EXHIBIT 10.2
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT ("Agreement"), dated as ofJune 16,
1999, is by and among MCII Holdings (USA), Inc., a Delaware corporation (the
"Company"), Xxxxxx Xxxxxxxxxx & Xxxx Fund III, L.P. ("JLL"), CIBC WG Argosy
Merchant Fund 2, L.L.C., ("CIBC Argosy"), Co-Investment Merchant Fund 3, LLC
("CMF" and, together with CIBC Argosy, "CIBC"), Consorcio G Grupo Xxxx, S.A. de
C.V., a corporation organized under the laws of the United Mexican States
("Xxxx"), and Xx. Xxxxxx Xxxxx Xxxxxx (JLL, Xxxx, CIBC Argosy, CMF and Xx.
Xxxxxx Xxxxx Xxxxxx being referred to herein as a "Stockholder" and collectively
being referred to herein as the "Stockholders").
W I T N E S S E T H
WHEREAS, pursuant to the Investment Agreement (the "Investment
Agreement") dated as of June 11, 1999, by and among JLL, CIBC and Xxxx, JLL and
CIBC, collectively acquired, among other things, an aggregate of 610,000 shares
of voting common stock, par value $0.01 per share (the "Voting Common Stock") of
the Company and convertible non-voting common stock, par value $0.01 per shares
(the "Non-Voting Common Stock" and, together with the Voting Common Stock, the
"Common Stock") of the Company (collectively, the "Investment") and,
simultaneously therewith, the Company repurchased from Xxxx 610,000 shares of
Voting Common Stock in exchange for cash and certain other consideration
(capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Investment Agreement);
WHEREAS, upon consummation of the Investment, JLL and CIBC
collectively will own approximately 61% of the outstanding Common Stock and Xxxx
will own approximately 39% of the outstanding Common Stock, in each case,
without giving effect to the adoption of the Stock Option Plan or the issuance
of the Warrants; and
WHEREAS, in connection with the transactions contemplated by
the Investment Agreement, the Company and each Stockholder desire to enter into
this Agreement to memorialize certain agreements of the Stockholders as to the
corporate governance of the Company, all in accordance with the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
of
which is hereby acknowledged, and intending to be legally bound, the parties
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms shall have
the following meanings:
(a) The term "APPLICABLE PERCENTAGE" shall mean, with respect
to any Stockholder, at the time of any issuance and sale of Common Stock by the
Company, a number equal to the quotient of (i) the total number of shares of
Common Stock held by such Stockholder immediately prior to such issuance and
sale, divided by (ii) the aggregate number of shares of Common Stock outstanding
immediately prior to such issuance and sale.
(b) The term "COMMISSION" shall mean the United States
Securities and Exchange Commission or any successor agency.
(c) The term "EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(d) The term "INITIAL PUBLIC OFFERING" shall mean the first
Public Offering (as hereinafter defined) of shares of Common Stock.
(e) The term "PERMITTED TRANSFEREE" shall mean, with respect
to each Stockholder bound by the terms of this Agreement, (i) any other
Stockholder; (ii) any descendant, Affiliate or Associate (each, as defined in
Rule 405 of the Securities Act (as hereinafter defined)) of such Stockholder or
any Permitted Transferee of such Affiliate; (iii) the Company; (iv) in the event
of the dissolution, liquidation or winding up of any such Stockholder that is a
corporation or a partnership, the partners of a partnership that is such
Stockholder, the stockholders of a corporation that is such Stockholder or a
successor partnership all of the partners of which or a successor corporation
all of the stockholders of which are the Persons (as hereinafter defined) who
were the partners of such partnership or the stockholders of such corporation
immediately prior to the dissolution, liquidation or winding up of such
Stockholder; (v) a transferee by testamentary or intestate disposition; (vi) a
transferee by INTER VIVOS transfer to the transferring Person's spouse, children
and/or other lineal descendants; (vii) a trust transferee by INTER VIVOS
transfer, the beneficiaries of which are the transferring Person, spouse,
children and/or other lineal descendants; or (viii) a successor nominee or
trustee for the beneficial owner of the Shares
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(as hereinafter defined) for which such Person acts as nominee or trustee, as
the case may be.
(f) The term "PERSON" shall mean any individual, firm,
corporation, partnership, limited liability company or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(g) The term "PUBLIC OFFERING" shall mean a public offering of
equity securities of the Company pursuant to an effective registration statement
under the Securities Act.
(h) The term "REGISTRABLE SECURITIES" shall mean (i) the
Shares and (ii) additional shares of Common Stock acquired by one or more
Stockholders after the date hereof. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (i) a registration
statement registering such securities under the Securities Act has been declared
effective and such securities have been sold or otherwise transferred by the
holder thereof pursuant to such effective registration statement, (ii) such
securities are sold in accordance with Rule 144 (or any successor provision)
promulgated under the Securities Act or (iii) such securities are transferred
under circumstances in which any legend borne by the certificates for such
securities relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed by the Company.
(i) The term "SECURITIES ACT" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
(j) The term "SHARES" shall mean the shares of Common Stock
owned by each Stockholder on the date hereof, as set forth opposite each
Stockholder's name on Annex I hereto, and all shares of Common Stock acquired by
any Stockholder after the date of this Agreement.
(k) The term "TRANSFER" shall mean any voluntary or
involuntary attempt to, directly or indirectly through the transfer of interests
in controlled Affiliates or otherwise, offer, sell, assign, transfer, grant a
participation in, pledge or otherwise dispose of any Shares, or the consummation
of any such transactions, or the soliciting of any offers to purchase or
otherwise acquire, or taking a pledge of, any of the Shares; PROVIDED, HOWEVER,
that the transfer of an interest in any of the Stockholders shall not be deemed
to be a transfer.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
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Section 1.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to each Stockholder as follows:
(1) CORPORATE AUTHORITY. The Company has full corporate power
and authority to execute, deliver and perform this Agreement;
(2) DUE AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms;
(3) NO CONFLICT. The execution, delivery and performance of
this Agreement by the Company do not violate or conflict with or constitute a
default under (i) the Company's certificate of incorporation or by-laws, (ii)
any judgment, order or decree or statute, law, ordinance, rule or regulation of
any governmental entity applicable to the Company or (iii) any material
agreement to which the Company is a party or by which it or its property is
bound;
(4) REGISTRATION RIGHTS. Except as provided herein, no other
party is entitled to any registration or similar right with respect to any
securities of the Company; and
(5) VOTING AGREEMENTS. Except as set forth herein, the Company
is not aware of any voting trust, voting agreement or arrangement with respect
to any of its voting securities.
Section 1.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
Each Stockholder individually represents and warrants to each other Stockholder
and the Company as follows:
(1) AUTHORITY. Such Stockholder has full power, capacity and
authority to execute, deliver and perform this Agreement;
(2) DUE AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by such Stockholder and constitutes a valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms; and (1)
(3) NO CONFLICT. The execution, delivery and performance of
this Agreement by such Stockholder do not violate or conflict with or constitute
a default under (i) such Stockholder's organizational documents, (ii) any
judgment, order or decree or statute, law, ordinance, rule or regulation of any
governmental entity applicable to such Stockholder or (iii) any material
agreement to which such Stockholder is a party or by which it or its property is
bound.
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Section 1.3 COVENANTS OF THE COMPANY. The Company covenants to
each Stockholder that it will afford to each Stockholder and its respective
officers, employees, financial advisors, legal counsel, accountants, consultants
and other representatives (except to the extent not permitted under applicable
law as advised by counsel to the Company and except as may be limited by any
confidentiality obligations contained in any contract with a third party)
reasonable access during normal business hours during the term of this Agreement
to all of its books and records and its properties and facilities and, during
such period, shall furnish promptly to each Stockholder periodic financial and
other information provided to the Board. The Company further covenants to
promptly provide to each Stockholder, copies of all monthly, quarterly and
annual financial information prepared for any directors, creditors or
stockholders of the Company. Unless otherwise required by law, each Stockholder
agrees that it shall (a) hold in confidence all non-public information so
acquired and (b) not use any such information as the basis for any market
transaction in the securities of the Company unless and until such information
is made generally available to the public.
ARTICLE III
BOARD OF DIRECTORS
Section 1.4 COMPOSITION.
(1) MEMBERS. During the term of this Agreement and unless
otherwise agreed by the holders of 66 2/3% of the shares of Common Stock
outstanding as of the date hereof, each party hereto shall use its best efforts
to cause the Board to consist of seven members, of which: (i) four members shall
be designees of JLL (the "JLL Designees"), who shall initially be Messrs. Xxxx
Xxxx, Xxxxxxx Xxxxxxxx, Xxxxx Xxxxxxxxx and Xxxxx Xxxx, and (ii) three members
shall be designees of Xxxx and shall include the Chief Executive Officer of the
Company (the "Xxxx Designees"), who shall initially be Messrs. Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx Xxxxxx Xxxxxx and Xxxxx Xxxxxxxxx, the current Chief Executive
Officer of the Company. Any successor JLL Designee must be reasonably acceptable
to Xxxx and any successor Xxxx Designee must be reasonably acceptable to JLL.
For so long as Xx. Xxxxx Xxxxxx serves as a director of the Company, he shall
also serve as the Chairman of the Board.
(2) REMOVAL. No Stockholder shall take any action to cause the
removal of any director designated by any other Stockholder other than "for
cause."
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(3) VACANCIES. If at any time a vacancy is created on the Board
by reason of the death, removal or resignation of any director who was nominated
and elected as a director pursuant to Section 3.01(a) above or this Section
3.01(c), the Stockholders shall, as soon as practicable, cause their designees
on the Board, to the extent not inconsistent with their fiduciary duties under
applicable law, to elect the individual designated to fill such vacancy or
vacancies by JLL or Xxxx, as the case may be, to fill such vacancy for the
unexpired term of the director whom such individual is replacing.
(a) DECREASE IN SHARES HELD. Notwithstanding anything to the
contrary in this Section 3.01, in the event that JLL, on the one hand, and Xxxx,
on the other hand, shall, together with their Affiliates or Associates (as such
terms are defined in Rule 405 of the Securities Act), cease to own at least 30%
of the Shares owned by JLL or Xxxx, as the case may be, on the date hereof, then
JLL or Xxxx, as the case may be, shall no longer have any right pursuant to this
Section 3.01 to designate any nominees for election to the Board.
(4) VOTING AGREEMENT.
(1) Each Stockholder agrees that, during the term of
this Agreement, (A) it will be present, in person or
represented by proxy, at all stockholder meetings of the
Company for the election of directors, so that all shares of
Voting Common Stock beneficially owned by it shall be
counted for the purpose of determining the presence of a
quorum for the election of directors at such meetings, and
(B) it shall vote, or act by consent with respect to, all
shares of Voting Common Stock beneficially owned by it for
the election of the nominees for the Board nominated by the
Board so long as such nominees consist of individuals
meeting the requirements of this Section 3.01.
(2) Except as specifically set forth in this
Section 3.01(e), each Stockholder shall be entitled to vote
its Shares on all other matters as it deems fit. (1)
Section 1.5 SUPERMAJORITY VOTE REQUIREMENT. JLL and Xxxx agree
to cause the JLL Designees or the Xxxx Designees, as the case may be, not to
take or permit the Company to take any of the actions set forth below without
the affirmative vote of at least six (6) members of the Board:
(a) increase the number of members constituting the Board
to greater than seven (7);
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(b) incur any indebtedness in excess of $48.3 million, in
connection with (i) any extraordinary expansion of the Business, or (ii) the
development of a new line of Business;
(c) amend or modify any provision of this Agreement;
(d) amend or modify the Amended and Restated Certificate
of Incorporation, other than to amend Article IV thereof to increase the
authorized shares of capital stock as contemplated by Article VI of this
Agreement (which amendment will only require the affirmative vote of a majority
of the members of the Board);
(e) amend the By-Laws of the Company;
(f) appoint or remove any executive officer of the
Company (as defined in Rule 405 promulgated under the Securities Act) or make
any determination with respect to the compensation payable to such senior
executive officer, PROVIDED, HOWEVER, that, such restrictions shall not be
applicable to the appointment or removal of or the compensation payable to the
Chief Executive Officer or Chief Financial Officer of the Company, which shall
require approval by the affirmative vote of only a majority of the members of
the Board;
(g) approve or modify the annual budget of the Company;
(h) approve any capital expenditures in excess of $10
million per annum;
(i) declare or pay, directly or indirectly, any dividend
or distribution, whether in cash, property or securities or a combination
thereof, other than any dividend or distribution declared or paid with the
proceeds of indebtedness or the issuance of securities;
(j) approve any transactions with JLL, Xxxx, or Xx.
Xxxxxx Xxxxx Xxxxxx or any of their respective affiliates (as defined in Rule
12b-2 promulgated under the Exchange Act);
(k) amend or modify the Stock Option Plan; or
(l) consummate any acquisition by the Company or any of
its subsidiaries of a business or assets, outside of the ordinary course of
business, whether by merger, consolidation or other business combination;
PROVIDED, HOWEVER, that only the affirmative vote of a majority of the members
of the Board shall be required to approve any sale of the Company or its assets,
whether by merger, consolidation or other business combination.
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Section 1.6 INITIAL PUBLIC OFFERING. The parties acknowledge
and agree that the provisions of this Article III may not be appropriate
following the Initial Public Offering. Accordingly, JLL and Xxxx agree to use
their reasonable best efforts to reach an agreement with respect to the
appropriate composition of the Board and supermajority voting requirements
following the Initial Public Offering and amend this Agreement accordingly.
ARTICLE IV
RESTRICTIONS ON TRANSFER
Section IV.1 GENERAL RESTRICTIONS. Neither Xxxx, Xx. Xxxxxx
Xxxxx Xxxxxx, CIBC Argosy nor CMF nor any of their respective Permitted
Transferees may Transfer any Shares prior to the fifth anniversary of the date
hereof except for Transfers (a) to any of their Permitted Transferees; PROVIDED,
HOWEVER, that prior to any Transfer of Shares, such Permitted Transferee shall
agree in writing to take such Shares subject to, and to comply with, all of the
provisions of this Agreement, a copy of which agreement shall be on file with
the Secretary of the Company and shall include the address of such Permitted
Transferee to which notices hereunder shall be sent, (b) pursuant to the
provisions of Section 4.04 (but only with respect to Shares Transferred as a
Notice Recipient (as defined herein)) or 4.05 hereof or (c) pursuant to any
corporate transaction requiring the approval of the holders of a majority of the
shares of Common Stock outstanding and as to which the requisite approval of the
stockholders shall have been obtained. Notwithstanding the foregoing, Xxxx may
pledge up to an aggregate of 214,500 of its Shares (i) to a trust established
for the benefit of holders of new indebtedness of Xxxx to be issued in exchange
for Dina's 8% Convertible Subordinated Xxxxxxxxxx xxx Xxxxxx 0, 0000, xx (xx) to
a bank, reasonably satisfactory to JLL; PROVIDED, HOWEVER, that the trust or the
bank, as the case may be, shall take the Shares subject to, and shall be bound
by, the provisions of this Agreement and the Company shall have no obligation to
file a registration statement with respect to such Shares, other than pursuant
to Article V hereof. The foregoing restrictions of this Section 4.01 shall also
apply to any transfer of the Warrant and the Warrant Shares.
Section 1.7 COMPLIANCE WITH SECURITIES LAWS. Each Stockholder
agrees that every Transfer of its Shares shall comply with all federal, state,
local and foreign securities laws applicable to such transaction. At the request
of the Company, the transferring Stockholder shall deliver to the Company an
opinion of counsel, which counsel and opinion shall be reasonably satisfactory
to the Company, to the effect that the sale, transfer or other disposition
satisfies this Section 4.02.
Section 1.8 TRANSFERS NOT IN COMPLIANCE. In the event of any
purported or attempted Transfer of Shares by a Stockholder that does not comply
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with this Agreement, the purported transferee or successor by operation of law
shall not be deemed to be a stockholder of the Company for any purpose and shall
not be entitled to any of the rights of a stockholder, including, without
limitation, the right to vote the Shares or to receive a certificate for the
Shares or any dividends or other distributions on or with respect to the Shares.
Section 1.9 TAG-ALONG RIGHTS. Except as provided below, if, at
any time during the term of this Agreement and subject to the provisions of
Section 4.01 hereof, any Stockholder proposes to directly or indirectly Transfer
its Shares to a Person (other than Transfers to Permitted Transferees, except in
the case of a transfer by JLL to Xxxx or any Permitted Transferee of Xxxx),
including pursuant to a Public Offering, such Stockholder (the "Transferring
Stockholder") shall provide the other Stockholders (the "Notice Recipients") and
the Company with not less than thirty (30) days' prior written notice (the ASale
Notice@) of such proposed Transfer, which notice shall include all of the terms
and conditions of such proposed Transfer and which shall identify such
purchaser; and each Notice Recipient shall have the option, exercisable by
written notice to the Transferring Stockholder within fifteen (15) days after
the receipt of the Sale Notice, to require the Transferring Stockholder to
arrange for such purchaser or purchasers to purchase the same percentage (the
"Percentage") of the Shares then owned by such Notice Recipient as the ratio of
the total number of Shares which are to be Transferred by the Transferring
Stockholder pursuant to the proposed Transfer to the total number of Shares
owned by the Transferring Stockholder immediately prior to such Transfer, or any
lesser amount of Shares as such Notice Recipient shall desire, together with the
Transferring Stockholder's Shares at the same time as, and upon the same terms
and conditions (including all direct or indirect consideration or compensation)
at which, the Transferring Stockholder sells its Shares. If a Notice Recipient
shall so elect, the Transferring Stockholder agrees that it shall either (a)
arrange for the proposed purchaser or purchasers to purchase all or a portion
(as such Notice Recipient shall specify) of the same Percentage of the Shares
then owned by such Notice Recipient at the same time as and upon the same terms
and conditions at which the Transferring Stockholder sells its Shares, and
PROVIDED that if such purchaser or purchasers shall elect to purchase only such
aggregate number of Shares as originally agreed with the Transferring
Stockholder, then the number of Shares to be sold by the Transferring
Stockholder and all Notice Recipients electing to participate in the proposed
Transfer shall be reduced pro rata to such aggregate number or (b) not effect
the proposed Transfer to such purchaser or purchasers. In the event that a
Notice Recipient does not exercise its right to participate in such Transfer or
declines to so participate, the Transferring Stockholder shall have 120 days
from the date of such Sale Notice to consummate the transaction on the terms set
forth therein without being required to provide an additional Sale Notice to the
remaining Stockholders. Notwithstanding the foregoing, the provisions of this
Section 4.04 shall not apply to the Transfer by JLL of a maximum of 10,000
Shares to Coaches, LLC which shall occur within thirty days of the date hereof.
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Section 1.10 RIGHT OF FIRST OFFER.
(1) In the event that JLL desires to effect a sale of
all of its Shares, directly or indirectly, through a sale of the Company or all
or substantially all of the Company's assets (a "Company Sale"), JLL shall give
notice in writing (the "Company Sale Notice") to Xxxx of such intention and
shall provide to Xxxx a right of first offer to purchase all of the Shares owned
by the Investors for the Investor Sale Amount (as hereinafter defined). The
Company Sale Notice shall set forth the Company Value (as hereinafter defined)
and the corresponding amount in cash sought by JLL for all of the Shares owned
by the Investors (the "Investor Sale Amount"). The Investor Sale Amount shall be
based on an enterprise valuation of the Company as a whole (the "Company
Value"), as determined by JLL in its sole discretion. Upon receipt of the
Company Sale Notice, Xxxx shall have 20 business days (the "Purchase Notice
Period") within which to offer by written notice (the "Purchase Notice") to
purchase such Shares for the Investor Sale Amount. On or before the later to
occur of (i) 40 business days after delivery of the Purchase Notice to JLL and
(ii) the receipt of any required governmental consent or approval (the "Purchase
Period"), Xxxx shall consummate its purchase of the Shares from the Investors by
delivering to the Investors the Investor Sale Amount. In the event that Xxxx
notifies JLL that it does not wish to purchase the Investors' Shares or fails to
give the Purchase Notice in the manner set forth herein within the Purchase
Notice Period, then JLL may, for a period of nine months following the end of
the Purchase Notice Period or, in the event that Xxxx does not consummate the
purchase of the Investors' Shares within the Purchase Period, for a period of
nine months following the end of the Purchase Period (the "Company Sale
Period"), pursue a Company Sale to any third party for consideration equal to at
least 85% of the Company Value set forth in the Company Sale Notice. In the
event that JLL proposes to enter into an agreement with a third party with
respect to a Company Sale, all of the Stockholders shall be required to consent
to such Company Sale and to take all steps necessary to consummate such
transaction, including, if applicable, selling its Shares to such third party.
It is expressly understood that each Stockholder will receive the same per share
consideration in connection with any Company Sale. In the event that JLL fails
to consummate a Company Sale within the Company Sale Period, then the Company
Sale Notice shall expire and JLL may not effect a Company Sale without again
complying with the terms of this Section 4.05, including giving a new notice to
Xxxx.
(2) JLL represents and warrants that, as of the date
hereof, it does not have any agreement with a third party to consummate a
Company Sale.
Section 1.11 EFFECT OF NOTICES. Notwithstanding any provision
hereof to the contrary, the giving to Xxxx of any Sale Notice shall not obligate
JLL to consummate or effect any transaction referred to therein.
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Section 1.12 NON-COMPETE. In the event that a Company Sale is
consummated, until the third anniversary of the consummation of the Company
Sale, Xxxx shall not, directly or indirectly, (a) participate in the ownership,
management, operation or control of, or be connected with or employed by, or act
as a consultant for, or have any financial interest in or aid or knowingly
assist any other Person in the conduct of, any business or entity which (i)
engages in any aspect of the Business, (ii) is contemplating engaging in such
Business or (iii) provides any services that compete with those services
provided by the Company or the Company Subsidiaries, in the case of (i), (ii)
and (iii), anywhere within the Territory or (b) hire any officer or other
employee of the Company or any Company Subsidiary or solicit or direct anyone
else to solicit any officer or other employee of the Company or any Company
Subsidiary (i) to terminate his or her employment or other relationship with the
Company or any Company Subsidiary; or (ii) to seek or accept employment or other
affiliation with any other entity (other than any solicitation directed at the
public in general in publications available to the public in general).
ARTICLE V
REGISTRATION RIGHTS
Section 1.13 PIGGYBACK REGISTRATIONS.
(1) RIGHT TO PIGGYBACK. Following an Initial Public
Offering of the Common Stock and subject the provisions of Section 4.01,
whenever the Company proposes to register any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (other than a registration relating to the
Company employee benefit plans, exchange offers by the Company or a merger or
acquisition of a business or assets by the Company including, without
limitation, a registration on Form S-4 or Form S-8 or any successor form) (a
"Piggyback Registration"), the Company shall give all Stockholders prompt
written notice thereof (but not less than ten (10) days prior to the filing by
the Company with the Commission of any registration statement with respect
thereto). Such notice (a "Piggyback Notice") shall specify, at a minimum, the
number of securities proposed to be registered, the proposed date of filing of
such registration statement with the Commission, the proposed means of
distribution, the proposed managing underwriter or underwriters (if any and if
known), and a good faith estimate by the Company of the proposed minimum
offering price of such securities. Upon the written request of a Stockholder
given within ten (10) business days of such Stockholder's receipt of the
Piggyback Notice (which written request shall specify the number of Registrable
Securi-
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ties intended to be disposed of by such Stockholder and the intended method
of distribution thereof), the Company shall include, subject to Section
5.01(b) below, in such registration all Registrable Securities with respect
to which the Company has received such written requests for inclusion.
(2) PRIORITY ON PIGGYBACK REGISTRATIONS. If, in connection
with a Piggyback Registration, any managing underwriter (or, if such
Piggyback Registration is not an underwritten offering, a nationally
recognized independent investment banking firm selected by the Company (and
reasonably acceptable to the holders of a majority of the Registrable
Securities sought to be included in such Piggyback Registration and whose
fees and expenses shall be borne solely by the Company)) advises the Company
and the holders of the Registrable Securities to be included in such
Piggyback Registration, that, in its opinion, the inclusion of all the
securities sought to be included in such Piggyback Registration by the
Company, any holders of Registrable Securities seeking to sell such
securities in such Piggyback Registration ("Piggyback Sellers") and any other
proposed sellers, in each case, if any, would adversely affect the
marketability of the securities sought to be sold pursuant thereto, then the
Company shall include in the registration statement applicable to such
Piggyback Registration only such securities as the Company and the Piggyback
Sellers are so advised by such underwriter can be sold without such an effect
(the "Maximum Piggyback Number"), as follows and in the following order of
priority:
(1) first, such number of securities to be sold by the
Company as the Company, in its reasonable judgment and acting in
good faith and in accordance with sound financial practice, shall
have determined; and
(2) second, if the number of securities to be included
under clause (i) above is less than the Maximum Piggyback Number,
pro rata in proportion to the Registrable Securities sought to
be registered by all the Piggyback Sellers and all other proposed
sellers, which, in the aggregate, when added to the number of
securities to be registered under clause (i) above, equals the
Maximum Piggyback Number.
(3) WITHDRAWAL BY THE COMPANY. If, at any time after
giving written notice of its intention to register any of its securities as
set forth in this Section 5.01 and prior to the time the registration statement
filed in connection with such registration is declared effective, the Company
shall determine for any reason not to register such securities, the Company may,
at its election, give written notice of such determination to each Stockholder
and thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such particular withdrawn or abandoned
registration (but not from its obligation to pay the Registration Expenses (as
hereinafter defined) in connection therewith as provided herein).
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Section 1.14 WITHDRAWAL RIGHTS. Any Stockholder having
notified or directed the Company to include any or all of its Registrable
Securities in a registration statement under the Securities Act shall have
the right to withdraw any such notice or direction with respect to any or all
of the Registrable Securities designated for registration thereby by giving
written notice to such effect to the Company prior to the effective date of
such registration statement. In the event of any such withdrawal, the Company
shall not include such Registrable Securities in the applicable registration
and such Registrable Securities shall continue to be Registrable Securities
hereunder. No such withdrawal shall affect the obligations of the Company
with respect to the Registrable Securities not so withdrawn.
Section 1.15 HOLDBACK AGREEMENTS. Each Stockholder agrees not
to effect any public sale or distribution (including sales pursuant to Rule 144
under the Securities Act) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
ten (10) day period prior to the date which the Company has notified the
Stockholders that it intends to commence a Public Offering through the 180-day
period immediately following the effective date of any Piggyback Registration
(in each case, except as part of such registration), or, in each case, if later,
the date of any underwriting agreement with respect thereto; PROVIDED, HOWEVER,
that the Stockholders shall not be obligated to comply with this Section 5.03 on
more than one (1) occasion in any nine (9) month period.
Section 1.16 REGISTRATION PROCEDURES.
(1) Whenever the Stockholders have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
(subject to its right to withdraw such registration as contemplated by
Section 5.01(c)) shall use its best efforts to effect the registration and
the sale of such Registrable Securities in accordance with the intended
method of disposition thereof and, in connection therewith, the Company shall
as expeditiously as possible:
(1) prepare and file with the Commission a registration
statement with respect to such Registrable Securities on any form
for which the Company then qualifies and is available for the sale
of Registrable Securities to be registered thereunder in accordance
with the intended method of distribution and use its best efforts to
cause such registration statement to become effective within ninety
(90) days of the date of the Piggyback Notice;
(2) 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 keep
such registration statement effective for a continuous period of
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not less than ninety (90) days (or, if earlier, until all Registrable
Securities included in such registration statement have been sold
thereunder in accordance with the manner of distribution set forth
therein) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended methods of disposition by the sellers thereof as set forth
in such registration statement (including, without limitation, by
incorporating in a prospectus supplement or post-effective
amendment, at the request of a seller of Registrable Securities, the
terms of the sale of such Registrable Securities);
(3) promptly (A) notify each seller of Registrable
Securities of each of (1) the filing and effectiveness of the
registration statement and prospectus and any amendment or supplements
thereto, (2) the receipt of any comments from the Commission or any
state securities law authorities or any other governmental authorities
with respect to any such registration statement or prospectus or any
amendments or supplements thereto and (3) any oral or written stop
order with respect to such registration, any suspension of the
registration or qualification of the sale of such Registrable
Securities in any jurisdiction or any initiation or threatening of any
proceedings with respect to any of the foregoing and (B) use its best
efforts to obtain the withdrawal of any order suspending the
registration or qualification (or the effectiveness thereof) or
suspending or preventing the use of any related prospectus in any
jurisdiction with respect thereto;
(4) furnish to each seller of Registrable Securities,
the underwriters and the sales or placement agent, if any, and counsel
for each of the foregoing, a conformed copy of such registration
statement and each amendment and supplement thereto (in each case,
including all exhibits thereto and documents incorporated by reference
therein) and such additional number of copies of such registration
statement, each amendment and supplement thereto (in such case without
such exhibits and documents), the prospectus (including each
preliminary prospectus) included in such registration statement and
prospectus supplements and all exhibits thereto and documents
incorporated by reference therein and such other documents as such
seller, underwriter, agent or counsel may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by
such Seller;
14
(5) if requested by the managing underwriter or
underwriters of any registration, subject to approval of counsel to the
Company in its reasonable judgment, promptly incorporate in a
prospectus, supplement or post-effective amendment to the registration
statement such information concerning underwriters and the plan of
distribution of the Registrable Securities as such managing underwriter
or underwriters or such holders reasonably shall furnish to the Company
in writing and request be included therein, including, without
limitation, with respect to the number of Registrable Securities being
sold by such holders to such underwriter or underwriters, the purchase
price being paid therefor by such underwriter or underwriters and with
respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering; and make all
required filings of such prospectus, supplement or post-effective
amendment as soon as possible after being notified of the matters to be
incorporated in such prospectus, supplement or post-effective
amendment;
(6) use its best efforts to register or qualify such
Registrable Securities under such securities or "blue sky" laws of such
jurisdictions as the holders of a majority of Registrable Securities
sought to be registered reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to
enable the holders of a majority of Registrable Securities sought to be
registered to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such holders and keep such registration
or qualification in effect for so long as the registration statement
remains effective under the Securities Act; PROVIDED that the Company
shall not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this paragraph, (B) subject itself to taxation in any such
jurisdiction where it would not otherwise be subject to taxation but
for this paragraph or (C) consent to the general service of process in
any jurisdiction where it would not otherwise be subject to general
service of process but for this paragraph;
(7) notify each seller of such Registrable Securities,
at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon the discovery that, or of
the happening of any event as a result of which, the registration
statement covering such Registrable Securities, as then in effect,
contains an untrue statement of a material fact or omits to state
any material fact required to be stated therein or any fact
necessary to make the statements therein not misleading, and
promptly prepare and
15
furnish to each such seller a supplement or amendment to the
prospectus contained in such registration statement so that such
registration statement shall not, and such prospectus as thereafter
delivered to the purchasers of such Registrable Securities shall
not, contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or any fact
necessary to make the statements therein not misleading;
(8) cause all such Registrable Securities to be listed
on any securities exchange or established over-the-counter market on
which or through which similar securities of the Company are listed
or traded and, if not so listed or traded, to be listed on the
National Association of Securities Dealers automated quotation
system ("Nasdaq") and if listed on Nasdaq, use its reasonable
efforts 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 11Aa2-1 under the
Exchange Act or, failing that, to secure Nasdaq authorization for
such Registrable Securities;
(9) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such seller or underwriter
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors,
employees, attorneys and independent accountants to supply all
information reasonably requested by any such sellers, underwriters,
attorneys, accountants or agents in connection with such registration
statement. Information which the Company determines, in good faith, to
be confidential shall not be disclosed by such persons unless (A) the
disclosure of such information is necessary to avoid or correct a
misstatement or omission in such registration statement, or (B) the
release of such information is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Each seller of
Registrable Securities agrees, on its own behalf and on behalf of all
its underwriters, accountants, attorneys and agents, that the
information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until
such is made generally available to the public. Each seller of
Registrable Securities further agrees, on its own behalf and on behalf
of all its underwriters, accountants, attorneys and agents, that it
will, upon learning that disclosure of such information is sought in a
court of competent
16
jurisdiction, give notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure
of the information deemed confidential;
(10) use its best efforts to comply with all applicable
laws related to such registration statement and offering and sale of
securities and all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation,
the Securities Act and the Exchange Act) and make generally
available to its security holders as soon as practicable (but in any
event not later than fifteen (15) months after the effectiveness of
such registration statement) an earnings statement of the Company
and its subsidiaries complying with Section 11(a) of the Securities
Act;
(11) permit any Stockholder, which Stockholder, in its
sole and exclusive judgment, might be deemed to be an underwriter or
controlling person of the Company, to participate in the preparation
of such registration statement and to require the insertion therein
of material, furnished to the Company in writing, which in the
reasonable judgment of such holder and such holder's counsel should
be included;
(12) use reasonable best efforts to furnish to each
seller of Registrable Securities a signed counterpart of (A) an opinion
of counsel for the Company and (B) a "comfort" letter signed by the
independent public accountants who have certified the Company's
financial statements included or incorporated by reference in such
registration statement, covering such matters with respect to such
registration statement and, in the case of the accountants' comfort
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' comfort letters delivered to the underwriters in
underwritten public offerings of securities for the account of, or on
behalf of, an issuer of common stock, such opinion and comfort letters
to be dated the date such opinions and comfort letters are customarily
dated in such transactions, and covering in the case of such legal
opinion, such other legal matters and, in the case of such comfort
letter, such other financial matters, as the holders of a majority of
the Registrable Securities being sold may reasonably request; and
(13) take all such other actions as the holders of a
majority of the Registrable Securities being sold or the underwrit-
17
ers, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities.
(2) UNDERWRITING. Without limiting any of the foregoing, in
the event that the offering of Registrable Securities is to be made
by or through an underwriter, the Company shall enter into an
underwriting agreement with a managing underwriter or underwriters
containing representations, warranties, indemnities and agreements
customarily included (but not inconsistent with the agreements
contained herein) by an issuer of common stock in underwriting
agreements with respect to offerings of common stock for the account
of, or on behalf of, such issuers. In connection with the sale of
Registrable Securities hereunder, any seller of such Registrable
Securities may, at its option, require that any and all
representations and warranties by, and indemnities and agreements
of, the Company to or for the benefit of such underwriter or
underwriters (or which would be made to or for the benefit of such
an underwriter or underwriters if such sale of Registrable
Securities were pursuant to a customary underwritten offering) be
made to and for the benefit of such seller and that any or all of
the conditions precedent to the obligations of such underwriter or
underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting
agreement) be conditions precedent to the obligations of such seller
in connection with the disposition of its securities pursuant to the
terms hereof. In connection with any offering of Registrable
Securities registered pursuant to this Agreement, the Company shall
(i) furnish to the underwriter, if any (or, if no underwriter, the
sellers of such Registrable Securities), unlegended certificates
representing ownership of the Registrable Securities being sold, in
such denominations as requested and (ii) instruct any transfer agent
and registrar of the Registrable Securities to release any stop
transfer order with respect thereto.
(3) RETURN OF PROSPECTUSES. Each seller of Registrable
Securities hereunder agrees that upon receipt of any notice from the
Company of the happening of any event of the kind described in
Section 5.04(a)(vii), such seller shall forthwith discontinue such
seller's disposition of Registrable Securities pursuant to the
applicable registration statement and prospectus relating thereto
until such seller's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5.04(a)(vii) and, if so
directed by the Company, deliver to the Company all copies, other
than permanent file copies, then in such seller's possession of the
prospectus current at the time of receipt of such notice relating to
such Registrable Securities. In the event the Company shall give
such notice, the ninety (90) day period during which such
registration statement must remain effective pursuant to this
Agreement shall be extended by the number of days during the period
from the date of giving of a notice regarding the happening of an
event of the kind described in Section 5.04(a)(vii) to the date when
all such sellers shall receive such a supplemented or amended
prospectus and such prospectus shall have been filed with the
Commission.
18
Section 1.17 REGISTRATION EXPENSES. All expenses incident to
the Company's performance of, or compliance with, its obligations under this
Agreement including, without limitation, all registration and filing fees, all
fees and expenses of compliance with securities and "blue sky" laws (including,
without limitation, the fees and expenses of counsel for underwriters or
placement or sales agents in connection therewith), all printing and copying
expenses, all messenger and delivery expenses, all fees and expenses of
underwriters and sales and placement agents in connection therewith, all fees
and expenses of the Company's independent certified public accountants and
counsel (including, without limitation, with respect to "comfort" letters and
opinions) (collectively, the "Registration Expenses") shall be borne by the
Company; PROVIDED, HOWEVER, that all incremental costs resulting from applicable
federal and blue sky registration and filing fees, National Association of
Securities Dealers filing fees, and underwriting discounts and commissions
allocable to each Stockholder selling Registrable Securities shall be borne by
such Stockholder. The Company shall be responsible for the fees and expenses of
one legal counsel retained by the holders of a majority of the Registrable
Securities included in such registration. Notwithstanding the foregoing, the
Company shall not be responsible for the fees and expenses of any additional
counsel, or any of the accountants, agents or experts retained by the
Stockholders in connection with the sale of Registrable Securities. The Company
will pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties,
the expense of any annual audit and the expense of any liability insurance)
(collectively, "Internal Expenses") and the expenses and fees for listing the
securities to be registered on each securities exchange and included in each
established over-the-counter market on which similar securities issued by the
Company are then listed or traded or for listing on Nasdaq.
Section 1.18 INDEMNIFICATION.
(1) BY THE COMPANY. The Company agrees to indemnify,
to the fullest extent permitted by law, each holder of Registrable Securities
being sold, its officers, directors, employees and agents and each Person who
controls (within the meaning of the Securities Act) such holder or such other
indemnified Person against all losses, claims, damages, liabilities and expenses
(collectively, the "Losses") caused by, resulting from or relating to any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or a fact necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished to the Company by or on behalf of such holder expressly
for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of
19
copies of the same. In connection with an underwritten offering and without
limiting any of the Company's other obligations under this Agreement, the
Company shall indemnify such underwriters, their officers, directors,
employees and agents and each Person who controls (within the meaning of the
Securities Act) such underwriters or such other indemnified Person to the
same extent as provided above with respect to the indemnification of the
holders of Registrable Securities being sold.
(2) BY STOCKHOLDERS. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Company in writing
information regarding such holder's ownership of Registrable Securities and
its intended method of distribution thereof and, to the extent permitted by
law, shall indemnify the Company, its directors, officers, employees and
agents and each Person who controls (within the meaning of the Securities
Act) the Company or such other indemnified Person against all Losses caused
by, resulting from or relating to any untrue or alleged untrue statement of
material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is caused by or contained in
such information so furnished in writing by or on behalf of such holder;
PROVIDED, HOWEVER, that each holder's obligation to indemnify the Company
hereunder shall be apportioned between each holder based upon the net amount
received by each holder from the sale of Registrable Securities, as compared
to the total net amount received by all of the holders of Registrable
Securities sold pursuant to such registration statement, no such holder being
liable to the Company in excess of such apportionment.
(3) NOTICE. Any Person entitled to indemnification
hereunder shall give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification; PROVIDED, HOWEVER, that
the failure to give such notice shall not release the indemnifying party from
its obligation, except to the extent that the indemnifying party has been
materially prejudiced by such failure to provide such notice.
(4) DEFENSE OF ACTIONS. In any case in which any such
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not (so long as it shall continue to have the right to defend, contest,
litigate and settle the matter in question in accordance with this paragraph)
be liable to such indemnified party hereunder for any legal or other expense
subsequently incurred by
20
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, supervision and monitoring (unless such
indemnified party reasonably objects to such assumption on the grounds that
there may be defenses available to it which are different from or in addition
to the defenses available to such indemnifying party, in which event the
indemnified party shall be reimbursed by the indemnifying party for the
expenses incurred in connection with retaining separate legal counsel). An
indemnifying party shall not be liable for any settlement of an action or
claim effected without its consent. The indemnifying party shall lose its
right to defend, contest, litigate and settle a matter if it shall fail to
diligently contest such matter (except to the extent settled in accordance
with the next following sentence). No matter shall be settled by an
indemnifying party without the consent of the indemnified party (which
consent shall not be unreasonably withheld).
(5) SURVIVAL. The indemnification provided for under
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified Person and will survive
the transfer of the Registrable Securities and the termination of this
Agreement.
(6) CONTRIBUTION. If recovery is not available under
the foregoing indemnification provisions for any reason or reasons other than
as specified therein, any Person who would otherwise be entitled to
indemnification by the terms thereof shall nevertheless be entitled to
contribution with respect to any Losses with respect to which such Person
would be entitled to such indemnification but for such reason or reasons. In
determining the amount of contribution to which the respective Persons are
entitled, there shall be considered the Persons' relative knowledge and
access to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement or
omission, and other equitable considerations appropriate under the
circumstances. It is hereby agreed that it would not necessarily be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation. 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 found guilty of such fraudulent
misrepresentation. Notwithstanding the foregoing, no Stockholder shall be
required to make a contribution in excess of the net amount received by such
holder from the sale of Registrable Securities.
ARTICLE VI
PREEMPTIVE RIGHTS
Section 1.19 PREEMPTIVE RIGHTS.
21
(1) If, at any time during the term of this Agreement
and prior to the consummation of the Initial Public Offering, the Company
proposes to issue and sell shares of Common Stock to any Person (other than
pursuant to the Stock Option Plan), each Stockholder shall have the right to
purchase from the Company (at the same price per share paid by the Investors
pursuant to the Investment) a number of shares of Common Stock equal to such
Stockholders' Applicable Percentage of the total number of shares of Common
Stock proposed to be issued and sold by the Company. Each Stockholder hereby
agrees that the Company may undertake one or more issuances of Common Stock
at the price of $204.918 per share, subject to the Stockholders' rights under
this Section 6.01. Each Stockholder further hereby acknowledges and agrees
that the payment of $204.918 per share shall be conclusive and binding as
evidence of the fair market value of the Common Stock at such time. The per
share price of $204.918 established by this Section 6.01(a) shall be subject
to the provisions of Section 7.13 hereof.
(2) If the Company proposes to issue and sell shares of
Common Stock, it shall give each Stockholder written notice of such issuance,
describing the price and terms upon which the Company intends to issue the
same, the total number of shares to be sold and the amount of Common Stock
eligible to be purchased by each Stockholder pursuant to Section 6.01(a)
above. Any revision of the terms of such intended issuance shall require
renotification to the Stockholders and a restarting of the ten (10) business
day period provided in Section 6.01(c) below.
(3) Upon receipt by each Stockholder of the written
notice of the Company pursuant to Section 6.01(b) above, each Stockholder
shall have ten (10) business days during which to exercise its right to
purchase its proportionate share of Common Stock for the price and upon the
terms specified in the aforesaid notice at the price set forth in Section
6.01(a) above. If any Stockholder fails to notify the Company of its exercise
of the rights granted by this Section 6.01 within such ten (10) business day
period, such Stockholder shall have no further rights with regard to the
purchase of any shares of Common Stock at such price and upon the terms
specified in the notice to such Stockholder, subject to Section 6.01(d) below.
(4) If the Company has not sold the shares of Common
Stock included in the notice issued pursuant to Section 6.01(b) above within
sixty (60) days following the expiration of the ten (10) business day period
referred to above, the Company shall not thereafter issue or sell any shares
of Common Stock without also offering the same to the Stockholders in the
manner provided above.
(5) Each share of Common Stock issued and sold to a
Stockholder pursuant to the rights set forth in this Section 6.01 shall be
subject to this Agreement and each certificate representing such shares of
Common Stock shall bear substantially the legend set forth in Section 7.01
hereof.
22
ARTICLE VII
MISCELLANEOUS
Section 1.20 LEGENDS. Each of the Stockholders agrees that
substantially the following legend shall be placed on the certificates
representing any Shares owned by them:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF ("TRANSFERRED") EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS OF THE STOCKHOLDERS AGREEMENT DATED AS OF JUNE 16, 1999
AND MAY NOT BE TRANSFERRED UNLESS SUCH TRANSFER COMPLIES WITH THE
PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT. A COPY OF SUCH STOCKHOLDERS
AGREEMENT IS ON FILE WITH THE SECRETARY OF MCII HOLDINGS (USA), INC.
AND IS AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.
From and after the date of this Agreement, any reference in any legend on any
certificate representing any Shares to the Stockholders Agreement shall be
deemed for all purposes to refer to this Agreement.
Section 1.21 SPECIFIC PERFORMANCE. Each of the Stockholders
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party or parties would be irreparably harmed and could not be made
whole by monetary damages. The Stockholders hereby agree that in addition to any
other remedy to which they may be entitled at law or in equity, they shall be
entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction for such action.
23
Section 1.22 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
Section 1.23 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement and understanding of the parties hereto with respect to the
subject matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
Section 1.24 PROXY. For so long as this Agreement is in
effect, if any Stockholder fails or refuses to vote that Stockholder's Shares
pursuant to this Agreement, then, without further action by such Stockholder,
the other Stockholder shall have an irrevocable proxy coupled with an interest
to vote such Stockholder's Shares in accordance with this Agreement, and each
Stockholder hereby grants to the other Stockholder such irrevocable proxy
coupled with an interest.
Section 1.25 NOTICES. All notices and other communications
hereunder shall be in writing and shall be delivered personally or by next-day
courier or telecopied, with confirmation of receipt, to the parties at the
addresses specified below (or at such other address for a party as shall be
specified by like notice; PROVIDED that notices of change of address shall be
effective only upon receipt thereof). Any such notice shall be effective upon
receipt, if personally delivered or telecopied, or one day after delivery to a
courier for next-day delivery.
If to the Company, to:
MCII Holdings (USA), Inc.
x/x Xxxxx Xxxxx Xxxxxxxxxx Xxxxxxxxxxxxx, Inc.
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
Facsimile: (000) 000-0000
If to JLL, to:
Xxxxxx Xxxxxxxxxx & Levy Fund III LP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
24
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esquire
Facsimile: (000) 000-0000
If to CIBC Argosy or CMF, to:
c/o CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esquire
Facsimile: (000) 000-0000
If to Xxxx, to:
Consorcio G Grupo Xxxx, S.A. de C.V.
Tlacoquemecatl Xx. 00
Xxxxxxx Xxx Xxxxx
00000, Xxxxxx D.F., Mexico
Attention: Xx. Xxxxxx Xxxxx Xxxxxx
Facsimile: 000-000-000-0000
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: M. Xxxxxx Xxxxxx, Esquire
Facsimile: (000) 000-0000
If to Xx. Xxxxxx Xxxxx Xxxxxx, to:
Xxxxxx Xxxxx Xxxxxx
25
c/o Consorcio G Grupo Xxxx, S.A. de X.X.
Xxxxxxxxxxxxxx 00
Xxxxxxx Xxx Xxxxx
00000 Xxxxxx D.F., Mexico
Facsimile: 000-000-000-0000
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: M. Xxxxxx Xxxxxx, Esquire
Facsimile: (000) 000-0000
Section 1.26 APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
giving effect to the principles and conflicts of law thereof. THE PARTIES HERETO
WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO DISPUTES HEREUNDER; ALL SUCH
DISPUTES SHALL BE SETTLED BY BINDING ARBITRATION PURSUANT TO THE RULES OF THE
AMERICAN ARBITRATION ASSOCIATION IN NEW YORK, NEW YORK AND THE ORDER OF SUCH
ARBITRATORS SHALL BE FINAL AND BINDING ON ALL PARTIES HERETO AND MAY BE ENTERED
AS A JUDGMENT IN A COURT HAVING JURISDICTION OVER THE PARTIES. Each Stockholder
hereby agrees and consents to the jurisdiction of the Chancery Court of and for
New Castle County, Delaware (the "Court"). Xxxx and Xx. Xxxxx Xxxxxx hereby
irrevocably consent to the service of any and all process in any such suit,
action or proceeding by the delivery of such process to such party at the
address and in the manner provided in Section 7.06. Xxxx has appointed The
Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, as
its authorized agent (the "Xxxx Authorized Agent") and Xx. Xxxxx Xxxxxx has
appointed The Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, as his authorized agent (the "Xxxxx Xxxxxx Authorized Agent"),
in each case, upon which process may be served in any suit, action or proceeding
based on this Agreement which may be instituted in any Court, by any Stockholder
or the Company, and Xxxx and Xx. Xxxxx Xxxxxx expressly accept the jurisdiction
of any such Court in respect of any such suit, action or proceeding. Such
appointment shall be irrevocable. Xxxx represents and warrants that the Xxxx
Authorized Agent, and Xx. Xxxxxx Xxxxx Xxxxxx represents and warrants that the
Xxxxx Xxxxxx Authorized Agent, in each case, has agreed to act as said agent,
respectively, for service of process, and Xxxx and Xx. Xxxxx Xxxxxx agree to
take any and all action, including the filing of any and all documents and
instruments, which may be necessary to continue such appointment in full force
and effect. Service of process upon the Xxxx Authorized Agent and written notice
of such service to Xxxx shall be deemed, in every respect, effective service of
process
26
upon Xxxx and the same shall be true with respect to Xx. Xxxxx Xxxxxx and the
Xxxxx Xxxxxx Authorized Agent.
Section 1.27 SEVERABILITY. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
Section 1.28 SUCCESSORS; ASSIGNS. The provisions of this
Agreement shall be binding upon the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement nor the rights or
obligations of any Stockholder hereunder may be assigned, except in connection
with the transfer by a Stockholder of shares of Common Stock to a Permitted
Transferee. Any such attempted assignment in contravention of this Agreement
shall be void and of no effect.
Section 1.29 AMENDMENTS. This Agreement may not be amended,
modified or supplemented unless such modification is in writing and signed by
the Company and Stockholders owning at least 66 2/3% of the outstanding
Shares as of the date hereof; PROVIDED, HOWEVER, that no such amendment shall
be effective against any party that does not consent to such amendment, if
such party would be materially and adversely affected thereby.
Section 1.30 WAIVER. Any waiver (express or implied) of any
default or breach of this Agreement shall not constitute a waiver of any other
or subsequent default or breach.
Section 1.31 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement.
Section 1.32 RECAPITALIZATION. In the event that any capital
stock or other securities are issued with respect to, in exchange for or in
substitution of any shares of Common Stock (other than upon the conversion
thereof) by reason of any reorganization, recapitalization, reclassification,
merger, consolidation, spin-off, partial or complete liquidation, stock
dividend, split-up, sale of assets, distribution to stockholders or combination
of the shares of Common Stock (other than upon the conversion thereof) or any
other change in the Company's capital structure, appropriate adjustments shall
be made to the terms hereof if necessary to fairly and equitably preserve the
original rights and obligations of the parties hereto under this Agreement.
27
Section 1.33 CERTAIN TRANSFERS. The parties acknowledge and
agree that JLL intends to Transfer up to a maximum of 10,000 Shares (the "JLL
Transferred Shares") to Coaches, LLC within thirty days of the date hereof. The
parties agree that, following such Transfer, the provisions of Sections 4.04,
4.05, 4.06, Article V and Section 6.01 shall apply to the JLL Transferred Shares
and the holders thereof as if such Shares continued to be owned by JLL.
Section 1.34 TERMINATION. Unless earlier terminated, this
Agreement shall terminate on the seventh anniversary of the date hereof;
PROVIDED, HOWEVER, that the provisions of Article V shall survive any such
termination.
[SIGNATURE PAGES FOLLOW]
28
IN WITNESS WHEREOF, the undersigned hereby agree to be bound
by the terms and provisions of this Stockholders Agreement as of the date first
above written.
MCII HOLDINGS (USA), INC.
By:
-----------------------------------
Name:
-----------------------------
Title:
-----------------------------
XXXXXX XXXXXXXXXX & XXXX FUND III, L.P.
By: JLL ASSOCIATES III, LLC,
-----------------------------------
its General Partner
By:
-----------------------------------
Managing Member
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By:
-----------------------------------
Xxx Xxxxxx, authorized signatory
CO-INVESTMENT MERCHANT FUND 3, LLC
By:
-----------------------------------
Xxx Xxxxxx, authorized signatory
CONSORCIO G GRUPO XXXX, S.A. de C.V.
By:
-----------------------------------
Name:
-----------------------------
Title:
-----------------------------
----------------------------------
XXXXXX XXXXX XXXXXX
ANNEX I
SHARES OF
NAME OF COMMON STOCK
STOCKHOLDER OWNED (#)
----------- ------------
Xxxxxx Xxxxxxxxxx & Xxxx Fund III, L.P. 522,855.4
Consorcio G Grupo Xxxx, S.A. de C.V. 390,000
CIBC WG ArgosyMerchant Fund 2, L.L.C. 78,430.14(1)
Co-InvestmentMerchant Fund 3, LLC 8,714.46(1)
Xxxxxx Xxxxx Xxxxxx --(2)
--------
(1) Includes shares of Nonvoting Common Stock.
(2) Xx. Xxxxx Xxxxxx has been granted option to purchase an aggregate of
214,285 shares of Common Stock pursuant to the Stock Option Plan.
