulgated thereunder, and all applicable state securities or "blue sky" laws.
"SELLING STOCKHOLDER GROUP" shall mean the following Employee
Stockholders: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"STERLING" shall mean Sterling Commercial Capital, Inc., a New York
corporation.
"STOCKHOLDER GROUP" shall mean, with respect to any Stockholder, such
Stockholder, each of his or its Related Transferees and each of their respective
successor Related Transferees.
"TRANSFER" shall mean any sale, assignment, transfer, pledge,
hypothecation, mortgage, charge, lien, encumbrance, gift, bequest, transmission
or other disposition of Securities, provided that the encumbrances contemplated
by, and transfers of Securities pursuant to the terms and provisions of Section
4 hereof shall not be deemed to be "transfers".
"VOTING SHARES" shall mean the Series B Preferred Shares, the Class A
Common Shares, the Class B Common Shares issuable upon exercise of the Warrant
issued to Equitable (notwithstanding that the Class B Common Shares are non-
voting) and the Class C Common Shares, including (a) any Class C Common Shares
issued upon conversion of the Series B Shares or (b) Class A Common Shares or
Class B Common Shares issued upon exercise of the Warrants.
"WARRANTS" shall have the meaning set forth in the recitals hereto.
2. REPRESENTATIONS OF THE STOCKHOLDERS; INDEMNITY.
(a) Each Stockholder other than Michigan and Equitable, severally
represents and warrants as follows:
(i) this Agreement constitutes the valid and legally binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms, subject to (A) laws of general application relating
to bankruptcy, insolvency, and the relief of debtors, and (B) rules of law
governing specific performance, injunctive relief or other equitable remedies;
(ii) the execution, delivery and performance of this Agreement by
such Stockholder does not (A) violate or result in a breach of or constitute a
default under any of the organizational or constituent documents of any
Stockholder which is not a natural Person, or any contract, agreement,
indenture, mortgage, pledge, note, bond, license, permit or other instrument or
obligation to which such Stockholder is a party or by which it or any of its
assets are bound or affected or (B) require any permit, consent, approval or
authorization of, or designation, declaration or filing with, any governmental
authority or any other person or entity, except for those which have already
been obtained; and
(iii) such Stockholder, if not a natural person, has all
requisite power and authority to enter into and perform its obligations under
this Agreement in accordance with its terms.
(b) Each Stockholder, other than Michigan and Equitable, agrees to
indemnify and hold harmless the other Stockholders and the Company and its
directors, employees, affiliates and agents from and against any and all
damages, losses, costs and expenses (including reasonable attorneys' fees) which
any of them may incur by reason of the failure of such Stockholder to fulfill
any of the terms or conditions of this Agreement, or by reason of any breach of
the representations and warranties made by such Stockholder in this Agreement.
3. RESTRICTIONS ON TRANSFERS OF SECURITIES.
(a) GENERAL RESTRICTIONS. During the term of this Agreement, none of
the Securities may be the subject of a transfer unless:
(i) such transfer shall be made in accordance with the provisions
of this Agreement and Exhibit B hereto, relating to the Stockholders'
rights to register their Common Shares or Warrants under the Securities
Acts;
(ii) the proposed transferee shall deliver to the Company a
written acknowledgment that the Securities to be transferred are subject to
this Agreement and that the proposed transferee and his or its successors
in interest agree to be and are bound hereby and thereby to the same extent
and in the same manner as the transferor of such Securities; provided, that
from and after the Put Date, the restrictions contained in this Agreement
shall cease to apply to any Shares which are covered by the Put Rights; and
(iii) such transfer shall be made in compliance with the Securities
Acts, and prior to any such transfer, the Stockholder proposing to
transfer Securities shall give the Company (A) notice describing the
manner and circumstances of the proposed transfer and (B) if reasonably
requested by the Company, a written opinion of legal
counsel reasonably satisfactory to the Company and its counsel, in form
and substance reasonably satisfactory to the Company and its counsel, to
the effect that the proposed transfer of Securities will be in compliance
with the Securities Acts; provided, however, that for transactions made
pursuant to Rule 144 under the Act, an opinion of counsel shall only be
required if reasonably requested by the Company and which shall be to the
effect that the proposed transfer of Securities may be effected without
registration under the Act; and provided, further, that no such opinion of
counsel shall be necessary for a transfer by a Stockholder which is (1) a
partnership to its partners or retired partners in accordance with
partnership interests, (2) an individual to a Related Transferee or trust
for the benefit of such individual or Related Transferee or (3) a trustee
for the benefit of others to a successor trustee.
Upon the transfer of Securities in accordance with this Agreement, the
transferee of such Securities shall be deemed a "Stockholder" hereunder. Any
attempted transfer of Securities other than in accordance with this Agreement
and the Registration Rights Agreement shall be null and void, and the Company
shall not recognize any such attempted transfer nor reflect in its records any
change in ownership of Securities pursuant thereto, nor issue any certificate or
other evidence of ownership of Securities in connection therewith.
(b) RESTRICTIONS ON STOCKHOLDER GROUPS. Any Securities transferred
upon satisfaction of the conditions contained in this Agreement shall be held
subject to the terms of this Agreement and the holder thereof shall be deemed a
Stockholder for purposes of this Agreement, as follows:
(i) Any Securities transferred to, or any Securities held by, any
one of the A Stockholders shall be held by such A Stockholder subject to the
provisions hereof governing Securities held by A
Stockholders.
(ii) Any Securities transferred to, or any Securities held by any
one of the B Stockholders shall be held by such B Stockholder subject to the
provisions hereof governing Securities held by B Stockholders.
(iii) Any Securities transferred to any Person that is not a
Stockholder prior to such transfer shall, unless otherwise provided herein, be
held by such Person subject to the provisions hereof governing Securities held
by the Stockholder that transferred Shares to such Person.
4. PERMITTED TRANSFERS OF SHARES. Notwithstanding the provisions of
Section 3(a) hereof, during the term of this Agreement, any Stockholder may
transfer any or all of his or its respective Securities, subject to the
restrictions contained in Section 3 hereof and upon compliance with the
following terms and conditions:
(a) A STOCKHOLDER TRANSFERS. Subject to the provisions of Section
11(a)(xiii), any A Stockholder may transfer any or all of his, her or its
Securities as follows:
(i) to any Related Transferee of the A Stockholder making such
transfer, provided that any Securities transferred to such Related Transferee
shall be held by such Related Transferee subject to the provisions hereof
governing A Stockholders;
(ii) to the Company in accordance with the procedures described in
Section 5 hereof;
(iii) Bulldog may transfer its Securities to the RFE Group in
accordance with the option granted to the RFE Group pursuant to Section 2 of the
Investors Rights Agreement;
(iv) Equitable may transfer its Securities to a Person (A) for
whom Alliance Corporate Finance Group Incorporated is the sole investment
advisor and (B) in connection with such Person becoming the
holder of any of the Senior Subordinated Notes of GMH originally issued to
Equitable; or
(v) to any Person, including any Stockholder (other than the
Persons described in (i), (ii), (iii) and (iv) above), provided that (A) such
Securities are first offered for sale to the Group A Offerees (excluding any
member of the Group A Offerees who is the transferor), pro rata in accordance
with the procedures described in Section 6 hereof, (B) if the Group A Offerees
do not agree to purchase all of such Securities offered for sale, the remainder
of such Securities are next offered to all other A Stockholders, pro rata in
accordance with the procedures described in Section 6 hereof, (C) if the Group A
Offerees and such other A Stockholders do not agree to purchase all of such
Securities offered for sale, the remainder of such Securities are next offered
for sale to all B Stockholders, pro rata in accordance with the procedures
described in Section 6 hereof and (D) if any such transfer involves a Co-Sale
Transfer, it shall be made in accordance with the procedures described in
Section 9 hereof; and provided, further, that from and after the Put Date, the
provisions of this Section 4(a)(iv) shall cease to apply to any transfer of
Voting Shares held by any A Stockholder which are subject to the Put Rights.
(b) B STOCKHOLDER TRANSFERS. Subject to the provisions of Section
11(a)(xiii), any B Stockholder may transfer any or all of his, her or its
Securities as follows:
(i) INTENTIONALLY DELETED
(ii) to any other B Stockholder; provided, that, (A) such
Securities are first offered for sale to the members of the Selling
Stockholder Group, pro rata in accordance with the procedures described in
Section 6 hereof and (B) if the members of the Selling Stockholder Group do
not agree to purchase all of such Securities offered for sale, the
remainder of such Securities are next offered
for sale to the members of the Non-Selling Stockholder Group, pro rata in
accordance with the procedures described in Section 6 hereof;
(iii) to the members of the Selling Stockholder Group in accordance
with the provisions of Section 7(a);
(iv) to any Related Transferee of the B Stockholder making
such transfer, provided that any Securities transferred to such Related
Transferee shall be held by such Related Transferee subject to the
provisions governing B Stockholders;
(v) to the Company in accordance with the procedures described in
Section 5 hereof; or
(vi) to any Person, including a Stockholder (other than the
Persons described in (i), (ii), (iii), (iv) and (v) above), provided that
(A) such Securities are first offered for sale to the Group A Offerees, pro
rata in accordance with the procedures described in Section 6 hereof
(except that if a member of the Non-Selling Stockholder Group is the
transferor, such Securities shall first be offered for sale to the members
of the Selling Stockholder Group, pro rata in accordance with the
procedures described in Section 6 hereof, and if the members of the Selling
Stockholder Group do not agree to purchase all of such Securities offered
for sale, the remainder of such Securities are then offered for sale to the
Group A Offerees), (B) if the Group A Offerees do not agree to purchase all
of such Securities offered for sale, the remainder of such Securities are
next offered for sale to all other B Stockholders, pro rata in accordance
with the procedures described in Section 6 hereof, (C) if the Group A
Offerees and such other B Stockholders do not agree to purchase all of such
Securities offered for sale, the remainder of such Securities are next
offered for sale to all A Stockholders (other than the Group A Offerees),
pro rata in accordance with the procedures described in Section 6 hereof
and (D) if such transfer involves a Co-Sale Transfer,
it shall be made in accordance with the procedures described in
Section 9 hereof.
5. TRANSFERS TO THE CORPORATION. Any Stockholder may transfer any or
all of his or its Securities to the Company, on such terms and conditions as the
Stockholder and the Corporation may agree; PROVIDED, HOWEVER, that except for
(a) any redemption of the Series A Preferred Shares in accordance with the
Certificate of Incorporation or (b) any repurchase of Voting Shares pursuant to
the Put Rights, the Company shall not repurchase or redeem any Securities
without the written consent of the Stockholders required pursuant to the
provisions of Sections 11(a) or (b) hereof, as applicable. Any Securities
purchased or redeemed by the Company shall be retired and not be reissued. If
the Company is legally or contractually restricted from purchasing all of such
Securities, the Company shall, at such time, purchase the portion of the
Securities which it is legally or contractually permitted to purchase, and shall
purchase the balance of the Securities as soon thereafter as it is legally or
contractually able to do so.
6. OFFER OF SECURITIES. Whenever any Stockholder is required to offer
Securities for sale to other Stockholders pursuant to Section 4 hereof, the
following procedures shall apply:
(a) The Stockholder proposing to make such a transfer (the
"Transferor") shall deliver a written notice of the proposed transfer (the
"Transfer Notice") to the Company and to each of the other Stockholders entitled
to receive an offer to purchase under the provisions of this Agreement. The
Transfer Notice shall contain a description of the proposed transaction and the
terms thereof, including the number of Securities to be transferred, the name of
each Person to whom or in favor of whom the proposed transfer shall be made (the
"Transferee"), and a description of the consideration to be received by the
Transferor upon transfer of the Securities which must be cash.
(b) At the same time as the delivery of the Transfer Notice, the
Transferor shall deliver a written offer to sell to each of the other
Stockholders entitled to receive such an offer under other provisions of this
Agreement, a pro rata (in accordance with the percentage of Voting Shares then
held by the other Stockholders) portion of the Securities offered for sale by
the Transferor, as required under other provisions of this Agreement. Such offer
to sell shall contain the same terms and conditions and shall be for the same
consideration as described in the Transfer Notice.
(c) For a period of twenty-five (25) days after the offer described in
(b) above is sent to Stockholders, each such Stockholder may, by written notice
to the Transferor and to the Company, accept in whole or in part the offer to
sell Securities. Such acceptance shall specify the amount of Securities to be
purchased by such Stockholder and a proposed date for closing such purchase,
which date shall not exceed sixty (60) days from the date the offer described in
(b) above is sent to Stockholders. If any Stockholder does not accept the offer
to purchase all of the Securities offered by the Transferor, the Transferor
shall make one or more additional offers of the remainder of such Securities to
Stockholders who have agreed to purchase all of the Securities previously
offered to them by the Transferor. Such additional offer or offers shall be made
for a period of ten (10) days to each of such Stockholders in the same ratio
that the amount of Voting Shares which such Stockholder has agreed to purchase
bears to the total amount of Voting Shares which all Stockholders to whom such
additional offer or offers are made have agreed to purchase.
(d) In the event that the other Stockholders do not agree to purchase
all of the Securities offered for sale by the Transferor, the Transferor shall
have the right at his or its election:
(i) to proceed with the sale of such Securities as other
Stockholders have agreed to purchase;
(ii) to cancel all of the offers to other Stockholders and
not sell; or
(iii) to cancel all of the offers to other Stockholders and
make a bona fide sale or other transfer of the Securities to the
Transferee named in the Transfer Notice, but only in strict accordance
with the terms and for the consideration stated in the Transfer Notice
and within ninety (90) days of the last offer to Stockholders
hereunder.
7. TRANSFERS WITH RESPECT TO EMPLOYEE STOCKHOLDERS.
(a) If any member of the Non-Selling Stockholder Group voluntarily
ceases to serve as an employee or officer of the Company or GMH without the
consent of the Company or GMH, as applicable, or his employment is terminated
for any reason other than death or disability, in each case, on or prior to the
third anniversary of the date of this Agreement, all Securities held by such
Stockholder and his Related Transferees, if any, shall, immediately upon such
termination of employment, be transferred to the members of the Selling
Stockholder Group (pro rata in accordance with the percentage of Voting Shares
then held by the members of the Selling Stockholder Group) for a purchase price
equal to the total number of Shares so transferred multiplied by the par value
of such Shares.
(b) If (i) the employment of any member of the Non-Selling Stockholder
Group with the Company or GMH terminates by reason of death or disability or
(ii) after the third anniversary of the date of this Agreement but prior to the
earlier of (A) the fifth anniversary of the date of this Agreement or (B) the
date upon which a Co-Sale Transfer occurs, any member of the Non-Selling
Stockholder Group voluntarily ceases to serve as an employee or officer of the
Company or GMH without the consent of the Company or GMH, as applicable, or his
employment with the Company or GMH is terminated for any reason other than death
or disability, then such Person shall immediately surrender to the Corporation
all
Shares held by him and his Related Transferees, if any, in exchange for an equal
number of Class B Common Shares.
(c) If prior to the earlier of (i) the fifth anniversary of the date
of this Agreement or (ii) the date upon which a Co-Sale Transfer occurs, any
member of the Selling Stockholder Group voluntarily ceases to serve as an
executive officer of the Company or GMH or his employment with the Company or
GMH is terminated for Cause, then such Person shall immediately surrender to the
Corporation all Shares held by him and his Related Transferees, if any, (and
who, in the case of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, shall mean his Related Transferees, if any,
who have acquired Securities by transfer from him after the date hereof), in
exchange for an equal number of Class B Common Shares.
(d) Immediately upon the occurrence of any event set forth in
paragraphs (b) or (c) above which requires the exchange of Class A Common Shares
for certificates of Class B Common Shares, the rights of the holder of such
Class A Common Shares shall automatically cease, and such Person shall be deemed
to have become a holder of Class B Common Shares.
8. CLOSING OF TRANSFERS. The closing for all purchases and sales of
Securities provided for in this Agreement hereof shall be held at the offices of
the Company. If any Stockholder (or a Related Transferee) who has become
obligated to purchase or sell Securities hereunder is deceased on the closing
date for such purchase or sale and such deceased person's personal
representative shall not have been appointed and qualified by such date, then
the closing shall be postponed until the 10th day after the appointment and
qualification of such personal representative. If the closing date of such
purchase or sale falls on a Saturday, Sunday or legal holiday, then the closing
shall be held on the next succeeding business day. The purchase price for the
Securities shall be paid at the closing by certified check or by cashier's or
official bank check. At the closing, the seller(s) shall deliver to the
purchaser(s) the
certificate or certificates representing the Securities to be sold, duly
endorsed in blank and bearing the necessary documentary stamps. Any Stockholder
(or his personal representative or any Related Transferee of such Stockholder)
which transfers Securities shall (a) do all things and execute and deliver all
such papers as may be necessary or reasonably requested by the Company in order
to consummate such transfer, (b) pay to the Company such amounts as may be
required for any applicable stock transfer taxes and (c) pay to the Company any
expenses incurred by the Company in connection with such transfer (including
reasonable attorneys fees). In the event that a Stockholder (or, his personal
representative or any Related Transferee of such Stockholder) having become
obligated to sell Securities hereunder shall fail to deliver such Securities in
accordance with the terms of this Agreement, the purchasers may, at their
option, in addition to all other remedies they may have, send to the sellers by
personal delivery or registered mail, return receipt requested, the purchase
price of such Securities as is hereinabove specified. Thereupon, the Company
shall (i) cancel on its books the certificate or certificates representing the
Securities to be sold, (ii) issue, in lieu thereof, a new certificate or
certificates in the name of the purchasers representing such Securities, (iii)
deliver such new certificate or certificates to the Purchasers and (iv) give
notice thereof to the sellers, and thereupon all of the sellers' rights in and
to such Securities shall terminate.
9. COME ALONG.
(a) COME ALONG. If any Stockholder proposes to transfer Voting Shares
in a Co-Sale Transfer (the "Selling Stockholder"), it shall give notice of such
proposed sale (the "Sale Notice") to the Company and the other Stockholders (the
"Other Stockholders"), which notice shall set forth at least the name and
address of the proposed transferee (the "Buyer") and the price and terms of such
proposed sale. Any of the Other Stockholders shall then be entitled to give,
within 20 days after the giving of such
Sale Notice, a counter-notice to the Company, the Selling Stockholder, and to
the Buyer at the address specified in the Sale Notice, that it elects to have
the Buyer choose to purchase the number of Voting Shares owned by such Other
Stockholder (and the Voting Shares of his, her or its Related Transferees, if
any) equal to (i) the number of Voting Shares held by such Other Stockholder and
his, her or its Related Transferees, if any, multiplied by (ii) a fraction, the
numerator of which is the number of Voting Shares proposed to be acquired by the
Buyer from the Selling Stockholder and the denominator of which is the total
number of Voting Shares held by the Selling Stockholder (before giving effect to
the proposed sale to the Buyer), at the same price and upon the same terms and
conditions as contained in the Sale Notice. In the event any Other Stockholder
makes the aforesaid election, the Buyer shall purchase and such Other
Stockholder (and his, her or its Related Transferees, if any) shall sell such
number of Voting Shares owned (or deemed owned) by them at the same price and
upon the same terms and conditions as contained in the Sale Notice; provided,
that if the Buyer is not willing to purchase the total number of Voting Shares
held by the Selling Stockholder and the Other Stockholders who have elected to
participate in such sale, the Buyer shall purchase that number of Voting Shares
that it wishes to purchase (but not less than the number set forth in the Sale
Notice), and the Selling Stockholder and the Other Stockholders shall each sell
that number of Voting Shares to the Buyer equal to the product of (x) the
aggregate number of Voting Shares to be purchased by the Buyer and (y) a
fraction, the numerator of which is the number of Voting Shares then owned by
such Stockholder, and the denominator of which is the aggregate number of Voting
Shares owned by the Selling Stockholder and the Other Stockholders who have
elected to participate in such sale.
(b) WARRANTS. For purposes of Section 9(a), any Stockholder which
holds Warrants and which, if such Warrants had been exercised, would
be permitted to sell the resulting Voting Shares under Section 9(a), shall have
the right to sell Warrants for the number of Voting Shares which, together with
the number of Voting Shares, if any, such Stockholder elects to sell, equals the
number of Voting Shares such Stockholder is permitted to sell under Section
9(a), without any requirement that such Warrants be exercised and converted to
Voting Shares before a sale under Section 9(a). The purchase price per Warrant
shall be the purchase price per Voting Share less the exercise price of the
Warrant.
10. ELECTION OF DIRECTORS AND OTHER VOTING REQUIREMENTS.
(a) VOTING FOR DIRECTORS. During the term of this Agreement, (i)
there shall be seven directors of the Company and (ii) at each meeting of the
Stockholders of the Company for the election of directors, the Stockholders
shall vote all Voting Shares held by them for the election of the seven persons
nominated pursuant to Section 10(b).
(b) NOMINATIONS. During the term of this Agreement, directors
shall be nominated by the Stockholders as follows: the nominees for directors
shall be (i) the four persons nominated by Bulldog, (ii) the two persons
receiving a plurality of votes cast by all members of the RFE Group, including
one nominee designated by RFE and (iii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
(c) VACANCIES. During the term of this Agreement, should a
vacancy in the Board of Directors be caused by death, resignation, removal or
any other reason, each of the Stockholders agrees to vote all Voting Shares
owned by such Stockholder for (i) the one person receiving a plurality of votes
cast by all B Stockholders at a meeting of B Stockholders held to nominate
directors, in the case of a vacancy caused by the death, resignation, removal or
other reason with respect to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or (ii) the nominee selected by
Bulldog or the RFE Group, as the case may be, as provided in Section 10(b)
hereof.
(d) REMOVAL OF DIRECTORS. If at any time any Stockholder proposes
to remove any director who was nominated by such Stockholder as
provided in Section 10(b) hereof, each Stockholder agrees to vote all of the
Voting Shares owned by such Stockholder for such removal if removal has been
approved by the persons who would be entitled to fill a vacancy pursuant to
Section 10(c) hereof.
(e) WRITTEN CONSENT. Notwithstanding any reference herein to
votes cast at a meeting of the Stockholders, directors may be chosen for
nomination by the Stockholders acting by written consent without a meeting and
directors may be elected by the Stockholders acting by written consent without a
meeting to the extent permitted by law, by the certificate of incorporation and
the by-laws of the Company; PROVIDED, HOWEVER, that nothing in this Section
10(e) shall authorize the nomination, election or removal of directors other
than in accordance with the provisions of this Section 10.
(f) DIRECTORS EXPENSES. Each director of the Company (and any
observer pursuant to Section 10(j)) shall be reimbursed for his actual out of
pocket expenses incurred in attending each meeting of the Board of Directors or
any committee thereof. In addition, if any of the directors nominated by the RFE
Group pursuant to Section 10(b)(ii) is a person with outside operating
experience and not otherwise affiliated with any member of the RFE Group, the
Company will pay such director reasonable directors fees.
(g) SPECIAL ELECTION MATTERS. Notwithstanding anything contained
in this Section 10 to the contrary, if an Event of Default, as defined in the
Certificate of Incorporation has occurred and not been cured, the Stockholders
shall (to the limited extent, if at all, necessary to accomplish the following)
vote all Voting Shares held by them at the time to accomplish the nomination and
election of that number of nominees of the holders of the Series A Preferred
Shares as constitute the smallest number of directors which shall constitute a
majority of the Company's Board of Directors (including, but not limited to,
voting to remove members
of the Board of Directors serving prior to such election).
(h) COMMITTEES OF THE BOARD. The Board of Directors of each of
the Company and GMH shall establish an Audit Committee and a Compensation
Committee in accordance with the By-laws of the Company and GMH and so long as
the RFE Group owns at least 10% of the issued and outstanding Voting Shares,
such committees shall include a representative of the RFE Group.
(i) GMH BOARD. Each of the Stockholders and the Company hereby
agrees to take such action as may be required so that the Board of Directors of
GMH is at all time identical to the Board of Directors of the Company.
(j) EQUITABLE'S RIGHTS. So long as Equitable continues to own at
least 70% of the initial purchase percentage of the Warrants issued to it,
Equitable will have (i) the ability to have a representative attend meetings of
the Board of Directors of each of the Company and GMH as an observer, (ii) the
right to receive all materials sent to such Boards of Directors by the Company
or GMH, as applicable, (iii) the right to inspect the Company's and GMH's books
and records and, upon reasonable notice, visit the Company and GMH and (iv)
consult with management of the Company and GMH. Holders of the Warrants issued
to Equitable shall receive monthly unaudited financial statements and annually,
a copy of management's budget for the succeeding year, each at the same time as
such financial statements and budget are delivered to the Company's and GMH's
lenders.
11. SPECIAL VOTING REQUIREMENTS.
(a) REQUIRED STOCKHOLDER APPROVAL WHILE SERIES A PREFERRED SHARES
ARE OUTSTANDING. At any time during the term of this Agreement that Series A
Preferred Shares are outstanding, the approval by the affirmative vote or
written consent of the Stockholders holding not less than (x) 66-2/3 of all of
the issued and outstanding Series A Preferred Shares with respect to paragraphs
(ii), (iv), (vi), (vii), (viii) or (ix) below and (y)
50.1% of the issued and outstanding Series A Preferred Shares with respect to
paragraphs (i), (iii), (v), (x), (xi), (xii) and (xiii) below shall be required
to authorize any of the following:
(i) the payment or declaration of any dividend on the Common
Shares, Series B Preferred Shares or any other equity securities
(including options or warrants) of the Company (other than the Series
A Preferred Shares) or the redemption, purchase or other acquisition
for value (or the payment into or setting aside for a sinking fund for
such purpose) any of the Common Shares, Series B Preferred Shares or
any other equity securities of the Company, or the application of any
of the Company's assets to the redemption, retirement, purchase or
acquisition, directly or indirectly, through subsidiaries or
otherwise, of any of the Common Shares, Series B Preferred Shares or
other equity securities of the Company, except for (A) redemptions of
Series A Preferred Shares as provided in accordance with the
provisions of the Certificate of Incorporation, and (B) repurchases of
Common Shares pursuant to the Investors' Rights Agreement;
(ii) (A) any acquisition of the Company by means of a merger
of the Company with or into any other corporation or other entity or
person or other form of corporate reorganization in which the Company
shall not be the continuing or surviving entity of such merger or
reorganization (other than a mere reincorporation transaction) or a
transaction in which the Company is the surviving entity but the
shares of the Company's capital stock outstanding immediately prior to
the transaction are exchanged or converted by virtue of the
transaction into other property, whether in the form of securities,
cash or otherwise or (B) a sale of all or substantially all of the
assets of the Company, or in either case, any such action with respect
to any subsidiary of the Company;
(iii) the making of any loan, advance or capital contribution
to, or investment in, or permitting or causing any subsidiary of the
Company to make any loan, advance or capital contribution to, or
investment in any of the officers, directors, employees, providers,
consultants, agents or other representatives of the Company, other
than (A) travel or salary advances in the ordinary course of business
in a manner consistent with past practice, and (B) loans evidenced by
promissory notes in connection with the purchase of Common Shares
under employment or restrictive stock purchase agreements or the
Investors' Rights Agreement;
(iv) any incurrence or assumption or permitting to exist of
or permitting or causing any subsidiary of the Company to incur or
assume or permit to exist any indebtedness for borrowed money
(including capitalized leases) other than the indebtedness owing to
(A) First Source Financial LLP pursuant to the terms of the Secured
Credit Agreement dated as of the date hereof by and between First
Source Financial LLP and GMH, (B) Equitable pursuant to the terms of
the Note and Warrant Purchase Agreement dated as of the date hereof by
and between Equitable, the Company and GMH, and (C) the RFE Group
pursuant to the terms of the Securities Purchase Agreement dated as of
the date hereof between and among the RFE Group, the Company and GMH
in excess of $2,600,000 in the aggregate, or the issuance of any debt
securities or the assumption, guarantee, endorsement (other than in
the ordinary course of business consistent with past practice) or
otherwise as an accommodation becoming responsible for, liabilities of
any other Person;
(v) any purchase, holding or owning, or permitting or
causing any subsidiary of the Company to purchase, hold or own any
capital stock, evidence of indebtedness or other security of any
subsidiary of the Company or other corporation, partnership or other
entity, unless such corporation, partnership or other entity is a
wholly owned subsidiary of the Company;
(vi) permitting or causing the Company, or any subsidiary of
the Company, to engage in any new line of business outside the
construction, manufacture, assembling, purchasing and selling all
types of manufactured buildings, structures and homes;
(vii) any authorization or issuance of any equity securities
of the Company, including any preferred stock, options or warrants to
purchase any such equity security;
(viii) any amendment or repeal of any provision of, the
addition of any provision to, or the waiver of any provision of the
Company's Certificate of Incorporation or By-Laws, or any alteration
or change in the rights, preferences, privileges or powers of, or the
restrictions provided for the benefit of, the Series A Preferred
Shares, or causing or permitting any subsidiary of the Company to do
the same;
(ix) the making of any acquisition of, or loan, advance or
capital contribution to, or investment in or permitting any subsidiary
of the Company to make any acquisition of, or loan, advance or capital
contribution to, or investment in any business entity, which,
individually or together with any related series of such transactions,
exceeds $1,000,000;
(x) the making of or permitting or causing any subsidiary of
the Company to make any capital expenditures in any one fiscal year in
excess of the sum of (A) $500,000 plus (B) the difference between
$500,000 and any unexpended amounts from prior years;
(xi) the entering into of any contract or transaction with an
Affiliate of the Company that does not deal at arm's length with the
Company or which exceeds $25,000 in amount, or causing or permitting
any subsidiary of the Company to do the same;
(xii) the reclassification of any shares of Common Stock or
any other shares of the Company into shares having any preference or
priority as to dividends or assets superior to or on a parity with any
such preference or priority of the Series A Preferred Stock; or
(xiii) the transfer of (A) any Shares of the Company held by
any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
Bulldog, (B) any membership interests in Bulldog held by SIHI-GMH LLC
or (C) any membership interest in SIHI-GMH LLC held by either ▇▇▇▇ ▇.
▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in each case in excess of 10% of the Shares
or membership interests originally held by them, in any transaction or
series of transactions, except for (I) transfers to Related
Transferees (or Persons who would be Related Transferees of SIHI-GMH
LLC, ▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ if they were parties to this
Agreement) and (II) transfers by Bulldog to the RFE Group pursuant to
the Investors Rights Agreement in any transaction or series of
transactions.
(b) REQUIRED STOCKHOLDER APPROVAL AFTER SERIES A PREFERRED SHARES ARE
REDEEMED. At any time during the term of this Agreement that there are no Series
A Preferred Shares outstanding, the approval by the affirmative vote or written
consent of the Stockholders holding not less than 70% of all of the issued and
outstanding Voting Shares shall be required to authorize any of the following:
(i) the repurchase or redemption of any of the Shares;
(ii) any amendment of the Certificate of Incorporation or By-Laws
of the Company or any consent by the Company to any amendment of the
Certificate of Incorporation or By-Laws of GMH;
(iii) any authorization of or any issuance of any authorized but
unissued capital stock of the Company, except the issuance of Securities
upon the exercise of the Warrants or upon conversion of any Series B
Preferred Shares;
(iv) any sale of the Company's entire interest in GMH;
(v) the sale, lease or exchange of all or substantially all of
the Company's assets or any consent by the Company to any sale, lease or
exchange by GMH of all or substantially all of the assets of GMH;
(vi) any merger or consolidation of the Company or GMH with or into
any other corporation;
(vii) the dissolution of the Company or GMH;
(viii) the adoption of a plan of liquidation of the Company or GMH;
(ix) any action by the Company to commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it or GMH, or
seeking to adjudicate it or GMH a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding up, liquidation,
dissolution, composition or other relief with respect to it or GMH or its
or GMH's debts, or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for it or GMH or for all or any
substantial part of its or GMH's assets, or making a general assignment for
the benefit of its or GMH's creditors;
(x) any recapitalization of the Company or GMH; or
(xi) except as provided in the Registration Rights Agreement, any
public offering of securities of the Company or any consent by the Company
to GMH authorizing any public offering of securities of GMH.
(c) Any of the actions described in Section 11(b)
above are herein referred to as a "Fundamental Change".
(d) For purposes of Section 11(a), as to any matter set forth therein
which requires the approval or consent of the Stockholders holding not less than
66-2/3% of all of the issued and outstanding Series A Preferred Shares, such
matter shall be deemed approved or consented to unless the Company shall have
received written notice from the requisite percentage of holders of Series A
Preferred Shares that they do not approve or consent to such matter within ten
(10) Business Days after the holders of the Series A Preferred Shares have
received a written request from the Company asking for such approval or consent.
12. SHARE AND WARRANT CERTIFICATES.
(a) RESTRICTIVE ENDORSEMENT. Each certificate representing
Securities now or hereafter held by a Stockholder shall be stamped with legends
in substantially the following form:
"THE SHARES [WARRANTS] REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS'
AGREEMENT DATED AS OF DECEMBER __, 1995, COPIES OF
WHICH ARE AVAILABLE AT THE OFFICE OF THE COMPANY
AND MAY BE INSPECTED BY ANY PROSPECTIVE TRANSFEREE
OF THE SHARES [WARRANTS] REPRESENTED HEREBY ON
REQUEST. SUCH STOCKHOLDERS' AGREEMENT PROVIDES,
AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION, MORTGAGE, CHARGE, LIEN,
ENCUMBRANCE, GIFT, BEQUEST, TRANSMISSION OR OTHER
DISPOSITION OF THE SHARES [WARRANTS] REPRESENTED
BY THIS CERTIFICATE."
THE SALE AND ISSUANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAW
OF ANY STATE OR OTHER JURISDICTION. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE
OFFERED, SOLD, PLEDGED, OR TRANSFERRED UNLESS (I)
A REGISTRATION STATEMENT UNDER THE ACT IS IN
EFFECT AS TO THESE SECURITIES AND SUCH OFFER,
SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH
APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION OR (II) THERE IS AN OPINION OF
COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE
CORPORATION, THAT AN EXEMPTION THEREFROM IS
AVAILABLE AND THAT SUCH OFFER, SALE, PLEDGE, OR
TRANSFER IS IN COMPLIANCE WITH APPLICABLE
SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.
Each Stockholder agrees that he or it will deliver all certificates for
Securities owned by him or it to the Company for the purpose of affixing such
legend thereto.
(b) REPLACEMENT CERTIFICATES. Upon presentation of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
certificate representing Securities and indemnity agreement reasonably
satisfactory to the Company, and upon reimbursement to the Company of all its
reasonable expenses incident thereto, and upon surrender of such certificate or
instrument, if mutilated, to the Company, each Stockholder agrees to use his or
its best efforts to cause the Company deliver a new certificate of like tenor in
lieu of such lost, stolen, destroyed or mutilated certificate.
13. NO DEFAULT. Notwithstanding anything to the contrary contained in
this agreement, none of the Stockholders shall take any action hereunder which
would cause the Company or any of its subsidiaries or Affiliates to breach any
material agreement to which the Company, such subsidiary or Affiliate is a
party.
14. PREEMPTIVE RIGHTS.
(a) In the event that the Company should determine to (i)
authorize and issue any shares of its capital stock or other equity securities
(other than securities issued (A) pursuant to the conversion of the Series B
Shares, (B) pursuant to the exercise of the Warrants, (C) pursuant to the
acquisition of another corporation by the Company or issued in connection with
any merger, consolidation, combination, purchase of all or substantially all of
the assets or other reorganization which has been approved by the Board of
Directors of the Company and the Stockholders in accordance with the provisions
of this Agreement, (D) pursuant to any rights or agreements, including without
limitation convertible securities, provided that the rights established by this
Section 14 apply with respect
to the initial sale or grant by the Company of such rights or agreements (other
than the rights or agreements described in clause (F) below), (E) in connection
with any stock split, stock dividend or recapitalization of the Company, (F) to
employees, consultants, officers or directors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or arrangement for
the primary purpose of soliciting or retaining such employees, consultants,
officers or directors services and which are outstanding on the date hereof or
are hereafter approved by the Board of Directors and the Stockholders in
accordance with the terms of this Agreement, and (G) in a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act, covering the offer and sale of securities for the
account of the Company and/or selling shareholders to the public) or (ii) to
reissue any treasury shares previously acquired by the Company, then the Company
shall notify each Stockholder holding Voting Shares and each Warrant holder of
such proposed offering and the price thereof, and for a period of 30 days after
such notice, each such Stockholder and Warrant holder may purchase a pro rata
(in accordance with the percentage of Voting Shares then held by such
Stockholder and Warrant holder) amount of the shares being offered by delivery
of the purchase price therefor to the Company. If any Stockholder or Warrant
holder does not accept the offer to purchase all of his or its pro rata share of
the shares being offered, the Company shall make one or more additional offers
of the remainder of such shares to Stockholders or Warrant holders who have
agreed to purchase all of the shares previously offered. Such additional offer
or offers shall be made for a period of 10 days to each of such Stockholders and
Warrant holders in the same ratio that the amount of shares which such
Stockholder or Warrant holder has agreed to purchase bears to the total amount
of shares which all Stockholders and Warrant holders to which such additional
offer or offers are made have agreed to purchase. Any shares not so purchased
may be sold
by the Company to a third party who agrees to be bound by the terms of this
Agreement and who shall become a Stockholder hereunder.
(b) For purposes of any calculation of the number of shares of
Voting Shares held or outstanding under this Section 14, the conversion of all
securities convertible into or exchangeable for Voting Shares and the exercise
of all outstanding rights, options and warrants to acquire Voting Shares shall
be assumed.
15. REGISTRATION RIGHTS. The Stockholders shall have the registration
rights set forth on Exhibit B hereto.
16. MISCELLANEOUS.
(a) NOTICES. Wherever this Agreement provides for notice to any
party (except as expressly provided to the contrary), it shall be given in
writing by messenger, electronic transmission, telegraph, telex or postage
prepaid, registered or recorded delivery, air mail letter sent to the address
set forth under each Stockholder's name at the foot of this Agreement, or to
such other address as the party affected may hereafter designate in writing to
the Company and all other Stockholders; together with a copy to the Company at
the address set forth at the foot of this Agreement. Any such notice shall be
effective when received by the party to whom addressed; provided that if given
or made by postage prepaid, registered or recorded delivery, airmail letter or
by telegraph or telex, it shall be deemed to have been received at the earlier
of (i) when actually received or (ii) five (5) business days after the same was
posted or sent (and in proving such it shall be sufficient to prove that the
envelope containing the same was properly addressed and posted as aforesaid or
sent), and provided that if given or made by telegraph or telex, it shall be
deemed to have been received at the time of dispatch.
(b) TERMINATION; AMENDMENT. This Agreement (i) may be terminated or
amended at any time by the written consent of the Company and the holders of
seventy percent (70%) of the Voting Shares and notice of
such to the Company and all Stockholders, provided that no amendment that
adversely affects the interest of any Stockholder shall be effective against
such Stockholder absent such Stockholder's prior written consent, and (ii) shall
be terminated (A) upon the consummation of (1) a registered public offering of
the Common Shares or (2) a Fundamental Change of the type described in Section
11(b)(iv), (vi), (vii), (viii) or (ix) of this Agreement or (B) ten years from
the date hereof, unless, at anytime within two years prior to any date upon
which termination would occur under this clause (B), all of the parties extend
its duration for an additional period, not to exceed ten years.
(c) WAIVER. No failure or delay on the part of the Stockholders or any
of them in exercising any right, power or privilege hereunder, and no course of
dealing between the Stockholders or any of them shall operate as a waiver
thereof nor shall any single or partial exercise of any right, power or
privilege hereunder preclude the simultaneous or later exercise of any other
right, power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Stockholders or
any of them would otherwise have. No notice to or demand in any case shall
entitle the recipient thereof to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Stockholders or any of them to take any other or further action in any
circumstances without notice or demand.
(d) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(e) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
(f) BENEFIT AND BINDING EFFECT. Except as expressly contemplated
herein, this Agreement may not be assigned or transferred.
This Agreement shall be binding upon and shall inure to the benefit of the
Company and each of the Stockholders and their respective executors,
administrators and personal representatives and heirs and their permitted
successors and assigns hereunder and shall be binding upon their successors and
assigns. In the event that any part of this Agreement shall be held to be
invalid or unenforceable, the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portions were not a
part hereof.
(g) FURTHER ASSURANCES. Each party hereto agrees to use its best
efforts to take, and to use its best efforts to cause the Company to take, any
action which may be reasonably requested by any other party hereto in order to
effectuate or implement the provisions of this Agreement; provided that no party
shall be required to take any requested action or cause the Company to take any
requested action not specifically required under this Agreement if such
requested action might adversely affect the interest of such party or the
Company.
(h) SPECIFIC PERFORMANCE. Due to the fact that the Securities cannot
be readily purchased or sold in the open market, and that legal remedies may be
inadequate to enforce this Agreement, the parties will be irreparably damaged in
the event that this Agreement is not specifically enforced. In the event of a
breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by any of the parties hereto, the other parties shall, in addition to
all other remedies, be entitled to a temporary or permanent mandatory
injunction, or any appropriate decree of specific performance, without any bond
or security being required and without being required to show any actual damage
or that monetary damages would not provide an adequate remedy.
(i) VOTING PERCENTAGES. Whenever any provision in this Agreement
provides for a specified percentage of Voting Shares to authorize or approve any
action, such percentage shall be calculated as if all Warrants had been
exercised and all shares convertible into Voting Shares had been converted. In
addition, each member of the RFE Group hereby grants to Bulldog the right to
vote 29.1667% of the Series B Preferred Shares and/or Class C Common Shares held
by it as if it were the record and beneficial owner thereof; provided, however,
that the rights granted to Bulldog under this sub-paragraph (i) shall not affect
the calculation of the number of Voting Shares owned by any member of the RFE
Group for purposes of any other provision of this Agreement; and provided,
further, that if Bulldog distributes the Series B Preferred Shares or Class C
Common Shares owned by it, the voting rights granted in this sub-paragraph (i)
shall cease to apply.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the day and year first above written.
GMH HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
A STOCKHOLDERS:
---------------
BULLDOG HOLDINGS LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RFE INVESTMENT PARTNERS, V, L.P.
By: RFE Associates V, L.P., general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: General Partner
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
STERLING COMMERCIAL CAPITAL, INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice-
President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
STATE TREASURER OF THE STATE OF MICHIGAN,
CUSTODIAN OF THE MICHIGAN PUBLIC SCHOOL
EMPLOYEES' RETIREMENT SYSTEM, STATE EMPLOYEES
RETIREMENT SYSTEM, MICHIGAN STATE POLICE
RETIREMENT SYSTEM, AND MICHIGAN JUDGES'
RETIREMENT SYSTEM
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Administrator
Alternate Investments Division
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
UNITED STATES
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Investment Officer
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B STOCKHOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Joint Tenant with ▇▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DREW ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
Drew ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Joint Tenant with
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT A
SCHEDULE OF STOCKHOLDERS
STOCKHOLDER NUMBER OF SHARES GROUP
SERIES A SERIES B CLASS A CLASS B CLASS C
PREFERRED PREFERRED COMMON COMMON COMMON WARRANTS
Bulldog Holdings LLC 1,400,000 A
RFE Investments
Partners V, L.P. 4,690,351 439,720 714,546 A
State Treasurer of
the State of
Michigan, Custodian 3,076,922 288,462 468,750 A
Sterling Commercial
Capital, Inc. 232,727 21,818 35,454 A
The Equitable Life
Assurance Society of
the United States 350,000 A
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 54,687 A
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 54,687 A
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 54,688 A
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 54,688 A
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
as joint tenants 92,749 B
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
as Trustee 71,167 B
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 71,167 B
Drew ▇▇▇▇ ▇▇▇▇▇ 71,167 B
▇▇▇▇▇▇ ▇▇▇▇▇▇ 28,000 B
▇▇▇▇▇ ▇▇▇▇▇▇▇ 28,000 B
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 21,000 B
▇▇▇▇▇ ▇▇▇▇▇▇▇ 14,000 B
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇ 14,000 B
▇▇▇▇▇ ▇▇▇▇▇ 13,125 B
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 13,125 B
_________ _________ _________ ________ ______ _______
TOTAL 8,000,000 2,150,000 1,656,250 0 0 568,750
EXHIBIT B
REGISTRATION RIGHTS
1. DEFINITIONS. Capitalized terms used without definition in
this Exhibit B shall have the meanings set forth in the Stockholders'
Agreement to which this Exhibit B is attached. The following terms shall
have the following respective meanings:
COMMISSION: the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act or the
Exchange Act, whichever is the relevant statute for the particular purpose.
Equitable Initiating Holders: any holder or holders of more
than 50% of the Warrants.
EXCHANGE ACT: the Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time of
determination.
INITIATING HOLDERS: each of (a) The Equitable Initiating
Holders and (b) the RFE Initiating Holders, together with their successors
and permitted assigns.
IPO: the issuance by the Company in a Public Offering under
the Act of a number of shares of Common Stock such that, after giving
effect to such Public Offering, there shall be outstanding pursuant to one
or more such Public Offerings shares of Common Stock equal to at least 20%
of the capital stock of the Company on a fully-diluted basis.
OTHER SECURITIES: any stock (other than Common Stock) and
other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled
to receive, or shall have received, upon the exercise of the Warrants, in
lieu of or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 3 of the Warrant
Agreement or otherwise.
PUBLIC OFFERING: any offering of Common Stock or Other
Securities, or any securities issued or issuable with respect to any Common
Stock or Other Securities by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise, in each case to the
public pursuant to an effective registration statement under the Act.
REGISTRABLE SECURITIES: (a) any shares of Common Stock
issued and outstanding as of the date hereof, (b) the Warrants, (c) any
shares of Common Stock or Other Securities issued or issuable upon exercise
of the Warrants or upon conversion of the Series B Preferred Shares and (d)
any securities issued or issuable with respect to any Common Stock or Other
Securities referred to in subdivision (c) by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any
particular Registrable Securities, once issued such securities shall cease
to be Registrable Securities when (x) a registration statement with respect
to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (y) they shall have been sold
as permitted under Rule 144 (or any successor provision) under the
Securities Act, or (z) they shall have ceased to be outstanding.
REGISTRATION EXPENSES: all expenses incident to the
Company's performance of or compliance with the provisions of this Exhibit
B, including, without limitation, all registration, filing and NASD fees,
all fees and expenses of complying with securities or blue sky laws, all
word processing, duplicating and printing expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special
audits or "cold comfort" letters required by or incident to such
performance and compliance, the reasonable fees and disbursements of a
single counsel and single firm of accountants retained by the holders of
the Registrable Securities being registered, premiums and other costs of
policies of insurance against liabilities arising out of the public
offering of the Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts, commissions, transfer
taxes and any other compensation paid to underwriters or other agents or
brokers to effect the sale, if any, PROVIDED
that, in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include salaries of Company personnel or
general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters of the
Company, or other expenses for the preparation of financial statements or
other data normally prepared by the Company in the ordinary course of its
business or which the Company would have incurred in any event.
REQUESTING HOLDER: the meaning in paragraph 7.
RFE INITIATING HOLDERS: RFE and Michigan.
WARRANT AGREEMENT: the Common Stock Purchase Warrant
expiring December 21, 2002 issued by the Company.
WARRANTS: the meaning specified in the opening paragraph of
the Warrant Agreement.
2. REGISTRATION ON REQUEST.
(a) REQUEST. At any time and from time to time after the
180th day following the consummation of an IPO, upon the written request of
one or more Initiating Holders, requesting that the Company effect the
registration under the Securities Act of all or part of such Initiating
Holders' Registrable Securities and specifying the intended method of
disposition thereof, the Company will promptly give written notice of such
requested registration to all holders of outstanding Registrable
Securities, and thereupon will use its best efforts to effect its
registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holder or Holders for
disposition in accordance with the intended method of disposition
stated in such request; and
(ii) all other Registrable Securities the Holders of which
have made written requests to the Company for registration thereof
within 20 Business Days after the giving of such written notice by the
Company (which request shall specify the intended method of
disposition thereof),
all to the extent required to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered; PROVIDED that the Company shall not be required to effect
the registration pursuant to this Section 2 of any Warrants (but shall be
required to effect the registration of Registrable Securities described in
clauses (b) and (c) of the definition of Registrable Securities), and
PROVIDED, FURTHER, that any holder of Registrable Securities to be included
in any such registration, may, by written notice to the Company within 10
Business Days after its receipt of a copy of a notice from the managing
underwriter delivered pursuant to paragraph (g) below, withdraw such
request and, on receipt of such notice of the withdrawal of such request
from holders comprising at least a majority of the holders of Registrable
Securities to be included in such registration, the Company may elect not
to effect such registration. Subject to paragraph (g) below, the Company
may include in such registration other securities for sale for its own
account or for the account of any other Person.
(b) NUMBER OF REGISTRATIONS. The Company shall not be
required to effect more than two registrations for the RFE Initiating
Holders and two registrations for the Equitable Initiating Holders pursuant
to this Section 2, PROVIDED that such registrations, taken together, shall
permit the disposition of at least 80% of the Registrable Securities which
the Company has been so requested to register, and PROVIDED, FURTHER, that
if two such registrations shall not permit the disposition of at least 80%
of such Registrable Securities, the Company shall be required to effect
additional registrations pursuant to this Section 2 until they have
permitted the disposition of at least 80% of such Registrable Securities.
(c) REGISTRATION STATEMENT FORM. Registrations under this
Section 2 shall be on such appropriate registration form of the Commission
(i) as shall be selected by the Company and as shall be acceptable to at
least a majority of the holders of Registrable Securities to be included in
such registration and (ii) as shall permit the disposition of the
Registrable Securities which the Company has been requested to register
under this Section 2 in accordance with the intended method or methods of
disposition specified in the request for their registration. The Company
may, if permitted by law, effect any registration requested under this
Section 2 by the filing of a registration statement on Form S-3 (or any
successor or similar short form registration statement) unless the holders
holding at least a majority (by number of shares) of the Registrable
Securities as to which such registration relates (and, if such registration
involves an underwritten Public Offering of such Registrable Securities,
the managing underwriter of such Public Offering) shall notify the Company
in writing that, in the judgment of such holders (and, if applicable, such
managing underwriter), the use of a more detailed form specified in such
notice is of material importance to the success of the Public Offering of
such Registrable Securities, in which case such registration shall be
effected on the form so specified. Upon the request of at least a majority
of the holders of Registrable Securities, registration under this Section 2
shall be by means of a shelf registration pursuant to Rule 415 under the
Securities Act (but only if the Company is then eligible to use Form S-2 or
S-3 (or any successor forms)).
(d) EXPENSES. The Company will pay all Registration
Expenses in connection with the first two registrations for each of the RFE
Initiating Holders and the Equitable Initiating Holders effected pursuant
to this Section 2, and, if such registrations, taken together, shall not
permit the disposition of at least 80% of the Registrable Securities which
the Company has been requested to register under this Section 2, the
Company will pay all Registration Expenses in connection with each
additional registration pursuant to this Section 2 until such
registrations, taken together, shall have permitted the disposition of at
least 80% of such Registrable Securities.
(e) SELECTION OF UNDERWRITERS. If, in the discretion of
the holders of a majority (by number of shares) of the Registrable
Securities, any offering pursuant to this Section 2 shall constitute an
underwritten offering, the underwriter or underwriters thereof shall be
selected, after consultation with such holders, by the Company and shall be
acceptable to the holders of at least a majority of the holders of
Registrable Securities to be included in such offering, who shall not
unreasonably withhold their acceptance of such underwriter or underwriters.
(f) EFFECTIVE REGISTRATION STATEMENT. A registration
requested pursuant to this Section 2 will not be deemed to have been
effected and a demand shall not be deemed to have been made (i) unless it
has become effective, (ii) if the registration does not remain effective
for a period of at least 120 days (or, with respect to any registration
statement filed pursuant to Rule 415 under the Securities Act, for a period
of at least 2 years) or, if earlier, until all the Registrable Securities
requested to be registered in connection therewith were sold, (iii) if,
after it has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or
other governmental agency or court, or (iv) if the conditions to closing
specified in the purchase agreement or underwriting agreement entered into
in connection with such registration are not satisfied other than by reason
of some act or omission by such Initiating Holders.
(g) PRIORITY IN REQUESTED REGISTRATIONS. If a requested
registration pursuant to this Section 2 involves an underwritten offering,
and the managing underwriter shall advise the Company in writing (with a
copy to each holder of Registrable Securities requesting registration)
that, in its opinion, the number of securities requested to be included in
such registration (including securities of the Company which are not
Registrable Securities) exceeds the number which can be sold in such
offering, the Company will include in any such registration to the extent
of the number which the Company is so advised can be sold in such offering
(i) first, Registrable Securities requested to be included in such
registration by the holder or holders of Registrable Securities who are
Initiating Holders, pro rata among such holders on the basis of the number
of Registrable Securities requested to be included by such holders, and
(ii) second, other securities of the Company proposed to be included in
such registration, in accordance with the priorities, if any, then existing
among the Company and the holders of such other securities.
3. INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES.
Notwithstanding any limitation contained in Section 2, if the Company at
any time proposes to register any of its securities under the Securities
Act (other than by a registration on Form S-4 or S-8 or any successor or
similar forms), whether or not for sale for its own account, in a manner
which would permit registration of Registrable Securities for sale to the
public under the Securities Act, each such time, it will give prompt
written notice to all holders of Registrable Securities of its intention to
do so and of such holders' rights under this Section 3. Upon the written
request of any such holder made within 20 days after receipt of any such
notice (which request shall specify the Registrable Securities intended to
be disposed of by such holder and the intended method of disposition
thereof), the Company will use its best efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company
has been so requested to register by the holders thereof, to the extent
requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered, by inclusion of such Registrable Securities in the registration
statement which covers the securities which the Company proposes to
register, PROVIDED that (i) the Company shall not be required to effect the
registration pursuant to this Section 3 of any Warrants (but shall be
required to effect the registration of Registrable Securities described in
clauses (b) and (c) of the definition of Registrable Securities) and (ii)
if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (x)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith), without prejudice, however, to the rights of any
holder or holders of Registrable Securities entitled to request that such
registration be effected as a registration under Section 2, and (y) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities. No registration effected under this
Section 3 shall relieve the Company of its obligation to effect any
registration statement upon request under Section 2. The Company will pay
all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 3.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. If a
registration pursuant to this Section 3 involves an underwritten offering
and the managing underwriter advises the Company in writing that, in its
opinion, the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, the
Company will include in such registration, to the extent of the number
which the Company is so advised can be sold in such offering, securities
determined as follows:
(i) if such registration as initially proposed by the
Company was solely a primary registration of its securities, (x)
first, the securities proposed by the Company to be sold for its own
account, (y) second, any Registrable Securities requested to be
included in such registration, pro rata among the holders thereof
requesting such registration on the basis of the number of shares of
Registrable Securities requested to be included by such holders and
(z) third, any other securities of the Company proposed to be included
in such registration, pro rata among the holders thereof requesting
such registration on the basis of the number of shares of such
securities requested to be included by such holders; and
(ii) if such registration as initially proposed by the
Company was in whole or in part requested by holders of securities of
the Company, other than holders of Registrable Securities, pursuant to
Section 2 hereof, such securities held by the holders initiating such
registration, any Registrable Securities requested to be included in
such registration, and any other securities of the Company proposed to
be included in such registration, pro rata among the holders thereof
requesting such registration on the basis of the number of shares of
such securities requested to be included by such holders.
4. REGISTRATION PROCEDURES. If and whenever (a) the
Company is required to use its best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Sections
2 and 3 or (b) there is a Requesting Holder in connection with any other
proposed registration by the Company under the Securities Act, the Company
will as expeditiously as possible:
(i) prepare and file with the Commission the requisite
registration statement (including such audited financial statements as
may be required by the Securities Act or the rules and regulations
promulgated thereunder) to effect such registration and use its best
efforts to cause such registration statement to become effective,
PROVIDED that before filing such registration statement or any
amendments thereto, the Company will furnish to the counsel selected
by the holders of Registrable Securities whose Registrable Securities
are to be included in such registration copies of all such documents
proposed to be filed, which documents will be subject to the review of
such counsel, and PROVIDED, FURTHER, that the Company may discontinue
any registration of its securities which are not Registrable
Securities at any time prior to the effective date of the registration
statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to maintain the effectiveness
of such registration statement and to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement until the earlier of (A) such
time as all of such securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (B) the
expiration of 120 days after such registration statement becomes
effective, except with respect to any such registration statement
filed pursuant to Rule 415 (or any successor Rule) under the
Securities Act, in which case such period shall be 2 years;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement and each Requesting Holder such number
of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such seller may
reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions as each seller thereof and each Requesting Holder
shall reasonably request, to keep such registration or qualification
in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (iv)
be obligated to be so qualified or to consent to general service of
process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities and
each Requesting Holder a signed counterpart, addressed to such seller
(and the underwriters, if any), of
(A) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten Public Offering, dated the
date of any closing under the underwriting agreement), reasonably
satisfactory in form and substance to such seller, and
(B) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration includes
an underwritten Public Offering, dated the date of any closing
under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial
statements included in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered
to the underwriters in underwritten Public Offerings of securities
and, in the case of the accountants' letter, such other financial
matters, as such seller (or the underwriters, if any) may reasonably
request;
(vii) immediately notify each seller of such Registrable
Securities, and (if requested by any such seller) confirm such advice
in writing, (A) when the prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to the
registration statement or any post-effective amendment, when the same
has become effective, (B) of any request by the Commission for
amendments or supplements to the registration statement or the
prospectus or for additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that
purpose and (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(viii) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at
the earliest possible time;
(ix) immediately notify each holder of Registrable Securities
covered by such registration statement and each Requesting Holder, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made, and at the request of any such holder promptly prepare and
furnish to such seller a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made;
(x) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after
the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act, and not file any amendment or supplement to such
registration statement or prospectus to which any such seller or any
Requesting Holder shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects
with the requirements of the Securities Act or of the rules or
regulations thereunder, having been furnished with a copy thereof at
least five business days prior to the filing thereof;
(xi) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement not later than the effective date of such registration
statement;
(xii) cooperate with the sellers of such Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which
securities shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company; and
enable such Registrable Securities to be in such denominations and
registered in such names as such sellers may request at least two
Business Days prior to any sale of Registrable Securities;
(xiii) use its best efforts (A) to cause all such Registrable
Securities covered by such registration statement to be listed on a
national securities exchange (if such Registrable Securities are not
already so listed) and on each additional national securities exchange
on which similar securities issued by the Company are then listed, if
the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (B) to secure designation of all such
Registrable Securities covered by such registration statement as a
NASDAQ "national market system security" within the meaning of Rule
llAa2-1 of the Commission or, failing that, secure NASDAQ
authorization for such Registrable Securities and, without limiting
the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities
with the NASD;
(xiv) provide a CUSIP number for all Registrable Securities,
not later than the effective date of the applicable registration
statement; and
(xv) enter into such agreements and take such other actions
as the Requisite Holders shall reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities.
The Company may require each holder of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such holder and the distribution of such securities as the
Company may from time to time reasonably request in writing.
5. UNDERWRITTEN OFFERINGS.
(a) REQUESTED UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offering by holders of Registrable
Securities pursuant to the registration requested under Section 2, the
Company will enter into an underwriting agreement with such underwriters
for such offering, such agreement to be satisfactory in substance and form
to each such holder and the underwriters and to contain such
representations and warranties by the Company and such other terms as are
customarily contained in agreements of this type, including, without
limitation, indemnities to the effect and to the extent provided in Section
8. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to such underwriting agreement and may, at
their option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the benefit of
such holders of Registrable Securities and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. No holder of Registrable Securities
shall be required (i) to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder and such holder's intended
method of distribution and any other representation required by law or (ii)
to indemnify (or to contribute with respect to an indemnifiable claim) the
Company or any underwriters of the Registrable Securities, except as set
forth in Section 8.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at
any time proposes to register any of its securities under the Securities
Act as contemplated by Section 3 and such securities are to be distributed
by or through one or more underwriters, the Company will, subject to the
provisions of Section 3(b), use its best efforts, if requested by any
holder of Registrable Securities, to arrange for such underwriters to
include the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters. The holders
of Registrable Securities to be distributed by such underwriters shall be
parties to the underwriting agreement between the Company and such
underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such holders of Registrable Securities and that
any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to
the obligations of such holders of Registrable Securities. No holder of
Registrable Securities shall be required (i) to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holder and such
holder's intended method of distribution and any other representation
required by law or (ii) to indemnify (or to contribute with respect to an
indemnifiable claim) the Company or any underwriters of the Registrable
Securities, except as set forth in Section 8.
(c) HOLDBACK AGREEMENTS.
(i) Each holder of Registrable Securities agrees, if so
required by the managing underwriter, not to effect any public sale or
distribution of securities of the Company of the same class as the
securities included in such Registration Statement, during the seven
days prior to the date on which any underwritten registration pursuant
to Section 2 or 3 has become effective and the 90 days thereafter,
except as part of such underwritten registration or to the extent that
such holder is prohibited by applicable law from agreeing to withhold
Registrable Securities from sale or is acting in its capacity as a
fiduciary or an investment adviser. Without limiting the scope of the
term "fiduciary," a holder shall be deemed to be acting as a fiduciary
or an investment adviser if its actions or the Registrable Securities
proposed to be sold are subject to ERISA, the Investment Company Act
of 1940 or the Investment Advisers Act of 1940 or if such Registrable
Securities are held in a separate account under applicable insurance
law or regulation.
(ii) The Company agrees (A) not to effect any public sale or
distribution of its equity securities or securities convertible into
or exchangeable or exercisable for any of such securities during the
seven days prior to the date on which any underwritten registration
pursuant to Section 2 or 3 has become effective and the 90 days
thereafter, except as part of such underwritten registration and
except pursuant to registrations on Form S-4 or S-8 or any successor
or similar forms thereto, and (B) to cause each holder of its equity
securities or of any securities convertible into or exchangeable or
exercisable for any of such securities, in each case purchased from
the Company at any time after the date of this Agreement (other than
in a Public Offering), to agree not to effect any such public sale or
distribution of such securities, during such period, except as part of
such underwritten registration.
6. PREPARATION; REASONABLE INVESTIGATION. In connection with
the preparation and filing of each registration statement under the
Securities Act, the Company will give the holders of Registrable Securities
to be registered under such registration statement, their underwriters, if
any, each Requesting Holder and one firm of counsel and accountants on
behalf of such Requesting Holders, the opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of such holders'
and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company agrees
to include in any such registration statement all information which any
holder of Registrable Securities being registered, upon advice of counsel,
shall reasonably request.
7. RIGHTS OF REQUESTING HOLDERS. The Company will not file any
registration statement under the Securities Act, whether or not pursuant to
registration rights granted to other holders of its securities and whether
or not for sale for its own account (other than by a registration on Form
▇-▇, ▇-▇ or any successor form thereto), unless it shall first have given
to each Person which holds any Registrable Securities issued by the Company
at least 30 days' prior written notice thereof. Any such holder who shall
so request within 30 days after such notice (a "Requesting Holder") shall
have the rights of a Requesting Holder provided in Sections 4, 6 and 8. In
addition, if any registration statement refers to any Requesting Holder by
name or otherwise as the holder of any securities of the Company, then such
holder shall have the right to require (A) the insertion therein of
language, in form and substance reasonably satisfactory to such holder, to
the effect, if true, that the holding by such holder of such securities
does not necessarily make such holder a "controlling person" of the Company
within the meaning of the Securities Act and is not to be construed as a
recommendation by such holder of the investment quality of the Company's
debt or equity securities covered thereby and that such holding does not
imply that such holder will assist in meeting any future financial
requirements of the Company, or (B) in the event that such reference to
such holder by name or otherwise is not required by the Securities Act or
any rules and regulations promulgated thereunder, the deletion of the
reference to such holder.
8. INDEMNIFICATION.
(a) The Company will, and hereby does, indemnify, to the
extent permitted by applicable law, each holder of Registrable Securities
and its Affiliates and their respective officers and directors, if any, and
each Person, if any, who controls such holder within the meaning of Section
15 of the Securities Act, against all losses, claims, damages, liabilities
(or proceedings in respect thereof) and expenses (under the Securities Act
or common law or otherwise), joint or several, caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities (or proceedings in respect thereof) or
expenses are caused by any untrue statement or alleged untrue statement
contained in or by any omission or alleged omission from information
furnished in writing to the Company by such holder expressly for use
therein. If the offering pursuant to any registration statement provided
for under this Agreement is made through underwriters, no action or failure
to act on the part of such underwriters (whether or not any such
underwriter is an Affiliate of any holder of Registrable Securities) shall
affect the obligations of the Company to indemnify any holder of
Registrable Securities or any other Person pursuant to the preceding
sentence. If the offering pursuant to any registration statement provided
for under this Agreement is made through underwriters, the Company agrees
to enter into an underwriting agreement in customary form with such
underwriters, and the Company agrees to indemnify such underwriters, their
officers and directors, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act to the
same extent as hereinbefore provided with respect to the indemnification of
the holders of Registrable Securities; PROVIDED that the Company shall not
be required to indemnify any such underwriter, or any officer or director
of such underwriter or any Person who controls such underwriter within the
meaning of Section 15 of the Securities Act, to the extent that the loss,
claim, damage, liability (or proceedings in respect thereof) or expense for
which indemnification is claimed results from such underwriter's failure to
send or give a copy of the amended or supplemented final prospectus to the
Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the
sale of Registrable Securities to such Person if such statement or omission
was corrected in such amended or supplemented final prospectus prior to
such written confirmation and the underwriter was given notice of the
availability of such amended or supplemented final prospectus.
(b) In connection with any registration statement in which
a holder of Registrable Securities is participating, each such holder will
indemnify, to the extent permitted by applicable law, the Company, its
officers and directors and each Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages, liabilities (or proceedings in respect thereof) and
expenses (under the Securities Act, common law or otherwise), caused by any
untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in
the registration statement or prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement
is contained in or such omission is from information so furnished in
writing by such holder expressly for use therein; PROVIDED that such
holder's obligations hereunder shall be limited to an amount equal to the
net proceeds to such holder of the Registrable Securities sold pursuant to
such registration statement.
(c) Any Person entitled to indemnification under the
provisions of this Section 8 shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification (but the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 8, except to the extent
that the indemnifying party is actually prejudiced by such failure) and
(ii) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in
respect of such claim, permit such indemnifying party to assume the defense
of such claim, with counsel reasonably satisfactory to the indemnified
party; and if such defense is so assumed, such indemnifying party shall not
enter into any settlement without the consent of the indemnified party if
such settlement attributes liability to the indemnified party, and such
indemnifying party shall not be subject to any liability for any settlement
made without its consent (which shall not be unreasonably withheld); and
any underwriting agreement entered into with respect to any registration
statement provided for under this Agreement shall so provide. In the event
an indemnifying party shall not be entitled, or elects not, to assume the
defense of a claim, such indemnifying party shall not be obligated to pay
the fees and expenses of more than one counsel or firm of counsel for all
parties indemnified by such indemnifying party in respect of such claim,
unless in the reasonable judgment of any such indemnified party a conflict
of interest may exist between such indemnified party and any other of such
indemnified parties in respect to such claim. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on
behalf of a participating holder of Registrable Securities, its officers,
directors or any Person, if any, who controls such holder as aforesaid, and
shall survive the transfer of such securities by such holder.
(d) If the indemnification provided for in this Section 8
shall for any reason be held by a court to be unavailable to an indemnified
party under Section 8(a) or (b) hereof in respect of any loss, claim,
damage or liability, or any action in respect thereof, then, in lieu of the
amount paid or payable under Section 8(a) or (b), the indemnified party and
the indemnifying party under Section 8(a) or (b) shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same),
(i) in such proportion as is appropriate to reflect the relative fault of
the Company and the prospective sellers of Registrable Securities covered
by the registration statement which resulted in such loss, claim, damage or
liability, or action or proceeding in respect thereof, with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action or proceeding in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company and such prospective sellers from the offering of the securities
covered by such registration statement, PROVIDED, that for purposes of
clauses (i) or (ii), the relative benefits received by the prospective
sellers shall be deemed not to exceed the amount of proceeds received by
such prospective sellers, and no holder of Registrable Securities shall be
required to contribute any amount in excess of the amount such holder would
have been required to pay to an indemnified party if the indemnity under
subsection (b) of this Section 8 was available. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. Such sellers' obligations
to contribute as provided in this Section 8(d) are several in proportion to
the relative value of their respective Registrable Securities covered by
such registration statement and not joint. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any settlement
of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Indemnification and contribution similar to that
specified in the preceding subdivisions of this Section 8 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification
of securities under any federal or state law or regulation of any
governmental authority other than the Securities Act.
(f) An indemnifying party shall make payments of all
amounts required to be made pursuant to the foregoing provisions of this
Section 8 to or for the account of the indemnified party from time to time
promptly upon receipt of bills or invoices relating thereto or when
otherwise due or payable, subject to an undertaking by the Indemnified
Party to repay all such amounts if a court of competent jurisdiction
determines that such Indemnified Party is not entitled to indemnity or the
benefits of contribution hereunder.
9. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not effect or permit to occur any combination or subdivision of shares
which would adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in any registration of
its securities contemplated by this Exhibit B or the marketability of such
Registrable Securities under any such registration.
10. REGISTRATION RIGHTS TO OTHERS. The Company shall not,
without the prior written consent of the holders of a majority of
Registrable Securities, provide to any holder of any securities of the
Company rights with respect to the registration of such securities under
the Act which are more favorable to such holder than the terms and
conditions provided in this Exhibit B to holders of Registrable Securities.
The Company shall provide to the holders of Registrable Securities copies
of any agreements which purport to grant rights with respect to the
registration of any of the Company's securities to any holder or
prospective holder thereof promptly upon executing the same.
11. OTHER REGISTRATION OF COMMON STOCK. If any shares of the
Common Stock required to be reserved for purposes of issuance upon exercise
of the Warrants in connection with their sale in a registration pursuant to
Section 2 or 3 require registration with or approval of any governmental
authority under any federal or state law (other than the Securities Act)
before such shares may be issued upon such exercise, the Company will, at
its expense and as expeditiously as possible, use its best efforts to cause
such shares to be duly registered or approved, as the case may be.
12. NOMINEES FOR BENEFICIAL OWNERS. For purposes of this
Exhibit B, in the event that any Registrable Securities are held by a
nominee for the beneficial owner thereof, the beneficial owner thereof may,
at its election, be treated as the holder of such Registrable Securities
for purposes of any request or other action by any holder or holders of
Registrable Securities pursuant to this Exhibit B or any determination of
any number or percentage of shares of Registrable Securities held by any
holder or holders of Registrable Securities contemplated by this Exhibit B.
If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such
owner's beneficial ownership of such Registrable Securities.
13. RULE 144 AND RULE 144A. The Company shall take all actions
reasonably necessary to enable holders of Registrable Securities to sell
such securities without registration under the Securities Act within the
limitation of the provisions of Rule 144 and Rule 144A under the Securities
Act, as such Rules may be amended from time to time, or any similar rules
or regulations hereafter adopted by the Commission, including, without
limitation, filing on a timely basis all reports required to be filed
pursuant to the Exchange Act.
14. TRANSFER; ASSIGNMENT. Upon a transfer of Registrable
Securities by the holder thereof, the rights granted hereunder to the
holders of Registrable Securities may be transferred to such transferee.
15. AMENDMENT. Notwithstanding the provisions of the
Stockholders Agreement to which this Exhibit B is attached, this Exhibit B
may not be amended or modified without the prior written consent of holders
of more than 50% of the Registrable Securities. Any approval, action or
waiver of any provision contained in this Exhibit B shall require the prior
approval or consent of holders of more than 50% of the Registrable
Securities, and upon receiving such approval or consent, such approval,
action or waiver shall be binding upon all holders of Registrable
Securities; provided, that if any amendment is adverse to any holder of
Registrable Securities, the same must be approved by such holder.
