EXHIBIT 10.2
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement is made as of April 4, 2000, by and among
DeNora New Energy Investments B.V., a company established under the laws of The
Netherlands and the parent company of DeNora Fuel Cells, S.p.A. ("DN"), Arthur
D. Little, Inc., a Massachusetts corporation ("ADL"), Amerada Hess Corporation,
a Delaware corporation ("Hess" and, together with ADL and DN, the
"Stockholders"), and Epyx Corporation, a Delaware corporation ("Epyx").
W I T N E S S E T H:
WHEREAS, the Stockholders desire to provide for certain matters with
respect to their ownership of common stock of New DeNora Epyx Corporation
(formerly, Epyx Corporation, "New DeNora Epyx"), as well as for the management
and operations of New DeNora Epyx.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
The following capitalized terms, as used in this Agreement, shall have the
meanings set forth below. Capitalized terms used herein without definition
shall have the meaning ascribed to such terms in that certain Investment and
Exchange Agreement dated as of the date hereof by and among DN, DeNora Fuel
Cells, S.p.A., ADL and Epyx (the "Investment Agreement").
An "Affiliate" of any Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with the first mentioned Person. A Person shall be deemed to
control another Person if such first Person possesses directly or indirectly
the power to direct, or cause the direction of, the management and policies of
the second Person, whether through the ownership of voting securities, by
contract or otherwise.
"Board" means the Board of Directors of New DeNora Epyx.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.01 per share, of New
DeNora Epyx, issued in accordance with and subject to the terms of the
Certificate of Incorporation of New DeNora Epyx, and any other common equity
securities now or hereafter issued by New DeNora Epyx, together with any other
shares of stock issued or issuable with respect thereto (whether by way of a
stock dividend, stock split or in exchange for or upon conversion of such
shares or otherwise in connection with a combination of shares,
recapitalization, merger, consolidation or other corporate reorganization).
1
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"Controlling Person" has the meaning set forth in Section 4.4.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations promulgated thereunder.
"Holder" has the meaning set forth in Section 4.1.
"Person" means an individual, a corporation, an association, a
partnership, a limited liability company, an estate, a trust, and any other
entity or organization, governmental or otherwise.
"Registrable Securities" has the meaning set forth in Section 4.2.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder.
"Selling Holder" has the meaning set forth in Section 4.4.
"Stock" means Common Stock and any other equity securities of New DeNora
Epyx.
"Transfer" means any direct or indirect offer, transfer, donation, sale,
assignment, pledge, hypothecation, grant of a security interest in, conveyance
of a beneficial ownership or other right in, or other disposal or attempted
disposal of all or any portion of a security or of any rights. "Transferred"
means the accomplishment of a Transfer, and "Transferee" means the recipient of
a Transfer.
ARTICLE II. ELECTION OF DIRECTORS OF NEW DENORA EPYX
2.1 Voting of Shares for Election of Directors of New DeNora Epyx.
(a) With respect to each election or removal of members of the Board
(including, without limitation, any replacement members), whether at an
annual or special meeting of stockholders or by written consent of
stockholders, each of the Stockholders agrees to vote its Stock (and any
shares of Stock over which it exercises voting control) and to take such
other action as may be necessary to fix the number of Directors of New
DeNora Epyx at eight (8), as indicated below, and to cause and maintain
the nomination and election to the Board and to keep in office as such:
(i) four (4) persons designated from time to time by DN (the "DN
Directors");
(ii) three (3) persons designated from time to time by ADL (the
"ADL Directors"); and
(iii) one (1) person designated from time to time by Hess (the
"Hess Director").
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(b) New DeNora Epyx shall nominate the DN Directors, the Hess
Director and the ADL Directors for election to the Board. Each of DN, ADL
and Hess further agrees to place at least one of the DN Directors, the
Hess Director and one of the ADL Directors on each committee of the Board.
The Chairman of the Board shall be nominated by ADL, subject to the
approval of DN. The Chief Executive Officer of New DeNora Epyx shall be
nominated by ADL, subject to the approval of DN, provided that upon the
selection of a Chief Executive Officer, such officer shall become a member
of the Board and will be one of the three ADL Directors.
2.2 Vacancies; Removal. Each of the Stockholders agrees to vote its Stock
(and any shares of Stock over which it exercises voting control), to the extent
required by Section 2.1, in such manner as shall be necessary or appropriate so
as to ensure that any vacancy occurring for any reason in the Board shall be
filled so as to constitute the Board in accordance with Section 2.1 above. The
DN Directors only may be removed by DN, the Hess Director only may be removed
by Hess and the ADL Directors only may be removed by ADL, provided that each of
DN, Hess and ADL agrees to vote for the removal of any director upon the
request of the party which designated such director and for the election to the
Board of a substitute director designated by such party.
2.3 Meetings; Expenses. The Board shall hold such number of meetings as
shall be determined by the Board. A quorum shall consist of four (4) Directors,
at least two of which shall be DN Directors and two of which shall be ADL
Directors. Meetings of the Board shall be convened in accordance with the
by-laws of New DeNora Epyx (attached hereto as Exhibit A), provided that in any
case a Board meeting shall be convened upon written request of at least two (2)
Directors, one of which is a DN Director and one of which is an ADL Director.
In such case, written notice of such meeting shall be delivered to each of the
other Directors at least seven (7) business days prior to the date of the
proposed meeting. In the event that the Hess Director is unavailable for any
meeting of the Board, Hess shall have the right to designate an alternate
Director for any such meeting, and such alternate Director shall have the same
rights, duties and obligations as the Hess Director. All Directors shall,
subject to reasonable substantiation and documentation be entitled to
reimbursement of out-of-pocket expenses incurred in attending each meeting of
the Board or any committee thereof or otherwise incurred in performing his or
her duties as a director of New DeNora Epyx (including, without limitation,
reasonable travel, lodging, meals and communication expenses).
2.4 Deadlock.
(a) If the Board, after a reasonable period of discussion at a duly
constituted meeting or meetings thereof, is unable to resolve any issue
before them, the resolution of which is necessary for the continued
operation of the Business in a commercially reasonable manner and/or the
Board is unable to agree upon any matter requiring special Board approval
pursuant to Section 3.3 below, a Special Meeting of the Board to further
consider the issue shall be scheduled and consideration of the matter
shall be suspended until such Special Meeting which shall meet within
seven (7) days to discuss the matter.
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(b) If the Board, after a reasonable period of discussion at a
Special Meeting called pursuant to Section 2.4(a), are unable to resolve
the issue that necessitated such meeting, (i) a subsequent Special Meeting
to further consider the issue shall be scheduled, (ii) consideration of
the matter shall be suspended until such Special Meeting and (iii) the
chief executive officers of DN, Hess and ADL (the "Senior Deadlock
Committee") shall meet within twenty (20) days to discuss the matter. At
the subsequent Special Meeting to discuss the issue, the Senior Deadlock
Committee shall make a report to the Board, and the Board shall adopt any
proposal agreed to unanimously by all members of the Senior Deadlock
Committee.
(c) During any period in which a deadlock continues, the Board shall
continue to conduct the Business in good faith and to the best of their
abilities consistent with past practices and the then current Operating
Plan.
ARTICLE III. COVENANTS OF NEW DENORA EPYX
3.1 Financial and Other Information.
(a) Accounts and Reports. New DeNora Epyx will maintain a standard
system of accounts in accordance with generally accepted accounting
principles consistently applied.
(b) Annual, Quarterly and Monthly Financial Statements. New DeNora
Epyx will deliver to each Stockholder: (i) within ninety (90) days after
the end of each fiscal year, financial statements of New DeNora Epyx and
its subsidiaries, if any, prepared in reasonable detail and in accordance
with generally accepted accounting principles consistently applied, and
certified by the principal financial officer of New DeNora Epyx that they
are true and accurate in all material respects as of their respective
dates, and (ii) copies of all financial statements and reports which New
DeNora Epyx shall send to its stockholders or file with the Securities and
Exchange Commission or any stock exchange on which any securities of New
DeNora Epyx may be listed. New DeNora Epyx also will deliver to each such
holder (x) within forty-five (45) days after the end of the first three
quarters of each fiscal year, a copy of the consolidated balance sheet of
New DeNora Epyx as of the end of such quarter and consolidated statements
of income and of cash flows of New DeNora Epyx for the fiscal quarter and
for the portion of the fiscal year ending on the last day of such quarter,
each of the foregoing balance sheets and statements to set forth in
comparative form the corresponding figures for the same period of the
prior fiscal year, and (y) within twenty (20) days after the end of each
calendar month, a copy of the consolidated balance sheet of New DeNora
Epyx as of the end of such month and consolidated statements of income and
of cash flows of New DeNora Epyx for such month and for the portion of the
fiscal year ending on the last day of such month, each of the foregoing
balance sheets and statements to set forth in comparative form the
corresponding figures for the same period of the prior fiscal year;
provided, however, that such financials may be subject to year-end
adjustments and need not contain all footnotes required under generally
accepted accounting principles, and to be certified, subject to normal
year-end audit adjustments, by the principal financial officer of New
DeNora Epyx that they are true and accurate in all material respects as of
their respective dates.
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(c) Operating Plan. The Operating Plan shall be revised at least
annually or otherwise as directed by the Board. The adoption of the
revised operating plan to supersede the Operating Plan shall be effective
as and when approved by the Required Percentage (as defined below) of the
Board.
(d) Visits and Discussions. New DeNora Epyx will permit each
Stockholder and its authorized representatives, at all reasonable times
during normal business hours and as often as reasonably requested, to
visit and inspect, at the expense of such Stockholder, any of the
properties of New DeNora Epyx, including its books and records and lists
of security holders, and to make extracts therefrom and to discuss the
affairs, finances and accounts of New DeNora Epyx with its officers.
(e) Confidentiality. Each Stockholder agrees to treat all non-public
information provided to it by New DeNora Epyx, including without
limitation all financial and other information provided to any such
Stockholder pursuant to this Section 3.1, as confidential and will not
convey any such information to any Person (other than such Stockholder's
Affiliates, accountants, legal counsel and other similar representatives)
without the prior written consent of New DeNora Epyx. The foregoing
obligation of confidentiality shall not apply to information (i) which
later becomes part of the public domain (other than as a result of a
violation of this Section 3.1(e) by any such Stockholder); (ii) which is
required to be disclosed to the extent necessary to enforce this
Agreement; or (iii) which is required to be disclosed by law or
governmental order or regulation, or subpoena or other legal process,
provided that such Stockholder notifies New DeNora Epyx as soon as
practicable prior to such disclosure, cooperates with New DeNora Epyx to
preserve the confidentiality of such information, and uses commercially
reasonable efforts to limit any such disclosure to the minimum disclosure
necessary to comply with such law or governmental order or regulation, or
subpoena or other legal process.
3.2 Dealings with Affiliates and Others. New DeNora Epyx covenants that it
shall not, without the prior approval of an absolute majority of the Board,
enter into any transaction (including without limitation the purchase, sale,
rental or exchange of any property or services, or any loans, advances or
guarantees) with any stockholder, director, officer, agent, partner, employee
or affiliate of New DeNora Epyx or any of its stockholders, other than upon
fair and reasonable terms no less favorable to New DeNora Epyx than would be
obtained in a comparable arms-length transaction with any other Person not so
affiliated with New DeNora Epyx.
3.3 Actions Requiring Special Board Approval.
(a) Without the prior approval of the Required Percentage (as defined
below) of the Board, acting by resolution at a duly called regular or
special meeting of the Board or acting by written consent, New DeNora Epyx
shall not:
(i) merge or consolidate New DeNora Epyx with any other Person,
or sell, assign, lease or otherwise dispose of or voluntarily part
with the control of (whether in one transaction or in a series of
transactions) all, or substantially all, of its assets or capital
stock (whether now owned or hereinafter acquired) or sell, assign or
otherwise dispose of (whether in one transaction or in a series of
transactions) any asset or group of
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assets which is material to the business or operations of New DeNora
Epyx, or agree to do any of the foregoing, except for sales or other
dispositions of assets in the ordinary course of business;
(ii) amend the Certificate of Incorporation or By-laws of New
DeNora Epyx;
(iii) sell or issue to any Person any capital stock of New
DeNora Epyx except pursuant to this Agreement or any approved stock
option or other equity participation plan, or agree to do either of
the foregoing;
(iv) redeem, purchase or otherwise acquire for value any Common
Stock or any other capital stock New DeNora Epyx except for
repurchases of Common Stock pursuant to the terms of any approved
stock option or other equity participation plan within the normal
operation of such plan, or agree to do any of the foregoing;
(v) declare or pay any dividend on any capital stock of New
DeNora Epyx;
(vi) liquidate, dissolve or commence proceedings in bankruptcy;
(vii) approve the Operating Plan; or
(viii) designate the individual to represent New DeNora Epyx in
the shareholders meeting of DNFC and the instructions to be granted
to such representative to vote at such meeting.
(b) For purposes of this Section 3.3, "Required Percentage" shall
mean: (i) seventy-five percent (rounded up to the nearest whole number) of
the Board as long as the number of directors on the Board is eight (8) or
less and (ii) sixty-six and two-thirds percent (rounded up to the nearest
whole number) of the Board as long as the number of directors on the Board
is nine (9) or more.
(c) To the extent that any of the matters listed in Section 3.3(a)
also require approval by the stockholders of New DeNora Epyx pursuant to
the General Corporation Law of the State of Delaware or any other
applicable law, such approval shall require the prior approval of
sixty-six and two-thirds percent of the shares of Common Stock then
outstanding, acting by resolution at a duly called regular or special
meeting of the stockholders of New DeNora Epyx or acting by written
consent.
3.4 Access to Public Capital Market. New DeNora Epyx shall use
commercially reasonable efforts to access the public capital market no later
than December 31, 2000.
3.5 Funding of Operations. The operations of New DeNora Epyx shall be
funded in accordance with the provisions of Section 7.4 of the Investment
Agreement.
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ARTICLE IV. REGISTRATION RIGHTS
4.1 "Piggy-Back" Registration Rights. If at any time or times after the
Closing Date, New DeNora Epyx shall determine or be required to register any
shares of its Common Stock for sale under the Securities Act (whether in
connection with a public offering of securities by New DeNora Epyx (a "primary
offering"), a public offering of securities by stockholders of New DeNora Epyx
(a "secondary offering"), or both, but not in connection with a registration
effected solely to implement an employee benefit plan or a transaction to which
Rule 145 or any other similar rule of the Commission under the Securities Act
is applicable), New DeNora Epyx will promptly give written notice (but in no
event less than 30 days before the anticipated filing date) thereof to DN, Hess
and ADL and any other Person to whom New DeNora Epyx has granted "piggy-back"
registration rights with respect to the Common Stock (referred to for purposes
of this Article IV collectively as the "Holders" and individually as a "Holder
) and such notice shall offer, subject to the terms and conditions hereof, each
such Holder the opportunity to register such Registrable Securities (as
hereinafter defined) as such Holder may request on the same terms and
conditions as the securities proposed to be sold by New DeNora Epyx or any
other Holder in such offering. If within 30 days after the delivery of such
notice by New DeNora Epyx one or more Holders of Registrable Securities request
in a writing delivered to New DeNora Epyx the inclusion of some or all of the
Registrable Securities (but not any other securities) held by them in such
registration, New DeNora Epyx will use its best efforts to effect the
registration under the Securities Act of all such Registrable Securities. In
the case of the registration of shares of Common Stock by New DeNora Epyx in
connection with an underwritten public offering, (i) New DeNora Epyx shall not
be required to include any Registrable Securities in such underwriting unless
the Holders thereof accept the terms of the underwriting as agreed upon between
New DeNora Epyx and the underwriter or underwriters selected by it, and (ii) if
the underwriter(s) determines that marketing factors require a limitation on
the number of Registrable Securities to be offered, New DeNora Epyx shall not
be required to register Registrable Securities of the Holders in excess of the
amount, if any, of shares of the capital stock which the principal underwriter
of such underwritten offering shall reasonably and in good faith agree to
include in such offering in excess of any amount to be registered for New
DeNora Epyx. In the event of any such limitation, the first shares to be
included in such registration shall be any shares to be registered for the
benefit of New DeNora Epyx and thereafter any shares which any other Holders
have requested to be registered shall be included on a pro rata basis, based
upon their respective holdings of Registrable Securities. All expenses relating
to the registration and offering of Registrable Securities pursuant to this
Section 4.1 (including the reasonable fees and expenses of not more than one
independent counsel for the Holders) shall be borne by New DeNora Epyx, except
that the Holders shall bear underwriting and selling commissions attributable
to their Registrable Securities being registered and any transfer taxes on
shares being sold by such Holders.
4.2 Registrable Securities. For the purposes of this Article IV, the term
"Registrable Securities" and any and all references to Registrable Securities
held by any Person shall mean any shares of Common Stock purchased by, or
issued to, a Stockholder prior to, at or after the Closing, and shall also mean
shares of Common Stock issuable pursuant to the exercise of warrants, options
or other convertible or exchangeable security, to the extent then exercisable,
notwithstanding that any such warrant, option or other convertible security has
not been
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exercised; provided, however, that any Common Stock that is sold in a
registered sale pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 thereunder, or that may be sold without
restriction (including volume limitations) pursuant to Rule 144(k) under the
Securities Act (as confirmed by an unqualified opinion of counsel to New DeNora
Epyx), shall not be deemed to be Registrable Securities.
4.3 Further Obligations of New DeNora Epyx. Whenever under Section 4.1 New
DeNora Epyx is required hereunder to register any Registrable Securities, it
agrees that it shall also do the following:
(a) Use its best efforts (with due regard to the management of the
ongoing business of New DeNora Epyx) diligently to prepare and file with
the Commission a registration statement and such amendments and
supplements to said registration statement and the prospectus used in
connection therewith as may be necessary to keep said registration
statement effective and to comply with the provisions of the Securities
Act with respect to the sale of securities covered by said registration
statement for the lesser of (i) 180 days (or 120 days in the case of
registration on Form S-3) or (ii) the period necessary to complete the
proposed public offering;
(b) Furnish to each selling Holder such copies of each preliminary
and final prospectus and such other documents as such Holder may
reasonably request to facilitate the public offering of its or his
Registrable Securities;
(c) Enter into any reasonable underwriting agreement required by the
proposed underwriter for the selling Holders, if any, in such form and
containing such terms as are customary; provided, however, that no Holder
shall be required to make any representations or warranties other than
with respect to its title to the Registrable Securities and any written
information provided by the Holders to New DeNora Epyx, and if the
underwriter requires that representations or warranties be made, New
DeNora Epyx shall make all such representations and warranties relating to
New DeNora Epyx reasonably required by such underwriter;
(d) Use its reasonable best efforts to register or qualify the
securities covered by said registration statement under the securities or
"blue-sky" laws of such jurisdictions as any selling Holders may
reasonably request, provided that New DeNora Epyx shall not be required to
register or qualify the securities in any jurisdictions which require it
to qualify to do business or subject itself to general service of process
therein;
(e) Immediately notify each selling Holder, at any time when a
prospectus relating to such Holder's Registrable Securities is required to
be delivered under the Securities Act, of the happening of any event as a
result of which such prospectus contains an untrue statement of a material
fact or omits any material fact necessary to make the statements therein
not misleading, and, at the request of any such selling Holder, prepare a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
not misleading;
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(f) Cause all such Registrable Securities to be listed on each
securities exchange or quoted in each quotation system on which similar
securities issued by New DeNora Epyx are then listed or quoted (or, in the
case of New DeNora Epyx's initial public offering, such exchange or
quotation system as New DeNora Epyx may determine);
(g) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make generally available to
its security holders, in each case as soon as practicable, but not later
than 45 days after the close of the period covered thereby (90 days in
case the period covered corresponds to a fiscal year of New DeNora Epyx),
an earnings statement of New DeNora Epyx which will satisfy the provisions
of Section 9(a) of the Securities Act;
(h) Obtain and furnish to each selling Holder, immediately prior to
the effectiveness of the registration statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto), a cold comfort letter from New DeNora
Epyx's independent public accountants in the same form and covering the
same matters as is typically delivered to underwriters and, in the event
that an underwriter or underwriters have been retained in connection with
such registration, such cold comfort letter to be provided to the selling
Holders shall be the same cold comfort letter delivered to such
underwriter or underwriters; and
(i) Otherwise cooperate with the underwriter or underwriters, the
Commission and other regulatory agencies and take all actions and execute
and deliver or cause to be executed and delivered all documents necessary
to effect the registration of any Registrable Securities under this
Article IV.
4.4 Indemnification; Contribution.
(a) Incident to any registration statement referred to in this
Article IV, and subject to applicable law, New DeNora Epyx will indemnify
and hold harmless each underwriter, each Holder who offers or sells any
such Registrable Securities in connection with such registration statement
(including its partners (including partners of partners and stockholders
of such partners), and directors, officers, employees and agents of any of
them (a "Selling Holder"), and each person (a "Controlling Person") who
controls any of them within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (collectively, the "Indemnified
Persons"), from and against any and all losses, claims, damages, expenses
and liabilities, joint or several (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, expenses
or liabilities arise out of or are based on (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement (including any related preliminary or definitive prospectus, or
any amendment or supplement to such registration statement or prospectus),
(ii) any omission or alleged omission to state in such document a material
fact required to be stated in it or necessary to make the statements in it
not misleading, or (iii) any violation by New DeNora Epyx of the
Securities Act,
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any state securities or "blue sky" laws or any rule or regulation
thereunder in connection with such registration; provided, however, that
New DeNora Epyx will not be liable to the extent that such loss, claim,
damage, expense or liability arises from and is based on an untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information furnished in writing to New
DeNora Epyx by such Indemnified Person expressly for use in such
registration statement (in such Person's capacity as a shareholder of New
DeNora Epyx and not in its capacity as an officer or director of New
DeNora Epyx and which such information relates to such Person's capacity
as a shareholder). With respect to such untrue statement or omission or
alleged untrue statement or omission in the information furnished in
writing to New DeNora Epyx by any Selling Holder expressly for use in such
registration statement (in such Person's capacity as a shareholder of New
DeNora Epyx and not in its capacity as an officer or director of New
DeNora Epyx and which such information relates to such Person's capacity
as a shareholder), such Selling Holder will indemnify and hold harmless
each underwriter, New DeNora Epyx (including its directors, officers,
employees and agents), each other Selling Holder (including its partners
(including partners of partners and stockholders of such partners) and
directors, officers, employees and agents of any of them), and each person
who controls any of them within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages, expenses and liabilities, joint or several,
to which they, or any of them, may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise to the same extent provided in the
immediately preceding sentence. In no event, however, shall the liability
of a Selling Holder for indemnification under this Section 4.4(a) in its
capacity as such (and not in its capacity as an officer or director of New
DeNora Epyx) exceed the lesser of (i) that proportion of the total of such
losses, claims, damages or liabilities indemnified against equal to the
proportion of the total securities sold under such registration statement
which is being sold by such Selling Holder or (ii) the proceeds received
by such Selling Holder from its sale of Registrable Securities under such
registration statement.
(b) If the indemnification provided for in Section 4.4(a) above for
any reason is held by a court of competent jurisdiction to be unavailable
to an indemnified party in respect of any losses, claims, damages,
expenses or liabilities referred to therein, then each indemnifying party
under this Section 4.4, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, expenses or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by New DeNora Epyx, the other Selling Holders
and the underwriters from the offering of the Registrable Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the
relative fault of New DeNora Epyx, the other Selling Holders and the
underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, expenses or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
New DeNora Epyx, the Selling Holders and the underwriters shall be deemed
to be in the same respective proportions that the net proceeds from the
offering (before deducting expenses) received by New DeNora Epyx and the
Selling Holders and the underwriting discount received by the
underwriters, in each case as set forth in the table on the cover page of
the applicable prospectus, bear to the aggregate public offering price of
the Registrable Securities. The relative fault of New DeNora Epyx, the
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Selling Holders and the underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by New DeNora Epyx, the Selling Holders or
the underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
New DeNora Epyx, the Selling Holders, and the underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 4.4(b)
were determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. In no event, however, shall a
Selling Holder be required to contribute any amount under this Section 4.4(b)
in excess of the lesser of (i) that proportion of the total of such losses,
claims, damages or liabilities indemnified against equal to the proportion of
the total Registrable Securities sold under such registration statement which
are being sold by such Selling Holder or (ii) the proceeds received by such
Selling Holder from its sale of Registrable Securities under such registration
statement. No person found 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.
(c) The amount paid by an indemnifying party or payable to an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 4.4 shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, payable as the same
are incurred. The indemnification and contribution provided for in this
Section 4.4 will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified parties or any
officer, director, employee, agent or controlling person of the
indemnified parties.
4.5 Rule 144 and 144A Requirements. If New DeNora Epyx becomes subject to
the reporting requirements of either Section 13 or 15(d) of the Exchange Act,
New DeNora Epyx will use its best efforts thereafter to file with the
Commission such information as is specified under either of said Sections for
so long as DN, Hess or ADL are Holders of Registrable Securities; and in such
event, New DeNora Epyx shall use its best efforts to take all action as may be
required as a condition to the availability of Rule 144 or Rule 144A under the
Securities Act (or any successor or similar exemptive rules hereafter in
effect). New DeNora Epyx shall furnish to each of DN, Hess and ADL upon request
a written statement executed by New DeNora Epyx as to the steps it has taken to
comply with the current public information requirement of Rule 144 or Rule 144A
or such successor rules.
4.6 Market Stand-Off. Each of DN, Hess and ADL agrees, if requested by New
DeNora Epyx and an underwriter of Common Stock of New DeNora Epyx (provided
that all Holders have been so requested), not to sell or otherwise transfer or
dispose of any Common Stock held by it for such period, not to exceed 180 days
following the effective date of any registration statement (other than a
registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable) of New DeNora Epyx filed under the
<PAGE>
Securities Act as New DeNora Epyx or such underwriter shall specify reasonably
and in good faith.
ARTICLE V. MISCELLANEOUS PROVISIONS
5.1 Restrictions on Transfer. No Stockholder shall Transfer any Stock
without the prior written consent, which consent shall not be unreasonably
withheld, of the other Stockholders except (i) pursuant to Article IV hereof;
(ii) in connection with any pledge to any of such Stockholder's lenders; (iii)
ADL may Transfer shares of Common Stock to Hess pursuant to the Investment
Agreement between ADL and Hess dated as of March 30, 2000; and (iv) any
Stockholder may Transfer, in one or more transactions, up to an aggregate of
ten percent (10%) of the outstanding shares of Common Stock, provided that each
Transferee is a financial or investment institution which is in good standing
with the applicable regulatory authorities and is in compliance with the
applicable laws and regulations. Notwithstanding any provision of this Section
5.1 to the contrary, no Stockholder may Transfer any shares of Stock unless the
Transferee agrees in writing to be bound by the provisions of this Section 5.1.
The provisions of this Section 5.1 shall terminate automatically and will be of
no further force and effect upon the closing of an IPO (as defined in Section
5.10 below). In the event that at October 15, 2000, the Stockholders determine
that an IPO will not be completed by December 31, 2000 for any reason, the
Stockholders agree to renegotiate in good faith the provisions of this Section
5.1.
5.2 Legend on Securities. The Stockholders acknowledge and agree that the
following legend shall be typed on each certificate evidencing any of the
securities issued hereunder held at any time by the Stockholders:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (1) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT OR
(2) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO THE
DISPOSITION OF SECURITIES. THESE SECURITIES ARE ALSO SUBJECT TO THE PROVISIONS
OF A CERTAIN STOCKHOLDERS' AGREEMENT, DATED AS OF APRIL 4, 2000, INCLUDING
CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. A COMPLETE AND CORRECT COPY
OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.
5.3 Amendment and Waiver. Any party may waive any provision hereof
intended solely for its benefit in writing. No failure or delay on the part of
any party hereto in exercising any right, power or remedy hereunder shall
operate as a waiver thereof. Except as otherwise expressly provided herein, the
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law or in equity or
otherwise. This Agreement may not be amended without the prior written consent
of each of the parties hereto.
<PAGE>
5.4 Notices. All notices and other communications shall be in writing and
shall be deemed given if delivered by hand, sent via facsimile, sent via a
reputable nationwide courier service or mailed by registered mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice) and shall be deemed
given on the date on which so hand-delivered, the date on which receipt of the
facsimile is acknowledged, the next business day following the date on which so
sent or on the third business day following the date on which so mailed, as the
case may be:
If to DN:
Herengracht 548
Postbus 990
1000AZ Amsterdam, The Netherlands
Attention: Managing Board of Directors
Facsimile: +31.20.625.8274
with a copy to:
Avv. Giuseppe Cambareri
Via dei Giardini 10
20121 Milano, Italy
Facsimile: +39.02.6555.152
If to ADL:
Acorn Park
Cambridge, MA 02140
Attention: General Counsel
Facsimile: (617) 498-7116
If to Hess:
1185 Avenue of the Americas
New York, NY 10036
Attention: General Counsel
Facsimile: (212) 536-8241
If to New DeNora Epyx:
Acorn Park
Cambridge, MA 02140
Attention: Chief Operating Officer
Facsimile: (617) 498-6655
5.5 Headings. The Article and Section headings used or contained in this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
5.6 Counterparts. This Agreement may be executed in one or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which together
shall be deemed to constitute one and the same agreement.
<PAGE>
5.7 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
5.8 Entire Agreement. This Agreement and the other agreements contemplated
hereby are intended by the parties as a final expression of their agreement and
intended to be complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. This Agreement and the other agreements contemplated hereby
(including the exhibits hereto) supersede all prior agreements and
understandings between the parties with respect to such subject matter. The
Stockholders agree that in the event of any inconsistencies between the by-laws
of New DeNora Epyx and the provisions of this Agreement, the latter shall
prevail. No amendment to the by-laws of New DeNora Epyx shall be deemed an
amendment of this Agreement, in whole or in part, so that no right or
obligation of the parties with respect to any matters covered by this Agreement
shall be affected thereby.
5.9 Law Governing. This Agreement shall be construed and enforced in
accordance with and governed by the laws of The Commonwealth of Massachusetts
(without giving effect to principles of conflicts of law). Any controversy,
claim or dispute arising out of or relating to this Agreement, the Investment
Agreement or any other agreement or instrument delivered in connection
therewith shall be submitted to and resolved exclusively by arbitration in
accordance with the rules of the American Arbitration Association in effect on
the date thereof. Judgment upon the award rendered by the arbitrator(s) in
accordance with said rules may be entered and enforced in any court of
competent jurisdiction and, for such purpose, each party hereby waives trial by
jury in any action relating thereto and consents to the jurisdiction of any
Massachusetts court (federal or state). Any such arbitration proceedings shall
be held in Boston, Massachusetts.
5.10 Termination upon Initial Public Offering. This Agreement
automatically shall, except as provided in the following sentence,
automatically terminate and be of no further force or effect upon the closing
of an underwritten initial public offering of New DeNora Epyx pursuant to an
effective registration statement covering the offer and sale to the public of a
number of shares equal to at least ten percent (10%) of the shares of Common
Stock outstanding prior to such offering (an "IPO"). Notwithstanding the
preceding sentence, Article IV and Sections 3.1(e) and 5.9 hereof shall survive
such termination.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DENORA NEW ENERGY INVESTMENTS B.V.
(presently ANDROMA B.V.)
By: /s/ Mauro Saponelli
---------------------------------
Mauro Saponelli
Managing Director
EPYX CORPORATION
By: /s/ Mark A. Brodsky
---------------------------------
Mark A. Brodsky
President
ARTHUR D. LITTLE, INC.
By: /s/ Mark A. Brodsky
---------------------------------
Mark A. Brodsky
Executive Vice President
AMERADA HESS CORPORATION
By: /s/ John A. Gartman
---------------------------------
Name: John A. Gartman
Title: Sr. Vice President
