Exhibit 3
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SHAREHOLDERS AGREEMENT
BY AND AMONG
MASCOTECH, INC.
MASCO CORPORATION
RICHARD MANOOGIAN
RICHARD AND JANE MANOOGIAN FOUNDATION
THE HEARTLAND ENTITIES LISTED ON THE
SIGNATURE PAGES HERETO
THE HIP CO-INVESTORS LISTED ON THE SIGNATURE PAGES HERETO
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DATED AS OF NOVEMBER 28, 2000
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions.................................................2
SECTION 1.02. Rules of Construction......................................10
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Authority; Enforceability..................................11
SECTION 2.02. No Breach..................................................11
SECTION 2.03. Consents...................................................11
SECTION 2.04. Share Ownership............................................12
ARTICLE III
SHARE TRANSFERS
SECTION 3.01. Restrictions on Transfer...................................13
SECTION 3.02. Exceptions to Restrictions.................................13
SECTION 3.03. Improper Transfer..........................................13
SECTION 3.04. Restrictive Legend.........................................13
ARTICLE IV
RIGHTS OF CERTAIN SHAREHOLDERS
SECTION 4.01. Rights of First Offer......................................14
SECTION 4.02. Tag-Along Rights...........................................15
SECTION 4.03. Drag-Along Rights..........................................17
SECTION 4.04. Information................................................18
SECTION 4.05. Preemptive Rights..........................................21
SECTION 4.06. Board of Directors.........................................24
SECTION 4.07. Right to Observer..........................................25
SECTION 4.08. Consultation Right.........................................26
SECTION 4.09. Approval Rights............................................26
SECTION 4.10. Transactions with Affiliates...............................27
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Company Registration.......................................28
SECTION 5.02. Demand Registration Rights.................................29
SECTION 5.03. Registration Procedures....................................33
SECTION 5.04. Registration Expenses......................................37
SECTION 5.05. Indemnification............................................38
SECTION 5.06. 1934 Act Reports...........................................41
SECTION 5.07. Holdback Agreements........................................41
SECTION 5.08. Participation in Registrations.............................42
SECTION 5.09. Remedies...................................................42
SECTION 5.10. Other Registration Rights..................................42
SECTION 5.11. Rule 144...................................................42
ARTICLE VI
RIGHTS OF HOLDERS OF CLASS A PREFERRED STOCK
SECTION 6.01. Series A Preferred Stock...................................43
SECTION 6.02. Management Fee.............................................43
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices....................................................43
SECTION 7.02. Binding Effect; Benefits; Entire Agreement.................44
SECTION 7.03. Waiver.....................................................44
SECTION 7.04. Amendment..................................................44
SECTION 7.05. Assignability..............................................45
SECTION 7.06. Applicable Law.............................................45
SECTION 7.07. Specific Performance.......................................45
SECTION 7.08. Severability...............................................45
SECTION 7.09. Additional Securities Subject to Agreement.................45
SECTION 7.10. Name Change................................................46
SECTION 7.11. Section and Other Headings.................................46
SECTION 7.12. Counterparts...............................................46
SECTION 7.13. Termination of Certain Provisions..........................46
SECTION 7.14. ERISA Matters..............................................46
SECTION 7.15. Regulatory Cooperation.....................................46
SECTION 7.16. Publicity..................................................47
SECTION 7.17. Expenses...................................................47
SHAREHOLDERS AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of November 28,
2000, by and among MASCOTECH, INC. a Delaware corporation (the "Company"),
Richard Manoogian ("IS"), the Richard and Jane Manoogian Foundation
("Foundation Shareholder" and, together with IS, "RM"), MASCO CORPORATION,
a Delaware corporation (together with RM, the "Rollover Investors"), the
HEARTLAND ENTITIES (as defined herein), LONG POINT CAPITAL FUND, L.P. and
LONG POINT CAPITAL PARTNERS L.L.C. (collectively "Long Point"), CRM 1999
ENTERPRISE FUND, LLC ("Cramer" and with Long Point collectively the "Masco
Transferees" or individually as a "Masco Transferee") and the entities
identified as HIP CO-INVESTORS on the signature pages hereof (the HIP
Co-Investors (including, without limitation, the Masco Transferees), the
Rollover Investors, Sponsor and each Person executing a Joinder Agreement
are collectively referred to herein as the "Shareholders" and individually
as a "Shareholder").
WHEREAS, the Company and Riverside Acquisition Corporation
(formerly Riverside Company LLC), a Delaware corporation ("Riverside") and
an affiliate of Sponsor, have entered into a Recapitalization Agreement,
dated as of August 1, 2000, as amended by Amendment No. 1 thereto, dated as
of October 23, 2000, and Amendment No. 2 thereto, dated as of November 28,
2000 (the "Recapitalization Agreement"), which provides for, among other
things, the merger of Riverside with and into the Company (the
"Recapitalization Merger").
WHEREAS, as a result of and in connection with the
Recapitalization Merger, each Shareholder will own the number of shares of
common stock of the Company, $1.00 par value (the "Common Stock"), set
forth on Schedule 2.04 hereto and Company Shareholder will own 361,001
shares of class A preferred stock of the Company, $1.00 par value (the
"Class A Preferred Stock").
WHEREAS, the parties hereto desire to enter into this agreement
to provide for certain rights and restrictions with respect to the Common
Stock.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties mutually agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"ADJUSTMENTS" means adjustments to the number of shares of
Common Stock outstanding as a result of a stock split, stock dividend,
reclassification, subdivision or reorganization, recapitalization or
similar event.
"ADVICE" see Section 5.03(p).
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling, controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGREEMENT" see the recitals to this Agreement.
"ASSIGNEE" see Section 4.01(c).
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the City of
New York are authorized or obligated by law or executive order to close.
"CAPITAL STOCK" means, with respect to any Person, except as
otherwise provided in Section 4.05, any and all shares, interests,
participations, rights in or other equivalents (however designated) of such
Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"CLASS A PREFERRED STOCK" see the recitals to this Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" see the recitals to this Agreement.
"COMPANY" see the recitals to this Agreement.
"COMPANY OPTION PERIOD" see Section 4.01(b).
"COMPANY SHAREHOLDER" means Masco Corporation, a Delaware
corporation, provided that upon the transfer of all of Masco Corporation's
shares of Common Stock to Masco Capital Corporation, a wholly-owned
subsidiary of Masco Corporation, Masco Capital Corporation shall also be
deemed Company Shareholder for all purposes of this Agreement; provided
that Masco Capital Corporation executes a Joinder Agreement.
"CSFB" means, collectively, the CSFB Plan Partner and the CSFB
Funds, or the CSFB Plan Partner acting on behalf of such other Persons.
"CSFB DIRECTOR" see Section 4.06(a)(ii)(c).
"CSFB FUNDS" means, collectively, Credit Suisse First
Boston Equity Partners (Bermuda), L.P., Credit Suisse First Boston U.S.
Executive Advisors, L.P., EMA Partners Fund 2000, L.P. and EMA Private
Equity Fund 2000, L.P.
"CSFB PLAN PARTNER" means Credit Suisse First Boston Equity
Partners, L.P.
"DEMAND HOLDERS" means any of Company Shareholder (on behalf of
itself and its Direct Permitted Transferees), RM (on behalf of himself,
itself and his or its Direct Permitted Transferees), a QI Demand Holder (on
behalf of itself and its Direct Permitted Transferees), CSFB (on behalf of
itself and its Direct Permitted Transferees and other Transferees to the
extent permitted by Section 5.02(g)) or Sponsor (on behalf of itself and
its Direct Permitted Transferees).
"DEMAND REGISTRATION" see Section 5.02(a).
"DIRECT PERMITTED TRANSFEREE" means:
(i) with respect to any Shareholder who is a natural person,
(1) the spouse or any lineal descendant (including by adoption and
stepchildren) of such Shareholder, (2) any trust of which such
Shareholder is the trustee and which is established solely for the
benefit of any of the foregoing individuals or (3) any partnership,
all of the general partner(s) and limited partner(s) (if any) of
which are one or more Persons identified in this clause (i);
(ii) with respect to Sponsor, any Affiliate of Sponsor;
(iii) with respect to Company Shareholder, any controlled
Affiliate of Company Shareholder (including any wholly-owned
subsidiary of Company Shareholder);
(iv) with respect to any Institutional Shareholder, any
Affiliate of such Institutional Shareholder;
(v) with respect to Foundation Shareholder, any Affiliate of
Foundation Shareholder;
(vi) with respect to MetLife, (a) any Affiliates of MetLife or
(b) Portfolio Advisors, LLC or any controlled Affiliate of Portfolio
Advisors, LLC; and
(vii) with respect to any Shareholder, any institutional lender
to which such Shareholder pledges or grants a security interest in
shares of Common Stock in a bona fide transaction effected in good
faith, provided that (x) such pledgee executes a Joinder Agreement
and (y) prior to any subsequent foreclosure or sale of such shares or
any Transfer resulting from such foreclosure is effected, the
provisions of Section 4.01 must be satisfied.
"ELIGIBLE OFFERING" see Section 4.05(a).
"FIRST OPTION" see Section 4.01(b).
"FIRST UNION CAPITAL PARTNERS" means First Union Capital
Partners, LLC.
"FOUNDATION SHAREHOLDER" see the recitals to this Agreement.
"GAAP" means United States generally accepted accounting
principles consistently applied throughout the specified period.
"HEARTLAND ENTITIES" means Heartland Industrial Partners,
L.P., Heartland Industrial Partners (FF), L.P., Heartland Industrial
Partners (E1), L.P., Heartland Industrial Partners (K1), L.P.,
Heartland Industrial Partners (C1), L.P. and Direct Permitted
Transferees of any of the foregoing.
"HIP CO-INVESTOR" means (i) each Shareholder that is a limited
partner, or an Affiliate of a limited partner, in Sponsor or in any other
fund or investment vehicle established or managed by Sponsor or an
Affiliate of Sponsor, (ii) CSFB, (iii) each Masco Transferee and (iv)
MetLife; provided that, upon the Transfer by MetLife of all of its shares
of Common Stock to Portfolio Advisors, LLC or any controlled Affiliate of
Portfolio Advisors, LLC in accordance with Section 3.02(a) of this
Agreement, Portfolio Advisors, LLC or such controlled Affiliate of
Portfolio Advisors, LLC shall be deemed to be a HIP Co-Investor under this
Agreement.
"HOLDER" means any Demand Holder or Incidental Demand
Holder.
"INCIDENTAL DEMAND HOLDER" see Section 5.02.
"INITIAL PUBLIC OFFERING" means either (x) an underwritten
initial public offering of the Company pursuant to an effective
registration statement filed under the 1933 Act (excluding registration
statements filed on Form S-8, or any similar successor form or another form
used for a purpose similar to the intended use for such forms) or (y) the
listing of the Common Stock on a national securities exchange or
authorization for quotation on the Nasdaq National Market System.
"INSTITUTIONAL SHAREHOLDER" means any Shareholder that is not a
natural person (other than Company Shareholder, Foundation Shareholder or
Sponsor).
"INVESTORS" see Section 4.01(a).
"INVESTOR'S NOTICE" see Section 4.01(a).
"IS" see the recitals to this Agreement.
"JOINDER AGREEMENT" means a joinder agreement, a form of which
is attached hereto as Exhibit A.
"MASCO TRANSFEREES" see the recitals to this Agreement.
"MATERIAL EVENT" see Section 4.09(a).
"METLIFE" means Metropolitan Life Insurance Company.
"1933 ACT" means the Securities Act of 1933.
"1934 ACT" means the Securities Exchange Act of 1934, as
amended.
"OBSERVER" see Section 4.07.
"OFFERED SHARES" see Section 4.01(a).
"PERMITTED TRANSFEREE" means:
(i) with respect to any Shareholder who is a natural person,
(1) the spouse or any lineal descendant (including by adoption and
stepchildren) of such Shareholder, (2) any trust of which such
Shareholder is the trustee and which is established solely for the
benefit of any of the foregoing individuals, (3) any charitable
foundation selected by such Shareholder, or (4) any partnership, all
of the general partner(s) and limited partner(s) (if any) of which
are one or more Persons identified in this clause (i), provided that,
in the case of clauses (1), (2), (3) or (4), such Person executes a
Joinder Agreement;
(ii) with respect to Sponsor, (a) any investor in Sponsor or an
Affiliate of such investor in Sponsor or an investor in any fund or
other investment vehicle established or managed by Sponsor or any of
its controlled Affiliates or any other Person which is an Affiliate
of Sponsor on the date hereof, (b) any of the Shareholders and any of
their respective Affiliates, (c) any controlled Affiliate of Sponsor,
and (d) any investor in Sponsor that is an investment fund in
connection with a pro rata distribution of shares of Common Stock to
all investors in Sponsor at the time of the expiration or termination
of the fund, provided that, in the case of clauses (a), (b), (c) or
(d), any such investor executes a Joinder Agreement; and provided,
further, that, in the case of these clauses (a), (b) or (c) Transfers
to such Persons would not cause Sponsor to own, together with its
Affiliates, a number of shares equal to less than thirty percent
(30%) of the outstanding shares of Common Stock of the Company as of
the date of any such Transfer;
(iii) with respect to Company Shareholder, any controlled
Affiliate of Company Shareholder (including any wholly-owned
subsidiary of Company Shareholder), provided that such Affiliate or
wholly-owned subsidiary executes a Joinder Agreement;
(iv) with respect to any Institutional Shareholder (other than
MetLife), (a) any Affiliate of such Institutional Shareholder, (b)
any investor of such Institutional Shareholder that is an investment
fund in connection with a pro rata distribution of shares of Common
Stock to all investors (a "Shareholder Investor" or collectively
"Shareholder Investors") in such Institutional Shareholder at the
time of the expiration or termination of the fund, or (c) any Person
acquiring all or substantially all of the investment portfolio of
such Institutional Holder; and provided, further, that, in the case
of clause (a), (b) or (c), all such investors execute a Joinder
Agreement;
(v) with respect to Foundation Shareholder, any Affiliate of
Foundation Shareholder, provided such Affiliate executes a Joinder
Agreement;
(vi) with respect to MetLife, (a) any Affiliate of MetLife, (b)
Portfolio Advisors, LLC or any controlled Affiliate of Portfolio
Advisors, LLC or (c) any Shareholder Investor of such Institutional
Shareholder that is an investment fund in connection with a pro rata
distribution to all Shareholder Investors of such Institutional
Shareholder at the time of the expiration or termination of the fund;
provided, further, that, in the case of clause (a), (b) or (c), such
investors execute a Joinder Agreement; and
(vii) with respect to any Shareholder, any institutional lender
to which such Shareholder pledges or grants a security interest in
shares of Common Stock in a bona fide transaction effected in good
faith, provided that (x) such pledgee executes a Joinder Agreement
and (y) prior to any subsequent foreclosure or sale of such shares or
any Transfer resulting from such foreclosure is effected, the
provisions of Section 4.01 must be satisfied.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government, a political subdivision or an agency or instrumentality
thereof.
"PIGGYBACK HOLDER" see Section 5.01(a).
"PIGGYBACK REGISTRATION" see Section 5.01(a).
"PROPORTIONATE PERCENTAGE" see Section 4.05(a).
"PRO RATA PORTION" means, with respect to shares of Common
Stock held by a Shareholder at any date of determination such number of
shares of Common Stock owned by such Shareholder as would result in such
Shareholder selling the same percentage of the total number of shares of
Common Stock held by such Shareholder in the Transfer subject to the
applicable Transfer Notice (the "Subject Sale") as the Sponsor Transferor
sells in the Subject Sale (assuming, with respect to the Transfer Notice,
that all Shareholders have exercised their Tag-Along Right).
"PUBLIC OFFERING" see Section 4.05(a)(i).
"PURCHASER" see Section 4.02(a).
"QI DEMAND HOLDER" means any Qualified Investor other than
CSFB.
"QUALIFIED INVESTOR" means a HIP Co-Investor who (x), together
with its Affiliates, at or prior to any date of determination, has made an
aggregate cash investment in Common Stock of the Company equal to at least
$40.0 million (based upon the original cost of such investment) or (y)
owns, together with its Direct Permitted Transferees, at least 10% or more
of the outstanding shares of Common Stock of the Company at the date of
determination. For purposes of this definition and any other definitions
containing thresholds for the dollar amount of cash invested in Common
Stock of the Company or the percentage ownership of Common Stock of the
Company, the cash investments and the beneficial ownership of the CSFB
Funds and the CSFB Plan Partner will be deemed to be aggregated.
"QUALIFYING PUBLIC EQUITY OFFERING" means either (x) one or
more underwritten public offerings of common equity securities of the
Company pursuant to an effective registration statement filed under the
1933 Act (excluding registration statements filed on Form S-8, or any
similar successor form) resulting in aggregate gross proceeds to the
Company of $100,000,000 or more or (y) the listing of the Common Stock on a
national securities exchange or authorization for quotation on the Nasdaq
National Market System for which there is a public float of least
$100,000,000 held by non-Affiliates of the Company.
"RECAPITALIZATION AGREEMENT" see the recitals to this
Agreement.
"RECAPITALIZATION MERGER" see the recitals to this Agreement.
"REGISTRABLE SECURITIES" shall mean any of (i) the shares of
Common Stock owned by any Shareholder at the time of determination and (ii)
any other securities issued or issuable with respect to the Common Stock by
way of a stock split, stock dividend, reclassification, subdivision or
reorganization, recapitalization or similar event. As to any particular
Registrable Securities, such securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the offering
of such securities by the holder thereof shall have been declared effective
under the 1933 Act and such securities shall have been disposed of by such
holder pursuant to such registration statement, (b) such securities have
been sold to the public pursuant to Rule 144 (or any similar provision then
in force) promulgated under the 1933 Act, (c) except for purposes of
Section 5.02, such securities shall have been otherwise transferred and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the 1933 Act or any similar state law then in force or
(d) such securities shall have ceased to be outstanding.
"REGISTRATION" see Section 5.03.
"REPRESENTATIVES" means the officers, employees, directors and
agents of such Shareholder, including, representatives of its legal,
accounting and financial advisors.
"REQUEST NOTICE" see Section 5.02(a).
"REQUISITE INVESTORS" means (i) Company Shareholder for so long
as Company Shareholder either (a) has outstanding commitments or loans
under the Subordinated Loan Agreement, (b) owns, together with its
Permitted Transferees, $10.0 million or more in liquidation preference of
Class A Preferred Stock, or (c) owns, together with its Direct Permitted
Transferees, at least 1,571,569 shares (as adjusted for Adjustments) of
Common Stock, (ii) RM, (iii) CSFB (on behalf of itself and its Direct
Permitted Transferees) and (iv) HIP Co-Investors (other than CSFB) (on
behalf of the HIP Co-Investors and their Direct Permitted Transferees)
owning a majority of the number of shares of Common Stock owned by all HIP
Co-Investors (other than CSFB) and their Direct Permitted Transferees as a
group at the applicable date of determination.
"RIVERSIDE" see the recitals to this Agreement.
"RM" see the recitals to this Agreement.
"ROLLOVER DEMAND HOLDERS" means Company Shareholder, RM and
their respective Direct Permitted Transferees.
"ROLLOVER INVESTORS" see the recitals to this Agreement.
"SECOND OPTION" see Section 4.01(c).
"SENIOR CREDIT FACILITIES" means the Credit Agreement, dated as
of the date hereof, among The Chase Manhattan Bank, Chase Securities Inc.,
the Company and certain of its subsidiaries and the other lenders and
financial institutions party thereto from time to time, as the same may be
amended, modified, waived, refinanced or replaced from time to time
(whether under a new credit agreement or otherwise).
"SHAREHOLDERS" see the recitals to this Agreement.
"SIGNIFICANT SUBSIDIARY" means any subsidiary of the Company
that would be a "significant subsidiary" as such term is defined in Rule
1.02 of Regulation S-X under the 1933 Act.
"SPONSOR" means collectively the Heartland Entities or
Heartland Industrial Partners, L.P. acting on behalf of the other
Heartland Entities.
"SPONSOR OPTION PERIOD" see Section 4.01(c).
"SUBORDINATED LOAN AGREEMENT" means the subordinated loan
agreement dated the date hereof between Company Shareholder and the
Company.
"SUBSTANTIAL CHANGE OF CONTROL" means the sale, lease or
transfer in one or a series of related transactions of at least a majority
of the consolidated assets of the Company and its subsidiaries or a
majority of the Capital Stock of the Company representing the right to vote
for directors to any Person or "group" of Persons (other than Sponsor and
its Affiliates) whether direct or indirect or by way of any merger,
consolidation or other business combination or purchase of beneficial
ownership or otherwise.
"TRANSACTIONS" means (i) the Recapitalization Merger and (ii)
all of the other transactions contemplated by the Recapitalization
Agreement, including the transactions contemplated by the subscription
agreements to be entered into in connection with the Recapitalization
Merger.
"TRANSFER" means the direct or indirect offer, sale, donation,
assignment (as collateral or otherwise), pledge, hypothecation,
encumbrance, transfer or disposition of any security.
"TRANSFER NOTICE" see Section 4.02(a).
"TRANSFEREE" means any Person who acquires shares of Common
Stock from a Shareholder and who is not a Permitted Transferee.
"TRIGGERING EVENT" means:
(i) with respect to a Rollover Demand Holder or CSFB, after the
earlier of (1) the fifth anniversary of the date hereof if an Initial
Public Offering has not been consummated by the fifth anniversary of
the date hereof and (2) 180 days after an Initial Public Offering;
(ii) with respect to a QI Demand Holder, 180 days after an
Initial Public Offering; and
(iii) with respect to Sponsor, at any time.
SECTION 1.02. Rules of Construction. For purposes of this
Agreement whenever a threshold for the dollar amount of cash invested in
Common Stock of the Company or the percentage of ownership of Common Stock
is to be determined as to a Shareholder, the cash investments and the
beneficial ownership of Direct Permitted Transferees of such Shareholder
shall be aggregated with the cash investments and beneficial ownership of
such Shareholder and the cash investments and the beneficial ownership of
the Heartland Entities will be deemed to be aggregated.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each of the parties hereby severally represents and warrants to
each of the other parties as follows:
SECTION 2.01. Authority; Enforceability. Such party has the
legal capacity or corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. Such party (in the
case of parties that are not natural persons) is duly organized and validly
existing under the laws of its jurisdiction of organization, and the
execution of this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by all necessary action. No
other act or proceeding, corporate or otherwise, on its part is necessary
to authorize the execution of this Agreement or the consummation of any of
the transactions contemplated hereby. This Agreement has been duly executed
by such party and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with the terms of this Agreement,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the rights of creditors generally and to the
exercise of judicial discretion in accordance with general principles of
equity (whether applied by a court of law or of equity).
SECTION 2.02. No Breach. Neither the execution of this
Agreement nor the performance by such party of its obligations hereunder
nor the consummation of the transactions contemplated hereby or by the
Transactions does or will:
(a) in the case of parties that are not natural persons,
conflict with or violate its certificate of incorporation, bylaws or
other organizational documents;
(b) violate, conflict with or result in the breach or
termination of, or otherwise give any other person the right to
accelerate, renegotiate or terminate or receive any payment or
constitute a default or an event of default (or an event which with
notice, lapse of time, or both, would constitute a default or event
of default) under the terms of, any contract or agreement to which it
is a party or by which it or any of its assets or operations are
bound or affected, including, in the case of the Company, the Senior
Credit Facilities or Subordinated Loan Agreement; or
(c) constitute a violation by such party of any laws, rules or
regulations of any governmental, administrative or regulatory
authority or any judgments, orders, rulings or awards of any court,
arbitrator or other judicial authority or any governmental,
administrative or regulatory authority.
SECTION 2.03. Consents. No consent, waiver, approval,
authorization, exemption, registration, license or declaration is required
to be made or obtained by such party, other than those which have been made
or obtained, in connection with (i) the execution or enforceability of this
Agreement or (ii) the consummation of any of the transactions contemplated
hereby or by the Transactions.
SECTION 2.04. Share Ownership. (a) The Company represents and
warrants that in the case of a Shareholder, such party will own,
immediately following the consummation of the transactions contemplated by
the Recapitalization Agreement, the number of shares of Capital Stock of
the Company set forth opposite such party's name in Schedule 2.04 attached
hereto, free and clear of any and all liens, claims and encumbrances, other
than those created by this Agreement.
(b) The Company represents and warrants that, as of the date
hereof after giving effect to the Transactions, the authorized capital
stock of the Company consists of (A) 250,000,000 shares of Common Stock, of
which 30,177,943 shares of Common Stock are issued and outstanding (without
giving effect to the restricted stock awards, whether or not vested, or
shares of Common Stock issuable to the former stockholders of K-Tech Mfg.,
Inc. pursuant to documentation in existence prior to the Transactions), and
(B) 25,000,000 shares of preferred stock, of which 361,001 shares of Class
A Preferred Stock are issued and outstanding. Without giving effect to any
cash elections or any accretion in respect of restricted stock awards after
the date of the Transactions and assuming full vesting of restricted stock
awards granted as of the date of the Transactions, there are approximately
3,741,325 shares of Common Stock subject to restricted stock awards on the
date hereof after giving effect to the Transactions. The maximum number of
shares of Common Stock issuable to the former K-Tech Mfg., Inc.
stockholders is not presently determinable, but is estimated at up to
approximately 550,000 shares of Common Stock. Except (i) as provided for in
this Agreement, (ii) for accretion in respect of restricted stock awards
after the date hereof, (iii) for Common Stock to be issued to former
stockholders of K-Tech Mfg., Inc. arising out of obligations existing prior
to the Transactions, as of the date of the Transactions, no subscription,
warrant, option, convertible or exchangeable security or other right to
purchase or acquire any shares of Capital Stock of the Company is
authorized or outstanding and the Company has no obligation to issue any
subscription, warrant, option, convertible or exchangeable security or
other such right.
(c) The Company represents and warrants that the shares of
Common Stock issued to each Shareholder in connection with the
Recapitalization Merger were duly and validly authorized, and when issued
to each Shareholder in connection with the Recapitalization Merger will be
duly and validly issued, fully paid and non-assessable and such shares are
not subject to preemptive or similar rights except as provided by this
Agreement.
(d) Each Shareholder hereby consents to and approves of the
contribution by the Company in connection with the Transactions of all of
its assets to Metalync Company LLC, its wholly-owned subsidiary, as
required by the Senior Credit Facilities.
ARTICLE III
SHARE TRANSFERS
SECTION 3.01. Restrictions on Transfer. During the term of this
Agreement, each Shareholder agrees that it will not Transfer any Common
Stock, except as permitted by or in accordance with this Agreement.
SECTION 3.02. Exceptions to Restrictions. Subject to all
applicable laws, the restrictions on Transfer set forth in Section 3.01
hereof shall not apply to any of the following:
(a) a Transfer by a Shareholder of Common Stock to one of its
Permitted Transferees; provided that such Permitted Transferee shall
agree to execute a Joinder Agreement in the form annexed hereto as
Exhibit A (the "Joinder Agreement");
(b) a Transfer of Common Stock by a Shareholder in
accordance with Sections 4.02 and 4.03 of this Agreement;
(c) a Transfer by a Shareholder after such Shareholder has
complied with Section 4.01; provided that the Transferee shall agree
to execute a Joinder Agreement; and
(d) a Transfer of Common Stock by a Shareholder pursuant to an
effective registration statement under the 1933 Act or a Transfer
pursuant to Rule 144 under the 1933 Act.
SECTION 3.03. Improper Transfer. Any attempt to Transfer any
shares of Common Stock not in accordance with this Agreement shall be null
and void and the Company will not give nor permit the Company's transfer
agent to give any effect to such attempted Transfer in its stock records.
SECTION 3.04. Restrictive Legend. Each certificate representing
shares of Common Stock and held by a Shareholder will bear a legend
substantially similar to the following (with such additions thereto or
changes therein as the Company may be advised by counsel are required by
law or necessary to give full effect to this Agreement):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE UNITED STATES SECURITIES ACT OF 1933 OR (ii) AN APPLICABLE
EXEMPTION FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT TO CLAUSE
(ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH
SALE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
THE TERMS AND CONDITIONS, INCLUDING WITH RESPECT TO THE DIRECT OR
INDIRECT TRANSFER THEREOF, OF A SHAREHOLDERS AGREEMENT DATED AS OF
NOVEMBER 28, 2000. THE SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER
THINGS, SIGNIFICANT RESTRICTIONS ON TRANSFER OF THE SECURITIES OF THE
COMPANY. A COPY OF THE SHAREHOLDERS AGREEMENT IS AVAILABLE UPON
REQUEST FROM THE COMPANY."
ARTICLE IV
RIGHTS OF CERTAIN SHAREHOLDERS
SECTION 4.01. Rights of First Offer. (a) At any time or from
time to time prior to a Qualifying Public Equity Offering, in the event
that (x) at any time following the first anniversary of the date hereof
(provided, however, that, prior to the second anniversary of the date
hereof, such Rollover Investor does not in the good faith judgment of the
Company jeopardize the "recapitalization" accounting treatment afforded the
Company in the Recapitalization Merger), a Rollover Investor desires to
Transfer, or (y) at any time following the date hereof, a HIP Co-Investor
desires to Transfer, all or part of its Common Stock ("Offered Shares"),
other than pursuant to Section 3.02(a), 3.02(d), 4.02 or 4.03 of this
Agreement, such Rollover Investor or HIP Co-Investor (individually, an
"Investor") shall give prompt written notice (an "Investor's Notice") of
its desire to sell the Offered Shares to the Company and Sponsor. The
Investor's Notice shall identify (i) the number of Offered Shares and (ii)
all other material terms and conditions of the proposed Transfer including
the purchase price and the form of the consideration.
(b) The Company shall have the right, but not the obligation,
to purchase all, but not less than all, the Offered Shares (the "First
Option") on the same terms and conditions as set forth in the Investor's
Notice, which option shall be exercised by delivering to such Investor
irrevocable written notice of its commitment to purchase the Offered Shares
within fifteen (15) business days after receipt of the Investor's Notice
(the "Company Option Period"). Failure by the Company to give such notice
within such fifteen (15) business day period shall be deemed an election by
the Company not to purchase the Offered Shares.
(c) In the event that the Company decides not to purchase the
Offered Shares pursuant to Section 4.01(b), then Sponsor shall have the
right, but not the obligation, to purchase all, but not less than all, the
Offered Shares (the "Second Option") on the same terms and conditions as
set forth in the Investor's Notice, which option shall be exercised by
delivering to such Investor irrevocable written notice of its commitment to
purchase the Offered Shares within ten (10) business days after the
termination of the Company Option Period (the "Sponsor Option Period");
provided that Sponsor may, at its sole option, assign its rights to
purchase an Investor's Offered Shares pursuant to this Section 4.01 to
another Shareholder or a Permitted Transferee of Sponsor (such person an
"Assignee"); provided that if the Assignee is a HIP Co-Investor, each HIP
Co-Investor will be able to participate in such assignment on a pro rata
basis. Failure by Sponsor or its Assignee to give such notice within such
ten (10) business day period shall be deemed an election by Sponsor or its
Assignee not to purchase the Offered Shares.
(d) Delivery of written notice by the Company, Sponsor or its
Assignee accepting the First Option or the Second Option, as the case may
be, shall constitute a contract between the Company, Sponsor or its
Assignee, on the one hand, and such Investor on the other hand, for the
purchase and sale of the Offered Shares on the terms and conditions set
forth in the Investor's Notice. The purchase of any shares pursuant to the
exercise of the First Option or the Second Option, as the case may be,
shall be completed not later than forty-five (45) days following receipt of
the Investor's Notice with respect to the Offered Shares, subject to
receipt of any required material third-party or governmental approvals,
compliance with applicable laws and the absence of any injunction or
similar legal order preventing such transaction (collectively, the
"Conditions") in which case the purchase of the Offered Shares shall be
delayed pending the satisfaction of the Conditions up to an additional
thirty (30) days. As a condition to entering into the contract referred to
above, the Company, Sponsor and its Assignee will agree to use commercially
reasonable efforts to satisfy the Conditions as soon as possible. In the
event that neither the First Option nor the Second Option is exercised, the
Investor shall have the right for a period of seventy-five (75) days after
the termination of the Sponsor Option Period to Transfer (the "Investor
Sale") the Offered Shares at a price not less than ninety percent (90%) of
the price contained in, and otherwise on terms and conditions no less
favorable to such Investor than those set forth in, the Investor's Notice,
except that the purchase of the Offered Shares may be delayed up to an
additional thirty (30) days pending satisfaction of the Conditions;
provided that the Transferee agrees to execute a Joinder Agreement. If the
Investor Sale is not consummated pursuant to the terms of the immediately
preceding sentence, the Investor will not effect Transfer of any of the
Offered Shares without commencing de novo the procedures set forth in this
Section 4.01.
SECTION 4.02. Tag-Along Rights. (a) If, at any time or from
time to time prior to a Qualifying Public Equity Offering, Sponsor or any
of its Affiliates (the "Sponsor Transferor") proposes to Transfer any
shares of Common Stock to a Person (the "Purchaser"), other than pursuant
to Section 3.02(a), 3.02(d), 5.01 or 5.02 or in a circumstance where all of
the shares owned by all of the Shareholders are being purchased pursuant to
Section 4.03, the Sponsor Transferor shall give written notice (a "Transfer
Notice") of such proposed Transfer to the Shareholders at least fifteen
(15) days prior to the consummation of such proposed Transfer, setting
forth (A) the total number of shares of Common Stock offered to be
Transferred to Purchaser, (B) the consideration to be received for such
shares of Common Stock by the Sponsor Transferor, (C) the identity of the
Purchaser(s), (D) any other material terms and conditions of the proposed
Transfer, (E) the expected date of the proposed Transfer and (F) that each
such Shareholder shall have the right (the "Tag-Along Right") to elect to
sell up to its Pro Rata Portion of such shares of Common Stock to be
Transferred to Purchaser. If any portion of the consideration contained in
the Transfer Notice includes consideration other than cash, the Sponsor
Transferor shall provide the Shareholders with a summary of a valuation
study, if any, that the Sponsor Transferor has prepared concerning such
consideration, but the Sponsor Transferor shall have no liability to any
Shareholder with respect to any such summary or study and no obligation to
undertake any such valuation. Notwithstanding the first sentence of this
Section 4.02(a), a Shareholder will have a Tag-Along Right in connection
with Transfers of shares of Common Stock by the Sponsor Transferor to a
Permitted Transferee (other than an Affiliate of the Sponsor Transferor)
when the Sponsor Transferor Transfers shares of Common Stock to such Person
at a price per share (as adjusted for Adjustments) that is greater than the
price per share (as adjusted for Adjustments) paid for such shares by the
Sponsor Transferor.
(b) Upon delivery of a Transfer Notice, each Shareholder has
the option, but not the obligation, to sell up to the Pro Rata Portion of
its shares of Common Stock at the same price per share of Common Stock and
pursuant to the same terms and conditions with respect to payment for the
shares of Common Stock as agreed to by the Sponsor Transferor, by sending
written notice to the Sponsor Transferor within ten (10) days of the date
of the Transfer Notice, indicating its election to sell up to the Pro Rata
Portion of its shares of Common Stock in the same transaction. To the
extent that elections pursuant to this Section 4.02(b) are not made with
respect to any shares of Common Stock included in a Transfer Notice within
such 10-day period, then the Sponsor Transferor shall re-offer to
Shareholders who have elected to sell their Pro Rata Portion (the
"Tag-Along Shareholders") for one additional three day period, the right to
sell such additional number of shares as will result in the Tag-Along
Shareholders being able to sell their pro rata share of such remaining
shares of Common Stock, based upon all the shares of Common Stock being
sold by all the Tag Along Shareholders (not including the remaining
shares). For a sixty (60) day period following such ten (10) day period
(which period may be extended an additional thirty (30) days in order to
satisfy the Conditions), each Tag-Along Shareholder shall be permitted to
sell to the Purchaser(s) on the terms and conditions set forth in the
Transfer Notice that amount of its shares of Common Stock as to which it
has made its election and the Sponsor Transferor shall be permitted to
concurrently sell the balance of the shares of Common Stock that are the
subject of the Transfer Notice that are not sold by the Tag-Along
Shareholders.
(c) The provisions of Section 4.02(a) and (b) shall not apply
to any Transfer or series of Transfers by Sponsor of shares of Common Stock
to one or more Persons other than Permitted Transferees which in the
aggregate do not exceed ten percent (10%) of such shares of Common Stock
owned by Sponsor immediately following the Transactions.
(d) Each Tag-Along Shareholder shall not be required to make
representations and warranties in connection with such sale other than
customary representations and warranties with respect to (i) such
Shareholder's due organization, power and authority, (ii) such
Shareholder's ownership of the shares of Common Stock and ability to freely
convey such shares of Common Stock without liens or encumbrances, (iii)
customary representations regarding non-contravention of such Shareholder's
charter, bylaws or other organizational documents or material agreements of
such Tag-Along Shareholder and (iv) the enforceable nature of such
Tag-Along Shareholder's obligations under the documents for such sale to
which it is a party (collectively, the "Shareholder Representations"). No
Tag-Along Shareholder shall be liable in respect of any indemnification
provided in connection with a Tag-Along Sale (with respect to such
Shareholder's Shareholder Representations) in excess of the consideration
received by such Tag-Along Shareholder in such Tag-Along Sale and no
Tag-Along Shareholder shall be required to participate in any escrow
relating to such Tag-Along Sale in excess of such Tag-Along Shareholder's
participation in the Tag-Along Sale.
(e) In the event that no Shareholder elects to sell shares of
Common Stock pursuant to this Section 4.02, Sponsor and/or its Affiliates
(as the case may be) shall have the right for a period of seventy-five (75)
days (which period may be extended by an additional thirty (30) days to
satisfy the Conditions) after the expiration of the 10-day period referred
to in Section 4.02(b) to Transfer the Shares subject to the Transfer Notice
to the Purchaser at a price not greater than the price contained in, and
otherwise on terms and conditions no more favorable to Sponsor and/or such
Affiliates than those set forth in, the Transfer Notice; it being agreed
that, after the end of the 75-day period referred to in this Section
4.02(e) (including any permitted extension thereof), Sponsor and/or such
Affiliates will not effect any transaction in any shares of Common Stock
that are the subject of the Transfer Notice without commencing de novo the
procedures set forth in this Section 4.02.
SECTION 4.03. Drag-Along Rights. If at any time prior to a
Qualifying Public Equity Offering, Sponsor and its Affiliates intend to
effect a Substantial Change of Control, Sponsor shall have the right to
require the other Shareholders (the "Drag-Along Shareholders") to sell the
same percentage of Common Stock held by them relative to such Shareholder's
ownership of Common Stock as Sponsor and its Affiliates are selling in such
transaction in connection with such Substantial Change of Control; to vote
such Common Stock, whether by proxy, voting agreement or otherwise in favor
of the transactions constituting a Substantial Change of Control; to waive
their appraisal or dissenters' rights with respect to such transaction; or
otherwise, participate in such Substantial Change of Control and each other
Shareholder agrees to take any and all reasonably necessary action in
furtherance of the foregoing; provided that (a) the consideration to be
received by the other Shareholders shall be for the same type and amount
per share of consideration received by Sponsor, and (b) after giving effect
to such transaction, Sponsor and its Direct Permitted Transferees shall
have sold the same percentage of their holdings of Common Stock of the
Company as sold by the Drag-Along Shareholders; provided, however, that
CSFB will not be obligated to participate in such transaction if the
consideration per share in such transaction is less than $16.90 per share
(as adjusted for Adjustments) of the Common Stock of the Company paid by
CSFB in connection with the Transactions and provided, further, that if
Sponsor and its Affiliates are selling all of their shares of Common Stock
in connection with such Substantial Change of Control, the Drag-Along
Shareholders will be required to sell all of their shares pursuant to this
Section 4.03. In connection with the sale of their shares of Common Stock
pursuant to this Section 4.03, the Drag-Along Shareholders shall not be
required to make any representations and warranties other than the
Shareholder Representations. In addition, no Drag-Along Shareholder shall
be liable in respect of any indemnification in connection with a
transaction effected pursuant to this Section 4.03 (a "Drag-Along
Transaction") (with respect to such Shareholder's Shareholder
Representations) in excess of the consideration received by such Drag-Along
Shareholder in such Drag-Along Transaction and no such Drag-Along
Shareholder shall be required to participate in any escrow relating to such
Drag-Along Transaction in excess of such Drag-Along Shareholder's Pro Rata
Portion.
SECTION 4.04. Information. (a) Prior to the occurrence of an
Initial Public Offering, the Company shall deliver to each Shareholder:
(1) as soon as available, but in any event within forty-five
(45) days after the end of each quarter, copies of:
(i) consolidated balance sheets of the Company and
its subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, stockholders'
equity and cash flows of the Company and its subsidiaries, for
such quarter and for the portion of the fiscal year ending with
such quarter,
in each case prepared in accordance with GAAP applicable to periodic
financial statements generally, fairly presenting, in all material
respects, the financial position of the Persons being reported on and
their results of operations and cash flows, subject to changes
resulting from normal year-end adjustments;
(2) as soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Company, copies of:
(i) consolidated balance sheets of the Company and
its subsidiaries as at the end of such year, and
(ii) consolidated statements of income,
stockholders' equity and cash flows of the Company and its
subsidiaries for such year,
in each case prepared in accordance with GAAP, fairly presenting, in
all material respects, the financial position of the Persons being
reported on and their results of operations and cash flows, and
accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all material
respects, the financial position of the Persons being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP;
(b) In the case of any Shareholder (other than CSFB) prior to
the occurrence of a Qualifying Public Equity Offering, and for so long as
such Shareholder owns twenty-five percent (25%) or more of the number of
shares of Common Stock (as adjusted for Adjustments) owned by such
Shareholder immediately following the Transactions, or in the case of CSFB,
for so long as CSFB retains a number of shares of Common Stock equal to at
least twenty-five (25%) of the number of shares of Common Stock (as
adjusted for Adjustments) owned by CSFB immediately following the
Transactions, the Company shall deliver to each such Shareholder and CSFB:
(1) the information and reports provided pursuant to
Sections 4.04(a)(1) and (2);
(2) monthly "flash reports" utilized by the Company in its own
management containing summarized, abbreviated data with respect to
income statement amounts, balance sheet data and cash flows; and
(3) such other information concerning the condition or
operations, financial or otherwise, of the Company and its
Subsidiaries as a Shareholder may, from time to time, reasonably
request.
(c) The rights to receive the information set forth in
subsections (1) and (2) of paragraph (a) shall be assignable to Transferees
of Common Stock. The rights to receive the information set forth in
subsections (2) and (3) of paragraph (b) shall be assignable to a
Transferee that acquires from CSFB at least 25% of the shares of Common
Stock owned by CSFB as of the date hereof (as adjusted for Adjustments).
(d) Prior to the occurrence of a Qualifying Public Equity
Offering, and for so long as a Shareholder owns twenty-five percent (25%)
or more of the number of shares of Common Stock owned by such Shareholder
immediately following the Transactions (as adjusted for Adjustments),
Representatives of such Shareholder shall be provided with a reasonable
opportunity to discuss the business and affairs of the Company with the
Company's senior managers, directors, officers and senior employees upon
reasonable advance notice during normal business hours; provided that such
Company representatives shall be available (A) to such Shareholder for an
annual meeting with senior management at which the following year's budget
is presented and (B) to Qualified Investors, RM and Company Shareholder for
quarterly meetings at which the most recent quarterly results are
discussed.
(e) Each Shareholder hereby agrees that neither it nor its
Representatives will disclose to any third party any information provided
to it or its Representatives by the Company hereunder which is not
generally available to the public, except with the prior express approval
of the Company or as may be required by applicable law; it being understood
that nothing in this Section 4.04(e) will restrict the ability of Sponsor
or a HIP Co-Investor to disclose certain information to its investors in
accordance with the governing documents of their partnership arrangement;
provided that such investors agree to be bound by the confidentiality
provisions of this Agreement.
(f) Notwithstanding the above, access to highly confidential
proprietary information and facilities need not be provided by the Company,
nor shall the Company be required to provide information to any Shareholder
that is a competitor or reasonably likely to become a competitor of the
Company or any of its subsidiaries; it being understood that the
Shareholders existing as of the date hereof are not competitors.
(g) Notwithstanding the foregoing, (x) MetLife in addition to
Portfolio Advisors, LLC or any controlled Affiliate of Portfolio Advisors,
LLC shall have the rights provided by this Section 4.04 notwithstanding the
fact it has transferred all of its shares of Common Stock to Portfolio
Advisors, LLC or any controlled Affiliate of Portfolio Advisors, LLC,
provided such Person would have such rights as a Shareholder (it being
agreed that, solely for purposes of paragraphs (b) and (d) of this Section
4.04, such Person shall be deemed to have held its shares of Common Stock
since the consummation of the Transactions) and (y) Company Shareholder
shall be entitled to receive the information provided by this Section 4.04
so long as Company Shareholder owns any Class A Preferred Stock or has
outstanding commitments or loans under the Subordinated Loan Agreement.
SECTION 4.05. Preemptive Rights. (a) Prior to the occurrence of
an Initial Public Offering, the Company hereby grants and hereby agrees to
cause each Significant Subsidiary of the Company to grant to each HIP
Co-Investor and its Direct Permitted Transferees and Sponsor and its Direct
Permitted Transferees the right to purchase up to such Shareholder's
Proportionate Percentage (as hereinafter defined) of any future Eligible
Offering (as hereinafter defined) and in the case such Eligible Offering is
in whole or in part to Sponsor or any of its Affiliates, then the Company
shall also grant Company Shareholder and RM the right to purchase up to
their Proportionate Percentage. For purposes of this Section 4.05, the
following terms shall have the meanings set forth below.
"Proportionate Percentage" means, with respect to any
Shareholder as of any given date with respect to an Eligible
Offering, the lower of (i) twenty percent (20%) of such Eligible
Offering or (ii) the number (expressed as a percentage) obtained by
dividing (A) the number of shares of Common Stock owned by such
Shareholder as of such date by (B) the total number of shares of
Common Stock outstanding as of such date, in each case, assuming all
shares of Capital Stock of the Company convertible into or
exercisable for Common Stock have been so converted; provided that
CSFB should not be limited by the foregoing clause (i) in the event
that the Eligible Offering consists of Capital Stock of the Company
for a consideration per share of Capital Stock which is less than the
purchase price per share of Common Stock paid by CSFB in connection
with the Transactions (as such price is adjusted by the Adjustments).
"Eligible Offering" means an offer by the Company or a
Significant Subsidiary of the Company to sell to any Person or
Persons (including any of the Shareholders) for cash, any Capital
Stock of the Company or any Significant Subsidiary, other than an
offering by the Company or a Significant Subsidiary of the Company:
(i) of Common Stock in an underwritten public offering (a
"Public Offering") registered under the 1933 Act or pursuant to
a Rule 144A offering under the 1933 Act;
(ii) of Common Stock of the Company issued upon the
exercise of options, warrants or convertible securities
outstanding as of the date hereof;
(iii) of Common Stock of the Company or options to purchase
shares of Common Stock in connection with or pursuant to any
stock option, stock purchase plan or agreement or other benefit
plans approved by the Board of Directors of the Company to
full-time employees, officers, directors, consultants and/or
advisors to the Company or its subsidiaries;(excluding
employees of Sponsor)
(iv) of Common Stock of the Company issued in connection
with restricted stock awards pursuant to and in accordance with
the Recapitalization Agreement;
(v) of Common Stock of the Company having a value of up
to $5.2 million in order to comply with Section 5.15 of the
Senior Credit Facilities;
(vi) of Capital Stock of the Company issued as
consideration to any seller in connection with the acquisition
by the Company or any subsidiary of the Company of the assets
of any Person in any transaction approved by the Board of
Directors of the Company;
(vii) of Capital Stock of the Company issued as an
inducement in connection with any debt financing of the
Company, subject to terms and conditions approved by the Board
of Directors of the Company;
(viii) of Capital Stock of a Significant Subsidiary of the
Company in connection with any sale of control of such
Significant Subsidiary to, or any joint venture between such
Significant Subsidiary and, a third party that is not a
financial sponsor or investor, which sale or joint venture is
approved by the Board of the Directors of the Company;
(ix) of director qualifying or similar shares of a
Significant Subsidiary;
(x) of Capital Stock of the Company issued as
consideration in connection with the acquisition by the
Company or any subsidiary of the Company of Simpson
Industries, Inc. or Global Metal Technologies, Inc. (or any
parent company thereof); and
(xi) of Capital Stock of the Company issued to
former stockholders of K-Tech Mfg., Inc. arising out of
obligations existing prior to the Transactions.
For purposes of this Section 4.05 only, "Capital Stock" means
any and all shares of common stock or options, warrants or similar
instruments or any other securities convertible or exchangeable therefor
(collectively, "Equity Interests") or any equity security linked to or
offered or sold in connection with any Equity Interests of such Person or
any of its Significant Subsidiaries, as the case may be.
(b) The Company shall, before any securities are issued
pursuant to an Eligible Offering, give written notice (a "Preemptive
Notice") thereof to each Shareholder that is entitled to preemptive rights
hereunder. Such notice shall specify the security or securities proposed to
be issued, the proposed date of issuance, the consideration that the
Company or such Significant Subsidiary, as the case may be, intends to
receive therefor and all other material terms and conditions of such
proposed issuance. For a period of ten (10) business days following the
date of such notice, each such Shareholder shall be entitled, by written
notice to the Company, to elect to purchase all or part of such
Shareholder's Proportionate Percentage of the securities being sold in the
Eligible Offering. To the extent that elections pursuant to this Section
4.05(b) shall not be made with respect to any shares of Common Stock
included in a Preemptive Notice within such 10-day period, then the Company
shall re-offer to Shareholders who have elected to purchase their
Proportionate Percentage (the "Preemptive Shareholders") for one additional
three-day period, the right to purchase any part of the shares of Common
Stock not purchased by other Shareholders (the "Section 4.05 Remaining
Shares") pursuant to this Section 4.05 which is equal to the product
obtained by multiplying (i) the number of Section 4.05 Remaining Shares by
(ii) a fraction, the numerator of which is the number of shares of Common
Stock then owned by any such Preemptive Shareholder and the denominator of
which is the aggregate number of shares owned by all Preemptive
Shareholders. To the extent that elections pursuant to this Section 4.05(b)
shall not be made with respect to any securities included in an Eligible
Offering within such ten (10) business day period, then the Company or such
Significant Subsidiary, as the case may be, shall not be obligated to issue
to such Shareholder such securities for which such Shareholder has elected
not to purchase. To the extent that there are securities that have not been
purchased pursuant to this Section 4.05, then the Company or such
Significant Subsidiary, as the case may be, may issue such securities, but
only for consideration not less than, and otherwise on no less favorable
terms to the Company or such Significant Subsidiary, as the case may be,
than, those set forth in the Company's notice and only within thirty (30)
days after the end of such ten (10) business day period. In the event that
any such offer is accepted by any such Shareholder or Shareholders, the
Company or such Significant Subsidiary, as the case may be, shall sell to
such Shareholder or Shareholders, and such Shareholder or Shareholders
shall purchase from the Company or such Significant Subsidiary, as the case
may be, for the consideration and on the terms set forth in the notice as
aforesaid, the securities that such Shareholder or Shareholders shall have
elected to purchase within ten (10) business days of such Shareholder's
election to purchase such Proportionate Percentage (subject to delay for an
additional thirty days for satisfaction of the Conditions).
(c) Each of the Shareholders granted rights pursuant to this
Section 4.05 acknowledges that it has been given the opportunity to
purchase their Proportionate Percentage of Common Stock in connection with
the acquisition of Simpson Industries, Inc. and accordingly this Section
4.05 shall not apply to the acquisition of Simpson Industries, Inc.
(d) The Company may comply with any applicable securities
laws before issuing any shares of Common Stock pursuant to this Section
4.05 and shall not be in violation of the provisions hereof by reason of
such compliance; provided it is using commercially reasonable efforts to so
comply.
SECTION 4.06. Board of Directors. (a) At each annual or special
stockholders meeting called for the election of directors, and whenever the
Shareholders of the Company act by written consent with respect to the
election of directors, each Shareholder agrees to vote or otherwise give
such Shareholder's consent in respect of all shares of the Capital Stock of
the Company (whether now owned or hereafter acquired) owned by such
Shareholder, and take all other appropriate action and the Company shall
take all necessary and desirable actions within its control in order to
cause:
(i) an amendment to the Bylaws of the Company to provide that
the authorized number of directors on the Board of Directors of the
Company shall be as recommended by the Sponsor in its sole
discretion.
(ii) the election to the Board of Directors of:
(a) such number of directors as shall constitute a
majority of the Board of Directors as designated by Heartland
Industrial Partners, L.P.;
(b) one director designated by the Company Shareholder;
provided, however, that except as set forth in the immediately
following sentence of this subpart (b) upon Company Shareholder
and its Direct Permitted Transferees ceasing to own at least
1,571,569 shares of Common Stock or, upon a Qualifying Public
Equity Offering, Company Shareholder shall no longer have the
right to designate one director to the Board. Notwithstanding
the foregoing, Company Shareholder shall maintain the right to
designate one director to the Board of Directors for so long as
Company Shareholder or its Affiliates, own (x) $10.0 million or
more of liquidation preference of the Class A Preferred Stock
or (y) have outstanding loans or unfunded commitments under the
Subordinated Loan Agreement; and
(c) one director designated by the CSFB Plan Partner (the
"CSFB Director") after consultation with Sponsor; provided,
however, that upon CSFB and its Direct Permitted Transferees
ceasing to own a number of shares of Common Stock which would
equal at least a majority of the shares of Common Stock owned
by CSFB immediately following the Transactions (as adjusted for
Adjustments), CSFB shall no longer have the right to designate
one director to the Board of Directors;
all of which persons shall hold office subject to their earlier
removal in accordance with clause (iii) below, the Bylaws of the
Company and applicable corporate law, until their respective
successors shall have been elected and shall have qualified;
(iii) the removal from the Board of Directors (with or without
cause) of any director elected in accordance with subpart (a), (b) or
(c) of clause (ii) above upon the written request of the Shareholders
that designated such director; and
(iv) upon any vacancy in the Board of Directors as a result of
any individual designated as provided in clause (ii) above ceasing to
be a member of the Board of Directors whether by resignation or
otherwise, the election to the Board of Directors as promptly as
possible of an individual designated by the Shareholders that
designated such individual; provided that the CSFB Plan Partner will
consult with Sponsor prior to designating a replacement to serve as
the CSFB Director.
(b) The ability of a Shareholder to designate a director to
the Board of Directors shall not be assignable to any Person.
(c) The parties hereto agree to cause the Board of Directors
to appoint the CSFB Director to each decision making committee of the Board
and to cause such CSFB Director to be nominated to the Board of each
subsidiary of the Company to the extent the composition of such boards is
substantially identical to the composition of the Board.
(d) The Company agrees to provide customary directors'
liability insurance.
SECTION 4.07 Right to Observer. In the case of a Qualified
Investor (other than CSFB), for so long as such Qualified Investor retains
a number of shares of Common Stock equal to at least a majority of, or, in
the case of the CSFB Plan Partner, for so long as it retains a number of
shares of Common Stock equal to at least twenty-five percent (25%) of, the
shares of Common Stock owned by such Person immediately following the
Transactions (as adjusted for the Adjustments), such Person will have right
to send one Representative on its behalf (the "Observer") to attend all
meetings of the Board, including all committees thereof, solely in a
non-voting observer capacity. The Company will furnish to the Observer
copies of all notices, minutes, consents and other materials that it
generally makes available to its directors. The Observer may participate in
discussions of matters under consideration by the Board of the Company and
any matters brought before any committee thereof but will not be entitled
to vote on any matter presented to the Board of Directors. Any Qualified
Investor and the CSFB Plan Partner will have the right to remove and
replace its Observer in its sole discretion and to designate a substitute
representative if its Observer is unable or unwilling to attend any of the
Board's meetings, including any committees thereof. The right of Qualified
Investors (other than CSFB) to appoint an Observer as set forth in this
Section 4.07 will terminate upon the occurrence of a Qualifying Public
Equity Offering.
SECTION 4.08. Consultation Right. (a) The Company hereby agrees
to consult (a "Consultation") with the Representatives of the CSFB Plan
Partner set forth on Exhibit B hereto with respect (x) to any issues,
events or transactions pertaining to the Company which in the good faith
judgment of the Board of Directors of the Company are material to the
consolidated business, operations and financial condition of the Company
and (y) to the preparation of the annual business plan of the Company. In
connection with any Consultation, the Company will provide such
Representatives with all material information regarding any action under
consideration and reasonable notice so that the consultation period shall
constitute sufficient time for the CSFB Plan Partner to participate
meaningfully in any decision-making process regarding the action to be
taken.
(b) The provision of Section 4.08(a) shall terminate upon a
Qualifying Public Equity Offering.
SECTION 4.09. Approval Rights. (a) The Company hereby agrees
not to enter into or adopt any Material Event (as defined below) without
the prior written approval of the majority of the Representatives of the
CSFB Plan Partner set forth on Exhibit B hereto, which approval with
respect to clauses (i) and (ii) of the definition of "Material Event" will
not be unreasonably withheld. For the purpose of this Section 4.09,
"Material Event" means (i) any agreement to acquire a business with a total
enterprise value of $250.0 million or more individually or any agreement to
acquire a business if there have been one or more agreements during the
immediately preceding twelve (12) month period for acquisitions(s) with a
total enterprise value of $500.0 million or more (it being hereby agreed by
the parties that the acquisition of Global Metal Technologies, Inc. shall
be counted toward such $500.0 million threshold and that the acquisition of
Simpson Industries, Inc. shall not be counted toward such threshold); (ii)
the selection of a chief executive officer of the Company; (iii) any
restructuring of debt or other similar transaction pursuant to which debt
holders of the Company would hold twenty-five percent (25%) or more of the
outstanding Capital Stock of the Company; and (iv) any liquidation,
dissolution, winding-up of the affairs of the Company, whether voluntary or
involuntary, or the filing of a voluntary petition in bankruptcy or the
filing of a plan of reorganization. The Company hereby agrees to promptly
give notice to the CSFB Plan Partner if the Company is contemplating any
Material Event. The CSFB Plan Partner hereby agrees to notify the Company
within ten (10) business days of the receipt of such notice as to whether
it approves of the Material Event. Failure of the CSFB Plan Partner to
notify the Company in writing within such ten (10) business day period of
its approval or disapproval of the Material Event shall be deemed an
approval by the CSFB Plan Partner of such Material Event.
(b) The provisions of Section 4.09(a) shall terminate upon a
Qualifying Public Equity Offering.
SECTION 4.10. Transactions with Affiliates. Without the consent
of the Requisite Investors, for so long as Sponsor directly or indirectly
beneficially owns twenty percent (20%) or more of the outstanding shares of
Common Stock of the Company, the Company and its subsidiaries will not
enter into, or suffer to exist, any transaction with Sponsor or any of its
Affiliates involving payments or other consideration in excess of $1.0
million. The foregoing restrictions will not apply to: (a) the payment of
annual monitoring fees to Sponsor in an amount not to exceed (x) $4.0
million plus reimbursement of out-of-pocket expenses incurred by Sponsor in
connection with the advisory services provided to the Company for the first
year after the date hereof and (y) not to exceed 0.25% of the consolidated
assets of the Company in subsequent years; provided that such amount will
not be less than $4.0 million plus reimbursement of out-of-pocket expenses
incurred by Sponsor in connection with the advisory services provided to
the Company; (b) the payment to Sponsor of advisory fees and out-of-pocket
expense reimbursement in connection with an acquisition, divestiture or
financing by the Company or any of its subsidiaries (but excluding sales
and purchases of personal property in the ordinary course of business)
provided that such fees shall be in an amount equal to 1% of the aggregate
value of such transaction; (c) fees payable to Sponsor in connection with
the Transactions and reimbursement of out-of-pocket expenses incurred by
Sponsor in connection with the Transactions; (d) transactions involving the
sale, purchase or lease of goods or services in the ordinary course of
business and on an arm's-length basis between or among the Company or any
of its subsidiaries and portfolio companies of Sponsor; (e) transactions
between or among the Company or any of its subsidiaries; (f) issuances of
Capital Stock to Sponsor and its Affiliates pursuant to, and in compliance
with, Section 4.05; and (g) issuances of Common Stock to Sponsor and other
Shareholders, as applicable (valued at $16.90 or more per share of Common
Stock, unless otherwise determined by the Board of Directors of the
Company) for cash, or in exchange for common stock, to provide for the
acquisition by the Company or one of its subsidiaries of all of the
outstanding Capital Stock of Simpson Industries, Inc. or Global Metal
Technologies, Inc. (or any parent company thereof) either initially or
within one (1) year after the acquisition thereof by Sponsor or one of its
Affiliates (based on the cash equity provided by Sponsor and its Affiliates
at the closing of any such acquisition). Notwithstanding the foregoing, the
benefits of this Section 4.10 in favor of a class of Requisite Investors
(other than Company Shareholder) shall terminate as to it individually when
such class (including their respective Direct Permitted Transferees) ceases
to own a number of shares of Common Stock that would equal at least a
majority of the number of shares of Common Stock (appropriately adjusted
for Adjustments) owned by such class immediately following the
Transactions. The benefits of this Section 4.10 in favor of Company
Shareholder will terminate as to Company Shareholder when Company
Shareholder (i) ceases to have outstanding commitments or loans under the
Subordinated Loan Agreement, (ii) owns, together with its Direct Permitted
Transferees, less than $10.0 million of liquidation preference of Class A
Preferred Stock and (iii) ceases to own, together with its Direct Permitted
Transferees, at least 1,571,569 shares of Common Stock.
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Company Registration.
(a) Right to Piggyback on Registration of Stock. Subject to
Section 5.01(c), if at any time or from time to time the Company proposes
to register the Common Stock under the 1933 Act in connection with a public
offering (other than an Initial Public Offering consisting solely of
primary Common Stock or in connection with the registration of shares of
Common Stock issued to former shareholders of K-Tech Mfg., Inc. arising out
of, or in lieu of, obligations existing prior to the Transactions) of such
Common Stock on any form other than Form S-4 or Form S-8 or any similar
successor forms or another form used for a purpose similar to the intended
use for such forms (a "Piggyback Registration"), whether for its own
account or for the account of one or more shareholders of the Company, the
Company shall each such time promptly give each Shareholder written notice
of such determination (in any event within 10 business days after its
receipt of notice of any exercise of demand registration rights); provided,
however, that such notice of a Piggyback Registration shall be given at
least thirty (30) days prior to the anticipated filing date of such
Piggyback Registration. Upon the written request of any Shareholder (the
"Piggyback Holder") given within ten (10) business days after the providing
of any such notice by the Company, the Company shall use its best efforts
to cause to be registered under the 1933 Act all of the Registrable
Securities held by such Shareholder that the Shareholder has requested to
be registered; provided, however, that if, at any time after giving written
notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or
to delay registration of such securities, the Company may, at its election,
give written notice of such determination to each Piggyback Holder and (i)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from any obligation of the Company to pay the
registration expenses in connection therewith); and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering
any Registrable Securities for the same period as the delay in registering
such other securities. No registration effected under this Section 5.01
shall relieve the Company of its obligation to effect any registration upon
demand under Section 5.02. The registration rights contained in Section
5.01 may be assigned to any Transferee or Permitted Transferee.
(b) Selection of Underwriters. If any Piggyback Registration
involves an underwritten primary offering, the Company shall have sole
discretion in the selection of any underwriter or underwriters to manage
such Piggyback Registration.
(c) Priority on Piggyback Registrations. In the event that
the Piggyback Registration includes an underwritten offering, the Company
shall so advise the Shareholders as part of the written notice given
pursuant to Section 5.01(a) and the registration rights provided in Section
5.01(a) shall be subject to the condition that if the managing underwriter
or underwriters of a Piggyback Registration advise the Company in writing
(a copy of which shall be provided to the applicable Shareholders) that in
its opinion the number of Registrable Securities proposed to be sold in
such Piggyback Registration exceeds the number which can be sold, and would
materially adversely affect the price at which the Registrable Securities
are to be sold, in such offering, the Company (or the Shareholders, as the
case may be) will include in such registration only the number of
Registrable Securities which, in the opinion of such underwriter or
underwriters can be sold in such offering without such material adverse
effect. The Registrable Securities so included in such Piggyback
Registration shall be apportioned (i) first, either (x) in the case of a
primary registration on behalf of the Company, to any shares of Common
Stock that the Company proposes to sell, or (y) in the case of a secondary
registration on behalf of a Shareholder, pro rata among the Holders on the
basis of the number of Registrable Securities requested to be registered
pursuant to such Demand Registration, (ii) second, pro rata among the
Company Shareholder, RM and the HIP Co-Investors (and their respective
Permitted Transferees), but only to the extent of shares of Common Stock of
the Company held by them as of the date hereof (as adjusted by the
Adjustments), and (iii) third, pro rata among other shares included in such
Piggyback Registration, in each case according to the total number of
shares of the Common Stock requested for inclusion by said selling
stockholders, or in such other proportions as shall mutually be agreed to
among such selling stockholders.
SECTION 5.02. Demand Registration Rights.
(a) Right to Demand. At any time after a Triggering Event,
the Demand Holders may (subject in the case of Sponsor to Section 6.01),
individually or collectively, make a written request, which request will
specify the aggregate number of Registrable Securities to be registered and
will also specify the intended methods of disposition thereof (the "Request
Notice") to the Company for registration with the Commission under and in
accordance with the provisions of the 1933 Act of all or part of the
Registrable Securities then owned by Demand Holders (a "Demand
Registration"); provided that the Company may, if the Board of Directors so
determines in the exercise of its reasonable, good faith judgment that due
to a pending or contemplated acquisition or disposition or public offering
or other material event involving the Company it would be inadvisable to
effect such Demand Registration at such time (but in no event after such
registration statement has become effective), the Company may, upon
providing the Demand Holders written notice (the "Delay Notice"), defer
such Demand Registration for a single period with respect to such Demand
Registration not to exceed one hundred thirty five (135) days. Upon receipt
by the Company of a request (a "Demand Request") to effect a Demand
Registration the Company will within 10 business days after the receipt of
such notice, notify each other Demand Holder of such request and such other
Demand Holder shall have the option to include its Registrable Securities
in such Demand Registration pursuant to this Section 5.02. Subject to
Section 5.02(f), the Company will register all other Registrable Securities
which the Company has been requested to register by such other Demand
Holders (each an "Incidental Demand Holder") pursuant to this Section 5.02
by written request given to the Company by such holders within 10 business
days after the giving of such written notice by the Company to such other
Demand Holders. The Company shall not be obligated to maintain a
registration statement pursuant to a Demand Registration effective for more
than (x) ninety (90) days or (y) such shorter period when all of the
Registrable Securities covered by such registration statement have been
sold pursuant thereto (the "Effectiveness Period"). Notwithstanding the
foregoing, the Company shall not be obligated to effect more than one
Demand Registration in any 90-day period or such longer period not to
exceed 180 days as requested by an underwriter pursuant to Section 5.07.
Upon any such request for a Demand Registration, the Company will deliver
any notices required by Section 5.01 and 5.02 and thereupon the Company
will, subject to Section 5.01(c) and 5.02(f) hereof use its best efforts to
effect the prompt registration under the 1933 Act of:
(i) the Registrable Securities which the Company has been
so requested to register by Demand Holders as contained in the
Request Notice, and
(ii) all other Registrable Securities which the Company has been
requested to register by the Piggyback Holders and Incidental Demand
Holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or
methods of disposition of each seller of such Registrable Securities.
(b) Number of Demand Registrations. The Company shall not be
required to prepare and file a registration statement pursuant to this
Section 5.02 if (i) a Rollover Demand Holder and its Direct Permitted
Transferees cease to own at the time of making the Request Notice
twenty-five percent (25%) or more of the shares of Common Stock of the
Company owned as of the date hereof (as adjusted for Adjustments) and (ii)
the Request Notice relates to less than twenty-five percent (25%) of the
shares of Common Stock held by such Demand Holder. In addition, the Company
will not be required to effect more than (i) two registrations pursuant to
this Section 5.02 on behalf of Company Shareholder, (ii) one registration
on behalf of RM pursuant to this Section 5.02, (iii) two registrations on
behalf of CSFB pursuant to this Section 5.02; provided that CSFB will be
afforded one additional Demand Registration in the event that CSFB has not
been able to dispose of all of the Registrable Securities requested to be
registered by CSFB with its initial two Demand Registrations; provided that
the Company shall not be obligated to attend or participate in any "road
shows" if such third and final Demand Registration is for less than 10% of
the shares of Common Stock of the Company owned by CSFB immediately
following the Transactions (as adjusted for Adjustments and (iv) one demand
on behalf of the QI Demand Holders as a group (other than CSFB) pursuant to
this Section 5.02. Sponsor and its Affiliates will be entitled to an
unlimited number of Demand Registrations. It being understood that if two
or more Demand Holders make a collective Demand Registration, such Demand
Registration will count pursuant to this Section 5.02(b) as a Demand
Registration for each such Demand Holder. It is hereby acknowledged and
agreed by the parties that any Registrable Securities included in a
registration statement on behalf of an Incidental Demand Holder will not
count as a Demand Registration for such Incidental Demand Holder. In
connection with a Demand Registration by more than one Demand Holder or by
a Demand Holder and Incidental Demand Holders, such Demand Holders and
Incidental Demand Holders shall elect one such Holder to act as
representative (the "DH Representative") in connection with such Demand
Registration and the Company shall only be obligated to communicate with
such DH Representative in connection with such Demand Registration. The
Holders shall give the Representative any and all necessary powers of
attorneys needed for the DH Representative to act on their behalf.
(c) Revocation. Holders of a majority in number of the
Registrable Securities to be included in a registration statement pursuant
to this Section 5.02 may, at any time prior to the effective date of the
registration statement relating to such Demand Registration, acting through
their DH Representative revoke such request by providing a written notice
thereof to the Company. The Holders of Registrable Securities who revoke
such request shall reimburse the Company for all its expenses incurred in
the preparation, filing and processing of the Registration Statement. If
pursuant to the terms of this Section 5.02(c), the Holders reimburse the
Company for its reasonable expenses incurred in the preparation, filing and
processing of any registration statement requested and subsequently revoked
by such Holders, the attempted registration by such requested and
subsequently revoked registration statement shall not be deemed to be a
Demand Registration. Notwithstanding the foregoing, the Holders of a
majority in number of the Registrable Securities to be included in a
registration statement pursuant to this Section 5.02 may, at any time
within five days after receipt of any Delay Notice acting through their DH
Representative revoke such request by providing written notice thereof to
the Company and the attempted Demand Registration shall not be deemed to be
a Demand Registration, notwithstanding that such Holders shall not
reimburse the Company for any expenses incurred in the preparation, filing
and processing of any Registration Statement.
(d) Effective Registration. A registration will not count as
a Demand Registration: (i) if a Holder determines in its good faith
judgment to withdraw the proposed registration of any Registrable
Securities requested to be registered by a Demand Holder (x) due to
marketing or regulatory reasons subject to such Holder reimbursing the
Company for its expenses in accordance with Section 5.02(c) above, or (y)
due to a material adverse change in the Company (other than as a result of
any action by the Holder); (ii) if such registration is interfered with by
any stop order, injunction or other order or requirement of the Commission
or other governmental agency or court for any reason (other than as a
result of any action by the Holder) and the Company fails to promptly have
such stop order, injunction or other order or requirement removed,
withdrawn or resolved to the Holder's satisfaction; or (iii) the conditions
to closing specified in the underwriting agreement or purchase agreement
entered into in connection with the registration relating to any such
demand are not satisfied (other than as a result of a default or breach
thereunder by the relevant Holder).
(e) Selection of Underwriters. If any of the Registrable
Securities covered by a Demand Registration are to be sold in an
underwritten offering, the relevant Holder, or Holders, will have the right
to select the managing underwriter(s) to administer the offering subject to
the approval of the Company, which will not be unreasonably withheld.
(f) Priority on Demand Registrations. If the managing
underwriter or underwriters of a Demand Registration advise the Company in
writing that in its or their opinion the number of Registrable Securities
proposed to be sold in such Demand Registration exceeds the number which
can be sold, or adversely affects the price at which the Registrable
Securities are to be sold, in such offering, the Company will include in
such registration only the number of Registrable Securities which, in the
opinion of such underwriter or underwriters, can be sold in such offering
without such material adverse effect. To the extent such Demand
Registration includes Registrable Securities of more than one Holder, the
Registrable Securities so included in such Demand Registration shall be
apportioned (i) first, pro rata among such Holders based upon the number of
shares of Common Stock owned by each Holder at the date of determination
and (ii) second, pro rata among other shares of Common Stock included in
such Demand Registration; provided that if such Demand Registration is
effected pursuant to a Demand Request by either Company Shareholder or RM
such number of Registrable Securities (as adjusted for Adjustments) of
either Company Shareholder or RM that are owned by Company Shareholder and
RM immediately following the Transactions will be included first without
regard to the pro rata treatment described in clause (i) of this sentence.
(g) Assignability of Demand Registration Rights. The rights
offered a Shareholder pursuant to Section 5.02 are only assignable to a
Direct Permitted Transferee. Notwithstanding the foregoing, CSFB will be
able to assign its rights under this Article V to a Transferee that
acquires from CSFB at least 25% of the shares of Common Stock owned by CSFB
as of the date hereof (as adjusted for Adjustments). Any such assignment
permitted hereunder shall be effected hereunder only by giving written
notice thereof from both the transferee and the transferee to the Company.
SECTION 5.03. Registration Procedures. It shall be a condition
precedent to the obligations of the Company and any underwriter or
underwriters to take any action pursuant to this Article V that the
Shareholders requesting inclusion in any Piggyback Registration or Demand
Registration (a "Registration") shall furnish to the Company such
information regarding them, the Registrable Securities held by them, the
intended method of disposition of such Registrable Securities, and such
agreements regarding indemnification, disposition of such securities and
other matters referred to in this Article V as the Company shall reasonably
request and as shall be required in connection with the action to be taken
by the Company. With respect to any Registration which includes Registrable
Securities held by a Shareholder, the Company will, subject to Sections
5.01 and 5.02 promptly:
(a) Prepare and file with the Commission a registration
statement on the appropriate form prescribed by the Commission and
use its best efforts to cause such registration statement to become
effective as soon as practicable thereafter; provided that the
Company shall not be obligated to maintain such registration
effective for a period longer than the Effectiveness Period; provided
further that before filing a registration statement or prospectus or
any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the
registration statement, the Company will furnish to the holders of
the Registrable Securities covered by such registration statement and
the underwriter or underwriters, if any, copies of or drafts of all
such documents proposed to be filed, including documents incorporated
by reference in the Prospectus and, if required by such holders, the
exhibits incorporated by reference, at least three (3) business days
prior thereto, which documents will be subject to the reasonable
review of such holders and underwriters. Holders will have the
opportunity to object to any information pertaining to such holders
that is contained therein and the Company will make the corrections
reasonably requested by such holders with respect to such information
prior to filing any registration statement or amendment thereto or
any prospectus or any supplement thereto; provided, however, that the
Company will not file any registration statement or amendment thereto
or any prospectus or any supplement thereto or any documents required
to be incorporated by reference therein to which holders of a
majority of the Registrable Securities covered by such registration
statement or the underwriters, if any, shall reasonably object;
(b) Prepare and file with the Commission such amendments and
post-effective amendments to such registration statement and any
documents required to be incorporated by reference therein as may be
necessary to keep the registration statement effective for a period
of not less than the Effectiveness Period (but not prior to the
expiration of the time period referred to in Section 4(3) of the 1933
Act and Rule 174 thereunder, if applicable); cause the prospectus to
be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act applicable to it with
respect to the disposition of all Registrable Securities covered by
such registration statement during the applicable period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement or supplement to the
prospectus;
(c) Furnish to such Shareholder, without charge, such number of
conformed copies of the registration statement and any post-effective
amendment thereto, as such Shareholder may reasonably request, and
such number of copies of the prospectus (including each preliminary
prospectus) and any amendments or supplements thereto, and any
documents incorporated by reference therein as the Shareholder or
underwriter or underwriters, if any, may request in order to
facilitate the disposition of the securities being sold by the
Shareholder (it being understood that the Company consents to the use
of the prospectus and any amendment or supplement thereto by the
Shareholder covered by the registration statement and the underwriter
or underwriters, if any, in connection with the offering and sale of
the securities covered by the prospectus or any amendments or
supplements thereto);
(d) Notify such Shareholder, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, when
the Company becomes aware of the happening of any event as a result
of which the prospectus included in such registration statement (as
then in effect) contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements
therein (in the case of the prospectus or any preliminary prospectus,
in light of the circumstances under which they were made) not
misleading and, as promptly as practicable thereafter, prepare and
file with the Commission and furnish a supplement or amendment to
such prospectus so that, as thereafter delivered to the investors of
such securities, such prospectus will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(e) In the case of an underwritten offering, enter into such
customary agreements (including underwriting agreements in customary
form) and make members of senior management of the Company available
on a basis reasonably requested by the underwriters to participate
in, "road show" and other customary marketing activities (including
one-on-one meetings with prospective purchasers of the Registrable
Securities) and cause to be delivered to the underwriters reasonable
opinions of counsel to the Company in customary form, covering such
matters as are customarily covered by opinions for an underwritten
public offering as the underwriters may reasonably request and
addressed to the underwriters;
(f) Make available, for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant
to a 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 and
independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or
agent that are necessary to be reviewed by such person in connection
with the preparation of such registration statement;
(g) If requested, cause to be delivered, 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), letters from the Company's
independent certified public accountants addressed to each selling
Shareholder (unless such selling Shareholder does not provide to such
accountants the appropriate representation letter required by rules
governing the accounting profession) and each underwriter, if any,
stating that such accountants are independent public accountants
within the meaning of the 1933 Act and the applicable rules and
regulations adopted by the Commission thereunder, and otherwise in
customary form and covering such financial and accounting matters as
are customarily covered by letters of the independent certified
public accountants delivered in connection with primary or secondary
underwritten public offerings, as the case may be;
(h) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of the
registration statement;
(i) Use its best efforts to cause all securities included in
such registration statement to be listed, by the date of the first
sale of securities pursuant to such registration statement, on any
national securities exchange, quotation system or other market on
which the Common Stock is then listed or proposed to be listed by the
Company, if any;
(j) Make generally available to its security holders an
earnings statement, which need not be audited, satisfying the
provisions of Section 11(a) of the 1933 Act as soon as reasonably
practicable after the end of the twelve (12)-month period beginning
with the first month of the Company's first fiscal quarter commencing
after the effective date of the registration statement, which
statement shall cover said twelve (12)-month period;
(k) After the filing of a registration statement, (i) promptly
notify each Shareholder holding Registrable Securities covered by
such registration statement of any stop order issued or, to the
Company's knowledge, threatened by the Commission and of the receipt
by the Company of any notification with respect to the suspension of
the qualification of any Registrable Securities for sale under the
applicable securities or blue sky laws of any jurisdiction and (ii)
take all reasonable actions to obtain the withdrawal of any order
suspending the effectiveness of the registration statement or the
qualification of any Registrable Securities at the earliest possible
moment;
(l) Subject to the time limitations specified in paragraph (b)
above, if requested by the managing underwriter or underwriters or
such Shareholder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter
or underwriters or the Shareholder reasonably requests to be included
therein, including, without limitation, with respect to the number of
shares being sold by the Shareholder to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any term of the
underwritten offering of the securities to be sold in such offering;
and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after being notified
of the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(m) As promptly as practicable after filing with the Commission
of any document which is incorporated by reference into a
registration statement, deliver a copy of such document to such
Shareholder;
(n) On or prior to the date on which the registration statement
is declared effective, use its best efforts to register or qualify,
and cooperate with such Shareholder, the underwriter or underwriters,
if any, and their counsel in connection with the registration or
qualification of, the securities covered by the registration
statement for offer and sale under the securities or blue sky laws of
each state and other jurisdiction of the United States as the
Shareholder or managing underwriter or underwriters, if any, requests
in writing, to use its best efforts to keep each such registration or
qualification effective, including through new filings, or amendments
or renewals, during the Effectiveness Period do any and all other
acts or things necessary or advisable to enable the disposition in
all such jurisdictions of the Registrable Securities covered by the
applicable registration statement; provided that the Company will not
be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would
subject it to general service of process in any such jurisdiction
where it is not then so subject;
(o) Cooperate with such Shareholder and the managing
underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or underwriters,
if any, may request; and
(p) Use its best efforts to cause the securities covered by the
registration statement to be registered with or approved by such
other governmental agencies, authorities or self-regulatory bodies
within the United States as may be necessary to enable the seller or
sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities.
At all times after an Initial Public Offering, the Company
shall file all reports required to be filed by it under the 1933 Act and
the 1934 Act and the rules and regulations adopted by the Commission
thereunder, and take such further action as any Shareholders may reasonably
request, all to the extent required to enable such Shareholders to be
eligible to sell Registrable Securities pursuant to Rule 144 (or any
similar rule then in effect).
The Shareholders, upon receipt of any notice from the Company
of the happening of any event of the kind described in subsection (d) of
this Section 5.03, will forthwith discontinue disposition of the securities
until the Shareholders' receipt of the copies of the supplemented or
amended prospectus contemplated by subsection (d) of this Section 5.03 or
until it is advised in writing (the "Advice") by the Company that the use
of the prospectus may be resumed, and has received copies of any additional
or supplemental filings which are incorporated by reference in the
prospectus, and, if so directed by the Company, each Shareholder will, or
will request the managing underwriter or underwriters, if any, to, deliver,
to the Company (at the Company's expense) all copies, other than permanent
file copies then in such Shareholder's possession, of the prospectus
covering such securities current at the time of receipt of such notice. In
the event the Company shall give any such notice, the time periods
mentioned in subsections (a), (b) and (n) of this Section 5.03 shall be
extended by the number of days during the period from and including any
date of the giving of such notice to and including the date when each
seller of securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated
by subsection (d) of this Section 5.03 hereof or the Advice.
SECTION 5.04. Registration Expenses. (a) Subject to Section
5.02(c), in the case of any Registration, the Company shall bear all
expenses incident to the Company's performance of or compliance with
Sections 5.01, 5.02 and 5.03 of this Agreement, including, without
limitation, all Commission and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees
and expenses of compliance with securities or blue sky laws (including,
without limitation, reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities),
rating agency fees, printing expenses, messenger, telephone and delivery
expenses, fees and disbursements of counsel for the Company and all
independent certified public accountants and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities (but not
including any underwriting discounts or commissions, or transfer taxes, if
any, attributable to the sale of Registrable Securities by a Piggyback
Holder or Holder or fees and expenses of more than one counsel representing
the Shareholders selling Registrable Securities under such Registration).
(b) In connection with each registration initiated hereunder
(whether a Demand Registration or a Piggyback Registration), the Company
shall reimburse the holders covered by such registration or sale for the
reasonable fees and disbursements of one law firm chosen by the holders of
a majority of the number of shares of Registrable Securities included in
such registration.
(c) The obligation of the Company to bear the expenses
described in Section 5.04(b) and to reimburse the holders for the expenses
described in Section 5.04(b) shall apply irrespective of whether a
registration, once properly demanded, if applicable, becomes effective, is
withdrawn or suspended, or is converted to another form of registration and
irrespective of when any of the foregoing shall occur; provided, however,
that the expenses for any registration statement withdrawn pursuant to
5.02(c) prior to its effectiveness at the request of a Holder (unless
withdrawn following and due to a Delay Notice), any registration statement
withdrawn solely at the request of a Holder, or any supplements or
amendments to a registration statement or prospectus resulting from a
misstatement furnished to the Company by a Holder, shall be borne by such
Holder.
SECTION 5.05. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder, its officers, directors,
Affiliates and agents and each Person who controls (within the meaning of
the 1933 Act or the 1934 Act) the Shareholder, including, without
limitation any general partner or manager of any thereof, against all
losses, claims, damages, liabilities and expenses (including reasonable
counsel fees and disbursements) arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus, or any amendment thereof
or supplement thereto, in which such Shareholder participates in an
offering of Registrable Securities or in any document incorporated by
reference therein or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus or any preliminary
prospectus, in light of the circumstances under which they were made) not
misleading, except insofar as the same are made in reliance on and in
conformity with any information with respect to such Shareholder furnished
in writing to the Company by such Shareholder expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any
Shareholder from whom the Person asserting such loss, claim, damage or
liability purchased the securities if it is determined that such loss,
claim, damage or liability was caused by such Shareholder's failure to
deliver to such Shareholder's immediate purchaser a current copy of the
prospectus (if the current copy of the prospectus was required by
applicable law to be so delivered) after the Company has furnished such
Shareholder with a sufficient number of copies of such prospectus. The
Company will also indemnify underwriters (as such term is defined in the
1933 Act), their officers and directors and each Person who controls such
underwriters (within the meaning of the 1933 Act) to the same extent as
provided above with respect to the indemnification of the Shareholders.
(b) Indemnification by the Shareholders. In connection with
any registration statement in which a Shareholder is participating, each
such Shareholder will furnish to the Company in writing such information
and affidavits with respect to such Shareholder as the Company reasonably
requests for use in connection with any registration statement or
prospectus covering the Registrable Securities of such Shareholder and to
the extent permitted by law agrees to indemnify and hold harmless the
Company, its directors, officers and agents and each Person who controls
(within the meaning of the 1933 Act or the 1934 Act) the Company, against
any losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue statement of a material fact or any omission to state
a material fact required to be stated therein or necessary to make the
statements in the registration statement or prospectus or preliminary
prospectus (in the case of the prospectus or preliminary prospectus, in
light of the circumstances under which they were made) not misleading, to
the extent, but only to the extent, that such untrue statement or omission
is made in reliance on and in conformity with the information or affidavit
with respect to such Shareholder so furnished in writing by such
Shareholder expressly for use in the registration statement or prospectus;
provided, however, that the obligation to indemnify shall be several, not
joint and several, among such Shareholders and the liability of each such
Shareholder shall be in proportion to and limited to the net amount
received by such Shareholder from the sale of Registrable Securities
pursuant to a registration statement in accordance with the terms of this
Agreement. The indemnity agreement contained in this Section 5.05 shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability, action or proceeding if such settlement is effected without the
consent of such seller (which consent shall not be unreasonably withheld or
delayed). The Company and the holders of the Registrable Securities hereby
acknowledge and agree that, unless otherwise expressly agreed to in writing
by such holders, the only information furnished or to be furnished to the
Company for use in any registration statement or prospectus relating to the
Registrable Securities or in any amendment, supplement or preliminary
materials associated therewith are statements specifically relating to (a)
transactions or the relationship between such holder and its Affiliates, on
the one hand, and the Company, on the other hand, (b) the beneficial
ownership of shares of Common Stock by such holder and its Affiliates, (c)
the name and address of such holder and (d) any additional information
about such holder or the plan of distribution (other than for an
underwritten offering) required by law or regulation to be disclosed in any
such document.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. The failure to so notify the
indemnifying party shall not relieve the indemnifying party from any
liability hereunder with respect to the action, except to the extent that
such indemnifying party is materially prejudiced by the failure to give
such notice; provided, however, that any such failure shall not relieve the
indemnifying party from any other liability which it may have to any other
party. No indemnifying party in the defense of any such claim or
litigation, shall, except with the consent of such indemnified party, which
consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim
or litigation. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party there may be one or more legal or
equitable defenses available to such indemnified party which are in
addition to or may conflict with those available to any other of such
indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and
expenses of such additional counsel or counsels; provided, however, that
such number of additional counsel must be reasonably acceptable to the
indemnifying party.
(d) Contribution. If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) of this Section 5.05
is unavailable to an indemnified party as contemplated by the preceding
paragraphs (a) and (b) of this Section 5.05, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations. In no event shall the liability of any
selling Shareholder be greater in amount than the amount of net proceeds
received by such Shareholder upon such sale or the amount for which such
indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided in paragraph (b) of this
Section 5.05 had been available.
SECTION 5.06. 1934 Act Reports. The Company agrees that at all
times after it has filed a registration statement pursuant to the
requirements of the 1933 Act relating to any class of equity securities of
the Company, it will use its best efforts to file in a timely manner all
reports required to be filed by it pursuant to the 1934 Act to the extent
the Company is required to file such reports. Notwithstanding the
foregoing, the Company may deregister any class of its equity securities
under Section 12 of the 1934 Act or suspend its duty to file reports with
respect to any class of its securities pursuant to Section 15(d) of the
1934 Act if it is then permitted to do so pursuant to the 1934 Act and
rules and regulations thereunder.
SECTION 5.07. Holdback Agreements. (a) Whenever the Company
proposes to register any of its equity securities under the 1933 Act for
its own account (other than on Form S-4 or S-8 or any similar successor
form or another form used for a purpose similar to the intended use of such
forms) or is required to use its best efforts to effect the registration of
any Registrable Securities under the 1933 Act pursuant to Section 5.01 or
5.02, each holder of Registrable Securities agrees by acquisition of such
Registrable Securities not to effect any sale or distribution, including
any sale pursuant to Rule 144 under the 1933 Act, or to request
registration under Section 5.02 of any Registrable Securities within 10
days prior to and 90 days (unless advised by the managing underwriter that
a longer period, not to exceed 180 days, is required, or such shorter
period as the managing underwriter for any underwritten offering may agree)
after the effective date of the registration statement relating to such
registration, except as part of such registration or unless in the case of
a private sale or distribution, the transferee agrees in writing to be
subject to this Section 5.07. If requested by such managing underwriter,
each holder of Registrable Securities agrees to execute a holdback
agreement, in customary form, consistent with the terms of this Section
5.07(a). Notwithstanding the foregoing, no Shareholder will be restricted
from selling any Registrable Securities if such Shareholder was not able to
sell all of its Registrable Securities pursuant to such registration
statement or such Shareholder and its Affiliates beneficially own a number
of shares of Common Stock as of such date of determination equal to less
than three percent (3%) of the outstanding Common Stock of the Company.
(b) The Company agrees not to effect any sale or distribution
of any of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities within the 10 days
prior to and during the 90 days (unless advised by the managing underwriter
that a longer period, not to exceed 180 days, is required, or such shorter
period as the managing underwriter for any underwritten offering may agree)
beginning on the effective date of any underwritten Demand Registration or
any underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-8 or S-4
or any successor forms thereto), except that such restriction shall not
prohibit (i) grants of employee stock options or other issuances of Capital
Stock pursuant to the terms of a Company employee benefit plan, issuances
by the Company of Capital Stock pursuant to the exercise of such options or
the exercise of any other employee stock options outstanding on the date
hereof, (ii) the Company from issuing shares of Capital Stock in private
placements pursuant to Section 4(2) of the 1933 Act or in connection with a
strategic alliance, or (iii) the Company from publicly announcing its
intention to issue, or actually issuing, shares of Capital Stock to
shareholders of another entity as consideration for the Company's
acquisition of, or merger with, such entity. In addition, upon the request
of the managing underwriter, the Company shall use its best efforts to
cause each holder of its equity securities or any securities convertible
into or exchangeable or exercisable for any of such securities whether
outstanding on the date of this Agreement or issued at any time after the
date of this Agreement (other than any such securities acquired in a public
offering), to agree not to effect any such public sale or distribution of
such securities during such period, except as part of any such registration
if permitted, and to cause each such holder to enter into a similar
agreement to such effect with the Company.
SECTION 5.08. Participation in Registrations. No Shareholder
may participate in any Registration hereunder which is underwritten unless
such Shareholder (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements, and (b) completes and executes all
questionnaires, powers of attorney, underwriting agreements and other
documents customarily required under the terms of such underwriting
arrangements.
SECTION 5.09. Remedies. Each Shareholder shall have the right
and remedy to have the provisions of Sections 5.01 and 5.02 specifically
enforced by any court having jurisdiction in the event that the Company
materially breaches such provisions, and the Company shall reimburse such
Shareholder for the reasonable costs of and expenses for counsel for such
Shareholder incurred in connection with such proceeding.
SECTION 5.10. Other Registration Rights. The Company will not
grant any Person any demand or piggyback registration rights with respect
to the Capital Stock of the Company other than registration rights that
would not be in conflict or inconsistent with the rights of the
Shareholders as set forth in this Article V.
SECTION 5.11. Rule 144. The Company shall file any reports
required to be filed by it under the 1933 Act and the 1934 Act and the
rules and regulations adopted by the Commission thereunder, and it will
take such further action as any holder may reasonably request to make
available adequate current public information with respect to the Company
meeting the current public information requirements of Rule 144(c) under
the 1933 Act, to the extent required to enable such holder to sell
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (i) Rule 144 under the 1933 Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Notwithstanding the
foregoing, nothing in this Section 5.11 shall be deemed to require the
Company to register any of its securities pursuant to the 1934 Act.
ARTICLE VI
RIGHTS OF HOLDERS OF CLASS A pREFERRED STOCK
SECTION 6.01. Series A Preferred Stock. For so long as Company
Shareholder or one of its Affiliates is the direct or indirect beneficial
owner of at least $10.0 million in liquidation preference of Class A
Preferred Stock, the Company will not (1) register for sale in any
underwritten public offering any shares of Common Stock beneficially owned
by Sponsor and its Affiliates or (2) redeem or repurchase any shares of
Common Stock beneficially owned by Sponsor and its Affiliates out of the
proceeds of any underwritten public offering by the Company, in any such
case, without optionally redeeming or repurchasing all of the shares of
Class A Preferred Stock owned by Company Shareholder and its Affiliates;
provided, however, that if the Company has no such right to optionally
redeem or repurchase all of the shares of Class A Preferred Stock, then the
Company, at its option, may offer to purchase for cash all of the Class A
Preferred Stock held by Company Shareholder and its Affiliates at a price
equal to the liquidation preference of the Class A Preferred Stock,
together with cumulated and unpaid dividends. The provisions of this
Section 6.01 will no longer be operative once the Company has made such
offer regardless of whether or not the Company Shareholder sells any shares
of Class A Preferred Stock pursuant to such offer unless such offer is not
effected because the Company does not purchase the shares of Class A Common
Stock which Company Shareholder has requested be purchased.
SECTION 6.02. Management Fee. For so long as Company
Shareholder or any of its Affiliates is the direct or indirect beneficial
owner of any Class A Preferred Stock, Sponsor agrees that any management
fee due and owning to Sponsor by the Company will accrue but not be payable
if at any time there are cumulated and unpaid dividends in respect of the
Class A Preferred Stock.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other
communications to any party, hereunder shall be in writing (including bank
wire, telex, facsimile or similar writing) and shall be given to such party
at its address or telex or facsimile number set forth on the signature
pages hereof or in the relevant Joinder Agreement or such other address or
telex or facsimile number as such party may hereafter specify in writing to
the Secretary of the Company for the purpose by notice to the party sending
such communication. Each such notice, request or other communication shall
be effective (i) if given by telex or facsimile, when such message is
transmitted to the number specified on the signature pages to this
Agreement or any Joinder Agreement, (ii) if given by mail, three (3)
business days after such communication is deposited in the mails registered
or certified, return receipt requested, with postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered at the
address specified on the signature pages to this Agreement or any Joinder
Agreement.
SECTION 7.02. Binding Effect; Benefits; Entire Agreement. This
Agreement shall be binding upon and inure to the benefit of the parties to
this Agreement and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended or shall be
construed to give any person other than the parties to this Agreement or
their respective successors or assigns any legal or equitable right, remedy
or claim under or in respect of any agreement or any provision contained
herein. This Agreement constitutes the entire agreement and understanding,
and supersedes all prior agreements and understandings, both oral and
written, between the parties hereto relating to the subject matter hereof.
SECTION 7.03. Waiver. Any party hereto may by written notice to
the other (a) extend the time for the performance of any of the obligations
or other actions of any other party under this Agreement; (b) waive
compliance with any of the conditions or covenants of any other party
contained in this Agreement; and (c) waive or modify performance of any of
the obligations of any other party under this Agreement. Except as provided
in the preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained herein. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a
waiver of any preceding or succeeding breach and no failure by any party to
exercise any right or privilege hereunder shall be deemed a waiver of such
party's rights or privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent time or times
hereunder.
SECTION 7.04. Amendment. Other than as a result of the
execution and delivery of a Joinder Agreement, this Agreement may not be
amended, modified or supplemented in any respect except by a written
instrument executed by each Shareholder and the Company; provided that this
Agreement may be amended and restated or amended without consent of
Shareholders for the addition of new shareholders after the date hereof if
such addition does not adversely affect the rights of the Shareholders (it
being agreed that the provision of demand registration rights and piggyback
registration rights and tag-along rights on an equal basis with HIP
Co-Investors will not constitute an adverse affect).
SECTION 7.05. Assignability. Neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by either the Company or any Shareholder except
as otherwise expressly stated hereunder or with the prior written consent
of each other party. A Direct Permitted Transferee who executes a Joinder
Agreement in accordance with the provisions hereof may be assigned any
rights available hereunder (other than Section 4.06). All of the rights
offered a Shareholder under this Agreement who executes a Joinder Agreement
are assignable to a Transferee, except for the rights set forth in Sections
4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 5.02 (other than certain rights
granted to CSFB pursuant to Section 5.02). The rights set forth in Sections
4.04 and 5.02 are assignable to a Transferee who executes a Joinder
Agreement to the extent provided in Section 4.04 and 5.02(g), respectively.
SECTION 7.06. Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law that would require the application of the
laws of another jurisdiction, and the parties irrevocably submit to (and
waive immunity from) the jurisdiction of the federal and state courts
located in the County of New York in the State of New York.
SECTION 7.07. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any state or federal court of New York (this being in
addition to any other remedy to which they are entitled at law or in
equity), and each party hereto agrees to waive in any action for such
enforcement the defense that a remedy at law would be adequate.
SECTION 7.08. Severability. If any provision of this Agreement
is declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of the Agreement will not be affected
and will remain in full force and effect.
SECTION 7.09. Additional Securities Subject to Agreement. Each
Shareholder agrees that any other shares of Common Stock of the Company
which it hereafter acquires by means of a stock split, stock dividend,
distribution, exercise of options or warrants or otherwise (other than
pursuant to a public offering) whether by merger, consolidation or
otherwise (including shares of a surviving corporation into which the
shares of Common Stock of the Company are exchanged in such transaction)
will be subject to the provisions of this Agreement to the same extent as
if held on the date hereof, including for purposes of constituting
Registrable Securities hereunder.
SECTION 7.10. Name Change. For the benefit of Company
Shareholder, the Company agrees to change its corporate name (but not the
trade names used by its businesses) to exclude "Masco" or a derivation
thereof from its corporate name prior to consummating an Initial Public
Offering of its Common Stock.
SECTION 7.11. Section and Other Headings. The section and other
headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
SECTION 7.12. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original
and all of which together shall be deemed to be one and the same
instrument. A facsimile, telecopy or other reproduction of this Agreement
may be executed by one or more parties hereto, and an executed copy of this
Agreement may be delivered by one or more parties hereto by facsimile or
similar instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.
At the request of any party hereto, all parties hereto agree to execute an
original of this Agreement as well as any facsimile, telecopy or other
reproduction hereof.
SECTION 7.13. Termination of Certain Provisions. The provisions
of this Agreement set forth in Sections 3.01, 3.02, 4.01, 4.02, 4.03,
4.04(b) (except as it relates to CSFB and Company Shareholder), 4.04(d)
(except as it relates to CSFB and Company Shareholder) and 4.09 will
terminate and be of no force and effect upon the occurrence of a Qualifying
Public Equity Offering. The provisions of this Agreement set forth in
Sections 4.04(a) (except as it relates to CSFB and Company Shareholder) and
4.05 will terminate and be of no force and effect upon the occurrence of an
Initial Public Offering. The provisions of this Agreement set forth in
Sections 4.04 (insofar as it relates to CSFB and Company Shareholder),
4.06, 4.07, 4.08 and 4.10 will terminate as to a particular Shareholder as
set forth in such section.
SECTION 7.14. ERISA Matters. The Company agrees to give Sponsor
the rights set forth in Sections 4.07 and 4.08 to the extent Sponsor does
not have the ability to designate a Person to the Board of Directors of the
Company and failure to have the rights set forth in Section 4.07 or 4.08
would cause Sponsor to have an ERISA Problem. For purposes of this Section
7.14, "ERISA Problem" means that the assets of Sponsor and its Affiliates
would be considered "Plan Assets" within the meaning of 29 CFR 2510.3-101
due to the fact that Sponsor and its Affiliates do not have the rights
specified in Section 4.07 or 4.08.
SECTION 7.15. Regulatory Cooperation. If any Shareholder
reasonably determines that, by reason of any existing or future federal or
state rule, regulation, guideline, order, request or directive (whether or
not having the force of law and whether or not failure to comply therewith
would be unlawful) (collectively, a "Regulatory Requirement"), it is
effectively restricted or prohibited from holding any of the shares of
Common Stock (including any shares of Capital Stock or other securities
distributable in any merger, reorganization, readjustment or other
reclassification of such shares), the Company and the other Shareholders
shall take such action as may be reasonably necessary to permit such
Shareholder to comply with such Regulatory Requirement; provided, that no
such action pursuant to this Section 7.15 shall adversely affect the
Company, the rights of the other Shareholders hereunder or the rights,
preferences, qualifications and limitations of any Capital Stock of the
Company held by the other Shareholders; provided, further that neither the
Company nor any Shareholder shall be required to purchase any of such
shares of Common Stock as a result of such Regulatory Requirement. Such
reasonable action to be taken may include the Company's authorization of
one or more new classes of non-voting common stock that is otherwise
substantially identical to the Common Stock then owned by such Shareholder
and the amendment of the Company's certificate of incorporation or any
other documents or instruments executed in connection with the shares held
by such Shareholder. Such Shareholder shall give written notice to the
Company and the other Shareholders of any such determination and the
actions necessary to comply with such Regulatory Requirement, and the
Company and such other Shareholders shall take all reasonably necessary
steps to comply with such determination as expeditiously as possible.
SECTION 7.16. Publicity. None of the parties hereto shall issue
any press release or make any public disclosure regarding the transactions
contemplated hereby unless such press release or public disclosure shall be
approved by those parties mentioned in such press release or public
disclosure in advance. Notwithstanding the foregoing, each of the parties
hereto may, in documents required to be filed by it with the Commission or
other regulatory bodies, make such statements with respect to the
transactions contemplated hereby as each may be advised by counsel is
legally necessary or advisable, and may make such disclosure as it is
advised by its counsel is required by law.
SECTION 7.17. Expenses. The Company agrees, if the Transactions
are consummated, to reimburse each Qualified Investor for all reasonable
out-of-pocket expenses arising in connection with the Transactions promptly
(including, without limitation, and, in any event, within 30 days after any
invoice or other statement or notice), including all reasonable documented
fees and expenses of counsel to such Qualified Investor incurred in
connection with this Agreement and the transactions contemplated hereby and
all reasonable out-of-pocket expenses incurred by such Qualified Investor
for so long as such Person is a Qualified Investor in connection with the
monitoring of its equity investment in the Company.
[Signature Pages Follow]
IN WITNESS WHEREOF, the Company and each Shareholder have
executed this Agreement as of the day and year first above written.
MASCOTECH, INC.
By: /s/ David B. Liner
----------------------------------
Name: David B. Liner
Title: Vice President
Notices:
21001 Van Born Road
Taylor, Michigan 48140
Attention: Chairman of the Board and
General Counsel
Facsimile: (313) 792-4107
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Jonathan A. Schaffzin, Esq.
Facsimile: (212) 269-5420
MASCO CORPORATION
By: John R. Leekley
----------------------------------
Name: John R. Leekley
Title: Senior Vice President
Notices:
21001 Van Born Road
Taylor, Michigan 48140
Attention: Chairman of the Board and
General Counsel
Facsimile: (313) 792-4107
With a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attention: Alan Stuart Schwartz, Esq.
Facsimile: (313) 465-7575
RICHARD A. MANOOGIAN
By: /s/ Richard A. Manoogian
----------------------------------
Notices:
Richard A. Manoogian
c/o Masco Corporation
21001 Van Born Road
Taylor, Michigan 48140
Attention: Richard A. Manoogian
Facsimile: (313) 792-6134
with a copy to:
Bodman Longley & Dahling LLP
100 Renaissance Center
Detroit, Michigan 48243
Attention: David M. Hempstead, Esq.
Facsimile: (313) 393-7579
RICHARD AND JANE MANOOGIAN FOUNDATION
By: /s/ Richard A. Manoogian
----------------------------------
Name: Richard A. Manoogian
Title: President
Notices:
Richard and Jane Manoogian Foundation
c/o Masco Corporation
21001 Van Born Road
Taylor, Michigan 48140
Attention: Richard A. Manoogian
Facsimile: (313) 792-6134
with a copy to:
Eugene A. Gargaro, Jr., Esq.
c/o Masco Corp.
21001 Van Born Road
Taylor, Michigan 48140
Facsimile: (313) 792-6289
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates
L.L.C.,
its General Partner
By: /s/ David A. Stockman
----------------------------------
Name: David A. Stockman
Title: Managing Member
Notices:
Heartland Industrial Partners, L.P.
320 Park Avenue, 33rd Floor
New York, New York 10022
Attention: David A. Stockman
Facsimile: (212) 981-3535
and
55 Railroad Avenue
Greenwich, Connecticut 06830
Attention: David A. Stockman
Facsimile: (203) 861-2722
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Jonathan A. Schaffzin, Esq.
Facsimile: (212) 269-5420
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (FF), L.P.
By: Heartland Industrial Associates
L.L.C.,
its General Partner
By: /s/ David A. Stockman
----------------------------------
Name: David A. Stockman
Title: Managing Member
Notices:
Heartland Industrial Partners, L.P.
320 Park Avenue, 33rd Floor
New York, New York 10022
Attention: David A. Stockman
Facsimile: (212) 981-3535
and
55 Railroad Avenue
Greenwich, Connecticut 06830
Attention: David A. Stockman
Facsimile: (203) 861-2722
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Jonathan A. Schaffzin,
Esq.
Facsimile: (212) 269-5420
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (E1), L.P.
By: Heartland Industrial Associates
L.L.C.,
its General Partner
By: /s/ David A. Stockman
----------------------------------
Name: David A. Stockman
Title: Managing Member:
Notices:
Heartland Industrial Partners, L.P.
320 Park Avenue, 33rd Floor
New York, New York 10022
Attention: David A. Stockman
Facsimile: (212) 981-3535
and
55 Railroad Avenue
Greenwich, Connecticut 06830
Attention: David A. Stockman
Facsimile: (203) 861-2722
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Jonathan A. Schaffzin, Esq.
Facsimile: (212) 269-5420
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (K1), L.P.
By: Heartland Industrial Associates
L.L.C.,
its General Partner
By: /s/ David A. Stockman
----------------------------------
Name: David A. Stockman
Title: Managing Member
Notices:
Heartland Industrial Partners, L.P.
320 Park Avenue, 33rd Floor
New York, New York 10022
Attention: David A. Stockman
Facsimile: (212) 981-3535
and
55 Railroad Avenue
Greenwich, Connecticut 06830
Attention: David A. Stockman
Facsimile: (203) 861-2722
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Jonathan A. Schaffzin, Esq.
Facsimile: (212) 269-5420
HEARTLAND ENTITY:
HEARTLAND INDUSTRIAL PARTNERS (C1), L.P.
By: Heartland Industrial Associates
L.L.C.,
its General Partner
By: /s/ David A. Stockman
----------------------------------
Name: David A. Stockman
Title: Managing Member:
Notices:
Heartland Industrial Partners, L.P.
320 Park Avenue, 33rd Floor
New York, New York 10022
Attention: David A. Stockman
Facsimile: (212) 981-3535
and
55 Railroad Avenue
Greenwich, Connecticut 06830
Attention: David A. Stockman
Facsimile: (203) 861-2722
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Jonathan A. Schaffzin, Esq.
Facsimile: (212) 269-5420
LONG POINT CAPITAL FUND, L.P.
By: /s/ Ira Starr
----------------------------------
Name: Ira Starr
Title: Managing Director
Notices:
767 Fifth Avenue
New York, New York 10153
Attention: Ira Starr
Facsimile: (212) 593-1888
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attention: Peter Samuels, Esq.
Facsimile: (212) 969-2900
LONG POINT CAPITAL PARTNERS, L.L.C.
By: /s/ Ira Starr
----------------------------------
Name: Ira Starr
Title: Managing Director
Notices:
767 Fifth Avenue
New York, New York 10153
Attention: Ira Starr
Facsimile: (212) 593-1888
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attention: Peter Samuels, Esq.
Facsimile: (212) 969-2900
CRM 1999 ENTERPRISE FUND, LLC
By: /s/ Jay Abramson
----------------------------------
Name: Jay Abramson
Title: Exec. VP of Managing Member
Notices:
520 Madison Avenue
32nd Floor
New York, NY 10022
Attention: Edward Azimi
Facsimile: (212) 371-3562
HIP CO-INVESTOR:
KLEINWORT BENSON HOLDINGS, INC.
By: /s/ Iain Leigh
----------------------------------
Name: Iain Leigh
Title: Authorized Person
By: /s/ John Walker
----------------------------------
Name: John Walker
Title: Authorized Person
Notices:
75 Wall Street
34th Floor
New York, NY 10005
Attention: Alexander P. Coleman
Adam Lichtenstein
Facsimile: (212) 429-3139
With a copy to
Kirkland & Ellis
153 East 53rd Street
39th Floor
New York, NY 10022
Attention: Eunu Chun
Facsimile: (212) 446-4900
HIP CO-INVESTOR:
75 WALL STREET ASSOCIATES, LLC
By: Kleinwort Benson (USA), Inc.
Its: Attorney-in-Fact
By: /s/ Iain Leigh
----------------------------------
Name: Iain Leigh
Title: Authorized Person
By: /s/ John Walker
----------------------------------
Name: John Walker
Title: Authorized Person
Notices:
75 Wall Street
34th Floor
New York, NY 10005
Attention: Alexander P. Coleman
Adam Lichtenstein
Facsimile: (212) 429-3139
With a copy to
Kirkland & Ellis
153 East 53rd Street
39th Floor
New York, NY 10022
Attention: Eunu Chun
Facsimile: (212) 446-4900
HIP CO-INVESTOR:
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ James A. Wiviott
----------------------------------
Name: James A. Wiviott
Title: Director
Notices:
Metropolitan Life Insurance Company
Corporate Equities
334 Madison Avenue
Convent Station, NJ 07961
Attention: Susan M. Garret
Facsimile: (973) 254-3055
With a copy to:
Metropolitan Life Insurance Company
One Madison Avenue
New York, NY 10010
Attention: Todd S. Shenkin, Esq.
(Law, Area 6H)
Facsimile: (212) 251-1673
and
Metropolitan Life Insurance Company
4100 Boy Scout Boulevard
Tampa, FL 33607
Attention: Desiree DiSalvo - Securities
Accounting
Facsimile: (813) 801-2506
HIP CO-INVESTOR:
FIRST UNION CAPITAL PARTNERS, LLC
By: /s/ A. Wellford Tabor
----------------------------------
Name: A. Wellford Tabor
Title: Principal
Notices:
First Union Capital Partners
One First Union Center, 12th Floor
301 South College Street
Charlotte, NC 28288-0732
Attention: A. Wellford Tabor
Facsimile: (704) 374-6711
With a copy to:
Kennedy Covington Lobdell & Hickman,
L.L.P.
100 North Tryon Street, Suite 4200
Charlotte, NC 28202-4006
Attention: Kevin P. Stichter
Facsimile: (704) 331-7598
HIP CO-INVESTOR:
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ William R. Kraus
----------------------------------
Name: William R. Kraus
Title: SVP
Notices:
GE Capital Equity Investments, Inc.
120 Long Ridge Road
Stamford, CT 06927
Attention: Barbara J. Gould, Esq.
Facsimile: (203) 357-3047
Attention: William R. Kraus
Facsimile: (203) 357-6426
With a copy to:
Winston & Strawn
200 Park Avenue
New York, NY 10166
Attention: David B. Hertzog, Esq.
Facsimile: (212) 294-4700
HIP CO-INVESTOR:
CREDIT SUISSE FIRST BOSTON
U.S. EXECUTIVE ADVISORS, L.P.
By: /s/ Hartley R. Rogers
----------------------------------
Name: Hartley R. Rogers
Title: Attorney-in-Fact
Notices:
Credit Suisse First Boston
U.S. Executive Advisors, L.P.
c/o Credit Suisse First Boston
Advisory Partners, LLC
Eleven Madison Avenue
New York, New York 10010
Attention: Hartley R. Rogers
Facsimile: (212) 325-2291
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Eileen T. Nugent
Facsimile: (212) 735-2000
HIP CO-INVESTOR:
CREDIT SUISSE FIRST BOSTON EQUITY
PARTNERS (BERMUDA), L.P.
By: /s/ Hartley R. Rogers
----------------------------------
Name: Hartley R. Rogers
Title: Attorney-in-Fact
Notices:
Credit Suisse First Boston Equity
Partners (Bermuda), L.P.
c/o Credit Suisse First Boston
Advisory Partners, LLC
Eleven Madison Avenue
New York, New York 10010
Attention: Hartley R. Rogers
Facsimile: (212) 325-2291
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Eileen T. Nugent
Facsimile: (212) 735-2000
HIP CO-INVESTOR:
CREDIT SUISSE FIRST BOSTON EQUITY
PARTNERS, L.P.
By: /s/ Hartley R. Rogers
----------------------------------
Name: Hartley R. Rogers
Title: Attorney-in-Fact
Notices:
Credit Suisse First Boston Equity
Partners, L.P.
c/o Credit Suisse First Boston
Advisory Partners, LLC
Eleven Madison Avenue
New York, New York 10010
Attention: Hartley R. Rogers
Facsimile: (212) 325-2291
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Eileen T. Nugent
Facsimile: (212) 735-2000
HIP CO-INVESTOR:
EMA PARTNERS FUND 2000, L.P.
By: /s/ Hartley R. Rogers
----------------------------------
Name: Hartley R. Rogers
Title: Attorney-in-Fact
Notices:
EMA Partners Fund 2000, L.P.
c/o Credit Suisse First Boston
Advisory Partners, LLC
Eleven Madison Avenue
New York, New York 10010
Attention: Hartley R. Rogers
Facsimile: (212) 325-2291
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Eileen T. Nugent
Facsimile: (212) 735-2000
EMA PRIVATE EQUITY FUND 2000, L.P.
By: /s/ Hartley R. Rogers
----------------------------------
Name: Hartley R. Rogers
Title: Attorney-in-Fact
EMA Private Equity Fund 2000, L.P.
c/o Credit Suisse First Boston Advisory
Partners, LLC
Eleven Madison Avenue
New York, New York 10010
Attention: Hartley R. Rogers
Facsimile: (212) 325-2291
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Eileen T. Nugent
Facsimile: (212) 735-2000
MERCHANT CAPITAL, INC.
By: /s/ Edward Nadel
----------------------------------
Name: Edward Nadel
Title: Vice President
Merchant Capital, Inc.
Eleven Madison Avenue
New York, New York 10010
Attention: Edward Nadel
Facsimile: (212) 325-1659
HIP CO-INVESTOR:
BANCBOSTON CAPITAL INC.
By: /s/ Mark H. DeBlois
----------------------------------
Name: Mark H. DeBlois
Title: Managing Director
Notices:
BancBoston Capital Inc.
175 Federal Street, 10th Floor
Boston, MA 02210
Attention: Daniel C. Reese
Facsimile: (617) 434-1153
With a copy to:
Bingham Dana LLP
150 Federal Street
Boston, MA 02110-1726
Attention: Robert M. Wolf
Facsimile: (617) 951-8736
PRIVATE EQUITY PORTFOLIO FUND II, LLC
By: Fleet Bank, NA, its Manager
By: /s/ Glen Holland
----------------------------------
Name: Glen Holland
Title: Director
Notices:
BancBoston Capital Inc.
175 Federal Street, 10th Floor
Boston, MA 02210
Attention: Daniel C. Reese
Facsimile: (617) 434-1153
With a copy to:
Bingham Dana LLP
150 Federal Street
Boston, MA 02110-1726
Attention: Robert M. Wolf
Facsimile: (617) 951-8736
EXHIBIT A
JOINDER AGREEMENT
WHEREAS, the undersigned is acquiring simultaneously with the
execution of this Agreement common stock (the "Common Stock"), par value
$1.00 per share of MascoTech, Inc. (the "Company"); and
WHEREAS, as a condition to the acquisition of the Common Stock,
the undersigned has agreed to join in a certain Stockholders Agreement (the
"Stockholders Agreement") dated as of November 28, 2000 among MascoTech,
Inc. and the Shareholders (as such term is defined in the Stockholders
Agreement); and
WHEREAS, the undersigned understands that execution of this
Agreement is a condition precedent to the acquisition of the Common Stock;
NOW, THEREFORE, as an inducement to both the transferor of the
Common Stock and the other Shareholders (as such term is defined in the
Stockholders Agreement), to Transfer (as such term is defined in the
Stockholders Agreement) and to allow the Transfer of the Common Stock to
the undersigned, the undersigned agrees as follows:
1. The undersigned hereby joins in the Stockholders Agreement
and agrees to be bound by the terms and provisions of the Stockholders
Agreement as provided by the Stockholders Agreement.
2. The undersigned hereby consents that the certificate or
certificates to be issued to the undersigned representing the Common Stock
shall be legended as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT
TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN
CONNECTION WITH SUCH SALE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
THE TERMS AND CONDITIONS, INCLUDING WITH RESPECT TO THE DIRECT OR
INDIRECT TRANSFER THEREOF, OF A SHAREHOLDERS AGREEMENT DATED AS OF
NOVEMBER 28, 2000. THE SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER
THINGS, SIGNIFICANT RESTRICTIONS ON TRANSFER OF THE SECURITIES OF THE
COMPANY. A COPY OF THE SHAREHOLDERS AGREEMENT IS AVAILABLE UPON
REQUEST FROM THE COMPANY."
IN WITNESS WHEREOF, the undersigned has executed this Agreement
this ____ day of _______________, 20__.
_________________________________
Name:
Title:
Address:
EXHIBIT B
Representatives of CSFB
Hartley R. Rogers Phone: (212) 325-4618
Fax: (212) 325-2291
Jay Finney Phone: (212) 325-4622
Fax: (212) 325-5553
Lee Wright Phone: (212) 325-2762
Fax: (212) 325-5553
SCHEDULE 2.04
SHAREHOLDER COMMON SHARES
Heartland Entities 12,261,251
Richard Manoogian 621,1701(a)
Richard and Jane Manoogian Foundation 661,260
Masco Corporation 2,492,248
Kleinwort Benson Holdings, Inc. 591,716
75 Wall Street Associates LLC 295,858
Metropolitan Life Insurance Company 591,716
First Union Capital Partners LLC 1,479,290
GE Capital Equity Investments Inc. 591,716
Credit Suisse First Boston Equity Partners, L.P. 6,247,530
Credit Suisse First Boston Equity Partners, (Bermuda) L.P. 1,746,345
Credit Suisse First Boston U.S. Executive Advisors, L.P. 5,558
EMA Partners Fund 2000, L.P. 533,168
EMA Private Equity Fund 2000, L.P. 343,139
Merchant Capital, Inc. 177,515
BancBoston Capital Inc. 769,231
Private Equity Portfolio Fund II, LLC 118,343
Long Point Capital Fund L.P. 581,025
Long Point Capital Partners LLC. 10,692
CRM Enterprises Fund, LLC 59,172
-------------------
(a) Exclusive of 49,215 shares of restricted stock that will vest on the
closing date of the Transactions (assuming no cash elections) and
147,645 shares of unvested restricted stock.
