Document:

ocdx-ex44_14.htm

Exhibit 4.4

 

Description of Securities Registered Pursuant to 

Section 12 of the Securities Exchange Act of 1934

General 

As of December 31, 2020, Ortho Clinical Diagnostics Holdings plc, a public limited company incorporated under the laws of England and Wales (the “Company,” “we,” “our” or “us”), had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: ordinary shares, par value $0.00001 per share. The following summary includes a brief description of the ordinary shares, as well as certain related additional information. The summary is not complete and is qualified in its entirety by reference to our articles of association (our “Articles”), a copy of which is incorporated by reference as Exhibit 3.1 to the Annual Report on Form 10-K, of which this exhibit is a part. We encourage you to read the Articles and the applicable provisions of English law, including the U.K. Companies Act 2006 (the “Companies Act”), for additional information.

Share capital 

As of December 31, 2020, after giving effect to the reorganization transactions (the “Reorganization Transactions”) and the shares issued in connection with our initial public offering (the “IPO”), our issued share capital was $2,347.12085. The nominal value of our ordinary shares is $0.00001 per ordinary share. Each issued ordinary share is fully paid. 

Options 

As of December 31, 2020, after giving effect to the Reorganization Transactions, there were options to purchase 16,080,124 ordinary shares outstanding with a weighted average exercise price of $9.66 per ordinary share. 

Ordinary shares 

The following summarizes the rights of holders of our ordinary shares: 

	
•
	
each holder of our ordinary shares is entitled to one vote per ordinary share at a meeting of shareholders; 

	
•
	
the holders of the ordinary shares shall be entitled to receive notice of, attend, speak and vote at our general meetings; 

	
•
	
holders of our ordinary shares are entitled to receive such dividends as are recommended by our directors and declared by our shareholders; and

	
•
	
on a return of capital on a winding-up or otherwise, any surplus assets of the Company available for distribution shall be distributed to each holder of an ordinary share pro rata to its shareholding.

Registered shares 

We are required by the Companies Act to keep a register of our shareholders. Under English law, the ordinary shares are deemed to be issued when the name of the shareholder is entered in our share register. The share register therefore is prima facie evidence of the identity of our shareholders and the ordinary shares that they hold. The share register generally provides limited, or no, information regarding the ultimate beneficial owners of our ordinary shares. Our share register is maintained by our registrar, Computershare Trust Company N.A.. 

Under the Companies Act, we must enter an allotment of ordinary shares in our share register as soon as practicable and in any event within two months of the allotment. We also are required by the Companies Act to register a valid transfer of ordinary shares (or give the transferee notice of and reasons for refusal) as soon as practicable and in any event within two months of receiving notice of the transfer. 

 

	
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We, any of our shareholders or any other affected person may apply to the court for rectification of the share register if: 

	
•
	
the name of any person, without sufficient cause, is wrongly entered in or omitted from our register of members; or 

	
•
	
there is a default or unnecessary delay in entering on the register the fact of any person having ceased to be a member or on which we have a lien, provided that such refusal does not prevent dealings in the ordinary shares taking place on an open and proper basis. 

Preemptive rights 

English law generally provides shareholders with preemptive rights when new shares are issued for cash; however, it is possible for the Articles, or shareholders in a general meeting, to exclude preemptive rights. Such an exclusion of preemptive rights may be for a maximum period of up to five years from the date of adoption of the Articles, if the exclusion is contained in the Articles, or from the date of the shareholder resolution, if the exclusion is by shareholder resolution. In either case, this exclusion would need to be renewed by our shareholders upon its expiration (i.e., at least every five years). At our annual general meeting on January 25, 2021 our shareholders approved the exclusion of preemptive rights for a period of five years from the date of the approval in respect of the allotment of up to a maximum amount of one billion ordinary shares, which exclusion will need to be renewed upon expiration (i.e., at least every five years) to remain effective, but may be sought more frequently for additional five-year terms (or any shorter period).

Articles of association 

Our Articles were approved by our shareholders prior to the completion of our IPO and were adopted with effect from the completion of the IPO. The following is a description of our Articles. 

Shares and rights attaching to them 

Objects 

The objects of our company are unrestricted. 

Share rights 

Subject to any special rights attaching to shares already in issue, our shares may be issued with or have attached to them any rights or restrictions as we may resolve by ordinary resolution of the shareholders or so far as the resolution does not make specific provision, as the board may determine. 

Voting rights 

Without prejudice to any special rights, privileges or restrictions as to voting rights attached to any shares forming part of our share capital from time to time, all votes at a general meeting shall be taken on a poll and each holder of the shares of the class shall, on a poll, have one vote in respect of every share of the class held by them. 

Restrictions on voting 

No shareholder shall be entitled to vote at any general meeting in respect of any share held by him unless all sums payable by him in respect of that share have been paid. 

The board may from time to time make calls upon the shareholders in respect of any money unpaid on their shares and each shareholder shall (subject to at least 14 clear days’ notice specifying when and how the payment is to be made) pay at the time or times so specified the amount called on his shares. 

Dividends 

We may by ordinary resolution of the shareholders declare dividends out of profits available for distribution in accordance with the respective rights of shareholders but no such dividend shall exceed the amount recommended by the board. The board may from time to time pay shareholders such interim dividends as appear to the board to be justified by our financial position but, if at any time, our share capital is divided into different classes the board may 

 

	
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not pay such interim dividends in respect of those shares which confer on the holders thereof deferred or non-preferential rights with regard to dividends if, at the time of payment, any preferential dividend is in arrears. 

Subject to any special rights attaching to or the terms of issue of any share, all dividends shall be declared and paid according to the amounts paid up on the ordinary shares and shall be apportioned and paid pro rata according to the amounts paid up on the ordinary shares during any part or parts of the period in respect of which the dividend is paid. 

No dividend or other moneys payable by us on or in respect of any share shall bear interest against us unless otherwise provided by the rights attached to the share or the provisions of another agreement between the shareholder and us. Any dividend unclaimed after a period of 12 years from the date such dividend became due for payment shall, by determination of the board, be forfeited and cease to remain owing. 

Dividends may be declared or paid in any currency and the board may decide the rate of exchange for any currency conversions that may be required, and how any costs involved are to be met, in relation to the currency of any dividend. 

Any general meeting declaring a dividend may by ordinary resolution of shareholders, upon the recommendation of the board, direct payment or satisfaction of such dividend wholly or in part by the distribution of non-cash assets of equivalent value, including shares or other securities in any company. 

The directors may, if authorized by an ordinary resolution of shareholders, offer any holders of ordinary shares the right to elect to receive in lieu of a dividend, or part of a dividend, an allotment of ordinary shares credited as fully paid up. 

Change of control 

Our Articles contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of our board of directors. These provisions are intended to avoid costly takeover battles, reduce our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these provisions may have the effect of delaying, deterring or preventing a merger or acquisition of our company by means of a tender offer, a proxy contest or other takeover attempt that a shareholder might consider in its best interest, including attempts that might result in a premium being payable for the ordinary shares over the prevailing market price for the ordinary shares held by shareholders. 

Distributions on winding up 

If we are in liquidation, the liquidator may, if authorized by a special resolution of shareholders and any other authority required at law, divide among shareholders (excluding us to the extent we are a shareholder by virtue only of holding treasury shares) in specie or in kind the whole or any part of our assets (whether or not the assets consist of property of one kind or consist of properties of different kinds and the liquidator may for such purpose set such value as the liquidator deems fair upon any one or more class or classes of property and may determine how such division shall be carried out as between the shareholders or different classes of shareholders), or vest the whole or any part of such assets in trustees upon such trusts for the benefit of the shareholders as the liquidator determines (and the liquidation of the Company may be closed and the Company dissolved), but no shareholder shall be compelled to accept any shares or other assets upon which there is any liability or potential liability. 

Variation of rights 

All or any of the rights and privileges attached to any class of shares issued may be varied or abrogated only with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class (excluding any shares held as treasury shares) or by special resolution passed at a separate general meeting of the holders of such shares, subject to the other provisions of the Companies Act and the terms of their issue. The Companies Act also provides a right to object to the variation of the share capital by the shareholders who did not vote in favor of the variation. Should 15% or more of the shareholders of the issued shares in question apply to the court to have the variation cancelled, the variation shall have no effect unless and until it is confirmed by the court. 

 

	
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Alteration to share capital 

We may, by ordinary resolution of shareholders, consolidate all or any of our share capital into shares of greater nominal value than our existing shares, or sub-divide our shares or any of them into shares of a lesser nominal value. We may, by special resolution of shareholders, confirmed by the court, reduce our share capital or any capital redemption reserve or any share premium account in any manner authorized by the Companies Act. We may redeem or purchase all or any of our shares as described in “—Other U.K. law considerations—Purchase of own shares.”

Preemption rights 

In certain circumstances, our shareholders may have statutory preemption rights under the Companies Act in respect of the allotment of new shares as described in “—Preemptive rights” and “—Differences in corporate law—Pre-emptive rights” in this exhibit. 

Transfer of shares 

Any shareholder holding shares in certificated form may transfer all or any of his shares by an instrument of transfer in any usual form or any other form approved by the board. Any written instrument of transfer shall be signed by or on behalf of the transferor and (in the case of a partly paid share) the transferee. 

In the case of uncertificated shares, the directors may take such action as they consider appropriate to achieve a transfer. The Uncertificated Securities Regulations 2001 permit shares to be issued and held in uncertificated form and transferred by means of a computer based system. 

The board may decline to register any transfer of any share: 

	
•
	
which is not a fully paid share; 

	
•
	
where the instrument of transfer is not lodged, duly stamped (if stampable), at our registered office or such other place as the directors have appointed; 

	
•
	
where the transfer is not accompanied by the share certificate to which it relates, or such other evidence as the board may reasonably require to show the transferor’s right to make the transfer, or evidence of the right of someone other than the transferor to make the transfer on the transferor’s behalf; 

	
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where the transfer is in respect of more than one class of share; and 

	
•
	
where the number of joint holders to whom the share is to be transferred exceeds four. 

If the board declines to register a transfer, it must return to the transferee the instrument of transfer together with notice of and reason for the refusal, unless the board suspects that the proposed transfer may be fraudulent. 

Shareholder meetings 

Annual general meetings 

In accordance with the Companies Act, we are required in each year to hold an annual general meeting in addition to any other general meetings in that year and to specify the meeting as such in the notice convening it. The annual general meeting shall be convened whenever and wherever the board sees fit, subject to the requirements of the Companies Act, as described in “—Differences in corporate law—Annual general meeting” and “—Differences in corporate law—Notice of general meetings” in this exhibit. 

Notice of general meetings 

The arrangements for the calling of general meetings are described in “—Differences in corporate law—Notice of general meetings” in this exhibit. 

Quorum of general meetings 

No business shall be transacted at any general meeting unless a quorum is present. At least two shareholders present in person, by proxy or authorized to act as the representative of a corporation in relation to the meeting, and entitled to vote, shall be a quorum for all purposes. 

 

	
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Class meetings 

The provisions in our Articles relating to general meetings apply to every separate general meeting of the holders of a class of shares. 

Directors 

Number of directors 

We may not have less than two directors on the board of directors and not more than fifteen. 

Appointment of directors 

Subject to the provisions of our Articles, we may, by ordinary resolution of the shareholders or a decision of the board, elect any person to be a director, either to fill a casual vacancy or as an addition to the existing board, provided the total number of directors does not exceed the maximum number fixed by or in accordance with the Articles, provided, further, that a vacancy caused by the departure of an appointee (a “Principal Shareholder appointee”) of our principal shareholder (the “Principal Shareholder”) may only be filled by the Principal Shareholder. However, any person that is not a director retiring from the existing board must be recommended by the board or the person must have confirmed in writing to the Company their willingness to be elected as a director. 

Our Articles will provide for a staggered board consisting of three classes of directors. Directors of each class are chosen for three-year terms, with only one class of directors being elected at each annual meeting of shareholders. At the first annual meeting of shareholders, the terms of the Class I directors (other than a Principal Shareholder appointee who is a Class I director) will expire and Class I directors (other than a Principal Shareholder appointee who is a Class I director) will be subject to a shareholder vote to be elected for a full term of three years. At the second annual meeting of shareholders, the terms of the Class II directors (other than a Principal Shareholder appointee who is a Class II director) will expire and Class II directors (other than a Principal Shareholder appointee who is a Class II director) will be subject to a shareholder vote to be elected for a full term of three years. At the third annual meeting of shareholders, the terms of the Class III directors (other than a Principal Shareholder appointee who is a Class III director) will expire and Class III directors (other than a Principal Shareholder appointee who is a Class III director) will be subject to a shareholder vote to be elected for a full term of three years. At each succeeding annual meeting, directors (other than Principal Shareholder appointees) will be subject to a shareholder vote to be elected for a full term of 3 years to succeed the directors of the class whose terms expire at such annual general meeting. 

Directors’ interests 

If a situation arises in which a director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with our interests (other than a situation that cannot reasonably be regarded as likely to give rise to a conflict of interest or a conflict of interest arising in relation to a transaction or arrangement with the Company), the board may authorize in accordance with the Companies Act the director’s interest and the continuing performance by the relevant director of his duties as a director on such terms as the board may determine. 

A director shall not be accountable to us for any benefit which he derives from or in connection with a relationship involving a conflict of interest or possible conflict of interest which has been authorized by the directors or by the Company in a general meeting and any such transaction or arrangement shall not be liable to be avoided on the grounds of any such benefit. 

Subject to the requirements under sections 175, 177 and 182 of the Companies Act, a director shall declare the nature and extent of such conflicts. 

A director may participate in the decision-making process and count in the quorum and vote on a proposed decision of the board which is concerned with such director’s interests (subject to any restrictions imposed by the other directors when providing such consent) if such director has declared the nature and extent of any interest of his and provided a majority of the other directors consent, or if one of the following situations applies: 

	
•
	
the director’s interest arises solely through an interest in shares, debentures or other securities of or otherwise in or through the Company; 

	
•
	
an ordinary resolution of the Company permits the director to count in the quorum and vote on the proposed decision; 

 

	
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•
	
the conflict of interest arises from one of the following: 

	
 
	
•
	
the giving of a guarantee, security or indemnity in respect of money lent or obligations incurred by them or any other person at the request of or for the benefit of, the Company or any of its subsidiary undertakings; 

	
 
	
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the giving of a guarantee, security or indemnity in respect of a debt or obligation of the Company or any of its subsidiary undertakings for which the director has assumed responsibility (in whole or part and whether alone or jointly with others) under a guarantee or indemnity or by the giving of security; 

	
 
	
•
	
a contract, arrangement, transaction or proposal concerning an offer of shares, debentures or other securities of the Company or any of its subsidiary undertakings for subscription or purchase, in which offer they are or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which they are to participate; 

	
 
	
•
	
proposals concerning another company in which the director is interested directly or indirectly (whether as officer, shareholder or otherwise), if the director and any other persons connected with him do not to his knowledge hold an interest in shares representing 1% or more of the issued shares of any class of the equity share capital of that company (or of any third company through which his or their interest is derived) or of the voting rights available to shareholders of the relevant company; 

	
 
	
•
	
a contract, arrangement, transaction or proposal for the benefit of employees of the Company or of any of its subsidiary undertakings which does not award them any privilege or benefit not generally accorded to the employees to whom the arrangement relates; or 

	
 
	
•
	
a contract, arrangement, transaction or proposal concerning any insurance which the Company is empowered to purchase or maintain for, or for the benefit of, and directors of the Company or for persons who include directors of the Company. 

A director shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote. 

If a question arises at a meeting of the board or of a committee of the board as to the right of a director to vote, the question may, before the conclusion of the meeting, be referred to the chair of the meeting and their ruling in relation to any director other than himself shall be final and conclusive, save where the nature of the interests of the direct have been fully disclosed. 

Directors’ fees and remuneration 

Each of the directors is entitled to remuneration as determined by the board for their service as directors and other services undertaken for the Company. 

Each director may be paid his expenses in connection with such director’s attendance at meetings of the board or committees of the board or general meetings or separate meetings of the holders class of shares or of debentures, or otherwise in connection with the exercise of powers and the discharge of responsibilities in relation to the Company. 

Indemnity 

Every director, officer or former director or officer of our group may be indemnified against all costs, charges, losses, expenses and liabilities incurred by him in connection with any negligence, default, breach of duty, or breach of trust by him in relation to us or in connection with our activities as a trustee of an occupational pension scheme, in the actual or purported exercise of his powers or duties or otherwise as our officer, to the extent permitted under the Companies Act. 

Other U.K. law considerations 

Mandatory purchases and acquisitions 

Pursuant to Sections 979 to 991 of the Companies Act, where a takeover offer has been made for us and the offeror has acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and not less than 90% of the voting rights carried by those shares, the offeror may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he wishes to acquire, and is entitled to so acquire, those shares on the same terms as the general offer. The offeror 

 

	
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would do so by sending a notice to the outstanding minority shareholders telling them that it will compulsorily acquire their shares. Such notice must be sent within three months of the last day on which the offer can be accepted in the prescribed manner. The squeeze-out of the minority shareholders can be completed at the end of six weeks from the date the notice has been given, subject to the minority shareholders failing to successfully lodge an application to the court to prevent such squeeze-out any time prior to the end of those six weeks following which the offeror can execute a transfer of the outstanding shares in its favor and pay the consideration to us, which would hold the consideration on trust for the outstanding minority shareholders. The consideration offered to the outstanding minority shareholders whose shares are compulsorily acquired under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer. 

Sell out 

The Companies Act also gives our minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer for all of our shares. The holder of shares to which the offer relates, and who has not otherwise accepted the offer, may require the offeror to acquire his shares if, prior to the expiry of the acceptance period for such offer, (i) the offeror has acquired or unconditionally agreed to acquire not less than 90% in value of the voting shares, and (ii) not less than 90% of the voting rights carried by those shares. The offeror may impose a time limit on the rights of minority shareholders to be bought out that is not less than three months after the end of the acceptance period. If a shareholder exercises his rights to be bought out, the offeror is required to acquire those shares on the terms of this offer or on such other terms as may be agreed. 

Disclosure of interest in shares 

Pursuant to Part 22 of the Companies Act, we are empowered to give notice in writing to any person whom we know or have reasonable cause to believe to be interested in our shares, or to have been so interested at any time during the three years immediately preceding the date on which the notice is issued requiring such persons, within a reasonable time to disclose to us particulars of that person’s interest and (so far as is within his knowledge) particulars of any other interest that subsists or subsisted in those shares. 

Under our Articles, if a person defaults in supplying us with the required particulars in relation to the ordinary shares in question, referred to in the Articles as ‘default shares’, within the prescribed period, the directors may by notice direct that: 

	
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in respect of the default shares, the relevant shareholder shall not be entitled to attend or vote (either in person or by proxy) at a general meeting or at a separate meeting of the holders of that class of shares or on a poll; 

	
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in respect of the default shares: 

	
 
	
•
	
no payment shall be made by way of dividend and no share shall be allotted pursuant to scrip dividend; 

	
 
	
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no transfer of any default share shall be registered unless: 

(A)    the shareholder is not himself in default as regards to supplying the information requested and the transfer when presented for registration is accompanied by a certificate by the shareholder in such form as the board may in its absolute discretion require to the effect that after due and careful enquiry the shareholder is satisfied that no person in default as regards supplying such information is interested in any of the shares the subject of the transfer; or 

(B)    the transfer is an approved transfer. 

Purchase of own shares 

Under English law, a limited company may only purchase its own shares out of the distributable profits of the company or the proceeds of a fresh issue of shares made for the purpose of financing the purchase, provided that they are not restricted from doing so by their articles. A limited company may not purchase its own shares if, as a result of the purchase, there would no longer be any issued shares of the company other than redeemable shares or shares held as treasury shares. Shares must be fully paid in order to be repurchased. 

We may purchase our own fully paid shares otherwise than on a recognized investment exchange pursuant to a purchase contract authorized by resolution of shareholders before the purchase takes place. Any authority will not be effective if any shareholder from whom we propose to purchase shares votes on the resolution and the resolution 

 

	
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would not have been passed if he had not done so. The resolution authorizing the purchase must specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire. 

Distributions and dividends 

Under the Companies Act, before a company can lawfully make a distribution or dividend, it must ensure that it has sufficient distributable reserves (on a non-consolidated basis). The basic rule is that a company’s profits available for the purpose of making a distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made. The requirement to have sufficient distributable reserves before a distribution or dividend can be paid applies to us and to each of our subsidiaries that has been incorporated under English law. 

It is not sufficient that we, as a public company, have made a distributable profit for the purpose of making a distribution. An additional capital maintenance requirement is imposed on us to ensure that the net worth of the company is at least equal to the amount of its capital. A public company can only make a distribution: 

	
•
	
if, at the time that the distribution is made, the amount of its net assets (that is, the total excess of assets over liabilities) is not less than the total of its called up share capital and distributable reserves; and 

	
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if, and to the extent that, the distribution itself, at the time that it is made, does not reduce the amount of the net assets to less than that total. 

Following the IPO, the Company capitalized all of the reserves arising as a result of the Reorganization Transactions by applying such amounts in the reserve to pay up in full such number of deferred shares (the “Capital Reduction Shares”), each with a nominal value of $0.01. The issued share capital of the Company was subsequently reduced by cancelling and extinguishing all of the Capital Reduction Shares, subject to the approval of the court. It is expected that Company will implement a further court-approved reduction of its share premium account in order to create distributable profits. There can be no assurance that court approval will be obtained in respect of the Company reducing its capital in order to create distributable profits. Neither the capitalization nor the reduction of capital described above will impact shareholder’ relative interests in the capital of the Company. 

Compromises and arrangements 

Where we and our creditors or shareholders or a class of either of them propose a compromise or arrangement between us and our creditors or our shareholders or a class of either of them (as applicable), the High Court of Justice in England and Wales may order a meeting of the creditors or class of creditors or of our shareholders or class of shareholders (as applicable) to be called in such a manner as the court directs. Any compromise or arrangement approved by a majority in number present and voting at the meeting representing 75% or more in value of the creditors or 75% or more of the voting rights of shareholders or class of either of them (as applicable) if sanctioned by the court, is binding upon us and all the creditors, shareholders or members of the specific class of either of them (as applicable). 

Whether the capital of the Company is to be treated as being divided into a single or multiple class(es) of shares is a matter to be determined by the court. The court may in its discretion treat a single class of shares as multiple classes, or multiple classes of shares as a single class, for the purposes of the shareholder approval referred to above taking into account all relevant circumstances, which may include circumstances other than the rights attaching to the shares themselves. 

City code on takeovers and mergers 

The U.K. City Code on Takeovers and Mergers (the “Takeover Code”) applies, among other things, to an offer for a public company whose registered office is in the United Kingdom and which is considered by the Panel on Takeovers and Mergers (the “Takeover Panel”), to have its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man (in each case, a “Code Company”). This is known as the “residency test.” Under the Takeover Code, the Takeover Panel will determine whether we have our place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man by looking at various factors, including the structure of our Board, the functions of the directors, and where they are resident. 

If at the time of a takeover offer, the Takeover Panel determines that the residency test is satisfied and we have our place of central management and control in the United Kingdom, we would be subject to several rules and 

 

	
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restrictions, including but not limited to the following: (i) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (ii) we might not, without the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (iii) we would be obliged to provide equality of information to all bona fide competing bidders. The Takeover Code also contains certain rules in respect of mandatory offers for Code Companies. Under Rule 9 of the Takeover Code, if a person: 

	
•
	
acquires an interest in shares of a Code Company that, when taken together with shares in which persons acting in concert with such person are interested, carry 30% or more of the voting rights of the Code Company; or 

	
•
	
who, together with persons acting in concert with such person, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting rights in the Code Company, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested, the acquirer, and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make a cash offer (or provide a cash alternative) for the Code Company’s outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous 12 months. 

A majority of our Board currently reside outside of the United Kingdom, the Channel Islands and the Isle of Man. Based upon our current and intended plans for our directors and management, for the purposes of the Takeover Code, we anticipate that the residency test will not be met and that we will be considered to have our place of central management and control outside the United Kingdom, the Channel Islands or the Isle of Man. Therefore, the Takeover Code should not apply to us. It is possible that in the future changes in the Board’s composition, changes in the Takeover Panel’s interpretation of the Takeover Code, or other events may cause the Takeover Code to apply to us. 

Exchange controls 

There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non-resident holders of our ordinary shares, other than withholding tax requirements. There is no limitation imposed by English law or in our Articles on the right of non-residents to hold or vote shares. 

Transfer agent and registrar 

The transfer agent and registrar for our ordinary shares is Computershare Trust Company N.A.. 

Listing 

Our ordinary shares are listed on the NASDAQ Global Select Market under the symbol “OCDX.” 

 

	
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Exhibit 10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRINCIPAL SHAREHOLDERS AGREEMENT

 

by and among

 

Ortho Clinical Diagnostics Holdings plc

 

 

and

 

The Carlyle Shareholder

 

 

January 25, 2021

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US-DOCS\120152113.5

 

TABLE OF CONTENTS 

 

Page

 

	
SECTION I.
	
DEFINITIONS
	
 
	
1

	
1.1
	
Drafting Conventions; No Construction Against Drafter
	
 
	
1

	
1.2
	
Defined Terms
	
 
	
2

	
SECTION II.
	
REPRESENTATIONS AND WARRANTIES
	
 
	
3

	
2.1
	
Representations and Warranties of the Initial Carlyle Shareholder
	
 
	
3

	
2.2
	
Representations and Warranties of the Company
	
 
	
4

	
SECTION III.
	
REGISTRATION RIGHTS
	
 
	
4

	
3.1
	
Demand and Piggyback Rights.
	
 
	
4

	
3.2
	
Notices, Cutbacks and Other Matters.
	
 
	
6

	
3.3
	
Facilitating Registrations and Offerings.
	
 
	
8

	
3.4
	
Indemnification.
	
 
	
13

	
3.5
	
Rule 144
	
 
	
15

	
SECTION IV.
	
MISCELLANEOUS PROVISIONS
	
 
	
16

	
4.1
	
Information and Access Rights
	
 
	
16

	
4.2
	
Confidentiality
	
 
	
18

	
4.3
	
Reliance
	
 
	
18

	
4.4
	
Access to Agreement; Amendment and Waiver; Actions of the Board
	
 
	
18

	
4.5
	
Notices
	
 
	
19

	
4.6
	
Counterparts
	
 
	
20

	
4.7
	
Remedies; Severability
	
 
	
20

	
4.8
	
Entire Agreement
	
 
	
20

	
4.9
	
Termination
	
 
	
20

	
4.10
	
Governing Law
	
 
	
20

	
4.11
	
Successors and Assigns; Beneficiaries
	
 
	
20

	
4.12
	
Consent to Jurisdiction; Specific Performance; WAIVER OF JURY TRIAL
	
 
	
20

	
4.13
	
Further Assurances; Company Logo
	
 
	
21

	
4.14
	
Regulatory Matters
	
 
	
21

	
4.15
	
Inconsistent Agreements
	
 
	
21

	
4.16
	
In-Kind Distributions..
	
 
	
21

	
4.17
	
Recapitalization Transactions.
	
 
	
21

 

 

EXHIBIT

Exhibit A: Form of Joinder Agreement

 

 

 

 

 

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Principal SHAREHOLDERS AGREEMENT

This Principal Shareholders Agreement (this “Agreement”) is made as of January 25, 2021 by and among Ortho Clinical Diagnostics Holdings plc, a public limited company incorporated and registered in England and Wales (the “Company”), and Carlyle Partners VI Cayman Holdings, L.P., a Cayman Islands exempted limited partnership (the “Initial Carlyle Shareholder”), and any other shareholder who from time to time becomes party to this Agreement by execution of a joinder agreement substantially in the form of Exhibit A (a “Joinder Agreement”).  

Recitals

A.The Company is proposing to consummate an initial public offering of its share capital (the “Initial Public Offering”).

B.The Initial Carlyle Shareholder and the Company desire to enter into this Agreement effective upon the effective date of the registration statement relating to the Initial Public Offering (the “Effective Date”).  

C.The Board of Directors of the Company (the “Board of Directors”) has approved this Agreement.

D.The parties hereto desire to agree upon the respective rights and obligations after the Effective Date with respect to the securities of the Company now or hereafter issued and outstanding and held by the parties to this Agreement and certain matters with respect to their investment in the Company.

Agreement

Now therefore, in consideration of the foregoing, and the mutual agreements and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

SECTION I.DEFINITIONS

1.1Drafting Conventions; No Construction Against Drafter.

(a)The headings in this Agreement are provided for convenience and do not affect its meaning.  The words “include,” “includes” and “including” are to be read as if they were followed by the phrase “without limitation.”  Unless specified otherwise, any reference to an agreement means that agreement as amended or supplemented, subject to any restrictions on amendment contained in such agreement.  Unless specified otherwise, any reference to a statute or regulation means that statute or regulation as amended or supplemented from time to time and any corresponding provisions of successor statutes or regulations.  If any date specified in this Agreement as a date for taking action falls on a day that is not a business day, then that action may be taken on the next business day.  Unless specified otherwise, the words “party” and “parties” refer only to a party named in this Agreement or one who joins this Agreement as a party pursuant to the terms hereof.  

(b)The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent.  If an ambiguity or question of intent or interpretation arises, this Agreement is to be construed as if drafted jointly by the parties and there is to be no presumption or burden of proof or rule of strict construction favoring or disfavoring any party because of the authorship of any provision of this Agreement.

 

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1.2Defined Terms.  The following capitalized terms, as used in this Agreement, shall have the meanings set forth below.

“Affiliate” shall mean with respect to any specified Person, any other Person which, directly or indirectly, controls, is controlled by or is under common control with the specified Person, including any partner, officer, director or member of the specified Person and, if the specified Person is a private equity fund, any investment fund now or hereafter managed by, or which is controlled by or is under common control with, one or more general partners or managing members of, or shares the same management company with, the specified Person or any investment fund, managed account vehicle, collective investment scheme or comparable investment vehicle (“Fund”) now or hereafter existing that shares the same management company or registered investment advisor with such Person or any Fund now or hereafter existing that is controlled by, under common control with, managed or advised by the same management company or registered investment advisor that controls, is under common control with, manages or advises the Fund that controls such Person.  For the purposes of this definition, “control” (including, with its correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct, or cause the direction of the management and policies of such Person, whether through the ownership of securities, by contract or otherwise.

“Articles of Association” shall mean the Company’s articles of association in effect as of the Effective Date, as amended from time to time.

 

“Carlyle Majority Interest” shall mean, at any given time, the Carlyle Shareholders holding a majority of the outstanding Shares held at that specified time by all Carlyle Shareholders.

“Carlyle Shareholders” means (i) the Initial Carlyle Shareholder and (ii) any Permitted Transferee or Affiliate of the Initial Carlyle Shareholder (x) which is issued Ordinary Shares or becomes the beneficial owner of any Ordinary Shares or is Transferred any Ordinary Shares by any other Person and (y) which becomes a party hereto by executing a Joinder Agreement.

“Charter” shall mean the Company’s certificate of incorporation in effect as of the Effective Date, as amended from time to time.

 

“Company” shall have the meaning set forth in the preamble and shall include any successor thereto.

“Director” shall mean a member of the Board of Directors.

“Exchange Act” shall mean the Securities Exchange Act of 1934 and the rules and regulations thereunder.

“FINRA” shall mean the Financial Industry Regulatory Authority.

“GAAP” means generally accepted accounting principles, as in effect in the United States of America from time to time. 

“Initial Capital Interest” means the aggregate sums which remain invested by a Shareholder in shares and yield free convertible preferred equity certificates of the Company immediately following the IPO.

 

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“IPO” means the underwritten registered public offering of the Company’s Ordinary Shares pursuant to which the Ordinary Shares are being listed on Nasdaq .

 “Nasdaq” means the Nasdaq Stock Market.

“Ordinary Shares” shall mean the ordinary shares, nominal value of USD $0.00001 per share, of the Company.

“Permitted Transferee” shall mean, with respect to the Carlyle Shareholder, (i) any Affiliate of the Carlyle Shareholder, (ii) any director, officer or employee of any Affiliate of such Carlyle Shareholder, (iii) any direct or indirect member or general or limited partner of such Carlyle Shareholder that is the transferee of Shares pursuant to a pro rata distribution of Shares by such Carlyle Shareholder to its partners or members, as applicable (or any subsequent transfer of such Shares by the transferee to another Permitted Transferee) or (iv) any other Transferee designated as a Permitted Transferee by the Carlyle Majority Interest.

“Person” shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government (or agency or political subdivision thereof) or any other entity or group (as defined in Section 13(d) of the Exchange Act).

“Public Offering” shall mean a public offering and sale of Ordinary Shares for cash pursuant to an effective registration statement under the Securities Act.

“SEC” shall mean the Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933 and the rules and regulations thereunder.

“Shares” shall mean, at any time, (i) Ordinary Shares and (ii) any other equity securities now or hereafter issued by the Company, together with any options, warrants or other rights thereon and any other shares or other equity securities issued or issuable with respect thereto (whether by way of a share dividend, share split or in exchange for or in replacement or upon conversion of such shares or otherwise in connection with a combination of shares, recapitalization, merger, consolidation or other corporate reorganization).

“Shareholders” means the Carlyle Shareholder and any other shareholders who from time to time become party to this Agreement by execution of a Joinder Agreement.

“Transfer” means any direct or indirect transfer, donation, sale, assignment, pledge, hypothecation, grant of a security interest in or other disposal or attempted disposal of all or any portion of a security, any interest or rights in a security, or any rights under this Agreement.

“Transferee” means the recipient of a Transfer. 

“WKSI” means a well-known seasoned issuer, as defined in the SEC’s Rule 405.

SECTION II.REPRESENTATIONS AND WARRANTIES 

2.1Representations and Warranties of the Initial Carlyle Shareholder.  The Initial Carlyle Shareholder hereby represents, warrants and covenants to the Company as follows: (a) such Initial Carlyle Shareholder has full limited partnership power and authority to enter into this Agreement and perform its obligations hereunder; (b) this Agreement constitutes the valid and binding obligation of such Initial Carlyle Shareholder enforceable against it in accordance with its terms; and (c) the execution, delivery and 

 

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performance by such Initial Carlyle Shareholder of this Agreement: (i) does not and will not violate any laws, rules or regulations of the United States or any state or other jurisdiction applicable to such Initial Carlyle Shareholder, or require such Initial Carlyle Shareholder to obtain any approval, consent or waiver of, or to make any filing with, any Person that has not been obtained or made; and (ii) does not constitute a breach of or default under any material agreement to which such Initial Carlyle Shareholder is a party.

2.2Representations and Warranties of the Company.  The Company hereby represents, warrants and covenants to the Shareholders as follows: (a) the Company has full corporate power and authority to enter into this Agreement and perform its obligations hereunder; (b) this Agreement constitutes the valid and binding obligation of the Company enforceable against it in accordance with its terms; and (c) the execution, delivery and performance by the Company of this Agreement: (i) does not and will not violate any laws, rules or regulations of the United States or any state or other jurisdiction applicable to the Company, or require the Company to obtain any approval, consent or waiver of, or to make any filing with, any Person that has not been obtained or made; and (ii) does not and will not result in a breach of, constitute a default under, accelerate any obligation under or give rise to a right of termination of any indenture or loan or credit agreement or any other material agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which the Company is a party or by which the property of the Company is bound or affected, or result in the creation or imposition of any mortgage, pledge, lien, security interest or other charge or encumbrance on any of the assets or properties of the Company.

SECTION III.REGISTRATION RIGHTS

3.1Demand and Piggyback Rights.

(a)Right to Demand a Non-Shelf Registered Offering. Upon the demand of any Carlyle Shareholder at any time and from time to time after (or in advance of, but subject to) the expiration or waiver of the underwriter lock-up period applicable to the Company’s IPO, the Company will facilitate in the manner described in this Agreement a non-shelf registered offering of the Shares requested by the demanding Carlyle Shareholders to be included in such offering. A demand by Carlyle Shareholders for a non-shelf registered offering that will result in the imposition of a lockup on the Company and the Shareholders may not be made unless the Shares requested to be sold by the demanding Carlyle Shareholders in such offering have an aggregate market value (based on the most recent closing price of the Ordinary Shares at the time of the demand) of at least $50 million (or such lesser amount if all Shares held by the demanding Carlyle Shareholders are requested to be sold). 

(b)Right to Piggyback on a Non-Shelf Registered Offering. In connection with any registered offering of Ordinary Shares covered by a non-shelf registration statement (whether pursuant to the exercise of demand rights or at the initiative of the Company), the Carlyle Shareholders may exercise piggyback rights to have included in such offering Shares held by them. The Company will facilitate in the manner described in this Agreement any such non-shelf registered offering.

(c)Right to Demand and be Included in a Shelf Registration. Upon the demand of any Carlyle Shareholder, made at any time and from time to time when the Company is eligible to utilize Form S-3 or a successor form to sell Shares in a secondary offering on a delayed or continuous basis in accordance with Rule 415, the Company will facilitate in the manner described in this Agreement a shelf registration of Shares held by such Carlyle Shareholder. Unless otherwise requested by any Carlyle Shareholder, any shelf registration filed by the Company covering Shares (whether pursuant to a Carlyle Shareholder demand or at the initiative of the Company) will cover Shares held by each of the Carlyle Shareholders (regardless of whether they demanded the filing of such shelf or not) up to an equivalent percentage of their original respective holdings as may be agreed upon by the demanding Carlyle Shareholders. If at the time of such 

 

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request the Company is a WKSI, such shelf registration would, at the request of such Carlyle Shareholders, cover an unspecified number of Shares to be sold by the Company and the Carlyle Shareholders.

(d)Demand and Piggyback Rights for Shelf Takedowns. Upon the demand of one or more Carlyle Shareholders made at any time and from time to time, the Company will facilitate in the manner described in this Agreement a “takedown” of Shares off of an effective shelf registration statement. In connection with any underwritten shelf takedown (whether pursuant to the exercise of such demand rights or at the initiative of the Company), the Carlyle Shareholders may exercise piggyback rights to have included in such takedown Shares held by them that are registered on such shelf. Notwithstanding the foregoing, Carlyle Shareholders may not demand a shelf takedown for an offering that will result in the imposition of a lockup on the Company and the Shareholders unless the Shares requested to be sold by the demanding Carlyle Shareholders in such takedown have an aggregate market value (based on the most recent closing price of the Ordinary Shares at the time of the demand) of at least $50 million (or such lesser amount if all Shares held by the demanding Carlyle Shareholders are requested to be sold).

(e)Right to Reload a Shelf. Upon the written request of a Carlyle Shareholder, the Company will file and seek the effectiveness of a post-effective amendment to an existing shelf in order to register up to the number of Shares previously taken down off of such shelf and not yet “reloaded” onto such shelf. 

(f)Limitations on Demand and Piggyback Rights.

(i)Any demand for the filing of a registration statement or for a registered offering or takedown will be subject to the constraints of any applicable lockup arrangements, and such demand must be deferred until such lockup arrangements no longer apply. If a demand has been made for a non-shelf registered offering or for an underwritten takedown, no further demands may be made so long as the related offering is still being pursued. Notwithstanding anything in this Agreement to the contrary, the Carlyle Shareholders will not have piggyback or other registration rights with respect to registered primary offerings by the Company (i) covered by a Form S-8 registration statement or a successor form applicable to employee benefit-related offers and sales, (ii) where the Shares are not being sold for cash or (iii) where the offering is a bona fide offering of securities other than Shares, even if such securities are convertible into or exchangeable or exercisable for Shares.

(ii)The Company may postpone the filing of a demanded registration statement or suspend the effectiveness of any shelf registration statement for a reasonable “blackout period” not in excess of 90 days if the Board of Directors of the Company determines that such registration or offering could materially interfere with a bona fide business or financing transaction of the Company or is reasonably likely to require premature disclosure of information, the premature disclosure of which could materially and adversely affect the Company; provided that the Company shall not postpone the filing of a demanded registration statement or suspend the effectiveness of any shelf registration statement pursuant to this Section 3.1(f)(ii) more than once in any 360 day period. The blackout period will end upon the earlier to occur of, (i) in the case of a bona fide business or financing transaction, a date not later than 90 days from the date such deferral commenced, and (ii) in the case of disclosure of other non-public information, the earlier to occur of (x) the filing by the Company of its next succeeding Form 10-K or Form 10-Q, or (y) the date upon which such information is otherwise disclosed.

 

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3.2Notices, Cutbacks and Other Matters.

(a)Notifications Regarding Registration Statements. In order for one or more Carlyle Shareholders to exercise their right to demand that a registration statement be filed, they must so notify the Company in writing indicating the number of Shares sought to be registered and the proposed plan of distribution. The Company will keep the Carlyle Shareholders contemporaneously apprised of all pertinent aspects of its pursuit of any registration, whether pursuant to a Carlyle Shareholder demand or otherwise, with respect to which a piggyback opportunity is available. Pending any required public disclosure and subject to applicable legal requirements, the parties will maintain the confidentiality of these discussions.

(b)Notifications Regarding Registration Piggyback Rights. Any Carlyle Shareholder wishing to exercise its piggyback rights with respect to a non-shelf registration statement must notify the Company and the other Carlyle Shareholders of the number of Shares it seeks to have included in such registration statement. Such notice must be given as soon as practicable, but in no event later than 5:00 pm, New York City time, on the second trading day prior to (i) if applicable, the date on which the preliminary prospectus intended to be used in connection with pre-effective marketing efforts for the relevant offering is expected to be finalized, and (ii) in any case, the date on which the pricing of the relevant offering is expected to occur. No such notice is required in connection with a shelf registration statement, as Shares held by all Carlyle Shareholders will be included up to the applicable percentage (unless otherwise requested by any Carlyle Shareholder).

(c)Notifications Regarding Demanded Underwritten Takedowns.

(i)The Company will keep the Carlyle Shareholders contemporaneously apprised of all pertinent aspects of any underwritten shelf takedown in order that they may have a reasonable opportunity to exercise their related piggyback rights. Without limiting the Company’s obligation as described in the preceding sentence, having a reasonable opportunity requires that the Carlyle Shareholders be notified by the Company of an anticipated underwritten takedown (whether pursuant to a demand made by other Carlyle Shareholders or made at the Company’s own initiative) no later than 5:00 pm, New York City time, on (i) if applicable, the second trading day prior to the date on which the preliminary prospectus or prospectus supplement intended to be used in connection with pre-pricing marketing efforts for such takedown is finalized, and (ii) in all cases, the second trading day prior to the date on which the pricing of the relevant takedown occurs.

(ii)Any Carlyle Shareholder wishing to exercise its piggyback rights with respect to an underwritten shelf takedown must notify the Company and the other Carlyle Shareholders of the number of Shares it seeks to have included in such takedown. Such notice must be given as soon as practicable, but in no event later than 5:00 pm, New York City time, on (i) if applicable, the trading day prior to the date on which the preliminary prospectus or prospectus supplement intended to be used in connection with marketing efforts for the relevant offering is expected to be finalized, and (ii) in all cases, the trading day prior to the date on which the pricing of the relevant takedown occurs.

(iii)Pending any required public disclosure and subject to applicable legal requirements, the parties will maintain appropriate confidentiality of their discussions regarding a prospective underwritten takedown.

(d)Plan of Distribution, Underwriters and Counsel. If (1) a majority of the Shares proposed to be sold in an underwritten offering through a non-shelf registration statement or through a shelf takedown are being sold by the Company for its own account and (2) such offering was initiated by the Company and not by any Carlyle Stockholder, the Company will be entitled to determine the plan of 

 

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distribution and select the managing underwriters for such offering. Otherwise, the Carlyle Shareholders holding a majority of the Shares requested to be included in such offering will be entitled to determine the plan of distribution and select the managing underwriters, and such majority will also be entitled to select counsel for the selling Shareholders (which may be the same as counsel for the Company). In the case of a shelf registration statement, the plan of distribution will provide as much flexibility as is reasonably possible, including with respect to resales by transferee Shareholders.

(e)Cutbacks. If the managing underwriters advise the Company and the selling Shareholders that, in their opinion, the number of Shares requested to be included in an underwritten offering exceeds the amount that can be sold in such offering without adversely affecting the distribution of the Shares being offered, such offering will include only the number of Shares that the underwriters advise can be sold in such offering.

(i)In the case of a registered offering upon the demand of one or more Carlyle Shareholders, the selling Shareholders (including those Carlyle Shareholders exercising piggyback rights pursuant to Section 3.1(b)) collectively will have first priority and will be subject to cutback pro rata based on the Initial Capital Interest of each such selling Shareholder (up to the number of Shares initially requested by them to be included in such offering). To the extent of any remaining capacity, all other shareholders having similar registration rights will have second priority and will be subject to cutback pro rata based on the number of Shares initially requested by them to be included in such offering. Except as contemplated by the immediately preceding two sentences, other selling shareholders (other than transferees to whom a Carlyle Shareholder has assigned its rights under this Agreement) will be included in an underwritten offering only with the consent of Carlyle Shareholders holding a majority of the Shares being sold in such offering.

(ii)In the case of a registered offering upon the initiative of the Company, the Company will have first priority. To the extent of any remaining capacity, the selling Carlyle Shareholders as a group, on the one hand, and all other shareholders having similar registration rights as a group, on the other hand, will be subject to cutback pro rata based on the number of Shares initially requested by such group to be included in such offering. The selling Carlyle Shareholders will be subject to cutback pro rata, based on the Initial Capital Interest of each such selling Carlyle Shareholder (up to the number of Shares initially requested by them to be included in such offering). Except as contemplated by the immediately preceding sentence, other shareholders (other than transferees to whom a Carlyle Shareholder has assigned its rights under this Agreement) will be included in an underwritten offering only with the consent of a Carlyle Majority Interest.

(f)Withdrawals. Even if Shares held by a Carlyle Shareholder have been part of a registered underwritten offering, such Carlyle Shareholder may, no later than the time at which the public offering price and underwriters’ discount are determined with the managing underwriter, decline to sell all or any portion of the Shares being offered for its account.

(g)Expenses. All expenses incurred in connection with any registration statement or registered offering covering Shares held by Carlyle Shareholders, including, without limitation, all registration and filing fees, printing expenses (including printing certificates for the Shares in a form eligible for deposit with the Depository Trust Company and printing preliminary, supplemental and final prospectuses), word processing, duplicating, telephone and facsimile expenses, messenger and delivery expenses, transfer taxes, expenses incurred in connection with promotional efforts or “roadshows”, fees and disbursements of counsel (including the fees and disbursements of outside counsel for Carlyle Shareholders (which may be the same as counsel for the Company) and fees and disbursements of counsel 

 

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to the underwriters with respect to “blue sky” qualification of such Shares and their determination for eligibility for investment under the laws of the various jurisdictions and in connection with any filing with, and clearance of any offering by, FINRA (up to the cap on such fees included in any applicable underwriting agreement)) and of the independent certified public accountants (including with respect to the preparation of customary financial statements required to be included in any offering document, the provision of any customary comfort letters and any the conduct of special audits required by, or incidental to, such registration), and the expense of qualifying such Shares under state blue sky and non-U.S. securities laws, will be borne by the Company. However, underwriters’, brokers’ and dealers’ discounts and commissions applicable to Shares sold for the account of a Carlyle Shareholder will be borne by such Carlyle Shareholder.

3.3Facilitating Registrations and Offerings.

(a)General. If the Company becomes obligated under this Agreement to facilitate a registration and offering of Shares on behalf of Carlyle Shareholders, the Company will do so with the same degree of care and dispatch as would reasonably be expected in the case of a registration and offering by the Company of Shares for its own account. Without limiting this general obligation, the Company will fulfill its specific obligations as described in this Section 3.3.

(b)Registration Statements. In connection with each registration statement that is demanded by Carlyle Shareholders or as to which piggyback rights otherwise apply, the Company will:

(i)prepare and file (or confidentially submit) with the SEC a registration statement covering the applicable Shares, (ii) prepare and file (or confidentially submit) such amendments or supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period ending when all of the securities covered by such registration statement have been disposed of in accordance with the intended methods of distribution by the sellers thereof set forth in such registration statement (but not in any event before the expiration of any longer period required under the Securities Act or, if such registration statement relates to an underwritten public offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with the sale of Shares by an underwriter or dealer), (iii) seek the effectiveness thereof, and (iv) file with the SEC prospectuses and prospectus supplements as may be required, all in consultation with the Carlyle Shareholders and as reasonably necessary in order to permit the offer and sale of the such Shares in accordance with the applicable plan of distribution;

(ii)(1)within a reasonable time prior to the filing of any registration statement, any prospectus, any amendment to a registration statement, amendment or supplement to a prospectus or any free writing prospectus, provide copies of such documents to the selling Carlyle Shareholders and to the underwriter or underwriters of an underwritten offering, if applicable, and to their respective counsel; fairly consider such reasonable changes in any such documents prior to or after the filing thereof as the counsel to the Carlyle Shareholders or the underwriter or the underwriters may request; and make such of the representatives of the Company as shall be reasonably requested by the selling Carlyle Shareholders or any underwriter available for discussion of such documents;

(2)within a reasonable time prior to the filing of any document which is to be incorporated by reference into a registration statement or a prospectus, provide copies of such document to counsel for the Carlyle Shareholders and underwriters; fairly consider such reasonable changes in such document prior to or after the filing 

 

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thereof as counsel for such Carlyle Shareholders or such underwriter shall request; and make such of the representatives of the Company as shall be reasonably requested by such counsel available for discussion of such document;

(iii)cause each registration statement and the related prospectus and any amendment or supplement thereto, as of the effective date of such registration statement, amendment or supplement and during the distribution of the registered Shares (x) to comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC and (y) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

(iv)notify each Carlyle Shareholder promptly, and, if requested by such Carlyle Shareholder, confirm such advice in writing, (i) when a registration statement has become effective and when any post-effective amendments and supplements thereto become effective if such registration statement or post-effective amendment is not automatically effective upon filing pursuant to Rule 462, (ii) of the issuance by the SEC or any state or non-U.S. securities authority of any stop order, injunction or other order or requirement suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose, (iii) if, between the effective date of a registration statement and the closing of any sale of securities covered thereby pursuant to any agreement to which the Company is a party, the representations and warranties of the Company contained in such agreement cease to be true and correct in all material respects or if the Company receives any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (iv) of the happening of any event during the period a registration statement is effective as a result of which such registration statement or the related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, if required by applicable law, prepare and file a supplement or amendment to such registration statement or prospectus so that, as thereafter delivered to the purchasers of Shares registered thereby, such registration statement or prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

(v)furnish counsel for each underwriter, if any, and for the Carlyle Shareholders copies of any correspondence with the SEC or any state securities authority relating to the registration statement or prospectus;

(vi)otherwise comply with all applicable rules and regulations of the SEC, including making available to its security holders an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar provision then in force);

(vii)use all reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement at the earliest possible time;

(c)Non-Shelf Registered Offerings and Shelf Takedowns. In connection with any non-shelf registered offering or shelf takedown that is demanded by Carlyle Shareholders or as to which piggyback rights otherwise apply, the Company will:

(i)cooperate with the selling Carlyle Shareholders and the sole underwriter or managing underwriter of an underwritten offering Shares, if any, to facilitate the timely preparation and delivery of certificates representing the Shares to be sold and not bearing any 

 

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restrictive legends; and enable such Shares to be in such denominations (consistent with the provisions of the governing documents thereof) and registered in such names as the selling Carlyle Shareholders or the sole underwriter or managing underwriter of an underwritten offering of Shares, if any, may reasonably request at least five days prior to any sale of such Shares;

(ii)furnish to each Carlyle Shareholder and to each underwriter, if any, participating in the relevant offering, without charge, as many copies of the applicable prospectus, including each preliminary prospectus, and any amendment or supplement thereto and such other documents as such Carlyle Shareholder or underwriter may reasonably request in order to facilitate the public sale or other disposition of the Shares; the Company hereby consents to the use of the prospectus, including each preliminary prospectus or prospectus supplement, by each such Carlyle Shareholder and underwriter in connection with the offering and sale of the Shares covered by the prospectus, the preliminary prospectus or prospectus supplement;

(iii)(i) use all reasonable efforts to register or qualify the Shares being offered and sold, no later than the time the applicable registration statement becomes effective, under all applicable state securities or “blue sky” laws of such jurisdictions as each underwriter, if any, or any Carlyle Shareholder holding Shares covered by a registration statement, shall reasonably request; (ii) use all reasonable efforts to keep each such registration or qualification effective during the period such registration statement is required to be kept effective; (iii) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in the registration statement and (iv) do any and all other acts and things which may be reasonably necessary or advisable to enable each such underwriter, if any, and Carlyle Shareholder to consummate the disposition in each such jurisdiction of such Shares owned by such Carlyle Shareholder; provided, however, that the Company shall not be obligated to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to consent to be subject to general service of process (other than service of process in connection with such registration or qualification or any sale of Shares in connection therewith) in any such jurisdiction where it would not otherwise be required to qualify but for this subparagraph (iv) or subject itself to taxation in any such jurisdiction;

(iv)(i) cause all Shares being sold to be qualified for inclusion in or listed on Nasdaq or any other U.S. securities exchange on which Shares issued by the Company are then so qualified or listed if so requested by the Carlyle Shareholders, or if so requested by the underwriter or underwriters of an underwritten offering of Shares, if any and arrange for at least two market makers to register as such with respect to the Shares with FINRA, (ii) comply (and continue to comply) with the requirements of any self-regulatory organization applicable to the Company, including without limitation all corporate governance requirements, (iii) use its best efforts to cause Shares covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Shares and (iv) use best efforts to provide a transfer agent and registrar for all Shares to be sold by the Carlyle Shareholders not later than the effective date of such registration statement;

(v)cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter in an underwritten offering;

(vi)use all reasonable efforts to facilitate the distribution and sale of any Shares to be offered pursuant to this Agreement, including without limitation by making road show 

 

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presentations, holding meetings with and making calls to potential investors and taking such other actions as shall be requested by the Carlyle Shareholders or the lead managing underwriter of an underwritten offering; 

(vii)enter into customary agreements (including, in the case of an underwritten offering, underwriting agreements in customary form, and including provisions with respect to indemnification and contribution in customary form and consistent with the provisions relating to indemnification and contribution contained herein) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Shares in connection therewith, including:

(1)make such representations and warranties to the selling Shareholders and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings;

(2)obtain opinions of counsel to the Company in all relevant jurisdictions and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the lead managing underwriter, if any) addressed to each selling Shareholder and the underwriters, if any, covering the matters and jurisdictions customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Shareholders and underwriters;

(3)obtain “cold comfort” letters and updates thereof from the Company’s independent certified public accountants addressed to the selling Shareholders, if permissible, and the underwriters, if any, which letters shall be customary in form and shall cover matters of the type customarily covered in “cold comfort” letters to underwriters in connection with primary underwritten offerings;

(4)to the extent requested by the Carlyle Shareholders, cause the Company’s directors and executive officers to enter into lock-up agreements in customary form; and

(5)to the extent requested and customary for the relevant transaction, enter into a securities sales agreement with the Carlyle Shareholders providing for, among other things, the appointment of such representative as agent for the selling Carlyle Shareholders for the purpose of soliciting purchases of Shares, which agreement shall be customary in form, substance and scope and shall contain customary representations, warranties and covenants.

The above shall be done at such times as customarily occur in similar registered offerings or shelf takedowns.

(viii)take all actions to ensure that any free writing prospectus utilized in connection with any registration or offering hereunder complies in all material respects with the Securities Act in relation to the circulation of a prospectus, is filed in accordance with the Securities Act, is retained in accordance with the Securities Act and, when taken together with the related prospectus, prospectus supplement and related documents, 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; 

 

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(ix)permit any Carlyle Stockholder that, in its sole exclusive judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such registrations statement and to allow such Carlyle Stockholder to provide language for insertion therein, in form and substance satisfactory to the Company, which in the reasonable judgment of such Carlyle Stockholder and its counsel should be included; 

(x)use best efforts to (i) make Form S-3 available for the sale of Shares and (ii) prevent the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Shares included in such registration statement for sale in any jurisdiction, and in the event any such order is issued, use best efforts to obtain promptly the withdrawal of such order; 

(xi)if requested by any managing underwriter and reasonably available, include in any prospectus or prospectus supplement updated financial or business information for the Company’s most recent period or current quarterly period (including estimated results or ranges of results) if required for purposes of marketing the offering in the view of the managing underwriter; 

(xii)take no direct or indirect action prohibited by Regulation M under the Exchange Act; 

(xiii)cooperate with each Carlyle Stockholder covered by the registration statement and each underwriter or agent participating in the disposition of such Shares and their respective counsel in connection with the preparation and filing of applications, notices, registrations and responses to requests for additional information with FINRA, Nasdaq or any other national securities exchange on which the Shares are or are to be listed, and to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter; 

(xiv)if the Company files an automatic shelf registration statement covering any Shares, use its best efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such automatic shelf registration statement is required to remain effective; 

(xv)if the Company does not pay the filing fee covering the Shares at the time an automatic shelf registration statement is filed, pay such fee at such time or times as the Shares are to be sold; 

(xvi)if the automatic shelf registration statement has been outstanding for at least three years, at the end of the third year, refile a new automatic shelf registration statement covering the Shares, and, if at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, use its best efforts to refile the shelf registration statement on Form S-3 and, if such form is not available, Form S-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective; and

(xvii)if the Company plans to file any automatic shelf registration statement for the benefit of the holders of any of its securities other than the Carlyle Shareholders, and the Carlyle Shareholders do not request that their Shares be included in such shelf registration statement, the Company agrees that, at the request of the Carlyle Majority Interest, include in such automatic shelf 

 

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registration statement such disclosures as may be required by Rule 430B in order to ensure that the Carlyle Shareholders may be added to such shelf registration statement at a later time through the filing of a prospectus supplement rather than a post-effective amendment (and if the Company has filed any automatic shelf registration statement for the benefit of the holders of any of its securities other than the Carlyle Shareholders, the Company shall, at the request of the Carlyle Majority Interest, file any post-effective amendments necessary to include therein all disclosure and language necessary to ensure that the Carlyle Shareholders may be added to such Shelf Registration Statement). 

(d)Due Diligence. In connection with each registration and offering of Shares to be sold by Carlyle Shareholders, the Company will, in accordance with customary practice, make available for inspection by representatives of the Carlyle Shareholders and underwriters and any counsel or accountant retained by such Carlyle Shareholder or underwriters all relevant financial and other records, pertinent corporate documents and properties of the Company and cause appropriate officers, managers and employees of the Company to supply all information reasonably requested by any such representative, underwriter, counsel or accountant in connection with their due diligence exercise.

(e)Information from Shareholders. Each Carlyle Shareholder that holds Shares covered by any registration statement will furnish to the Company such information regarding itself as is required to be included in the registration statement, the ownership of Shares by such Carlyle Shareholder and the proposed distribution by such Carlyle Shareholder of such Shares as the Company may from time to time reasonably request in writing.

3.4Indemnification.

(a)Indemnification by the Company. In the event of any registration under the Securities Act by any registration statement of Shares held by Carlyle Shareholders, the Company will hold harmless Carlyle Shareholders, any such Carlyle Shareholder’s officers, directors, employees, agents, fiduciaries, shareholders, managers, partners, members, affiliates, direct and indirect equityholders, consultants and representatives, and any successors and assigns thereof, and each underwriter of such securities and each other person, if any, who controls any Carlyle Shareholder or such underwriter within the meaning of the Securities Act (collectively, the “Indemnified Parties”), against any losses, claims, actions, damages, liabilities or expenses (including with respect to actions or proceedings, whether commenced or threatened, and including reasonable attorney fees and expenses) (collectively, “Losses”), joint or several, to which Carlyle Shareholders or such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such Losses arise out of or are based upon (i) any untrue or alleged untrue statement of material fact contained in (A) any registration statement, prospectus, preliminary prospectus or free writing prospectus, or any amendment thereof or supplement thereto or (B) any application or other document or communication (in this Section 3.4, collectively called an “application”) executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration under the “blue sky” or securities laws thereof, (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance; and will reimburse any such Indemnified Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Losses; provided, however, that the Company shall not be liable to any such Indemnified Person in any such case to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or 

 

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omission or alleged omission made in such registration statement, prospectus, preliminary prospectus or free writing prospectus or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with information furnished to the Company through a written instrument duly executed by such Indemnified Person specifically for use in the preparation thereof.

(b)Indemnification by Carlyle Shareholders. Each Carlyle Shareholder will indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 3.4(a)) the Company, its officers, directors, employees, agents and representatives, and each Person who controls the Company (within the meaning of the Securities Act), with respect to Losses (as determined by a final and unappealable judgment, order or decree of a court of competent jurisdiction) arising from (i) any statement or omission from such registration statement, or any amendment or supplement to it, if such statement or omission was made in reliance upon and in conformity with information furnished to the Company through a written instrument duly executed by such Carlyle Shareholder specifically regarding such Carlyle Shareholder for use in the preparation of such registration statement or amendment or supplement, and (ii) compliance by such Carlyle Shareholder with applicable laws in effecting the sale or other disposition of the securities covered by such registration statement.

(c)Indemnification Procedures. Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in Section 3.4(a) and Section 3.4(b), the indemnified party will, if a resulting claim is to be made or may be made against and indemnifying party, give written notice to the indemnifying party of the commencement of the action. The failure of any indemnified party to give notice shall not relieve the indemnifying party of its obligations in this Section 3.4, except to the extent that the indemnifying party is actually prejudiced by the failure to give notice. If any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense of the action with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to such indemnified party of its election to assume defense of the action, the indemnifying party will not be liable to such indemnified party for any legal or other expenses incurred by the latter in connection with the action’s defense. An indemnified party shall have the right to employ separate counsel in any action or proceeding and participate in the defense thereof, but the fees and expenses of such counsel shall be at such indemnified party’s expense unless (a) the employment of such counsel has been specifically authorized in writing by the indemnifying party, which authorization shall not be unreasonably withheld, (ii) the indemnifying party has not assumed the defense and employed counsel reasonably satisfactory to the indemnified party within 30 days after notice of any such action or proceeding, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the indemnified party and the indemnifying party and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to the indemnified party that are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action or proceeding on behalf of the indemnified party), it being understood, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to all local counsel which is necessary, in the good faith opinion of both counsel for the indemnifying party and counsel for the indemnified party in order to adequately represent the indemnified parties) for the indemnified party and that all such fees and expenses shall be reimbursed as they are incurred upon written request and presentation of invoices. Whether or not a defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (such consent not to be unreasonably withheld, delayed or conditioned). No indemnifying party will consent to entry of any judgment or enter into any settlement which (i) does not include as an unconditional term the giving by the claimant or plaintiff, to the indemnified 

 

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party, of a release from all liability in respect of such claim or litigation or (ii) involves the imposition of equitable remedies or the imposition of any non-financial obligations on the indemnified party.

(d)Contribution. If the indemnification required by this Section 3.4 from the indemnifying party is unavailable to or insufficient to hold harmless an indemnified party in respect of any indemnifiable Losses, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect (i) the relative benefit of the indemnifying and indemnified parties and (ii) if the allocation in clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect the relative benefit referred to in clause (i) and also the relative fault of the indemnified and indemnifying parties, in connection with the actions which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact, has been made by, or relates to information supplied by, such indemnifying party or parties, and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The Company and Carlyle Shareholders agree that it would not be just and equitable if contribution pursuant to this Section 3.4(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the prior provisions of this Section 3.4(d).  Notwithstanding the provisions of this Section 3.4(d), no Carlyle Shareholder shall be required to contribute any amount in excess of the amount by which the net proceeds from the sale of the securities by such Carlyle Shareholder exceeds the amount of any damages which the indemnifying party has otherwise been required to pay by reason of an untrue statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such a fraudulent misrepresentation.

(e)Non-Exclusive Remedy. The indemnification and contribution provided for under this Agreement will be in addition to any other rights to indemnification or contribution that any indemnified party may have pursuant to law or contract (and the Company and its subsidiaries shall be considered the indemnitors of first resort in all such circumstances to which this Section 3 applies) and will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the transfer of Shares and the termination or expiration of this Agreement.

3.5Rule 144.  If the Company is subject to the requirements of Section 13, 14 or 15(d) of the Exchange Act, the Company covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act (or, if the Company is subject to the requirements of Section 13, 14 or 15(d) of the Exchange Act but is not required to file such reports, it will, upon the request of any Carlyle Shareholder, make publicly available such information) and it will take such further action as any Carlyle Shareholder may reasonably request, so as to enable such Carlyle Shareholder to sell Shares without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Carlyle Shareholder, the Company will deliver to such Carlyle Shareholder a written statement as to whether it has complied with such requirements. Furthermore, the Company shall use its reasonable best efforts to facilitate any sale by a Carlyle Shareholder under Rule 144, including delivery of any legal opinions and instruction letters required by the Company’s transfer agent and such other documentation as may be reasonably requested by the Carlyle Shareholder or its broker in connection with such sales.

 

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SECTION IV.MISCELLANEOUS PROVISIONS

4.1Information and Access Rights.  

(a)Available Financial Information. Upon written request, the Company will deliver, or will cause to be delivered, to each Carlyle Shareholder (until such time as such Carlyle Shareholder shall cease to own any Shares):  

(i)as soon as available after the end of each month and in any event within 30 days thereafter, a consolidated balance sheet of the Company and its subsidiaries as of the end of such month and consolidated statements of operations, income, cash flows, retained earnings and shareholders’ equity of the Company and its subsidiaries, for each month and for the current fiscal year of the Company to date, prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto), together with a comparison of such statements to the corresponding periods of the prior fiscal year and to the Company’s business plan then in effect and approved by the Board of Directors;

(ii)an annual budget, a business plan and financial forecasts for the Company for the fiscal year of the Company (the “Annual Budget”), no later than three (3) business days after the approval thereof by the Board of Directors (but no later than March 31 of such fiscal year), in such manner and form as approved by the Board of Directors, which shall include at least a projection of income and a projected cash flow statement for each fiscal quarter in such fiscal year and a projected balance sheet as of the end of each fiscal quarter in such fiscal year, in each case prepared in reasonable detail, with appropriate presentation and discussion of the principal assumptions upon which such budgets and projections are based, which shall be accompanied by the statement of the chief executive officer or chief financial officer or equivalent officer of the Company to the effect that such budget and projections are based on reasonable and good faith estimates and assumptions made by the management of the Company for the respective periods covered thereby; it being recognized by such holders that such budgets and projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by them may differ from the projected results.  Any material changes in such Annual Budget shall be delivered to the Carlyle Shareholders as promptly as practicable after such changes have been approved by the Board of Directors;

(iii)as soon as available after the end of each fiscal year of the Company, and in any event within 90 days thereafter, (A) the annual financial statements required to be filed by the Company pursuant to the Exchange Act or (B) a consolidated balance sheet of the Company and its subsidiaries as of the end of such fiscal year, and consolidated statements of income, retained earnings and cash flows of the Company and its subsidiaries for such year, prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by the opinion of independent public accountants of recognized national standing selected by the Company, and a Company-prepared comparison to the Company’s Annual Budget for such year as approved by the Board of Directors (the “Annual Financial Statements”); and 

(iv)as soon as available after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within 45 days thereafter, (A) the quarterly financial statements required to be filed by the Company pursuant to the Exchange Act or (B) a consolidated balance sheet of the Company and its subsidiaries as of the end of each such quarterly period, and consolidated statements of income, retained earnings and cash flows of the Company and its subsidiaries for such period and for the current fiscal year to date, prepared in 

 

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accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto) and setting forth in comparative form the figures for the corresponding periods of the previous fiscal year and to the Company’s Annual Budget then in effect as approved by the Board of Directors, all of the information to be provided pursuant to this Section 4.1(a)(iv) in reasonable detail and certified by the principal financial or accounting officer of the Company. 

In addition to the foregoing, the Company covenants and agrees to provide periodic updates to each Carlyle Shareholder during the course of the preparation of the Annual Budget and to keep the Carlyle Shareholders reasonably informed as to its progress, status and the budgeted items set forth therein.  Notwithstanding anything to the contrary in Section 4.1(a), the Company’s obligations thereunder shall be deemed satisfied to the extent that such information is provided by (A) providing the financial statements of any wholly-owned subsidiary of the Company to the extent such financial statements reflect the entirety of the operations of the business or (B) in the case of Section 4.1(a)(iii) and Section 4.1(a)(iv),  filing such financial statements of the Company or any wholly-owned subsidiary of the Company whose financial statements satisfy the requirements of clause (A), as applicable, with the Securities and Exchange Commission on EDGAR or in such other manner as makes them publicly available.  The Company’s obligation to furnish the materials described in Section 4.1(a)(i), Section 4.1(a)(iii) and Section 4.1(a)(iv), shall be satisfied so long as it transmits such materials to the requesting Carlyle Shareholders within the time periods specified therein, notwithstanding that such materials may actually be received after the expiration of such periods.

(b)Tax Information.  Promptly upon request by any Carlyle Shareholder, the Company will, at the Company’s expense, prepare and deliver to such Carlyle Shareholder any information and certified statement that such Carlyle Shareholder determines to be necessary for such Carlyle Shareholder (or its direct or indirect owners) to comply with obligations for tax reporting or tax withholding with respect to an investment (direct or indirect) in the Company or any of its subsidiaries.  For the avoidance of doubt, such a request by any Carlyle Shareholder may require the Company, (i) for purposes of Section 301 of the United States Internal Revenue Code of 1986, as amended (the “Code”), to prepare financial statements pursuant to the principles of “earnings and profits” within the meaning of United States federal income tax law and to determine the amount of any “dividend” within the meaning of Section 316 of the Code, (ii) for purposes of Section 951 and Section 951A of the Code, to determine whether the Company or any of its subsidiaries is a “controlled foreign corporation” within the meaning of Section 957 of the Code, to prepare financial statements pursuant to the principles of “earnings and profits” within the meaning of United States federal income tax law, and to determine the amount of any “subpart F income” within the meaning of Section 952 of the Code and any “global intangible low-taxed income” income within the meaning of Section 951A of the Code, and (iii) for purposes of Section 1291 of the Code and the election under Section 1295 of the Code, to determine whether the Company or any of its subsidiaries is a “passive foreign investment company” within the meaning of Section 1297 of the Code and to provide the information described in Treasury Regulations Section 1.1295-1(g).

(c)Other Information.  The Company covenants and agrees to deliver to each Carlyle Shareholder, upon written request, until such time as such Carlyle Shareholder shall cease to own any Shares, with reasonable promptness, such other information and data (including such information and reports made available to any lender of the Company or any of its subsidiaries under any credit agreement or otherwise) with respect to the Company and each of its subsidiaries as from time to time may be reasonably requested by any such Carlyle Shareholder.  Each such Carlyle Shareholder, until such time as such Carlyle Shareholder shall cease to own any Shares, shall have access to such other information concerning the Company’s business or financial condition and the Company’s management as may be reasonably requested, including such information as may be necessary to comply with regulatory, tax or other governmental filings.

 

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(d)Access. The Company shall, and shall cause its subsidiaries, officers, directors, employees, auditors and other agents to (a) afford the Carlyle Shareholders and their officers, employees, auditors and other agents, during normal business hours and upon reasonable notice, at all reasonable times to the Company’s and its subsidiaries’ officers, employees, auditors, legal counsel, properties, offices, plants and other facilities and to all books and records, and (b) afford the Carlyle Shareholders and their officers, employees, auditors and other agents the opportunity to discuss the affairs, finances and accounts of the Company and its subsidiaries with their respective officers from time to time as each such Carlyle Shareholder may reasonably request, in each case, until such time as such Carlyle Shareholder shall cease to own any Shares.  

4.2Confidentiality.  Each Shareholder agrees that it will keep confidential and will not disclose, divulge or use for any purpose, other than to monitor its investment in the Company and its subsidiaries, any confidential information obtained from the Company pursuant to Section 4.1, unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of any confidentiality obligation by such Shareholder or its affiliates), (b) is or has been independently developed or conceived by such Shareholder without use of the Company’s confidential information or (c) is or has been made known or disclosed to such Shareholder by a third party (other than an Affiliate of such Shareholder) without a breach of any confidentiality obligations such third party may have to the Company that is known to such Shareholder; provided, that, a Shareholder may disclose confidential information (i) to its attorneys, accountants, consultants and other professional advisors to the extent necessary to obtain their services in connection with monitoring its investment in the Company, (ii) to any prospective purchaser of any Shares from such Shareholder as long as such prospective purchaser agrees to be bound by the provisions of this Section 4.2 as if a Shareholder, (iii) to any Affiliate, partner, member, limited partners, prospective partners or related investment fund of such Shareholder and their respective directors, employees, consultants and representatives, in each case in the ordinary course of business (provided that the recipients of such confidential information are subject to a customary confidentiality and non-disclosure obligation), (iv) as may be reasonably determined by such Shareholder to be necessary in connection with such Shareholder’s enforcement of its rights in connection with this Agreement or its investment in the Company and its subsidiaries, or (v) as may otherwise be required by law or legal, judicial or regulatory process.

4.3Reliance.  Each covenant and agreement made by a party in this Agreement or in any certificate, instrument or other document delivered pursuant to this Agreement is material, shall be deemed to have been relied upon by the other parties and shall remain operative and in full force and effect after the Effective Date regardless of any investigation.  This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties hereto and their respective successors and permitted assigns.

4.4Access to Agreement; Amendment and Waiver; Actions of the Board.  For so long as this Agreement shall be in effect, this Agreement shall be made available for inspection by any Shareholder at the principal executive offices of the Company.  Any party may waive in writing any provision hereof intended for its benefit, provided, that, in the case of any waiver by the Company, such waiver is consented to in writing by the Carlyle Majority Interest.  No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof.  The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to any party at law or in equity or otherwise.  This Agreement may be amended only with the prior written consent of the Carlyle Majority Interest and the Company.  Any consent given as provided in the preceding sentence shall be binding on all parties.  Further, with the prior written consent of the Carlyle Majority Interest and the Company, at any time hereafter Permitted Transferees may be made parties hereto, with any such additional parties shall be treated as “Shareholders” for all purposes hereunder, by executing a counterpart signature page in the form 

 

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attached as Exhibit A hereto, which signature page shall be attached to this Agreement and become a part hereof without any further action of any other party hereto.

4.5Notices.  All notices, requests, demands and other communications provided for hereunder shall be in writing and mailed (by first class registered or certified mail, postage prepaid), sent by express overnight courier service, or delivered to the applicable party at the respective address indicated below:

If to the Company:

c/o Ortho-Clinical Diagnostics, Inc.

1001 Route 202

Raritan, NJ 08869

Attention: Michael A. Schlesinger

Facsimile: (844) 892-5398

 

With a copy (which shall not constitute notice):

Latham & Watkins LLP

555 Eleventh Street, N.W.

Washington, D.C. 20004

Attention:  Daniel T. Lennon; David I. Brown

Facsimile: (202) 637-2201

 

If to the Carlyle Shareholders:

c/o The Carlyle Group

520 Madison Avenue

42nd Floor

New York, NY  10022

Attention: Stephen H. Wise

Facsimile: (212) 893-4901

 

With a copy (which shall not constitute notice):

Latham & Watkins LLP

555 Eleventh Street, N.W.

Washington, D.C. 20004

Attention:  Daniel T. Lennon; David I. Brown

Facsimile: (202) 637-2201

 

If to any other Shareholder:

At such Person’s address for notice as set forth in the books and records of the Company, or, as to each of the foregoing, at such other address as shall be designated by a party in a written notice to other parties complying as to delivery with the terms of this Section 4.5.  All such notices, requests, demands and other communications shall, when mailed, telegraphed or sent, respectively, be effective (i) two days after being deposited in the mail or (ii) one day after being deposited with the express overnight courier service, respectively, addressed as aforesaid.

 

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4.6Counterparts.  This Agreement may be executed in two or more counterparts, and delivered via facsimile, .pdf or other electronic transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

4.7Remedies; Severability.  It is specifically understood and agreed that any breach of the provisions of this Agreement by any party will result in irreparable injury to the other parties, that the remedy at law alone will be an inadequate remedy for such breach, and that, in addition to any other legal or equitable remedies which they may have, such other parties may enforce their respective rights by actions for specific performance or injunctive relief (to the extent permitted at law or in equity).  If any one or more of the provisions of this Agreement, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein are not to be in any way impaired thereby, it being intended that all of the rights and privileges of the parties be enforceable to the fullest extent permitted by law.

4.8Entire Agreement.  This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof.

4.9Termination.  This Agreement shall terminate on the earlier of (i) the election of the Carlyle Majority Interest or (ii) such date as the Carlyle Shareholders, in the aggregate, cease to hold any Shares; provided that notwithstanding any such termination, Section 3.4 shall survive any expiration or termination of this Agreement. Termination of this Agreement shall not relieve any party for the breach of any obligations under this Agreement prior to such termination.

4.10Governing Law.  This Agreement is to be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules are not mandatorily applicable by statute and would require or permit the application of the laws of another jurisdiction.

4.11Successors and Assigns; Beneficiaries.  This Agreement shall be binding upon and inure to the benefit of the parties and the respective successors and assigns of the parties as contemplated herein.  Any successor to the Company by way of merger or otherwise must specifically agree to be bound by the terms hereof as a condition of such succession.

4.12Consent to Jurisdiction; Specific Performance; WAIVER OF JURY TRIAL.  

(a)Each of the parties hereto irrevocably and unconditionally consents to the sole and exclusive jurisdiction of the state and federal courts located in Wilmington, Delaware to resolve all disputes, claims or controversies arising out of or relating to this Agreement or any other agreement executed and delivered pursuant to or in connection with this Agreement or the negotiation, breach, validity, termination or performance hereof and thereof or the transactions contemplated hereby and thereby and agrees that it will not bring any such action in any court other than the federal or state courts located in Wilmington, Delaware.  Each party further irrevocably waives any objection to proceeding in such courts based upon lack of personal jurisdiction or to the laying of venue in such courts and further irrevocably and unconditionally waives and agrees not to make a claim that such courts are an inconvenient forum.  Each of the parties hereto hereby consents to service of process by registered mail at the address to which notices are to be given as provided in Section 4.5.  Each of the parties hereto agrees that its or his submission to jurisdiction and its or his consent to service of process by mail is made for the express benefit of the other parties hereto.  The choice of forum set forth in this Section shall not be deemed to preclude the enforcement of any judgment of a Delaware federal or state court, or the taking of any action under this Agreement to enforce such a judgment, in any other appropriate jurisdiction. 

 

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(b)The parties 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 this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which such party is entitled at law or in equity.  

(c)EACH PARTY TO THIS AGREEMENT WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED AND DELIVERED PURSUANT TO OR IN CONNECTION HEREWITH OR THE NEGOTIATION, BREACH, VALIDITY, TERMINATION OR PERFORMANCE HEREOF AND THEREOF OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  FURTHER, (I) NO PARTY TO THIS AGREEMENT SHALL SEEK A JURY TRIAL IN ANY SUCH ACTION AND (II) NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH PARTY TO THIS AGREEMENT CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR INSTRUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE IN THIS SECTION 4.12. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.  

4.13Further Assurances; Company Logo.  At any time or from time to time after the Effective Date, the parties hereto agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as any other party may reasonably request in order to evidence or effectuate the provisions of this Agreement and to otherwise carry out the intent of the parties hereunder. The Company hereby grants the Carlyle Shareholders and their respective Affiliates permission to use the Company’s and its subsidiaries’ name and logo in marketing materials.

4.14Regulatory Matters.  The Company shall and shall cause its subsidiaries to keep the Carlyle Shareholders informed, on a current basis, of any events, discussions, notices or changes with respect to any criminal or regulatory investigation or action involving the Company or any of its subsidiaries, so that the Carlyle Shareholders and their respective Affiliates will have the opportunity to take appropriate steps to avoid or mitigate any regulatory consequences to them that might arise from such investigation or action.

4.15Inconsistent Agreements.  Neither the Company nor any Shareholder shall enter into any agreement or side letter with, or grant any proxy to, any Shareholder, the Company or any other Person (whether or not such proxy, agreements or side letters are with other Shareholders, holders of Ordinary Shares that are not parties to this Agreement or otherwise) that conflicts with the provisions of this Agreement or which would obligate such Person to breach any provision of this Agreement.

4.16In-Kind Distributions. If any of the Carlyle Shareholders (and/or any of their Affiliates) seeks to effectuate an in-kind distribution of all or part of its Shares to its respective direct or indirect equity holders, the Company will, subject to any applicable lock-ups, work with the foregoing Persons to facilitate such in-kind distribution in the manner reasonably requested and consistent with the Company’s obligations under the Securities Act. 

4.17Recapitalization Transactions. If at any time or from time to time there is any change in the capital structure of the Company by way of share split, share dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by other means, appropriate 

 

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adjustments will be made in the provision hereof so that the rights and privileges granted hereby will continue. 

[SIGNATURE PAGE FOLLOWS]

 

 

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IN WITNESS WHEREOF, the parties are signing this Principal Shareholders Agreement as of the date first set forth above.

 

COMPANY:

 

 

	
Ortho Clinical Diagnostics Holdings plc

	
 
	
 

	
 
	
 

	
By:
	
/s/ John K. Sanders

	
 
	
Name: John K. Sanders

	
 
	
Title: Vice President, Finance and Treasurer

 

 

 

[Signature page to Principal Shareholders Agreement]

 

 

	
INITIAL CARLYLE SHAREHOLDER:

	
 

	
Carlyle Partners VI Cayman Holdings, L.P.

	
 
	
 

	
By:
	
TC Group VI Cayman, L.P.

	
Its:
	
General Partner

	
 
	
 

	
By:
	
TC Group VI Cayman, L.L.C.

	
Its:
	
General Partner

	
 
	
 

	
 
	
 

	
By:
	
/s/ Jeremy W. Anderson

	
Name:
	
Jeremy W. Anderson

	
Title:
	
Authorized Person

 

 

 

[Signature page to Principal Shareholders Agreement]

 

EXHIBIT A

Joinder Agreement

 

By execution of this signature page, [_______________] hereby agrees to become a Party to, and to be bound by the obligations of, and receive the benefits of, that certain Principal Shareholders Agreement, dated as of [ ● ], 2021, by and among Ortho Clinical Diagnostics Holdings plc, a public limited company incorporated and registered in England and Wales, and Carlyle Partners VI Cayman Holdings, L.P., a Cayman Islands exempted limited partnership, and certain other Parties named therein, as amended from time to time thereafter.

 

	
[Name]

	
 

	
 

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 
	
 

	
Notice Address:

	
 
	
 

	
 

	
 
	
 

	
 

 

	
Accepted:

	
 

	
ORTHO CLINICAL DIAGNOSTICS HOLDINGS PLC

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

 

US-DOCS\120152113.5

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