Document:

Exhibit 10.6

 

EXECUTION VERSION

 

SECOND AMENDED AND RESTATED

 

STOCKHOLDERS’ AGREEMENT

 

among

 

EWT HOLDINGS I CORP.,

 

THE AEA INVESTORS,

 

MANAGEMENT INVESTORS,

 

ADDITIONAL INVESTORS

 

and

 

RELATIONSHIP INVESTORS

 

Dated as of December 11, 2014

 

 

TABLE OF CONTENTS

 

	
I.
    	
INTRODUCTORY MATTERS
    	
2
    
	
 
    	
1.1.
    	
Defined Terms
    	
2
    
	
 
    	
1.2.
    	
Construction
    	
7
    
	
II.
    	
TRANSFERS
    	
7
    
	
 
    	
2.1.
    	
Limitations on Transfer
    	
7
    
	
 
    	
2.2.
    	
Certain Permitted   Transfers
    	
8
    
	
 
    	
2.3.
    	
Tag-Along Rights
    	
9
    
	
 
    	
2.4.
    	
Drag Along Rights
    	
11
    
	
 
    	
2.5.
    	
Participation Right
    	
13
    
	
 
    	
2.6.
    	
Capitalization Changes
    	
14
    
	
III.
    	
REGISTRATION RIGHTS   AGREEMENT
    	
14
    
	
IV.
    	
PURCHASE OF MINORITY   SHARES UPON TERMINATION DATE
    	
15
    
	
 
    	
4.1.
    	
Purchase of Minority   Shares from Management Investors Upon Termination of Employment
    	
15
    
	
 
    	
4.2.
    	
Purchase Price for   Minority Shares
    	
16
    
	
 
    	
4.3.
    	
Purchase of Minority   Shares from Relationship Investors Upon Termination of Contractual   Relationship
    	
17
    
	
V.
    	
CERTAIN OTHER   AGREEMENTS
    	
18
    
	
 
    	
5.1.
    	
Certain Transactions
    	
18
    
	
 
    	
5.2.
    	
Mergers, Etc.
    	
18
    
	
 
    	
5.3.
    	
Board of Directors;   Books and Records
    	
18
    
	
 
    	
5.4.
    	
Corporate Opportunities
    	
19
    
	
 
    	
5.5.
    	
Confidentiality
    	
20
    
	
 
    	
5.6.
    	
Distributions or   Redemptions
    	
21
    
	
 
    	
5.7.
    	
Annual Valuation
    	
22
    
	
VI.
    	
MISCELLANEOUS
    	
22
    
	
 
    	
6.1.
    	
Additional Securities   Subject to Agreement
    	
22
    
	
 
    	
6.2.
    	
Term
    	
22
    
	
 
    	
6.3.
    	
Notices
    	
22
    
	
 
    	
6.4.
    	
Further Assurances
    	
22
    
	
 
    	
6.5.
    	
Non-Assignability
    	
23
    
	
 
    	
6.6.
    	
Amendment, Waiver
    	
23
    
	
 
    	
6.7.
    	
Third Parties
    	
23
    

 

i

 

	
 
    	
6.8.
    	
Governing Law;   Arbitration
    	
23
    
	
 
    	
6.9.
    	
Specific Performance
    	
24
    
	
 
    	
6.10.
    	
Entire Agreement
    	
24
    
	
 
    	
6.11.
    	
Titles and Headings
    	
24
    
	
 
    	
6.12.
    	
Severability
    	
24
    
	
 
    	
6.13.
    	
Counterparts
    	
24
    
	
 
    	
6.14.
    	
Additional Management   Investors and Relationship Investors
    	
24
    
	
 
    	
6.15.
    	
Stock Certificates
    	
25
    
	
 
    	
6.16.
    	
Tax Forms; FATCA
    	
25
    
	
 
    	
6.17.
    	
Relationship Investors
    	
25
    

 

Schedule 4.13

 

Purchase Price for Relationship Investor’s Minority Shares

 

ii

 

SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, dated as of December 11, 2014 (as amended, modified or supplemented from time to time, this “Agreement”), among (i) EWT Holdings I Corp., a Delaware corporation (the “Company”), (ii) the AEA Investors (as defined herein), (iii) the parties identified on the signature pages hereto as “Management Investors” (together with their respective Permitted Transferees, the “Management Investors”), (iv) the parties identified on the signature pages hereto as “Additional Investors” (together with their respective Permitted Transferees, the “Additional Investors”), and (v) the Persons identified on the signature pages hereto as “Relationship Investors” that have either a municipal, distributor, representative, consulting or industrial contract with the Company and/or its subsidiaries ((together with their respective Permitted Transferees, the “Relationship Investors”); collectively with the Management Investors, the Additional Investors and each Person who executes an Assumption Agreement and falls under clause (x)(i) of the definition of Assumption Agreement, the “Minority Investors”).

 

RECITALS

 

A.                                    EWT Holdings III Corp. (f/k/a WTG Holdings III Corp.), a Delaware corporation and indirect wholly-owned subsidiary of the Company (“EWT III”), and Siemens Aktiengesellschaft (“Siemens”) are parties to a Master Sale and Purchase Agreement, dated as of October 15, 2013 (as amended, modified or supplemented from time to time, the “MSPA”), pursuant to which, among other things, Siemens sold and transferred the business of providing products, equipment, solutions and services related to water and wastewater treatment markets through Siemens’ business unit “Water Technologies” with three segments (i.e., industrial, municipal and service) (the “Business”) to EWT III and its Affiliates, and EWT III and its Affiliates purchased and acquired the Business from Siemens, in each case at the Closing (as defined in the MSPA) and with economic effect as of the Effective Date (as defined in the MSPA);

 

B.                                    The AEA Investors hold a majority of the outstanding shares of common stock, par value $0.01 per share of the Company (the “Company Common Stock”), the Minority Investors hold the remainder of the outstanding shares of the Company Common Stock and the Company has no other capital stock outstanding as of the date hereof;

 

C.                                    The Company, the AEA Investors, the Management Investors and the Additional Investors entered into that certain Stockholders’ Agreement, dated as of January 15, 2014 (the “Original Agreement”), on the terms and conditions set forth in the Original Agreement to provide for certain matters relating to their respective holdings of the Company Common Stock;

 

D.                                    The Company and the AEA Investors executed that certain First Amended and Restated Stockholders’ Agreement, dated as of March 5, 2014 (the “First A&R Agreement”), on the terms and conditions set forth in the First A&R Agreement to provide for certain matters relating to their respective holdings of the Company Common Stock; and

 

E.                                     Pursuant to 6.6(i) of the First A&R Agreement as in effect immediately prior to the execution of this Agreement, the Company, the AEA Investors and the Minority

 

1

 

Investors, which collectively hold 100% of the outstanding Company Common Stock, desire to amend and restate the First A&R Agreement on the terms and conditions set forth herein.

 

I.                                        INTRODUCTORY MATTERS

 

1.1.                            Defined Terms.  The following terms have the following meanings when used herein with initial capital letters:

 

“Additional Investors” shall have the meaning set forth in the preamble of this Agreement.

 

“AEA” means AEA Investors LP, a Delaware limited partnership.

 

“AEA Investors” means (i) AEA Investors Fund V LP, a Cayman Islands exempted limited partnership. (ii) AEA Investors Fund V-A LP, a Delaware limited partnership, (iii) AEA Investors Fund V-B LP, a Delaware limited partnership, (iv) AEA Investors Participant Fund V LP, a Delaware limited partnership, (v) AEA Investors QP Participant Fund V LP, a Delaware limited partnership, (vi) any general or limited partnership, corporation or limited liability company having as a general partner, controlling equity holder or managing member (whether directly or indirectly) a Person who is a member of AEA or an Affiliate of any such Person and (vii) any successor or permitted assign or transferee of any of the foregoing.

 

“AEA Sale” shall have the meaning set forth in Section 2.3(a).

 

“Affiliate” means, with respect to any Person, any Person that directly or indirectly controls, is controlled or is under common control with, such Person.

 

“Agreement” shall have the meaning set forth in the preamble of this Agreement.

 

“Assumption Agreement” means a writing reasonably satisfactory in form and substance to the AEA Investors whereby a transferee of shares of Company Common Stock becomes a party to, and agrees to be bound, to the same extent as its transferor, by the terms of this Agreement (i.e., (x)(i) if the transferor of such shares was a Minority Investor, such transferee will be subject to the same rights and obligations as the Minority Investor who transferred such shares unless (ii) the transfer occurred pursuant to Section 2.3, in which case such transferee will be subject to the same rights and obligations as an AEA Investor and (y) if the transferor of such shares was an AEA Investor, such transferee will be subject to the same rights and obligations of an AEA Investor).

 

“BC Act” shall have the meaning set forth in Section 5.5(b).

 

“bcIMC Investor” shall have the meaning set forth in Section 5.5(b).

 

“Board” means the Board of Directors of the Company.

 

2

 

“Breaching Drag-Along Stockholder” shall have the meaning set forth in Section 2.4(c).

 

“Business Day” a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

 

“Cause” means, (i) if a Management Investor is a party to an employment or a severance agreement with the Company or one of its subsidiaries, the occurrence of any circumstances defined as “Cause” in such employment or severance agreement or (ii) if a Management Investor is not a party to an employment or severance agreement with the Company or one of its subsidiaries, (A) the Management Investor’s indictment for, or conviction or entry of a plea of guilty or nolo contendere to (1) any felony or (2) any crime (whether or not a felony) involving moral turpitude, fraud, theft, breach of trust or other similar acts, whether of the United States or any state thereof or any similar foreign law to which the Management Investor may be subject, (B) the Management Investor’s being or having been engaged in conduct constituting a breach of fiduciary duty, willful misconduct or negligence relating to the Company or any of its subsidiaries or the performance of the Management Investor’s duties, (C) the Management Investor’s willful failure to (1) follow a reasonable and lawful directive of the Company or of, the subsidiary of the Company at which he or she is employed or provides services, or the Board, or (2) comply with any written rules, regulations, policies or procedures of the Company or a subsidiary of the Company at which he or he is employed or to which he or she provides services which, if not complied with, would reasonably be expected to have more than a de minimis adverse effect on the business or financial condition of the Company, (D) the Management Investor’s violation of any agreement, contract or understanding with the Company and/or its subsidiaries to which the Management Investor is a party, or (E) the Management Investor’s deliberate and continued failure to perform his or her material duties to the Company or any of its subsidiaries.  Notwithstanding the foregoing, the events described in clauses (A) through (E) of this definition shall constitute Cause only if the Company provides the Management Investor with notice within thirty (30) days after the Company’s initial knowledge of the events or circumstances that the Company believes constitute Cause and the Management Investor fails to cure such event or circumstance within thirty (30) days after receipt from the Company of such notice.  For purposes of this definition, no act, or failure to act, on the part of the Management Investor shall be considered “willful” unless it is done, or omitted to be done, by the Management Investor in bad faith or without reasonable belief that the Management Investor’s action or omission was in the best interests of the Company.

 

“Business” shall have the meaning set forth in the recitals of this Agreement.

 

“Company” shall have the meaning set forth in the preamble of this Agreement.

 

“Company Common Stock” shall have the meaning set forth in the recitals of this Agreement.

 

3

 

“Confidential Information” shall have the meaning set forth in Section 5.5(a).

 

“Contractual RI Party” shall have the meaning set forth in Section 6.17(a).

 

“Credit Agreement” shall have the meaning set forth in Section 5.3(d).

 

“Disability” means (i) if a Management Investor is a party to an employment or a severance agreement with the Company or one of its subsidiaries, the occurrence of any circumstances defined as “Disability” in such employment or severance agreement if such term is defined or (ii) if a Management Investor is not a party to an employment or severance agreement with the Company or one of its subsidiaries or the Management Investor’s employment or severance agreement does not define “Disability,” permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended from time to time.  A determination of Disability may be made by a physician selected or approved by the Board and, in this respect, the Management Investor shall submit to any reasonable examination(s) required by such physician upon request.

 

“Disclosing Party” shall have the meaning set forth in Section 5.5(a).

 

“Drag-Along Proxy Holder” shall have the meaning set forth in Section 2.4(c).

 

“Dragging Parties” shall have the meaning set forth in Section 2.4(a).

 

“Equity Securities” means any (i) capital stock of any class or series, (ii) options, warrants or other securities convertible into or exercisable or exchangeable for such capital stock, (iii) options, warrants or other securities convertible into or exercisable or exchangeable for such securities described in clause (ii), or (iv) any other rights to acquire, directly or indirectly, such capital stock.

 

“First A&R Agreement” shall have the meaning set forth in the recitals of this Agreement.

 

“Fair Market Value” of a share of Company Common Stock on any date shall mean a value determined in good faith by the Board that reflects the equity value of the Company assuming a total sale of the Company (including its goodwill) and shall not include any discounts to reflect the fact that the Company Common Stock subject to any such determination represents a minority interest in the Company.

 

“FATCA” shall have the meaning set forth in Section 6.16.

 

“IPO” means the initial bona fide underwritten public offering and sale of Company Common Stock (or other Equity Securities of the Company or any subsidiary of the Company, or of any successor of the Company or any of its subsidiaries) pursuant to an effective registration statement (other than on Form S-4, S-8 or a comparable form) filed under the Securities Act.

 

4

 

“Issuance” shall have the meaning set forth in Section 2.5.

 

“Legend” shall have the meaning set forth in Section 2.1(d).

 

“Management Agreement” means the Management Agreement, dated as of January 15, 2014, (as amended, modified or supplemented from time to time) between the Company and AEA.

 

“Management Investors” shall have the meaning set forth in the preamble to this Agreement.

 

“Management Investor Available Shares” shall have the meaning set forth in Section 4.1(a).

 

“Management Investor Call Notice” shall have the meaning set forth in Section 4.1(a).

 

“Management Investor Call Option” shall have the meaning set forth in Section 4.1(a).

 

“Management Investor Call Period” shall have the meaning set forth in Section 4.1(a).

 

“Management Investor Option Notice” shall have the meaning set forth in Section 4.1(a).

 

“Management Investor Termination Date” shall have the meaning set forth in Section 4.1(a).

 

“Minority Investors” shall have the meaning set forth in the preamble to this Agreement.

 

“Minority Shares” shall mean all shares of Company Common Stock issued to or held by, any Minority Investor, including, without limitation, all shares of Company Common Stock purchased by a Minority Investor for cash or issued upon conversion of convertible securities, upon exercise of stock options, by way of a stock dividend or stock sold or in connection with any conversion, merger, consolidation, recapitalization or other reorganization affecting the Company Common Stock.  Minority Shares will continue to be Minority Shares in the hands of any transferee other than the Company or the AEA Investors.

 

“MSPA” shall have the meaning set forth in the recitals of this Agreement.

 

“Original Agreement” shall have the meaning set forth in the recitals of this Agreement.

 

“Permitted Transferee” means any Person to whom shares of Company Common Stock are Transferred in a Transfer in accordance with Section 2.2 and not in violation

 

5

 

of this Agreement and who is required to, and does, enter into an Assumption Agreement, and includes any Person to whom a Permitted Transferee of a Minority Investor (or a Permitted Transferee of a Permitted Transferee) so further Transfers shares of Company Common Stock and who is required to, and does, execute and deliver to the Company and the AEA Investors an Assumption Agreement.

 

“Person” means any individual, firm, corporation, company, limited liability company, partnership, trust, joint stock company, business trust, incorporated or unincorporated association, joint venture, governmental authority or other legal entity of any nature whatsoever.

 

“Proposed Transferee” shall have the meaning set forth in Section 2.3(a).

 

“Qualified Transaction” shall have the meaning set forth in Section 2.5.

 

“Receiving Party” shall have the meaning set forth in Section 5.5(a).

 

“Registration Rights Agreement” shall have the meaning set forth in Article III.

 

“Relationship Investor” shall have the meaning set forth in the preamble to this Agreement.

 

“Relationship Investor Available Shares” shall have the meaning set forth in Section 4.3(a).

 

“Relationship Investor Call Notice” shall have the meaning set forth in Section 4.3(a).

 

“Relationship Investor Call Option” shall have the meaning set forth in Section 4.3(a).

 

“Relationship Investor Call Period” shall have the meaning set forth in Section 4.3(a).

 

“Relationship Investor Option Notice” shall have the meaning set forth in Section 4.3(a).

 

“Relationship Investor Representative Agreement” shall have the meaning set forth in Section 4.3(a).

 

“Relationship Investor Termination Date” shall have the meaning set forth in Section 4.3(a).

 

“Right” shall have the meaning set forth in Section 2.5.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

 

6

 

“Siemens” shall have the meaning set forth in the recitals of this Agreement.

 

“Significant Stockholder” means each Stockholder who holds at least 20% of the outstanding Company Common Stock.

 

“Stockholders” means each of the holders of Company Common Stock who are parties to this Agreement or an Assumption Agreement.

 

“Tagging Stockholder” shall have the meaning set forth in Section 2.3(a).

 

“Third Party” shall have the meaning set forth in Section 2.4(a).

 

“Third Party Offer” shall have the meaning set forth in Section 2.4(a).

 

“Transfer” means a transfer, sale, assignment, donation, contribution, pledge, hypothecation, encumbrance or other disposition (including, without limitation, by operation of law), whether directly or indirectly, pursuant to the creation of a derivative security, the grant of an option or other right.

 

“VCOC Fund” shall have the meaning set forth in Section 5.3(a).

 

1.2.                            Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.  Unless the context otherwise requires: (a) “or” is disjunctive but not exclusive, (b) words in the singular include the plural, and in the plural include the singular, and (c) the words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified.

 

II.                                   TRANSFERS

 

2.1.                            Limitations on Transfer.  (a) Each Stockholder hereby agrees that it will not, directly or indirectly, Transfer any shares of Company Common Stock unless such Transfer complies with the provisions hereof and (i) such Transfer is pursuant to an effective registration statement under the Securities Act and has been registered under all applicable state securities or “blue sky” laws or (ii) such Stockholder shall have furnished the Company with a written opinion of counsel in form and substance reasonably satisfactory to the Company to the effect that no such registration is required because of the availability of an exemption from registration under the Securities Act and all applicable state securities or “blue sky” laws.

 

(b)                                 (i)                                     Prior to an IPO, no Minority Investor may Transfer any shares of Company Common Stock other than pursuant to Sections 2.2, 2.3 or 2.4.

 

7

 

(ii)                                  Prior to an IPO, the AEA Investors will not Transfer any shares of Company Common Stock in a transaction subject to Section 2.3 unless Section 2.3 is complied with.

 

(c)                                  In the event of any purported Transfer by any of the Stockholders of any shares of Company Common Stock in violation of the provisions of this Agreement, such purported Transfer will be void and of no effect and the Company will not give effect to such Transfer.

 

(d)                                 Each certificate representing shares of Company Common Stock issued to the Stockholders will bear a legend on the face thereof substantially to the following effect (with such additions thereto or changes therein as the Company may be advised by counsel are required by law or necessary to give full effect to this Agreement, the “Legend”):

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE “BLUE SKY” LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH STATE LAWS OR AN EXEMPTION FROM REGISTRATION THEREUNDER.  THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, AND CERTAIN OTHER AGREEMENTS SET FORTH IN THE SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AS OF DECEMBER 11, 2014 (AS AMENDED, MODIFIED AND SUPPLEMENTED FROM TIME TO TIME), BY THE COMPANY AND THE PARTIES THERETO, A COPY OF WHICH MAY BE OBTAINED BY THE STOCKHOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”

 

The Company shall imprint such legend on certificates evidencing outstanding Company Common Stock.

 

2.2.                            Certain Permitted Transfers.  Notwithstanding any other provision of this Agreement to the contrary, each Minority Investor shall be entitled from time to time to Transfer any or all of the shares of Company Common Stock held by it to (i) any one or more of its respective Affiliates, (ii) in the case of any transferor which is a partnership or limited liability company, any partners or members of such transferor, (iii) in the case of any transferor which is a trust, the beneficiaries of such transferor, (iv) in the case of any transferor who is an individual, such transferor’s current or former spouse or direct lineal descendants (including adopted children) or antecedents or a charitable remainder trust or trust, in either case the current beneficiaries of which, or to a corporation, limited liability company or partnership, the stockholders, members or limited or general partners of which, include only such transferor and/or such transferor’s current or former spouse and/or such transferor’s direct lineal descendants (including adopted children) or antecedents, or the executor, administrator, testamentary trustee,

 

8

 

legatee or beneficiary of any deceased transferor holding shares of Company Common Stock or (v) in accordance with Sections 4.1 and 4.3 hereof; provided, however, that in the case of clauses (i) — (iv) of this Section 2.2, (x) the Minority Investor making the Transfer must first give the Company at least ten (10) Business Days prior written notice of such Transfer, which notice must include the name and address of the proposed transferee and the number of shares of Company Common Stock to be Transferred, (y) any such transferee duly executes and delivers an Assumption Agreement, and (z) the Company has been furnished with an opinion of counsel in connection with such Transfer, in form and substance reasonably satisfactory to the Company, to the effect that no registration under the Securities Act or any state securities or “blue sky” laws is required because of the availability of an exemption from registration under the Securities Act and all applicable state securities or “blue sky” laws.

 

2.3.                            Tag-Along Rights.  (a) So long as this Agreement remains in effect, with respect to any proposed Transfer by the AEA Investors of the shares of Company Common Stock held by the AEA Investors to any Person other than an Affiliate of AEA or another AEA Investor (other than in an IPO, which shall be subject to the Registration Rights Agreement contemplated in Article III hereof), whether pursuant to a stock sale, merger, consolidation, a tender or exchange offer or any other transaction (any such transaction, an “AEA Sale”), the AEA Investors will have the obligation, and each of the Minority Investors will have the right, to require the proposed transferee or acquiring Person to purchase from each of the Minority Investors who exercises its rights under Section 2.3(b) (a “Tagging Stockholder”) (x) in the case of the first such proposed Transfer following which the AEA Investors, after giving effect to such AEA Sale, would not either hold a majority of the outstanding shares of Company Common Stock or have the ability to elect or appoint a majority of the members of the Board, all shares of Company Common Stock owned by such Tagging Stockholder and (y) in all other cases, a number of shares of Company Common Stock up to the product (rounded up to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of outstanding shares of Company Common Stock owned by such Tagging Stockholder by (B) the aggregate number of outstanding shares of Company Common Stock and (ii) the total number of shares of Company Common Stock proposed to be directly or indirectly Transferred to the transferee or acquiring Person by the AEA Investors in the contemplated AEA Sale (a “Proposed Transferee”), at the same price per share and upon substantially the same terms and conditions (including, without limitation, time of payment and form of consideration) as to be paid by and given to the AEA Investors.  In order to be entitled to exercise its right to sell shares of Company Common Stock to the Proposed Transferee pursuant to this Section 2.3, each Tagging Stockholder must agree to make to the Proposed Transferee the same covenants, indemnities (with respect to all matters other than the AEA Investors’ or other Tagging Stockholders’ ownership of Company Common Stock) and agreements as the AEA Investors agree to make in connection with the AEA Sale and only such representations and warranties (and related indemnification) as to its ownership

 

9

 

of its Company Common Stock as are given by the AEA Investors with respect to such party’s ownership of Company Common Stock; provided, however, that all such covenants, indemnities and agreements shall be made by the Tagging Stockholders severally and not jointly and that the liabilities thereunder (other than with respect to the ownership of each Stockholder’s shares being transferred, which shall be several obligations) shall be borne on a pro rata basis based on the number of shares Transferred by each of the AEA Investors and the Tagging Stockholders and are limited to the lesser of (A) the net proceeds actually received by such Tagging Stockholder for such Transferred shares and (B) such Tagging Stockholder’s pro rata share of any “cap” on indemnification obligations of the Stockholders selling shares of Company Common Stock in the AEA Sale.  Each Tagging Stockholder will be responsible for its proportionate share of the reasonable out-of-pocket costs incurred by the AEA Investors in connection with the AEA Sale to the extent not paid or reimbursed by the Company or the Proposed Transferee.

 

(b)                                 The AEA Investors will give notice to each Tagging Stockholder of each proposed AEA Sale at least ten (10) Business Days prior to the proposed consummation of such AEA Sale, setting forth the number of shares of Company Common Stock proposed to be so Transferred, the name and address of the Proposed Transferee, the proposed amount and form of consideration (and if such consideration consists in part or in whole of property other than cash, the AEA Investors will provide such information, to the extent reasonably available to the AEA Investors, relating to such consideration as the Tagging Stockholder may reasonably request in order to evaluate such non-cash consideration) and other terms and conditions of payment offered by the Proposed Transferee.  The tag-along rights provided by this Section 2.3 must be exercised by each Tagging Stockholder within ten (10) Business Days following receipt of the notice required by the preceding sentence by delivery of an irrevocable written notice to the AEA Investors (with a copy to the Company) indicating such Tagging Stockholder’s exercise of its, her or his rights and specifying the maximum number of shares of Company Common Stock it, she or he desires to sell.  The Tagging Stockholder will be entitled under this Section 2.3 to Transfer to the Proposed Transferee the number of shares of Company Common Stock determined in accordance with Section 2.3(a).

 

(c)                                  If any Tagging Stockholder exercises its, her or his rights under Section 2.3(a), the closing of the purchase of the Company Common Stock with respect to which such rights have been exercised is subject to, and will take place concurrently with, the closing of the AEA Sale.  If the closing of the AEA Sale does not occur within one hundred twenty (120) days after the Minority Investors’ receipt of written notice of such AEA Sale pursuant to Section 2.3(b), each Tagging Stockholder may withdraw from AEA Sale by providing written notice to the AEA Investors within ten (10) Business Days after the expiration of such one hundred twenty (120) day period.

 

(d)                                 The requirements of this Section 2.3 shall not apply to (i) proposed Transfers of Common Stock by the AEA Investors in a transaction or series of related transactions that occurs during the six (6) month period following the Closing Date (as defined in the MSPA) in which the AEA Investors Transfer shares of Company Common Stock held by the

 

10

 

AEA Investors to any Person with an aggregate value that does not exceed Thirty Million Dollars ($30,000,000.00) in the aggregate for all such transactions and does not cause the AEA Investors to hold less than a majority of the outstanding Company Shares following such transaction or series of related transactions, (ii) Transfers to a Permitted Transferee, or (iii) any Transfer of Company Common Stock required to be made by a Stockholder pursuant to the Drag-Along rights set forth in Section 2.4 hereof.  The requirements of this Section 2.3 are in addition to, and not in limitation of, any other restrictions on Transfers of Company Common Stock contained in this Agreement.

 

(e)                                  If a Minority Investor exercises its rights as a Tagging Stockholder under this Section 2.3, such Minority Investor shall use commercially reasonable efforts to secure any governmental authorization required to be obtained by such Minority Investor and shall provide any information which may be needed from such Minority Investor in connection therewith, to comply as soon as reasonably practicable with all applicable Laws and to take all such other actions and to execute such additional documents as are necessary or appropriate in order to consummate the AEA Sale.

 

2.4.                            Drag Along Rights.  (a) If Stockholders holding a majority of the outstanding shares of Company Common Stock (in such capacity, the “Dragging Parties”) receive a bona fide offer from a Person other than a Stockholder or an Affiliate of a Stockholder (a “Third Party”) to purchase (other than in an IPO) at least a majority of the shares of Company Common Stock (a “Third Party Offer”) and such Third Party Offer is accepted by the Dragging Parties, then each of the other Stockholders hereby agrees that, if requested by the Dragging Parties, it will Transfer to such Third Party on substantially the same terms and conditions (including, without limitation, time of payment and form of consideration) as to be paid and given to the Dragging Parties, the number of shares equal to the number of shares owned by it multiplied by the percentage of the then outstanding shares to which the Third Party Offer is applicable.

 

(b)                                 The Dragging Parties will give notice (the “Drag-Along Notice”) to each of the other Stockholders of any proposed Transfer giving rise to the rights of the Dragging Parties set forth in Section 2.4(a) as soon as reasonably practicable following the acceptance of the offer referred to in Section 2.4(a).  The Drag-Along Notice will set forth the number of shares of Company Common Stock proposed to be so Transferred, the name of the Proposed Transferee or acquiring Person, the proposed amount and form of consideration (and if such consideration consists in part or in whole of property other than cash, the Dragging Parties will provide such information, to the extent reasonably available to the Dragging Parties, relating to such consideration as the other Stockholders may reasonably request in order to evaluate such non-cash consideration), the number of shares of Company Common Stock sought and the other terms and conditions of the offer.  The Dragging Parties will notify the other Stockholders at least ten (10) Business Days in advance of the closing of the sale of shares to the Third Party.  In any such agreement, such other Stockholders will be required (i) to make or agree to the same covenants, indemnities (with respect to all matters other than the Dragging Parties’ or other Stockholders’ ownership of Company Common Stock) and agreements as the Dragging Parties so long as such covenants, indemnities and agreements are made severally and not jointly and the

 

11

 

liabilities thereunder (other than with respect to the ownership of each Stockholder’s shares being transferred, which shall be several obligations) are borne on a pro rata basis based on the number of shares Transferred by each Stockholder and are limited to the lesser of (A) the net proceeds actually received by such Stockholder for such Transferred shares and (B) such Stockholder’s pro rata share of any “cap” on indemnification obligations of the Stockholders selling shares of Company Common Stock in the sale to the Third Party, (ii) to make representations and warranties (and provide related indemnification) only as to their respective ownership of Company Common Stock as are given by the Dragging Parties with respect to such party’s ownership of Company Common Stock, (iii) otherwise take all necessary action, including, without limitation, to the extent applicable, expressly waiving any dissenter’s rights or rights of appraisal or similar rights, surrendering certificates, cooperating in obtaining any applicable governmental authorization(s) and otherwise as reasonably required to assist the Dragging Parties in the consummation of such Third Party Offer and (iv) to pay their proportionate share of the reasonable costs incurred for the benefit of all Stockholders in connection with such transaction to the extent not paid or reimbursed by the Company or the transferee or acquiring Person.  If the Transfer referred to in the Drag-Along Notice is not consummated within one hundred twenty (120) days from the date of the Drag-Along Notice, the Dragging Parties must deliver another Drag-Along Notice in order to exercise its rights under this Section 2.4 with respect to such Transfer or any other Transfer.

 

(c)                                  Notwithstanding anything in this Agreement to the contrary, upon receipt of the Drag-Along Notice, each other Stockholder shall be obligated to vote his, her or its shares of Company Common Stock, if applicable, in favor of such Third Party Offer at any meeting of holders of Company Common Stock called to vote on or approve such Third Party Offer (or any written consent solicited for such purpose).  Solely for purposes of this Section 2.4(c) and in order to secure the performance of each Stockholder’s obligations under this Section 2.4(c), each Stockholder hereby irrevocably appoints each other Stockholder that qualifies as a Drag-Along Proxy Holder (as defined below) the attorney-in-fact and proxy of such Stockholder (with full power of substitution) to vote or provide a written consent with respect to its Company Common Stock as described in this paragraph if, and only in the event that, such Stockholder fails to vote or provide a written consent with respect to his, her or its Company Common Stock in accordance with the terms of this Section 2.4(c) (each such Stockholder, a “Breaching Drag-Along Stockholder”) within three (3) days of a request for such vote or written consent.  Upon such failure, the Dragging Parties shall have and are hereby irrevocably granted a proxy to vote or provide a written consent with respect to each such Breaching Drag-Along Stockholder’s Company Common Stock for the purposes of taking the actions required by this Section 2.4(c) (such Dragging Parties, a “Drag-Along Proxy Holder”).  Each Stockholder intends this proxy to be, and it shall be, irrevocable and coupled with an interest, and each Stockholder will take such further action and execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revoke any proxy previously granted by it with respect to the matters set forth in Section 2.4(c) with respect to the Company Common Stock owned by such Stockholder.  Notwithstanding the foregoing, the conditional proxy granted by this Section 2.4(c) shall be deemed to be revoked upon the termination of this Section 2.4 in accordance with this Agreement.

 

12

 

(d)                                 If a Minority Investor is required to Transfer any of its shares in accordance with this Section 2.4, such Minority Investor shall use commercially reasonable efforts to secure any governmental authorization required to be obtained by such Minority Investor and shall provide any information which may be needed from such Minority Investor in connection therewith, to comply as soon as reasonably practicable with all applicable Laws and to take all such other actions and to execute such additional documents as are necessary or appropriate in order to consummate the Third Party Offer.

 

(e)                                  For the avoidance of doubt, the Dragging Parties will not receive any collateral consideration in connection with a Third Party Offer that is not also received by each of the other Stockholders in connection with any proposed Transfer giving rise to the rights of the Dragging Parties set forth in Section 2.4(a).

 

2.5.                            Participation Right.  (a) The Company shall not issue (an “Issuance”) additional shares of Company Common Stock or other Equity Securities to any Person, including AEA or the AEA Investors (other than (i) shares or other securities issued upon the exchange, exercise or conversion of options, warrants, convertible stock, rights, calls or other securities exchangeable or exercisable for or convertible into such class of shares or other securities in accordance with the terms thereof, (ii) shares or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company, (iii) shares or other securities issued by the Company pursuant to the acquisition of another corporation, partnership or other business or entity or a material portion of the assets thereof, by merger or purchase of assets (any such transaction, a “Qualified Transaction”) or otherwise pursuant to a plan, agreement or other arrangement in relation to a Qualified Transaction approved by the Board; provided, however, that if such corporation, partnership or other business or entity is an Affiliate of the Company or the AEA Investors, such acquisition is made on an arms-length basis, (iv) shares or other Equity Securities issued to employees, the Relationship Investors, officers or directors of the Company that are not employees of AEA; provided, however, that such Issuances are approved by the Board or a committee thereof and, in the case of Issuances to Relationship Investors, so long as such Issuances to the Relationship Investors do not have an aggregate value that exceeds Five Million Dollars ($5,000,000.00) in the aggregate for all such transactions and does not cause the AEA Investors to hold less than a majority of the outstanding Company Shares following such transactions, or (v) shares or other securities issued in connection with an IPO), unless, prior to such Issuance, the Company notifies each Stockholder party hereto in writing of the proposed Issuance and grants to each such Stockholder or, at such Stockholder’s election, one or more of its Affiliates the right (the “Right”) to subscribe for and purchase such additional shares of Company Common Stock or units of other Equity Securities to be issued in the proposed Issuance at the same price and upon the same terms and conditions (including, in the event such securities are issued as a unit together with other securities, the purchase of such other securities) to be issued in the proposed Issuance such that, immediately after giving effect to the Issuance and exercise of the Right (including, for purposes of this calculation, the

 

13

 

issuance of shares of Company Common Stock upon conversion, exchange or exercise of any other Equity Securities issued in the Issuance or subject to the Right), the shares of Company Common Stock beneficially owned by such Stockholder and its Affiliates on a fully diluted basis (rounded to the nearest whole share) shall represent the same percentage of the aggregate number of shares of Company Common Stock outstanding on a fully diluted basis as were beneficially owned by such Stockholder and its Affiliates immediately prior to the Issuance.

 

(b)                                 The Right may be exercised by each Stockholder party hereto or its Affiliates at any time by written notice to the Company received by the Company within fifteen (15) Business Days after receipt of notice from the Company of the proposed Issuance, and the closing of the purchase and sale pursuant to the exercise of the right shall occur at least thirty (30) days after the giving of the notice of the proposed Issuance by the Company.  Notwithstanding the foregoing, the Right shall not apply to any Issuance, pro rata, to all holders of Company Common Stock.

 

(c)                                  Notwithstanding the other provisions of this Section 2.5, if the Board reasonably determines that there is a need of the Company to issue securities of the Company that would otherwise be required to be offered to the Stockholders to exercise the Right under this Section 2.5 prior to such Issuance, the Company may issue such securities without first complying with this Section 2.5; provided, however, that within thirty (30) days after such Issuance, the Company offers each Stockholder the opportunity to purchase such number of securities that such Stockholder would have been entitled to purchase pursuant to the Right of Section 2.5 by sending written notice to the Stockholders.  In the event of an offer made by the Company pursuant to this Section 2.5(c), the timing and procedures for the exercise and consummation of such offer shall be the same as those set forth in Section 2.5(b), with appropriate modifications to reflect the post-issuance delivery of the notice as contemplated in this Section 2.5(c).

 

2.6.                            Capitalization Changes.  Within thirty (30) days of an Issuance, the Company shall notify the Additional Investors of such Issuance and provide the Additional Investors with a capitalization table, which shall set forth the name of each stockholder of the Company and the number of shares of Company Common Stock or other Equity Securities that are outstanding for each such stockholder.

 

III.                              REGISTRATION RIGHTS AGREEMENT

 

Each of the Company, the AEA Investors, any Management Investor, any Relationship Investor and any Additional Investor (or any Permitted Transferee of the foregoing) shall enter into the Amended and Restated Registration Rights Agreement, dated as of the date hereof (as amended, modified and supplemented from time to time, the “Registration Rights Agreement”).

 

14

 

IV.                               PURCHASE OF MINORITY SHARES UPON TERMINATION DATE

 

4.1.                            Purchase of Minority Shares from Management Investors Upon Termination of Employment.

 

(a)                                 (i)                                     If the employment with the Company or any of its subsidiaries of any Management Investor (or any employee of the Company or any of its subsidiaries who transferred such employee’s Minority Shares to a Permitted Transferee) shall terminate for any reason whatsoever, including death, Disability, resignation, or termination with or without Cause (the date on which such termination occurs being referred to as the “Management Investor Termination Date”), then the Company shall have the option (the “Management Investor Call Option”) to repurchase all, but not less than all, of the Minority Shares held by such Management Investor (or by any Minority Investor who acquired such shares as a Permitted Transferee from an employee of the Company or any of its subsidiaries), at the price and on the other terms specified in Section 4.2.  The Company may exercise the Management Investor Call Option by delivery of written notice (the “Management Investor Call Notice”) to the holder or holders of the Minority Shares within ninety (90) days, or within three hundred sixty five (365) days if termination is because of death or Disability, after the Management Investor Termination Date (the “Management Investor Call Period”).  The Management Investor Call Notice shall set forth the number of the Minority Shares to be acquired from such holder(s), the aggregate consideration to be paid for such shares and the time and place for the closing of the transaction.

 

(ii)                                  If for any reason the Company does not elect to purchase all of the Minority Shares pursuant to the Management Investor Call Option, then each Significant Stockholder shall be entitled to exercise the Company’s Management Investor Call Option in the manner set forth in the preceding paragraph (a) for all, but not less than all, of the Minority Shares (the “Management Investor Available Shares”).  As soon as practicable after the Company has determined that there will be Management Investor Available Shares, but in any event within the Management Investor Call Period, the Company shall deliver written notice (the “Management Investor Option Notice”) to each Significant Stockholder setting forth the number of Management Investor Available Shares and the price for each Management Investor Available Share.  Each Significant Stockholder may elect to purchase all of the Management Investor Available Shares by delivering written notice to the Company within ten (10) days after receipt of the Management Investor Option Notice by such Significant Stockholder.  As soon as practicable, and in any event within five (5) days after the expiration of such ten (10) day period, the Company shall notify the holder(s) of Minority Shares as to the number of Minority Shares being purchased from such holder by such Significant Stockholder.  If more than one Significant Stockholder elects to exercise such purchase option with respect to the Minority Shares not purchased by the Company, such electing Persons shall be entitled to purchase such Minority Shares pro rata on the basis of their ownership of Company Common Stock or in such proportion as they may agree between or among themselves.

 

15

 

(b)                                 Settlement of the purchase of Minority Shares pursuant to this Section 4.1 will occur at the Company’s principal office on a Business Day to be fixed by the Company within fifteen (15) days after the expiration of the Management Investor Call Period.  At the time of the settlement, (i) the purchaser or purchasers shall pay the purchase price in the manner specified in Section 4.2, (ii) the holders of the Minority Shares being purchased shall deliver the certificate or certificates representing such shares to the purchaser or purchasers or their nominees, endorsed in blank, or accompanied by appropriate stock powers executed in blank, together with funds for any required stock transfer taxes, and (iii) the transferor shall represent in writing to the transferee (and to the Company, if the Company is not the transferee) that such Minority Shares are owned of record and beneficially by such transferor, free and clear of all liens, security interests, claims, restrictions and encumbrances of any kind.

 

(c)                                  Each Management Investor acknowledges that the Minority Shares which the Company or a Significant Stockholder may elect to purchase include any Minority Shares issued upon exercise of any stock option (regardless of whether such option is exercised before or after the Management Investor Termination Date).

 

4.2.                            Purchase Price for Minority Shares.  The purchase price per share to be paid for any Minority Shares purchased by the Company or a Significant Stockholder pursuant to Section 4.1 shall be equal to:

 

(i)                                     if the termination of employment giving rise to the Management Investor Call Option arose (x) out of a termination for Cause or (y) because such employee left the Company or any of its subsidiaries to serve as an employee, office or director of or consultant to or owner of a business engaged in any activity which the Company determines is in competition with the Company or any of its subsidiaries, the lesser of (1) the cost incurred by the terminated Management Investor (or the employee of the Company or any of its subsidiaries who transferred such Minority Shares to such Minority Investor) in connection with the purchase of the Minority Shares being repurchased (it being agreed that in the case of shares acquired upon the exercise of options to purchase Company Common Stock, the cost incurred shall be deemed to be the exercise price) and (2) the Fair Market Value of the Minority Shares being purchased; and

 

(ii)                                  if the termination of employment giving rise to the Management Investor Call Option arose for any other reason, the Fair Market Value of the Minority Shares being purchased.

 

Such purchase price may be paid (a) in the case of a purchase by the Company, at the option of the Management Investor, either in cash at the closing contemplated by Section 4.1(b) or, to the extent the Company’s credit agreements do not permit such cash payment, by delivery of a subordinated promissory note having the terms described in the next sentence, or (b) in the case of a purchase by a Significant Stockholder, in cash at the closing contemplated by Section 4.1(b).  Any subordinated promissory note issued by the Company in payment of such purchase price shall (x) provide that the principal amount thereof shall be payable on the first anniversary of the date thereof, (y) bear interest at the rate of publically announced by Credit Suisse as their respective prime commercial lending rate, payable semiannually and (z) be subordinated on

 

16

 

terms and conditions satisfactory to any holders of indebtedness (other than Affiliates of the Company) for borrowed money of the Company and its subsidiaries.

 

4.3.                            Purchase of Minority Shares from Relationship Investors Upon Termination of Contractual Relationship.

 

(a)                                 (i)                                     If the contractual relationship (“Relationship Investor Representative Agreement”) between the Company or any of its subsidiaries and any Relationship Investor (or any Permitted Transferee who currently holds the Relationship Investor’s Minority Shares) shall terminate for any reason whatsoever, including death, resignation, or termination (the date on which such termination occurs being referred to as the “Relationship Investor Termination Date”), then the Company shall have the option (the “Relationship Investor Call Option”) to repurchase all, but not less than all, of the Minority Shares held by such Relationship Investor (or by any Minority Investor who acquired such shares as a Permitted Transferee from the Relationship Investor), at the price and on the other terms specified in Schedule 4.3.  The Company may exercise the Relationship Investor Call Option by delivery of written notice (the “Relationship Investor Call Notice”) to the holder or holders of the Minority Shares within ninety (90) days, or within three hundred sixty five (365) days if termination is because of death, after the Relationship Investor Termination Date (the “Relationship Investor Call Period”).  The Relationship Investor Call Notice shall set forth the number of the Minority Shares to be acquired from such holder(s), the aggregate consideration to be paid for such shares and the time and place for the closing of the transaction.

 

(ii)                                  If for any reason the Company does not elect to purchase all of the Minority Shares pursuant to the Relationship Investor Call Option, then each Significant Stockholder shall be entitled to exercise the Company’s Relationship Investor Call Option in the manner set forth in the preceding paragraph (a) for all, but not less than all, of the Minority Shares (the “Relationship Investor Available Shares”).  As soon as practicable after the Company has determined that there will be Relationship Investor Available Shares, but in any event within the Relationship Investor Call Period, the Company shall deliver written notice (the “Relationship Investor Option Notice”) to each Significant Stockholder setting forth the number of Relationship Investor Available Shares and the price for each Relationship Investor Available Share.  Each Significant Stockholder may elect to purchase all of the Relationship Investor Available Shares by delivering written notice to the Company within ten (10) days after receipt of the Relationship Investor Option Notice by such Significant Stockholder.  As soon as practicable, and in any event within five (5) days after the expiration of such ten (10) day period, the Company shall notify the holder(s) of Minority Shares as to the number of Minority Shares being purchased from such holder by such Significant Stockholder.  If more than one Significant Stockholder elects to exercise such purchase option with respect to the Minority Shares not purchased by the Company, such electing Persons shall be entitled to purchase such Minority Shares pro rata on the basis of their ownership of Company Common Stock or in such proportion as they may agree between or among themselves.

 

17

 

(b)                                 Settlement of the purchase of Minority Shares pursuant to this Section 4.3 will occur at the Company’s principal office on a Business Day to be fixed by the Company within fifteen (15) days after the expiration of the Relationship Investor Call Period.  At the time of the settlement, (i) the purchaser or purchasers shall pay the purchase price in the manner specified in Schedule 4.3, (ii) the holders of the Minority Shares being purchased shall deliver the certificate or certificates representing such shares to the purchaser or purchasers or their nominees, endorsed in blank, or accompanied by appropriate stock powers executed in blank, together with funds for any required stock transfer taxes, and (iii) the transferor shall represent in writing to the transferee (and to the Company, if the Company is not the transferee) that such Minority Shares are owned of record and beneficially by such transferor, free and clear of all liens, security interests, claims, restrictions and encumbrances of any kind.

 

(c)                                  Each Relationship Investor acknowledges that the Minority Shares which the Company or a Significant Stockholder may elect to purchase include any Minority Shares issued upon exercise of any stock option (regardless of whether such option is exercised before or after the Relationship Investor Termination Date).

 

V.                                    CERTAIN OTHER AGREEMENTS

 

5.1.                            Certain Transactions.  The parties hereto agree to the execution, delivery and performance of the Management Agreement by the Company.

 

5.2.                            Mergers, Etc.  If the Board and the Stockholders holding a majority of the outstanding shares of Company Common Stock approve (a) any merger, consolidation, amalgamation or other business combination involving the Company, (b) any acquisition by purchase or otherwise of all or a material portion of the business or assets of, or stock or other evidences of beneficial ownership of, any Person, or (c) the sale of all of the business or assets of, or substantially all of the assets of, the Company, then each Stockholder agrees to vote or cause to be vote all of its shares of Company Common Stock in favor of such transaction and agrees not to exercise any appraisal or dissenters’ rights available under any rule, regulation, statute, agreement, the certificate of incorporation, the by-laws or otherwise.  The obligations of each Stockholder with respect to any transaction subject to this Section 5.2 shall be conditioned on the same terms in such transaction applying to such Stockholder as apply to all other Stockholders.

 

5.3.                            Board of Directors; Books and Records.  (a) The Stockholders and the Company hereby agree that, at all times until an IPO, the Board shall consist entirely of (i) the person who holds the title of Chief Executive Officer of the Company so long as such individual remains an employee of the Company; provided, however, that the parties hereto acknowledge and agree that the Chief Executive Officer shall not be appointed to the Board until immediately following the Closing Date, and (ii) any number of other individuals designated by the AEA Investors; provided, however, that for so long as each of AEA Investors Fund V LP, AEA Investors Fund V-A LP and AEA Investors Fund V-B LP (each, a “VCOC Fund”), directly or indirectly through any other entity owns any of the Company Common Shares

 

18

 

owned by the AEA Investors, such VCOC Fund shall have the right to designate at least one of the individuals that the AEA Investors are entitled to designate for election to the Board of Directors.  The Stockholders and the Company shall take all such actions as may be necessary or appropriate to cause such individuals to be elected or re-elected as the members of the Board and to be maintained in such positions at all such times.

 

(b)                                 Following an IPO, for so long as the AEA Investors in the aggregate own at least 10% of the outstanding shares of Company Common Stock, the AEA Investors shall at all times be entitled to nominate at least one individual for election to the Board.  The Company hereby agrees that, at all times after the IPO, at and in connection with each annual or special meeting of stockholders of the Company at which directors of the Company are to be elected, the Company, the Board and the nominating committee thereof will (A) nominate and recommend to stockholders for election or re-election as part of the management slate of directors each such individual and (B) provide the same type of support for the election of each such individual as a director of the Company as provided by the Company, its directors, its management and its Affiliates to other persons standing for election as directors of the Company as part of the management slate.  Each Stockholder hereby agrees that, at all times after the IPO, such Stockholder will, and will cause each of its Affiliates to, vote all shares of Company Common Stock owned or held of record by it, at each annual or special meeting of stockholders of the Company at which directors of the Company are to be elected, in favor of the election or reelection as a member of the Board of each such individual nominated by the AEA Investors.

 

(c)                                  For so long as the AEA Investors shall have the right to designate a member of the Board pursuant to this Section 5.3, the AEA Investors shall be furnished full and complete access to the files and records regarding the business of the Company including, without limitation, monthly statements of profit and loss and any other periodic management reports.

 

(d)                                 For so long as an Additional Investor owns any shares of Company Common Stock, the Company shall (i) permit such Additional Investor, upon its reasonable request and reasonable advance notice to have reasonable access during normal business hours to the files and records regarding the Business; provided, however, that each Additional Investor acknowledges and agrees that no access granted hereunder shall unreasonably interfere with the business operations of the Business, and (ii) provide each Additional Investor (A) unaudited monthly reports and unaudited quarterly and audited annual financial statements regarding its financial operations within five (5) Business Days following the date upon which the AEA Investors receive such reports or financial statements, as applicable, and (B) any additional information the Company is required to deliver the lending agent pursuant to the credit agreement that EWT III will execute in connection with the acquisition of the Business (the “Credit Agreement”) within five (5) Business Days following the date upon which the Company has delivered such information to such lending agent under the Credit Agreement.

 

5.4.                            Corporate Opportunities.

 

(a)                                 In recognition and anticipation of the facts that (i) the directors, officers and/or employees of each AEA Investor or its Affiliates may serve as directors and/or officers of

 

19

 

the Company or any of its subsidiaries, and (ii) each AEA Investor and its Affiliates engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company, directly or indirectly, may engage, the provisions of this Section 5.4 are set forth to regulate and define the conduct of certain affairs of the Company as they may involve the AEA Investors, their Affiliates and their respective officers, directors and employees, and the powers, rights, duties and liabilities of the Company and its officers, directors, Affiliates and Stockholders in connection therewith.

 

(b)                                 No AEA Investor, any of its Affiliates nor any of their respective officers, directors or employees shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Company.  The Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for both an AEA Investor or any of its Affiliates or any of their respective officers, directors or employees and the Company, and therefore no AEA Investor, any of its Affiliates nor any of their respective officers, directors or employees shall have any duty, except and to the extent expressly assumed by contract, to communicate or offer such corporate opportunity to the Company and shall not be liable to the Company or its Stockholders for breach of any fiduciary duty as a stockholder, director and/or officer of the Company solely by reason of the fact that such party pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person, or does not communicate information regarding such corporate opportunity to the Company.

 

(c)                                  To the extent a court might hold that the conduct of any activity related to a corporate opportunity that is renounced in this Section 5.4 to be a breach of duty to the Company or its Stockholders, the Company and its Stockholders hereby waive any and all claims and causes of action that the Company or the Stockholders may have for such activities to the fullest extent permitted by law.  The provisions of this Section 5.4 apply equally to activities conducted in the future and that have been conducted in the past.

 

5.5.                            Confidentiality.

 

(a)                                 In respect of any trade secrets, customer lists, drawings, designs, information regarding product development, services, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board or management), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to the Company or a Stockholder (in each case, such party being the “Disclosing Party”), any of its subsidiaries or the business or information designated as confidential or proprietary that the Disclosing Party or any of its subsidiaries may receive belonging to suppliers, customers or others who do business with the Disclosing Party or any of its subsidiaries (collectively, “Confidential Information”) that is disclosed by the Disclosing Party to the Company, its subsidiaries or another Stockholder (in each case, such party being the “Receiving Party”), without the prior written consent of the Disclosing Party, except (a) to the extent required by law, rule, regulation or court order or otherwise compelled by regulatory or legal process, (b) for disclosure made by the Receiving

 

20

 

Party to any Person who is an officer, director, employee or agent of the Receiving Party or any of their respective Affiliates or counsel to, accountants of, consultants to or other advisors for, the Receiving Party or its Affiliates, (c) to the extent necessary in connection with the exercise of any remedy hereunder, (d) to any potential transferee in connection with a proposed Transfer of Company Common Stock, in each case as permitted hereunder, as long as such transferee agrees to be bound by a confidentiality agreement containing terms substantially similar to the provisions of this Section 5.5, or (e) for disclosure to the direct or indirect shareholders, limited partners, partners or members of the Receiving Party and their respective advisors (provided, however, any disclosure pursuant to this clause (e) is generally consistent with the scope and nature of disclosure made by the Receiving Party to such Persons in respect of the Receiving Party’s other investments), the Receiving Party shall not disclose Confidential Information to any third Person unless such Confidential Information has been previously disclosed to the public by the Disclosing Party or is in the public domain (other than by reason of the Receiving Party’s breach of this Section 5.5).

 

(b)                                 bcIMC Private Placement (2013) Investment Corporation and bcIMC (WCBAF) Private Placement (2013) Investment Corporation (collectively, “bcIMC Investor”) hereby represents and warrants that it is subject to the Freedom of Information and Protection of Privacy Act (British Columbia) (the “BC Act”) and that it is contractually obligated to disclose certain information to its investors and prospective investors.  Based solely on the foregoing representations in the immediately preceding sentence, the Company agrees that, notwithstanding anything to the contrary in Section 5.5(a), the bcIMC Investor may disclose to its ultimate equity holders and to any other Person to which it is required to disclose pursuant to the BC Act the following information about the Company: (i) the name and address of the Company and the fact that such bcIMC Investor has made an investment in the Company, (ii) a brief description of the business of the Company, (iii) the amount and currency of bcIMC Investor’s investment in the Company, (iv) the internal rate of return of the bcIMC Investor’s investment in the Company with respect the Company’s performance as a whole as prepared by the bcIMC Investor, (v) the amount of any distributions received by the bcIMC investor in connection with its investment in the Company, and (vi) that AEA is the financial sponsor of the Company; provided that in each case (x) such bcIMC Investor shall clearly indicate that any such disclosure made pursuant to clause (iv) was not prepared, reviewed, or approved by the Company, AEA or any of their respective affiliates and (y) such bcIMC Investor agrees that none of the Company, AEA or any of their respective affiliates shall have any responsibility or liability in connection with any disclosure made pursuant to this Section 5.5(b).

 

5.6.                            Distributions or Redemptions.  For the avoidance of doubt, the Company shall not distribute its earnings to its Stockholders or redeem shares of Company Common Stock of its Stockholders unless such distribution or redemption is available to all Stockholders, pro rata, based on their respective holdings of Company Common Stock; provided, however, that the Company shall be permitted to redeem any number of shares of Company Common Stock held by (a) any Management Investor that is not an employee of AEA and (b) any Relationship Investor, in each case, to the extent the Board determines that such redemption is in the best interests of the Company.

 

21

 

5.7.                            Annual Valuation.  The Company shall, at the request of an Additional Investor, use commercially reasonable efforts to provide to such Additional Investor on or prior to the last business day of February of each fiscal year a preliminary estimate (based on unaudited financial information actually known by the Company at the time and without any requirement of the Company to change the timing of its ordinary course year-end valuation work) of the Fair Market Value of the Company as of December 31 of the preceding fiscal year; provided, however, that such Additional Investor confirms that it understands that such information may be incomplete and/or change prior the issuance of any other determination of Fair Market Value of the Company otherwise required to be delivered to such Additional Investor in connection with such Additional Investor’s investment in funds or investment vehicles managed by AEA.  Notwithstanding any other provision in this Agreement to the contrary, each Additional Investor agrees to keep such information confidential and only disclose such information to employees and advisers who need to know such information in connection with the preparation of such Additional Investor’s statutorily required reports.

 

VI.                               MISCELLANEOUS

 

6.1.                            Additional Securities Subject to Agreement.  Each Stockholder agrees that any other Equity Securities of the Company which they hereafter acquire by means of a stock split, stock dividend, or distribution will be subject to the provisions of this Agreement to the same extent as if held on the date hereof.

 

6.2.                            Term.  This Agreement will be effective from and after the date hereof and will terminate and be of no further force and effect (other than with respect to prior breaches) with respect to the provisions referred to below as follows: (i) with respect to Sections 2.1, 2.2, 2.3, 2.4, 2.5, 4.1, 4.2, 4.3 and Schedule 4.3, upon completion of an IPO; and (ii) with respect to all Sections, upon the sale of all or substantially all of the assets or equity interests in the Company to a Third Party whether by merger, consolidation, sale of assets or securities or otherwise.

 

6.3.                            Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by telecopy, by telegram, by telex or registered or certified mail (postage prepaid, return receipt requested), or by electronic mail to the respective parties at the addresses set forth on the signature pages (or at such other address for a party as shall be specified in a notice given in accordance with this Section 6.3).

 

6.4.                            Further Assurances.  The parties hereto will sign such further documents, cause such meetings to be held, resolutions passed, exercise their votes and do and perform and cause to be done such further acts and things as may be necessary in order to give full effect to this Agreement and every provision hereof.

 

22

 

6.5.                            Non-Assignability.  This Agreement will inure to the benefit of and be binding on the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by any party hereto without the express prior written consent of the other parties, and any attempted assignment, without such consents, will be null and void; provided, however, that any Stockholder may assign or delegate all or any portion of its rights hereunder to any Permitted Transferee so long as such Person is a party hereto or executes and delivers to the Company an Assumption Agreement satisfactory to the Company; and; provided, further, that each Person who acquires any Company Common Stock from any Stockholder hereunder shall assume the rights and obligations, including the economic rights, of the AEA Investors (in the case of any Transfer from the AEA Investors) or a Minority Investor (in the case of any Transfer from a Minority Investor unless the Transfer occurred pursuant to Section 2.3, in which case such Person will be subject to the same rights and obligations, including the economic rights, as an AEA Investor).

 

6.6.                            Amendment, Waiver.  This Agreement may be amended, supplemented or otherwise modified only by a written instrument executed by the Company and the holders of a majority of the shares of Company Common Stock; provided, however, (i) that any amendment, supplement or modification of Article 2 and Sections 5.3(a), 5.3(d), 5.4, 5.5(a), 5.6 and 5.7 and Article 6 (other than Sections 6.3, 6.14 and 6.15) of this Agreement shall require the written approval of each Additional Investor and (ii) that any amendment, supplement or modification of this Agreement which disproportionately adversely affects any Stockholder shall not be effective without the written approval of such Stockholder; provided, however, that the Company and the AEA Investors shall be expressly permitted to amend, supplement or modify Schedule 4.3 without the consent of any of the Minority Investors.  No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and executed by the party so waiving.  Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including without limitation, any investigation by or on behalf of any party, will be deemed to constitute a waiver by the party taking such action of compliance with any covenants or agreements contained herein.  The waiver by any party hereto of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach.

 

6.7.                            Third Parties.  This Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third party beneficiary hereto.

 

6.8.                            Governing Law; Arbitration.

 

(a)                                 This Agreement will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof.

 

23

 

(b)                                 Except as otherwise provided in this Agreement, any controversy or dispute arising out of this Agreement, the interpretation of any of the provisions hereof or the action or inaction of any Person hereunder shall be submitted to arbitration in New York, New York, before the American Arbitration Association under the commercial arbitration rules of such Association.  Any award or decision obtained from any such arbitration proceeding shall be final and binding on the parties, and judgment upon any award so obtained may be entered in any court having jurisdiction thereof.  To the fullest extent permitted by law, no action at law or in equity based upon any claim arising out of or related to this Agreement shall be instituted in any court by any party except:  (i) an action to compel arbitration pursuant to this Section 6.8(b), (ii) an action to enforce an award obtained in an arbitration proceeding in accordance with this Section 6.8(b), or (iii) an action for injunctive relief when and if such relief is appropriate under the terms of this Agreement.

 

6.9.                            Specific Performance.  Without limiting or waiving in any respect any rights or remedies of the parties hereto under this Agreement now or hereinafter existing at law or in equity or by statute, each of the parties hereto will be entitled to seek specific performance of the obligations to be performed by the other in accordance with the provisions of this Agreement.

 

6.10.                     Entire Agreement.  This Agreement, together with, as applicable, the subscription agreements entered into by Company and the Management Investors, the subscription agreements entered into by the Company and the Relationship Investors and the subscription agreements entered into by the Company, the AEA Investors and each Additional Investor as of the date hereof, sets forth the entire understanding of the parties hereto with respect to the subject matter hereof.

 

6.11.                     Titles and Headings.  The section headings contained in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement.

 

6.12.                     Severability.  If any provision of this Agreement is declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Agreement will not be affected and will remain in full force and effect.

 

6.13.                     Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which together will be deemed to be one and the same instrument.

 

6.14.                     Additional Management Investors and Relationship Investors.  Any employee or director of the Company or any of its subsidiaries who becomes party to a stock subscription agreement, option agreement or similar agreement after the date hereof, or any Person that has a Relationship Investor Representative Agreement with the Company and/or its subsidiaries and who the Company has agreed to admit as a Relationship Investor may become a party hereto and may become bound hereby by entering into a supplementary agreement with the Company agreeing to be bound by the terms hereof (or only specific sections hereof).  Each such supplementary agreement shall become effective upon its execution by the

 

24

 

Company and such employee, director or any Person that has a Relationship Investor Representative Agreement with the Company and/or its subsidiaries and who the Company has agreed to admit as a Relationship Investor, and it shall not require the signature or consent of any other party hereto.  Such supplementary agreement may modify some of the terms hereof as they effect such employee, director or Person that has a Relationship Investor Representative Agreement with the Company and/or its subsidiaries and who the Company has agreed to admit as a Relationship Investor.

 

6.15.                     Stock Certificates.  Until the occurrence of an IPO, AEA Sale or consummation of a Third Party Offer, any certificate representing shares of Company Common Stock issued to the Management Investors and Relationship Investors shall be held by the Company for the benefit of the Management Investors and Relationship Investors.  Upon the occurrence of an IPO, AEA Sale or consummation of a Third Party Offer, the Company shall return any such certificates representing shares of Company Common Stock issued to the Management Investors and Relationship Investors to the record holder(s) thereof.

 

6.16.                     Tax Forms; FATCA.

 

(a)                                 Each Stockholder shall furnish to the Company from time to time all such information as is required by applicable law or otherwise reasonably requested by the Company (including IRS Forms W-8 or W9, as applicable, and any other forms or certificates prescribed by the Internal Revenue Code of 1986, as amended from time to time, the regulations promulgated thereunder, or other applicable state, local or non-U.S. law) to permit the Company to ascertain whether and in what amount withholding of taxes is required in respect of such Stockholder.

 

(b)                                 Without limiting the preceding paragraph, the Company will comply with any withholding or information reporting requirements applicable to it required by sections 1471 through 1474 (or any successor provisions or amendments thereof)  of the U.S. Internal Revenue Code of 1986, as amended, or any current or future U.S. Treasury Regulations or rulings promulgated thereunder (“FATCA”).  Each Stockholder will comply with all requirements and obligations imposed on it under FATCA that are applicable to its investment in the Company, including providing the Company with any applicable forms and information to avoid the imposition of withholding tax on amounts received with respect to its investment in the Company.  Each Stockholder shall bear any taxes or withholding, and all other costs, attributable its failure to comply with FATCA and amounts paid to such Stockholder being subject to withholding tax, and no Stockholder shall be entitled to reimbursement from the Company or any other Stockholder.

 

6.17.                     Relationship Investors.

 

(a)                                 For the avoidance of doubt, a natural person shall be permitted to own Company Shares and qualify as a “Relationship Investor” hereunder if he or she is employed by, consulting with or owns an entity that has a Relationship Investor Representative Agreement with the Company and/or its subsidiaries (such entity that has a Relationship Investor

 

25

 

Representative Agreement with the Company and/or its subsidiaries shall be referred to as the “Contractual RI Party”).

 

(b)                                 A natural person of the type referenced in Section 6.17(a) that executes this Agreement and owns Company Shares agrees to be bound by the terms and conditions of the Relationship Investor Representative Agreement referenced in Section 6.17(a) as if he or she is the Contractual RI Party under such Relationship Investor Representative Agreement.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

26

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement or caused this Agreement to be executed on its behalf as of the date first written above.

 

	
 
    	
THE COMPANY:
    
	
 
    	
 
    
	
 
    	
EWT HOLDINGS I CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara L. Burns
    
	
 
    	
Name: Barbara L.   Burns
    
	
 
    	
Title: Vice   President, Secretary and Assistant
    
	
 
    	
Treasurer
    
	
 
    	
Address: c/o AEA   Investors L.P.
    
	
 
    	
666 Fifth Avenue,   36th Floor
    
	
 
    	
New York, NY 10103
    
	
 
    	
Attention: Barbara   Burns
    
	
 
    	
Fax:
    
	
 
    	
Email: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
THE AEA INVESTORS:
    
	
 
    	
 
    
	
 
    	
AEA INVESTORS FUND V LP
    
	
 
    	
 
    
	
 
    	
By: AEA Investors   Partners V LP,
    
	
 
    	
Its general partner
    
	
 
    	
 
    
	
 
    	
By: AEA Management   (Cayman) Ltd.,
    
	
 
    	
Its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara L. Burns
    
	
 
    	
Name: Barbara L.   Burns
    
	
 
    	
Title: Vice   President
    
	
 
    	
Address: c/o AEA   Investors L.P.
    
	
 
    	
666 Fifth Avenue,   36th Floor
    
	
 
    	
New York, NY 10103
    
	
 
    	
Attention: Barbara   Burns
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    
	
 
    	
 
    
	
 
    	
AEA INVESTORS FUND V-A LP
    
	
 
    	
 
    
	
 
    	
By: AEA Investors   Partners V LP,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
By: AEA Management   (Cayman) Ltd.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara L. Burns
    
	
 
    	
Name: Barbara L.   Burns
    
	
 
    	
Title: Vice   President
    
	
 
    	
Address: c/o AEA   Investors L.P.
    
	
 
    	
666 Fifth Avenue,   36th Floor
    
	
 
    	
New York, NY 10103
    
	
 
    	
Attention: Barbara   Burns
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    
	
 
    	
 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
AEA INVESTORS FUND V-B LP
    
	
 
    	
 
    
	
 
    	
By: AEA Investors   Partners V LP,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
By: AEA Management   (Cayman) Ltd.,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara L. Burns
    
	
 
    	
Name: Barbara L.   Burns
    
	
 
    	
Title: Vice   President
    
	
 
    	
Address: c/o AEA   Investors L.P.
    
	
 
    	
666 Fifth Avenue,   36th Floor
    
	
 
    	
New York, NY 10103
    
	
 
    	
Attention: Barbara   Burns
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    
	
 
    	
 
    
	
 
    	
AEA INVESTORS PARTICIPANT   FUND V LP
    
	
 
    	
 
    
	
 
    	
By: AEA Investors PF   V LLC,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara L. Burns
    
	
 
    	
Name: Barbara L.   Burns
    
	
 
    	
Title: Vice   President
    
	
 
    	
Address: c/o AEA   Investors L.P.
    
	
 
    	
666 Fifth Avenue,   36th Floor
    
	
 
    	
New York, NY 10103
    
	
 
    	
Attention: Barbara   Burns
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
AEA INVESTORS QP   PARTICIPANT FUND V LP
    
	
 
    	
 
    
	
 
    	
By: AEA Investors PF   V LLC,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara L. Burns
    
	
 
    	
Name: Barbara L.   Burns
    
	
 
    	
Title: Vice   President
    
	
 
    	
Address: c/o AEA   Investors L.P.
    
	
 
    	
666 Fifth Avenue,   36th Floor
    
	
 
    	
New York, NY 10103
    
	
 
    	
Attention: Barbara   Burns
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
THE ADDITIONAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
bcIMC Private Placement   (2013) Investment Corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lincoln Webb
    
	
 
    	
Name: Lincoln Webb
    
	
 
    	
Title: President
    
	
 
    	
Address: 301-2940   Jutland Rd., Victoria, BC,
    
	
 
    	
              Canada,   V8T 5K6
    
	
 
    	
Telephone: 
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
bcIMC (WCBAF) Private   Placement (2013) Investment Corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lincoln Webb
    
	
 
    	
Name: Lincoln Webb
    
	
 
    	
Title: President
    
	
 
    	
Address: 301 – 2940   Jutland Rd., Victoria, BC,
    
	
 
    	
              Canada,   V8T 5K6
    
	
 
    	
Telephone: 
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
FW RMB NANSEMOND   INVESTORS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bryan Barrett
    
	
 
    	
Name: Bryan Barrett
    
	
 
    	
Title: Vice   President
    
	
 
    	
Address: 201 Main   Street Suite 2600
    
	
 
    	
              Fort   Worth, TX 76102
    
	
 
    	
Telephone: 
    
	
 
    	
Email: 
    
	
 
    	
Fax: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
2014 WATER LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ H. Hiter Harris III
    
	
 
    	
Name:
    
	
 
    	
Title: Manager
    
	
 
    	
Address: 1001 Haxall   Point, 9th Floor
    
	
 
    	
              Richmond,   VA 23219
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email: 
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
Jungfrau SICAV-SIF, in   relation to its compartment Long Term Allocation, by its investment manager   Banque Pictet & Cie S.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Gerald Formaz
    	
/s/ Carsten Beyer
    
	
 
    	
Name: 
    	
Gerald Formaz
    	
Carsten Beyer
    
	
 
    	
Title: Assistant   Vice Presidents
    
	
 
    	
Address: Route des   Acacias 60
    
	
 
    	
              1211   Geneva 73, Switzerland
    
	
 
    	
Telephone: 
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    
					

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
Pictet Private Equity   Investors SA, acting as nominee for the account of Banque Pictet &   Cie S.A., in turn on behalf of its undisclosed clients
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Gerald Formaz
    	
/s/ Carsten Beyer
    
	
 
    	
Name: 
    	
Gerald Formaz
    	
Carsten Beyer
    
	
 
    	
Title:
    	
Director
    	
Director
    
	
 
    	
Address: Route des   Acacias 60
    
	
 
    	
              1211   Geneva 73, Switzerland
    
	
 
    	
Telephone: 
    
	
 
    	
Fax: 
    
	
 
    	
Email: 
    
					

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
HAVELOCK FUND INVESTMENTS   PTE LTD
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Alan Thompson
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address: 60B Orchard   Road
    
	
 
    	
           #06-18 Tower 2 The Atrium @   Orchard 
    
	
 
    	
           Singapore 238891 
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
Partners Group U.S.   Private Equity 2011, L.P. Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Neil Hartley
    	
/s/ Brett McFarlane
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address: 1114 Avenue   of the Americas, 37th Floor
    
	
 
    	
           New York, NY 10036
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
Monte Rosa Funds   SICAV-SIF, in relation to its segregated compartment Monte Rosa 2011, by its   investment manager Banque Pictet & Cie S.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Marechal
    	
/s/ Jerome Vogt
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address:
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
Monte Rosa Opportunities   SICAV-SIF, in relation to its segregated compartment Monte Rosa   Co-Investments II, by its investment manager Banque Pictet & Cie   S.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Marechal
    	
/s/ Jerome Vogt
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address:
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
Xyris Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bowei Lee
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address:   Suite 2, 20/F., CMA Building, No. 64
    
	
 
    	
           Connaught Road Central, Hong Kong
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
LCY Investments Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bowei Lee
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address: 4F, Bade   Road Section 4, 
    
	
 
    	
           Taipei 105, Taiwan
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

	
 
    	
NB PEP Holdings Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Blake Rice
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Address: c/o NB   Alternatives, 325 N. Saint
    
	
 
    	
           Paul Street Suite 4900
    
	
 
    	
           Dallas, TX 7520
    
	
 
    	
Telephone:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    

 

[Signature Page to Second Amended and Restated Stockholders’ Agreement]

 

 

Schedule 4.13

 

Purchase Price for Relationship Investor’s Minority Shares

 

The purchase price per share to be paid for any Minority Shares purchased by the Company or a Significant Stockholder pursuant to Section 4.3 of this Agreement shall be equal to:

 

(i)                                   if the termination of the Relationship Investor Representative Agreement giving rise to the Relationship Investor Call Option arose (x) out of the mutual consent of the Company or its subsidiaries and the applicable Relationship Investor or (ii) the Relationship Investor terminating the Relationship Investor Representative Agreement with the Company or its subsidiaries solely due to the Company or its subsidiaries discontinuing Relationship Investor’s sales rights of a product line that was responsible for greater than fifty percent (50%) of the commissions paid to such Relationship Investor over the preceding 36-month period prior to such termination, the Fair Market Value of the Minority Shares being purchased.

 

(ii)                                if the termination of the Relationship Investor Representative Agreement giving rise to the Relationship Investor Call Option arose for any reason other than the reasons set forth in this Schedule 4.3(i), then the purchase price per share to be paid for any Minority Shares shall be the lesser of (1) the cost incurred by the Relationship Investor that has terminated the Relationship Investor Representative Agreement (or any Permitted Transferee who currently holds the Relationship Investor’s Minority Shares) in connection with the purchase of the Minority Shares being repurchased and (2) the Fair Market Value of the Minority Shares being purchased.

 

Such purchase price may be paid (a) in the case of a purchase by the Company, at the option of the Relationship Investor, either in cash at the closing contemplated by Section 4.3(b) of this Agreement or, to the extent the Company’s credit agreements do not permit such cash payment, by delivery of a subordinated promissory note having the terms described in the next sentence, or (b) in the case of a purchase by a Significant Stockholder, in cash at the closing contemplated by Section 4.3(b) of this Agreement.  Any subordinated promissory note issued by the Company in payment of such purchase price shall (x) provide that the principal amount thereof shall be payable on the first anniversary of the date thereof, (y) bear interest at the rate of publically announced by Credit Suisse as their respective prime commercial lending rate, payable semiannually and (z) be subordinated on terms and conditions satisfactory to any holders of indebtedness (other than Affiliates of the Company) for borrowed money of the Company and its subsidiaries.Exhibit 10.7

 

SECOND AMENDED AND RESTATED

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

EVOQUA WATER TECHNOLOGIES CORP.,

 

THE AEA INVESTORS,

 

MANAGEMENT INVESTORS,

 

RELATIONSHIP INVESTORS

 

and

 

ADDITIONAL INVESTORS

 

Dated as of October 16, 2017

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 1.
    	
Certain Definitions
    	
2
    
	
Section 2.
    	
Registration Rights
    	
7
    
	
 
    	
2.1.
    	
Demand Registrations
    	
7
    
	
 
    	
2.2.
    	
Piggyback Registrations
    	
11
    
	
 
    	
2.3.
    	
Allocation of   Securities Included in Registration Statement
    	
13
    
	
 
    	
2.4.
    	
Registration Procedures
    	
16
    
	
 
    	
2.5.
    	
Registration Expenses
    	
23
    
	
 
    	
2.6.
    	
Certain Limitations on   Registration Rights
    	
23
    
	
 
    	
2.7.
    	
Limitations on Sale or   Distribution of Other Securities
    	
24
    
	
 
    	
2.8.
    	
No Required Sale
    	
25
    
	
 
    	
2.9.
    	
Indemnification
    	
26
    
	
 
    	
2.10.
    	
Limitations on   Registration of Other Securities; Representation
    	
30
    
	
 
    	
2.11.
    	
No Inconsistent   Agreements
    	
30
    
	
Section 3.
    	
Underwritten Offerings
    	
30
    
	
 
    	
3.1.
    	
Requested Underwritten   Offerings
    	
30
    
	
 
    	
3.2.
    	
Piggyback Underwritten   Offerings
    	
30
    
	
Section 4.
    	
General
    	
31
    
	
 
    	
4.1.
    	
Adjustments Affecting   Registrable Securities
    	
31
    
	
 
    	
4.2.
    	
Rule 144 and   Rule 144A
    	
31
    
	
 
    	
4.3.
    	
Nominees for Beneficial   Owners
    	
32
    
	
 
    	
4.4.
    	
Amendments and Waivers
    	
32
    
	
 
    	
4.5.
    	
Notices
    	
32
    
	
 
    	
4.6.
    	
Successors and Assigns
    	
33
    
	
 
    	
4.7.
    	
Entire Agreement
    	
34
    
	
 
    	
4.8.
    	
Governing Law;   Arbitration
    	
34
    
	
 
    	
4.9.
    	
Interpretation;   Construction
    	
34
    
	
 
    	
4.10.
    	
Counterparts
    	
35
    
	
 
    	
4.11.
    	
Severability
    	
35
    
	
 
    	
4.12.
    	
Remedies
    	
35
    
	
 
    	
4.13.
    	
Further Assurances
    	
35
    
	
 
    	
4.14.
    	
Confidentiality
    	
35
    
	
 
    	
4.15.
    	
IPO
    	
36
    
	
 
    	
4.16.
    	
MFN
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
Schedule I
    	
   Notices
    	
 
    

 

i

 

SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of October 16, 2017 (as amended, modified or supplemented from time to time, this “Agreement”), by and among (i) Evoqua Water Technologies Corp. (f/k/a EWT Holdings I Corp.), a Delaware corporation (the “Company”) , (ii) the AEA Investors (as defined herein), (iii) the parties identified on Schedule I hereto as “Management Investors” (together with their respective Permitted Transferees and each party who executes a joinder to this Agreement (or has executed a joinder to the Original Agreement or the First A&R Agreement (each as defined below)) agreeing to be bound by and comply with the applicable terms, conditions and provisions hereof from time to time, the “Management Investors”), (iv) the parties identified on Schedule I hereto as “Additional Investors” (together with their respective Permitted Transferees and each party who executes a joinder to this Agreement (or has executed a joinder to the Original Agreement or the First A&R Agreement (each as defined below)) agreeing to be bound by and comply with the applicable terms, conditions and provisions hereof from time to time, the “Additional Investors”), and (v) the Persons identified on Schedule I hereto as “Relationship Investors” that have either a municipal, distributor, representative, consulting or industrial contract with the Company and/or its subsidiaries (together with their respective Permitted Transferees and each party who executes a joinder to this Agreement (or has executed a joinder to the Original Agreement or the First A&R Agreement (each as defined below)) agreeing to be bound by and comply with the applicable terms, conditions and provisions hereof from time to time, the “Relationship Investors”); and, collectively with the Management Investors, the Additional Investors and each Person who executes an Assumption Agreement (as defined in the Second A&R Stockholders Agreement (as defined below)) and falls under clause (x)(i) of the definition of Assumption Agreement, the “Minority Investors”).

 

RECITALS:

 

WHEREAS, EWT Holdings III Corp. (f/k/a WTG Holdings III Corp.), a Delaware corporation and indirect wholly-owned subsidiary of the Company (“EWT III”), and Siemens Aktiengesellschaft (“Siemens”) are parties to a Master Sale and Purchase Agreement, dated as of October 15, 2013 (as amended, modified or supplemented from time to time, the “MSPA”), pursuant to which, among other things, Siemens sold and transferred the business of providing products, equipment, solutions and services related to water and wastewater treatment markets through Siemens’ business unit “Water Technologies” with three segments (i.e., industrial, municipal and service) (the “Business”) to EWT III and its Affiliates, and EWT III and its Affiliates purchased and acquired the Business from Siemens, in each case at the January 15, 2014 and with economic effect as of the Effective Date (as defined in the MSPA);

 

WHEREAS, the AEA Investors hold a majority of the outstanding shares of Common Stock, the Minority Investors hold the remainder of the outstanding shares of Common Stock and the Company has no other capital stock outstanding as of the date hereof;

 

WHEREAS, the Company, the AEA Investors, the Management Investors and the Additional Investors entered into that certain Registration Rights Agreement, dated as of January 15, 2014 (the “Original Agreement”), on the terms and conditions set forth in the Original Agreement to provide for certain registration rights set forth therein with respect to the ownership of shares of capital stock of the Company;

 

 

WHEREAS, the Company, the AEA Investors, the Management Investors and the Additional Investors executed that certain First Amended and Restated Registration Rights Agreement, dated as of December 11, 2014 (the “First A&R Agreement”), on the terms and conditions set forth in the First A&R Agreement to provide for certain registration rights set forth therein with respect to the ownership of shares of capital stock of the Company;

 

WHEREAS, the Company, the AEA Investors, the Management Investors and the Additional Investors are parties to that certain Stockholders Agreement, dated as January 15, 2014 (the “Stockholders Agreement”), establishing and setting forth their agreement with respect to certain rights and obligations associated with the ownership of shares of capital stock of the Company;

 

WHEREAS, as permitted under the Stockholders Agreement, the Company and the AEA Investors executed that certain First Amended and Restated Stockholders’ Agreement, dated as of March 5, 2014 (the “First A&R Stockholders Agreement”), on the terms and conditions set forth in the First A&R Stockholders Agreement to provide for certain matters relating to their rights and obligations associated with the ownership of shares of capital stock of the Company;

 

WHEREAS, as permitted under the First A&R Stockholders Agreement, the Company, the AEA Investors and the Additional Investors executed that certain Second Amended and Restated Stockholders’ Agreement, dated as of December 11, 2014 (as amended, modified or supplemented from time to time, the “Second A&R Stockholders Agreement”), on the terms and conditions set forth in the Second A&R Stockholders Agreement to provide for certain matters relating to their rights and obligations associated with the ownership of shares of capital stock of the Company;

 

WHEREAS, in connection with entering into the Second A&R Stockholders Agreement, the Company has agreed to provide the registration rights set forth in this Agreement; and

 

WHEREAS, pursuant to Section 4.4 of the First A&R Agreement as in effect immediately prior to the execution of this Agreement, the Company, the AEA Investors and the Additional Investors, which are the holders of a majority of the shares of Registrable Securities desire to amend and restate the First A&R Agreement on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the parties hereto hereby agree as follows:

 

Section 1.                                           Certain Definitions.  As used herein, the following terms shall have the following meanings:

 

“Additional Investors” has the meaning ascribed to such term in the Preamble.

 

“Additional Piggyback Rights” has the meaning ascribed to such term in Section 2.2(b).

 

“AEA” means AEA Investors LP, a Delaware limited partnership.

 

2

 

“AEA Investors” means (i) AEA Investors Fund V LP, a Cayman Islands exempted limited partnership. (ii) AEA Investors Fund V-A LP, a Delaware limited partnership, (iii) AEA Investors Fund V-B LP, a Delaware limited partnership, (iv) AEA Investors Participant Fund V LP, a Delaware limited partnership, (v) AEA Investors QP Participant Fund V LP, a Delaware limited partnership, (vi) any general or limited partnership, corporation or limited liability company having as a general partner, controlling equity holder or managing member (whether directly or indirectly) a Person who is a member of AEA or an Affiliate of any such Person and (vii) any successor or permitted assign or transferee of any of the foregoing.

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such Person.

 

“Agreement” has the meaning ascribed to such term in the Preamble.

 

“Automatic shelf registration statement” has the meaning ascribed to such term in Section 2.4.

 

“bcIMC Investor” has the meaning ascribed to such term in Section 4.14(b).

 

“Board” means the Board of Directors of the Company.

 

“Business” has the meaning ascribed to such term in the Recitals.

 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

 

“Claims” has the meaning ascribed to such term in Section 2.9(a).

 

“Common Stock” means the common stock, par value $0.01 per share, of the Company and any and all securities of any kind whatsoever which may be issued after the date hereof in respect of, or in exchange for, such shares of common stock of the Company pursuant to a merger, consolidation, stock split, stock dividend or recapitalization of the Company or otherwise.

 

“Common Stock Equivalents” means, with respect to the Company, all options, warrants and other securities convertible into, or exchangeable or exercisable for (at any time or upon the occurrence of any event or contingency and without regard to any vesting or other conditions to which such securities may be subject), shares of Common Stock or other equity securities of the Company (including, without limitation, any note or debt security convertible into or exchangeable for shares of Common Stock or other equity securities of the Company).

 

“Company” has the meaning ascribed to such term in the Preamble and, for purposes of this Agreement, such term shall include any Subsidiary or parent company of Evoqua Water Technologies Corp. and any successor to Evoqua Water Technologies Corp. or any Subsidiary or parent company of Evoqua Water Technologies Corp.

 

“Confidential Information” has the meaning ascribed to such term in Section 4.14(a).

 

3

 

“Demand Exercise Notice” has the meaning ascribed to such term in Section 2.1(a)(i).

 

“Demand Registration” has the meaning ascribed to such term in Section 2.1(a)(i).

 

“Demand Registration Request” has the meaning ascribed to such term in Section 2.1(a)(i).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC issued under such Act, as they may from time to time be in effect.

 

“Expenses” means any and all fees and expenses incident to the Company’s performance of or compliance with Section 2, including, without limitation:  (i) SEC, stock exchange, FINRA and all other registration and filing fees and all listing fees and fees with respect to the inclusion of securities on the New York Stock Exchange, Nasdaq or on any other U.S. or non-U.S. securities market on which the Common Stock is or may be listed or quoted, (ii) fees and expenses of compliance with state securities or “blue sky” laws of any state or jurisdiction of the United States or compliance with the securities laws of foreign jurisdictions and in connection with the preparation of a “blue sky” survey, including, without limitation, reasonable fees and expenses of outside “blue sky” counsel and securities counsel in foreign jurisdictions, (iii) word processing, printing and copying expenses, (iv) messenger and delivery expenses, (v) expenses incurred in connection with any road show, (vi) fees and disbursements of counsel for the Company, (vii) with respect to each registration or underwritten offering, the fees and disbursements of one counsel for the AEA Investors and one counsel for all other Participating Holder(s) collectively (selected by the holders of a majority of the shares held by such other Participating Holder(s)), together in each case with any local counsel, (viii) fees and disbursements of all independent public accountants (including the expenses of any audit/review and/or “cold comfort” letter and updates thereof) and fees and expenses of other Persons, including special experts, retained by the Company, (ix) fees and expenses payable to a Qualified Independent Underwriter, (x) fees and expenses of any transfer agent or custodian, (xi) any other fees and disbursements of underwriters, if any, customarily paid by issuers or sellers of securities, including reasonable fees and expenses of counsel for the underwriters in connection with any filing with or review by FINRA and (xii) expenses for securities law liability insurance and, if any, rating agency fees.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“First A&R Agreement” has the meaning ascribed to such term in the Recitals.

 

“First A&R Stockholders Agreement” has the meaning ascribed to such term in the Recitals.

 

“Holder” or “Holders” means (1) any Person who is a signatory to this Agreement or (2) any permitted transferee of Registrable Securities to whom any Person who is a signatory to this Agreement shall assign or transfer any rights hereunder, provided that such transferee has agreed in writing to be bound generally by the terms of this Agreement in respect of such Registrable Securities.

 

“Initiating Holders” has the meaning ascribed to such term in Section 2.1(a)(i).

 

4

 

“Investor Holders” means the AEA Investors, or any of them, to the extent they acquire or hold Registrable Securities.

 

“IPO” means the initial bona fide underwritten public offering and sale of Common Stock (or other equity securities of the Company) pursuant to an effective registration statement (other than on Form S-4, S-8 or a comparable form) filed under the Securities Act.

 

“Majority Participating Holders” means Participating Holders holding more than 50% of the Registrable Securities proposed to be included in any offering of Registrable Securities by such Participating Holders pursuant to Section 2.1 or Section 2.2.

 

“Management Investors” has the meaning ascribed to such term in the Preamble to this Agreement.

 

“Manager” has the meaning ascribed to such term in Section 2.1(c).

 

“Minimum Threshold” means $20 million.

 

“MSPA” has the meaning ascribed to such term in the Recitals.

 

“Original Agreement” has the meaning ascribed to such term in the Recitals.

 

“Participating Holders” means all Holders of Registrable Securities which are proposed to be included in any offering of Registrable Securities pursuant to Section 2.1 or Section 2.2.

 

“Partner Distribution” has the meaning ascribed to such term in Section 2.1(a)(iii).

 

“Person” means any individual, firm, corporation, company, limited liability company, partnership, trust, joint stock company, business trust, incorporated or unincorporated association, joint venture, governmental authority or other legal entity of any nature whatsoever.

 

“Piggyback Notice” has the meaning ascribed to such term in Section 2.2(a).

 

“Piggyback Shares” has the meaning ascribed to such term in Section 2.3(a)(iii).

 

“Postponement Period” has the meaning ascribed to such term in Section 2.1(b).

 

“Qualified Independent Underwriter” means a “qualified independent underwriter” within the meaning of FINRA Rule 5121.

 

“Registrable Securities” means (a) any shares of Common Stock held by the Holders at any time (including those held as a result of, or issuable upon, the conversion or exercise of Common Stock Equivalents), whether now owned or acquired by the Holders at a later time, (b) any shares of Common Stock issued or issuable, directly or indirectly, in exchange for or with respect to the Common Stock referenced in clause (a) above by way of stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, merger, share exchange, consolidation or other reorganization and (c) any securities issued in replacement of or exchange for any securities described in clause (a) or (b) above.  As to any

 

5

 

particular Registrable Securities, such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, or (B) such securities shall have been sold or, with respect to the Minority Investors, can be sold (without being restricted by any volume limitations), in compliance with the requirements of Rule 144 under the Securities Act, as such Rule 144 may be amended (or any successor provision thereto).

 

“Relationship Investor” has the meaning ascribed to it in the Preamble.

 

“Restricted Period” has the meaning ascribed to such term in Section 2.7(c).

 

“Rule 144” and “Rule 144A” have the meaning ascribed to such term in Section 4.2.

 

“SEC” means the U.S. Securities and Exchange Commission or such other federal agency which at such time administers the Securities Act.

 

“Second A&R Stockholders Agreement” has the meaning ascribed to such term in the Recitals.

 

“Section 2.3(a) Sale Number” has the meaning ascribed to such term in Section 2.3(a).

 

“Section 2.3(b) Sale Number” has the meaning ascribed to such term in Section 2.3(b).

 

“Section 2.3(c) Sale Number” has the meaning ascribed to such term in Section 2.3(c).

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC issued under such Act, as they may from time to time be in effect.

 

“Shelf Registrable Securities” has the meaning ascribed to such term in Section 2.1(e).

 

“Shelf Registration Statement” has the meaning ascribed to such term in Section 2.1(e).

 

“Shelf Underwriting” has the meaning ascribed to such term in Section 2.1(e).

 

“Shelf Underwriting Notice” has the meaning ascribed to such term in Section 2.1(e).

 

“Shelf Underwriting Request” has the meaning ascribed to such term in Section 2.1(e).

 

“Siemens” has the meaning ascribed to such term in the Recitals.

 

“Stockholders Agreement” has the meaning ascribed to such term in the Recitals.

 

“Subsidiary” means any direct or indirect subsidiary of the Company on the date hereof and any direct or indirect subsidiary of the Company organized or acquired after the date hereof.

 

“Valid Business Reason” has the meaning ascribed to such term in Section 2.1(b).

 

“WKSI” has the meaning ascribed to such term in Section 2.1(a)(i).

 

6

 

“EWT III” has the meaning ascribed to such term in the Recitals.

 

Section 2.                                           Registration Rights.

 

2.1.                            Demand Registrations.

 

(a)                                 (i)                                     Subject to Sections 2.1(b) and 2.3, at any time and from time to time after the closing of an IPO, the AEA Investors shall have the right to require the Company to file one or more registration statements under the Securities Act covering all or any part of its and its Affiliates’ Registrable Securities by delivering a written request therefor to the Company specifying the number of Registrable Securities to be included in such registration and the intended method of distribution thereof.  Any such request by any AEA Investor pursuant to this Section 2.1(a)(i) is referred to herein as a “Demand Registration Request,” and the registration so requested is referred to herein as a “Demand Registration” (with respect to any Demand Registration, the Holder(s) making such demand for registration being referred to as the “Initiating Holders”).  Any Demand Registration Request may request that the Company register Registrable Securities on an appropriate form, including a shelf registration statement, and, if the Company is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act, a “WKSI”), an automatic shelf registration statement.  The Company shall give written notice (the “Demand Exercise Notice”) of such Demand Registration Request (1) to each of the Holders of record of Registrable Securities (other than individuals), at least five (5) Business Days prior to the filing of any registration statement under the Securities Act and (2) to each Holder of Registrable Securities that is an individual, no more than five (5) Business Days after the filing of the registration statement under the Securities Act (or, in the case of a request for the filing of an automatic shelf registration statement, at least five (5) Business Days prior to the filing of such registration statement).  Notwithstanding the foregoing, the Company may delay any Demand Exercise Notice until after filing a registration statement, so long as all recipients of such notice have the same amount of time to determine whether to participate in an offering as they would have had if such notice had not been so delayed.

 

(ii)                                  The Company, subject to Sections 2.3 and 2.6, shall include in a Demand Registration (x) the Registrable Securities of the Initiating Holders and (y) the Registrable Securities of any other Holder of Registrable Securities which shall have made a written request to the Company for inclusion in such registration pursuant to Section 2.2 (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Participating Holder) within five (5) days following the receipt of any such Demand Exercise Notice.

 

(iii)                               The Company shall, as expeditiously as possible, but subject to Section 2.1(b), use its reasonable best efforts to (x) file with the SEC (no later than forty five (45) days from the Company’s receipt of the applicable Demand Registration Request) and cause to be declared effective such registration under the Securities Act as soon as reasonably practicable (including, without limitation, by means of a shelf registration pursuant to Rule 415 under the Securities Act if so requested and if the Company is then eligible to use such a registration) of the Registrable Securities which the Company has been so requested to register, for distribution in accordance with the intended method of distribution, including a distribution to, and resale by, the members or partners of a Holder (a “Partner Distribution”) and (y) if

 

7

 

requested by the Initiating Holders, obtain acceleration of the effective date of the registration statement relating to such registration.

 

(iv)                              Notwithstanding anything contained herein to the contrary, the Company shall, at the request of any Holder seeking to effect or considering a Partner Distribution, file any prospectus supplement or post-effective amendments, or include in the initial registration statement any disclosure or language, or include in any prospectus supplement or post-effective amendment any disclosure or language, and otherwise take any action, deemed necessary or advisable by such Holder to effect such Partner Distribution.

 

(b)                                 Notwithstanding anything to the contrary in Section 2.1(a), the Demand Registration rights granted in Section 2.1(a) are subject to the following limitations:  (i) the Company shall not be required to cause a registration pursuant to Section 2.1(a) to be declared effective within a period of one hundred and twenty (120) days after the effective date of any other registration of the Company (or one hundred and eighty (180) days in the case of an IPO) filed pursuant to the Securities Act (other than a Form S-4 or Form S-8 or any successor or other forms promulgated for similar purposes or forms filed in connection with an exchange offer or any employee benefit or dividend reinvestment plan);  (ii) the Company shall not be required to effect more than five (5) Demand Registrations on Form S-1 or any similar long-form registration at the request of the AEA Investors (it being understood that if a single Demand Registration Request is delivered by more than one AEA Investor, the registration requested by such Demand Registration Request shall constitute only one Demand Registration); provided, however, that the AEA Investors shall be entitled to request an unlimited number of Demand Registrations on Form S-3 or any similar short-form registration (including pursuant to Rule 415 under the Securities Act);  (iii) each registration in respect of a Demand Registration Request made by any Holder must include, in the aggregate, shares of Common Stock having an aggregate market value of at least the lesser of (a) the Minimum Threshold (based on the Common Stock included in such registration by all Holders participating in such registration) and (b) the Initiating Holder’s remaining shares of Common Stock; and (iv) if the Board, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially and adversely interfere with any existing or potential material financing, acquisition, corporate reorganization, merger, share exchange or other transaction or event involving the Company or any of its subsidiaries or because the Company does not yet have appropriate financial statements of acquired or to be acquired entities available for filing (in each case, a “Valid Business Reason”), then (x) the Company may postpone filing a registration statement relating to a Demand Registration Request until five (5) Business Days after such Valid Business Reason no longer exists, but in no event for more than forty-five (45) days after the date the Board determines a Valid Business Reason exists and (y) in case a registration statement has been filed relating to a Demand Registration Request, if the Valid Business Reason has not resulted in whole or part from actions taken or omitted to be taken by the Company, the Company may, to the extent determined in the good faith judgment of the Board to be reasonably necessary to avoid interference with any of the transactions described above, suspend use of or, if required by the SEC, cause such registration statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such registration statement until five (5) Business Days after such Valid Business Reason no longer exists, but in no event for more than forty-five (45) days after the date the Board determines a Valid Business Reason exists (such period of postponement or withdrawal under this clause (iv),

 

8

 

the “Postponement Period”).  The Company shall give written notice to the Initiating Holders and any other Holders that have requested registration pursuant to Section 2.2 of its determination to postpone or suspend use of or withdraw a registration statement and of the fact that the Valid Business Reason for such postponement or suspension or withdrawal no longer exists, in each case, promptly after the occurrence thereof; provided, however, the Company shall not be permitted to postpone or suspend use of or withdraw a registration statement after the expiration of any Postponement Period until twelve (12) months after the expiration of such Postponement Period.

 

If the Company shall give any notice of postponement or suspension or withdrawal of any registration statement pursuant to clause (iv) above, the Company shall not, during the Postponement Period, register any Common Stock, other than pursuant to a registration statement on Form S-4 or S-8 (or an equivalent registration form then in effect).  Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company that the Company has determined to suspend use of, withdraw, terminate or postpone amending or supplementing any registration statement pursuant to clause (iv) above, such Holder will discontinue its disposition of Registrable Securities pursuant to such registration statement.  If the Company shall have suspended use of, withdrawn or terminated a registration statement filed under Section 2.1(a)(i) (whether pursuant to clause (iv) above or as a result of any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court), the Company shall not be considered to have effected a Demand Registration for the purposes of this Agreement until the Company shall have permitted use of such suspended registration statement or filed a new registration statement covering the Registrable Securities covered by the withdrawn or terminated registration statement and such registration statement shall have been declared effective and shall not have been withdrawn.  If the Company shall give any notice of suspension, withdrawal or postponement of a registration statement, the Company shall, not later than five (5) Business Days after the Valid Business Reason that caused such suspension, withdrawal or postponement no longer exists (but in no event later than forty-five (45) days after the date of the suspension, postponement or withdrawal), as applicable, permit use of such suspended registration statement or use its reasonable best efforts to effect the registration under the Securities Act of the Registrable Securities covered by the withdrawn or postponed registration statement in accordance with this Section 2.1 (unless the Initiating Holders shall have withdrawn such request, in which case the Company shall not be considered to have effected a Demand Registration for the purposes of this Agreement and such request shall not count as a Demand Registration Request under this Agreement), and following such permission or such effectiveness such registration shall no longer be deemed to be suspended, withdrawn or postponed pursuant to clause (iv) of Section 2.1(b) above.

 

(c)                                  In connection with any Demand Registration, the majority of the Initiating Holders participating in such Demand Registration shall have the right to designate the lead managing underwriter (any lead managing underwriter for the purposes of this Agreement, the “Manager”) in connection with any underwritten offering pursuant to such registration and each other managing underwriter for any such underwritten offering; provided that in each case, each such underwriter is reasonably satisfactory to the Company, which approval shall not be unreasonably withheld or delayed.

 

9

 

(d)                                 No Demand Registration shall be deemed to have occurred for purposes of Section 2.1(a) (i) if the registration statement relating thereto (x) does not become effective, (y) is not maintained effective for a period of at least one hundred eighty (180) days after the effective date thereof or such shorter period during which all Registrable Securities included in such Registration Statement have actually been sold (provided, however, that such period shall be extended for a period of time equal to the period the Holder of Registrable Securities refrains from selling any securities included in such Registration Statement at the request of the Company or an underwriter of the Company), or (z) is subject to a stop order, injunction, or similar order or requirement of the SEC during such period, (ii) with respect to one Demand Registration for each Initiating Holder, if any of the Registrable Securities requested by such Initiating Holder to be included in such Demand Registration are not so included pursuant to Section 2.3 (even where some or most of such Holder’s Registrable Securities are included in such Demand Registration), (iii) if the method of disposition is a firm commitment underwritten public offering and any of the applicable Registrable Securities have not been sold pursuant thereto or (iv) if the conditions to closing specified in any underwriting agreement, purchase agreement or similar agreement entered into in connection with the registration relating to such request are not satisfied (other than as a result of a default or breach thereunder by such Initiating Holder(s) or its Affiliates) or are otherwise waived by such Initiating Holder(s).

 

(e)                                  In the event that the Company files a shelf registration statement under Rule 415 of the Securities Act pursuant to a Demand Registration Request and such registration becomes effective (such registration statement, a “Shelf Registration Statement”), the Initiating Holders with respect to such Demand Registration Request shall have the right at any time and from time to time to elect to sell pursuant to an underwritten offering Registrable Securities available for sale pursuant to such registration statement.  The Initiating Holders shall make such election by delivering to the Company a written request (a “Shelf Underwriting Request”) for such underwritten offering specifying the number of Registrable Securities that the Initiating Holders desire to sell pursuant to such underwritten offering (the “Shelf Underwriting”).  As promptly as practicable, but no later than two (2) Business Days after receipt of a Shelf Underwriting Request, the Company shall give written notice (the “Shelf Underwriting Notice”) of such Shelf Underwriting Request to the Holders of record of other Registrable Securities registered on such Shelf Registration Statement (“Shelf Registrable Securities”).  The Company, subject to Sections 2.3 and 2.6, shall include in such Shelf Underwriting (x) the Registrable Securities of the Initiating Holders and (y) the Shelf Registrable Securities of any other Holder of Shelf Registrable Securities which shall have made a written request to the Company for inclusion in such Shelf Underwriting (which request shall specify the maximum number of Shelf Registrable Securities intended to be disposed of by such Holder) within five (5) days after the receipt of the Shelf Underwriting Notice.  The Company shall, as expeditiously as possible (and in any event within twenty (20) days after the receipt of a Shelf Underwriting Request), but subject to Section 2.1(b), use its reasonable best efforts to facilitate such Shelf Underwriting.  Notwithstanding the foregoing, if an Investor Holder wishes to engage in an underwritten block trade or similar transaction or other transaction with a 2-day or less marketing period (collectively, “Underwritten Block Trade”) off of a Shelf Registration Statement (either through filing an automatic shelf registration statement or through a take-down from an already existing Shelf Registration Statement), then notwithstanding the foregoing time periods, such Investor Holder only needs to notify the Company of the Underwritten Block Trade on the day such offering is to commence and the Company shall notify other Investor Holders and, during the

 

10

 

Restricted Period, the Additional Investors on the same day and such other Investor Holders  and, during the Restricted Period, the Additional Investors must elect whether or not to participate on the day such offering is to commence, and the Company shall as expeditiously as possible, but subject to Section 2.1(b),  use its reasonable best efforts to facilitate such Shelf Underwriting (which may close as early as three (3) Business Days after the date it commences); provided, however, that the Investor Holder requesting such Underwritten Block Trade shall use commercially reasonable efforts to work with the Company and the underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Underwritten Block Trade.  In the event an Investor Holder requests such an Underwritten Block Trade, notwithstanding anything to the contrary in this Section 2.1 or in Section 2.2, (1) the Additional Investors shall have no right to notice of or to participate in such Underwritten Block Trade following the Restricted Period and (2) any other Holder who does not constitute an Investor Holder shall have no right to notice of or to participate in such Underwritten Block Trade at any time.  The Company shall, at the request of any Initiating Holder, file any prospectus supplement or, if the applicable Shelf Registration Statement is an automatic shelf registration statement, any post-effective amendments and otherwise take any action necessary to include therein all disclosure and language deemed necessary or advisable by the Initiating Holders or any other Holder of Shelf Registrable Securities to effect such Shelf Underwriting.  Once a Shelf Registration Statement has been declared effective, the Initiating Holders may request, and the Company shall be required to facilitate, subject to Section 2.1(b), an unlimited number of Shelf Underwritings with respect to such Shelf Registration Statement.  Notwithstanding anything to the contrary in this Section 2.1(e), each Shelf Underwriting must include, in the aggregate, shares of Common Stock having an aggregate market value of at least the lesser of (a) the Minimum Threshold (based on the Common Stock included in such Shelf Underwriting by all Holders participating in such Shelf Underwriting) and (b) the Initiating Holder’s remaining shares of Common Stock

 

(f)                                   Any Initiating Holder may revoke a Demand Registration Request delivered by such Initiating Holder at any time prior to the effectiveness of such Demand Registration and such Demand Registration shall have no further force or effect and such request shall not count as a Demand Registration Request under this Agreement.

 

2.2.                            Piggyback Registrations.

 

(a)                                 If the Company proposes or is required (pursuant to Section 2.1 or otherwise) to register any of its equity securities for its own account or for the account of any other shareholder under the Securities Act (other than pursuant to registrations on Form S-4 or Form S-8 or any similar successor forms thereto), the Company shall give written notice (the “Piggyback Notice”) of its intention to do so (1) to each of the Holders of record of Registrable Securities (other than individuals), at least five (5) Business Days prior to the filing of any registration statement under the Securities Act and (2) to each Holder of Registrable Securities that is an individual, no more than five (5) Business Days after the filing of the registration statement under the Securities Act (or, in the case of an automatic shelf registration statement, at least five (5) Business Days prior to the filing of such registration statement).  Notwithstanding the foregoing, the Company may delay any Piggyback Notice until after filing a registration statement, so long as all recipients of such notice have the same amount of time to determine whether to participate in an offering as they would have had if such notice had not been so

 

11

 

delayed.  Upon the written request of any such Holder, made within five (5) days following the receipt of any such Piggyback Notice (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder and the intended method of distribution thereof), the Company shall, subject to Sections 2.2(c), 2.2(f), 2.3 and 2.6 hereof, use its reasonable best efforts to cause all such Registrable Securities, the Holders of which have so requested the registration thereof, to be registered under the Securities Act with the securities which the Company at the time proposes to register to permit the sale or other disposition by the Holders (in accordance with the intended method of distribution thereof) of the Registrable Securities to be so registered, including, if necessary, by filing with the SEC a post-effective amendment or a supplement to the registration statement filed by the Company or the prospectus related thereto.  There is no limitation on the number of such piggyback registrations pursuant to the preceding sentence which the Company is obligated to effect.  No registration of Registrable Securities effected under this Section 2.2(a) shall relieve the Company of its obligations to effect Demand Registrations under Section 2.1 hereof.   Notwithstanding the foregoing, if an Investor Holder wishes to engage in an Underwritten Block Trade off of a Shelf Registration Statement (either through filing an automatic shelf registration statement or through a take-down from an already existing Shelf Registration Statement), then notwithstanding the foregoing time periods, the Investor Holder only needs to notify the Company of the Underwritten Block Trade on the day such offering is to commence and the Company shall notify other Investor Holders and, during the Restricted Period, the Additional Investors on the same day and such other Investor Holders and, during the Restricted Period, the Additional Investors must elect whether or not to participate on the day such offering is to commence, and the Company shall as expeditiously as possible use its reasonable best efforts to facilitate such Shelf Underwriting (which may close as early as three (3) Business Days after the date it commences); provided, however, that the Investor Holder requesting such Underwritten Block Trade shall use commercially reasonable efforts to work with the Company and the underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Underwritten Block Trade.  In the event an Investor Holder requests such an Underwritten Block Trade, notwithstanding anything to the contrary in Section 2.1 or in this Section 2.2, (1) the Additional Investors shall have no right to notice of or to participate in such Underwritten Block Trade following the Restricted Period and (2) any other Holder who does not constitute an Investor Holder shall have no right to notice of or to participate in such Underwritten Block Trade at any time.

 

(b)                                 The Company, subject to Sections 2.3 and 2.6, may elect to include in any registration statement and offering pursuant to demand registration rights by any Person or otherwise, (i) authorized but unissued shares of Common Stock or shares of Common Stock held by the Company as treasury shares and (ii) any other shares of Common Stock which are requested to be included in such registration pursuant to the exercise of piggyback registration rights granted by the Company after the date hereof and which are not inconsistent with the rights granted in, or otherwise conflict with the terms of, this Agreement (“Additional Piggyback Rights”); provided, however, that, with respect to any underwritten offering, including a block trade, such inclusion shall be permitted only to the extent that it is pursuant to, and subject to, the terms of the underwriting agreement or arrangements, if any, entered into by the Initiating Holders or the Majority Participating Holders in such underwritten offering.

 

12

 

(c)                                  Other than in connection with a Demand Registration, if, at any time after giving a Piggyback Notice and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such equity securities, the Company may, at its election, give written notice of such determination to all institutional Holders of record of Registrable Securities and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such abandoned registration, without prejudice, however, to the rights of Holders under Section 2.1, and (ii) in the case of a determination to delay such registration of its equity securities, shall be permitted to delay the registration of such Registrable Securities for the same period as the delay in registering such other equity securities.

 

(d)                                 Any Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section 2.2 by giving written notice to the Company of its request to withdraw; provided, however, that such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration or as otherwise required by the underwriters.

 

(e)                                  Notwithstanding anything contained herein to the contrary, the Company shall, at the request of any Holder (including to effect a Partner Distribution), file any prospectus supplement or post-effective amendments, or include in the initial registration statement any disclosure or language, or include in any prospectus supplement or post-effective amendment any disclosure or language, and otherwise take any action, deemed necessary or advisable by such Holder (including to effect such Partner Distribution).

 

(f)                                   Notwithstanding anything contained herein to the contrary, the piggyback registration rights set forth in Section 2.2(a) shall not apply to any Holder in connection with the IPO without the prior written consent of AEA; provided, however, that if any AEA Investor participates in the IPO, each Additional Investor shall be entitled to participate in such IPO on a pro rata basis in accordance with the provisions of this Section 2.2, subject to Sections 2.3 and 2.6 hereof.

 

2.3.                            Allocation of Securities Included in Registration Statement.

 

(a)                                 If any requested registration made pursuant to Section 2.1 (including a Shelf Underwriting) involves an underwritten offering and the Manager of such offering shall advise the Company that, in its view, the number of securities requested to be included in such underwritten offering by the Holders of Registrable Securities, the Company or any other Persons exercising Additional Piggyback Rights exceeds the largest number (the “Section 2.3(a) Sale Number”) that can be sold in an orderly manner in such underwritten offering within a price range acceptable to the Initiating Holders and the Majority Participating Holders, the Company shall use its reasonable best efforts to include in such underwritten offering:

 

(i)                                     first, all Registrable Securities requested to be included in such underwritten offering by the Holders thereof (including pursuant to the exercise of piggyback rights pursuant to Section 2.2); provided, however, that if the number of such Registrable Securities exceeds the Section 2.3(a) Sale Number, the number of such Registrable Securities

 

13

 

(not to exceed the Section 2.3(a) Sale Number) to be included in such underwritten offering shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such underwritten offering (including pursuant to the exercise of piggyback rights pursuant to Section 2.2), based on the number of Registrable Securities then owned by each such Holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all Holders requesting inclusion;

 

(ii)                                  second, to the extent that the number of Registrable Securities to be included pursuant to clause (i) of this Section 2.3(a) is less than the Section 2.3(a) Sale Number, any securities that the Company proposes to register, up to the Section 2.3(a) Sale Number; and

 

(iii)                               third, to the extent that the number of Registrable Securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(a) is less than the Section 2.3(a) Sale Number, the remaining Registrable Securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Persons requesting that securities be included in such underwritten offering pursuant to the exercise of Additional Piggyback Rights (“Piggyback Shares”), based on the number of Piggyback Shares then owned by each Person requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all Persons requesting inclusion, up to the Section 2.3(a) Sale Number.

 

Notwithstanding anything in this Section 2.3(a) to the contrary, no employee stockholder of the Company will be entitled to include Registrable Securities in an underwritten offering requested by the Initiating Holders pursuant to Section 2.1 to the extent that the Manager of such underwritten offering shall determine in good faith that the participation of such employee stockholder would adversely affect the marketability of the securities being sold by the Initiating Holders in such underwritten offering.

 

(b)                                 If any registration or offering made pursuant to Section 2.2 involves an underwritten primary offering on behalf of the Company after the date hereof and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such underwritten offering by the Holders of Registrable Securities, the Company or any other Persons exercising Additional Piggyback Rights exceeds the largest number (the “Section 2.3(b) Sale Number”) that can be sold in an orderly manner in such underwritten offering within a price range acceptable to the Company, the Company shall include in such underwritten offering:

 

(i)                                     first, all equity securities that the Company proposes to register for its own account;

 

(ii)                                  second, to the extent that the number of Registrable Securities to be included pursuant to clause (i) of this Section 2.3(b) is less than the Section 2.3(b) Sale Number, the remaining Registrable Securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Holders requesting that Registrable Securities be included in such underwritten offering pursuant to the exercise of piggyback rights pursuant to Section 2.2(a), based on the number of Registrable Securities then owned by each such Holder requesting inclusion in relation to the aggregate number of Registrable Securities owned by all Holders requesting inclusion, up to the Section 2.3(b) Sale Number; and

 

14

 

(iii)                               third, to the extent that the number of Registrable Securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(b) is less than the Section 2.3(b) Sale Number, the remaining Registrable Securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Persons requesting that securities be included in such underwritten offering pursuant to the exercise of Additional Piggyback Rights, based on the number of Piggyback Shares then owned by each Person requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all Persons requesting inclusion, up to the Section 2.3(b) Sale Number.

 

(c)                                  If any registration pursuant to Section 2.2 involves an underwritten offering that was initially requested by any Person(s) (other than a Holder) to whom the Company has granted registration rights which are not inconsistent with the rights granted in, and do not otherwise conflict with the terms of, this Agreement and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such underwritten offering exceeds the number (the “Section 2.3(c) Sale Number”) that can be sold in an orderly manner in such underwritten offering within a price range acceptable to the Company, the Company shall include in such underwritten offering:

 

(i)                                     first, the shares requested to be included in such underwritten offering shall be allocated on a pro rata basis among such Person(s) requesting the registration and all Holders requesting that Registrable Securities be included in such underwritten offering pursuant to the exercise of piggyback rights pursuant to Section 2.2(a), based on the aggregate number of securities or Registrable Securities, as applicable, then owned by each of the foregoing requesting inclusion in relation to the aggregate number of securities or Registrable Securities, as applicable, owned by all such Holders and Persons requesting inclusion, up to the Section 2.3(c) Sale Number;

 

(ii)                                  second, to the extent that the number of Registrable Securities to be included pursuant to clause (i) of this Section 2.3(c) is less than the Section 2.3(c) Sale Number, the remaining Registrable Securities to be included in such underwritten offering shall be allocated on a pro rata basis among all Persons requesting that securities be included in such underwritten offering pursuant to the exercise of Additional Piggyback Rights, based on the number of Piggyback Shares then owned by each Person requesting inclusion in relation to the aggregate number of Piggyback Shares owned by all Persons requesting inclusion, up to the Section 2.3(c) Sale Number; and

 

(iii)                               third, to the extent that the number of Registrable Securities to be included pursuant to clauses (i) and (ii) of this Section 2.3(c) is less than the Section 2.3(c) Sale Number, the remaining Registrable Securities to be included in such underwritten offering shall be allocated to shares the Company proposes to register for its own account, up to the Section 2.3(c) Sale Number.

 

(d)                                 If, as a result of the proration provisions set forth in clauses (a), (b) or (c) of this Section 2.3, any Holder shall not be entitled to include all Registrable Securities in an underwritten offering that such Holder has requested be included, such Holder may elect to withdraw such Holder’s request to include Registrable Securities in the registration to which such underwritten offering relates or may reduce the number requested to be included; provided,

 

15

 

however, that (x) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (y) such withdrawal or reduction shall be irrevocable and, after making such withdrawal or reduction, such Holder shall no longer have any right to include Registrable Securities in the registration as to which such withdrawal or reduction was made to the extent of the Registrable Securities so withdrawn or reduced.

 

2.4.                            Registration Procedures.  If and whenever the Company is required by the provisions of this Agreement to effect or cause the registration of and/or participate in any offering or sale of any Registrable Securities under the Securities Act as provided in this Agreement (or use reasonable best efforts to accomplish the same), the Company shall, as expeditiously as possible:

 

(a)                                 prepare and file all required filings with the SEC and FINRA, including preparing and filing with the SEC a registration statement on an appropriate registration form of the SEC for the disposition of such Registrable Securities in accordance with the intended method of disposition thereof (including, without limitation, a Partner Distribution), which registration form (i) shall be selected by the Company (except as provided for in a Demand Registration Request) and (ii) shall, in the case of a shelf registration, be available for the sale of the Registrable Securities by the selling Holders thereof and such registration statement shall comply as to form in all material respects with the requirements of the applicable registration form and include all financial statements required by the SEC to be filed therewith, and the Company shall use its reasonable best efforts to cause such registration statement to become effective and remain continuously effective for such period as any Participating Holder pursuant to such registration statement shall request (provided, however, that as far in advance as reasonably practicable before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or state “blue sky” laws of any jurisdiction, or any free writing prospectus related thereto, the Company will furnish to one counsel for the Holders participating in the planned offering (jointly selected by the Initiating Holder and the Majority Participating Holders) and to one counsel for the Manager, if any, copies of reasonably complete drafts of all such documents proposed to be filed (including all exhibits thereto and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC), which documents will be subject to the reasonable review and reasonable comment of such counsel (including any objections to any information pertaining to any Participating Holder and its plan of distribution and otherwise to the extent necessary, if at all, to complete the filing or maintain the effectiveness thereof), and the Company shall make the changes reasonably requested by such counsel and shall not file any registration statement or amendment thereto, any prospectus or supplement thereto or any free writing prospectus related thereto to which the Initiating Holders, the Majority Participating Holders or the underwriters, if any, shall reasonably object); provided, however, that, notwithstanding the foregoing, in no event shall the Company be required to file any document with the SEC which in the view of the Company or its counsel contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make any statement therein not misleading;

 

(b)                                 (i) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith and such free writing

 

16

 

prospectuses and Exchange Act reports as may be necessary to keep such registration statement continuously effective for such period as any Participating Holder pursuant to such registration statement shall request and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement, and any prospectus so supplemented to be filed pursuant to Rule 424 under the Securities Act, in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement and (ii) provide notice to such sellers of Registrable Securities and the Manager, if any, of the Company’s reasonable determination that a post-effective amendment to a registration statement would be appropriate;

 

(c)                                  furnish, without charge, to each Participating Holder and each underwriter, if any, of the securities covered by such registration statement such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, each free writing prospectus utilized in connection therewith, in each case, in all material respects in conformity with the requirements of the Securities Act, and other documents, as such seller and underwriter may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable laws of each such registration statement (or amendment or post-effective amendment thereto) and each such prospectus (or preliminary prospectus or supplement thereto) or free writing prospectus by each such Participating Holder and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);

 

(d)                                 use its reasonable best efforts to register or qualify the Registrable Securities covered by such registration statement under such other securities or state “blue sky” laws of such jurisdictions as any sellers of Registrable Securities or any managing underwriter, if any, shall reasonably request in writing, and do any and all other acts and things which may be reasonably necessary or advisable to enable such sellers or underwriter, if any, to consummate the disposition of the Registrable Securities in such jurisdictions in accordance with the intended methods of disposition (including keeping such registration or qualification in effect for so long as such registration statement remains in effect), except that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (d), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

 

(e)                                  promptly notify each institutional Participating Holder and each managing underwriter, if any: (i) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto, any post-effective amendment to the registration statement or any free writing prospectus has been filed with the SEC and, with respect to the registration statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or state securities authority for amendments or supplements to the registration statement or the prospectus related thereto or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose; (iv) of the receipt

 

17

 

by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or state “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose; (v) of the existence of any fact of which the Company becomes aware which results in the registration statement or any amendment thereto, the prospectus related thereto or any supplement thereto, any document incorporated therein by reference, any free writing prospectus or the information conveyed to any purchaser at the time of sale to such purchaser containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading (which notice shall notify the Participating Holders only of the occurrence of such an event and shall provide no additional information regarding such event to the extent such information would constitute material non-public information); and (vi) if at any time the representations and warranties contemplated by any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct; and, if the notification relates to an event described in clause (v), unless the Company has declared that a Postponement Period exists, the Company shall promptly prepare and furnish to each such seller and each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading;

 

(f)                                   comply (and continue to comply) with all applicable rules and regulations of the SEC (including, without limitation, maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) in accordance with the Exchange Act), and make generally available to its security holders, as soon as reasonably practicable after the effective date of the registration statement (and in any event within forty-five (45) days, or ninety (90) days if it is a fiscal year, after the end of such twelve month period described hereafter), an earnings statement (which need not be audited) covering the period of at least twelve (12) consecutive months beginning with the first day of the Company’s first calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

 

(g)                                  (i) (A) cause all such Registrable Securities covered by such registration statement to be listed on the principal securities exchange on which similar securities issued by the Company are then listed (if any), if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (B) if no similar securities are then so listed, to either cause all such Registrable Securities to be listed on a national securities exchange or to secure designation of all such Registrable Securities as a Nasdaq National Market “national market system security” within the meaning of Rule 11Aa2-1 of the Exchange Act or, failing that, secure Nasdaq National Market authorization for such shares and, without limiting the generality of the foregoing, take all actions that may be required by the Company as the issuer of such Registrable Securities in order to facilitate the managing underwriter’s arranging for the registration of at least two market makers as such with respect to such shares with FINRA, and (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;

 

18

 

(h)                                 cause its senior management, officers and employees to participate in, and to otherwise facilitate and cooperate with the preparation of the registration statement and prospectus and any amendments or supplements thereto (including participating in meetings, drafting sessions, due diligence sessions and rating agency presentations) taking into account the Company’s reasonable business needs;

 

(i)                                     provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities covered by such registration statement not later than the effective date of such registration statement and, in the case of any secondary equity offering, provide and enter into any reasonable agreements with a custodian for the Registrable Securities;

 

(j)                                    enter into such customary agreements (including, if applicable, an underwriting agreement) and take such other actions as the Initiating Holder or the Majority Participating Holders or the underwriters shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (it being understood that the Holders of the Registrable Securities which are to be distributed by any underwriters shall be parties to any such underwriting agreement and may, at their option, require that the Company make to and for the benefit of such Holders the representations, warranties and covenants of the Company which are being made to and for the benefit of such underwriters);

 

(k)                                 use its reasonable best efforts (i) to obtain opinions from the Company’s counsel, including without limitation local and/or regulatory counsel, and a “cold comfort” letter and updates thereof from the independent public accountants who have certified the financial statements of the Company (and/or any other financial statements) included or incorporated by reference in such registration statement, in each case, in customary form and covering such matters as are customarily covered by such opinions and “cold comfort” letters (including, in the case of such “cold comfort” letter, events subsequent to the date of such financial statements) delivered to underwriters in underwritten public offerings, which opinions and letters shall be dated the dates such opinions and “cold comfort” letters are customarily dated and otherwise reasonably satisfactory to the underwriters, if any, and to the Majority Participating Holders, and (ii) furnish to each Participating Holder upon its request and to each underwriter, if any, a copy of such opinions and letters addressed to such underwriter and each Participating Holder to the extent permitted by the Company’s independent public accountants;

 

(l)                                     deliver promptly to counsel for the Majority Participating Holders and to each managing underwriter, if any, copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the registration statement, and, upon receipt of such confidentiality agreements as the Company may reasonably request, make reasonably available for inspection by counsel for the Majority Participating Holders, by counsel for any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by the Majority Participating Holders or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such counsel for the Majority Participating Holders, counsel for an underwriter, attorney, accountant or agent in connection with such registration statement;

 

19

 

(m)                             use its reasonable best efforts to prevent the issuance or obtain the withdrawal of any order suspending the effectiveness of the registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, in each case, as promptly as reasonably practicable;

 

(n)                                 provide a CUSIP number for all Registrable Securities, not later than the effective date of the registration statement;

 

(o)                                 use its reasonable best efforts to make available its senior management, employees and personnel for participation in “road shows” and other marketing efforts and otherwise provide reasonable assistance to the underwriters (taking into account the Company’s reasonable business needs and the requirements of the marketing process) in the marketing of Registrable Securities in any underwritten offering;

 

(p)                                 promptly prior to the filing of any document which is to be incorporated by reference into the registration statement or the prospectus (after the initial filing of such registration statement), and prior to the filing or use of any free writing prospectus, provide copies of such document to counsel for the Majority Participating Holders and to each managing underwriter, if any, and make the Company’s representatives reasonably available for discussion of such document and make such changes in such document concerning the Participating Holders prior to the filing thereof as counsel for the Majority Participating Holders or underwriters may reasonably request (provided, however, that, notwithstanding the foregoing, in no event shall the Company be required to file any document with the SEC which in the view of the Company or its counsel contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make any statement therein not misleading);

 

(q)                                 furnish to counsel for each Participating Holder upon its request and to each managing underwriter, without charge, upon request, at least one conformed copy of the registration statement and any post-effective amendments or supplements thereto, including financial statements and schedules, all documents incorporated therein by reference, the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus), any other prospectus and prospectus supplement filed under Rule 424 under the Securities Act and all exhibits (including those incorporated by reference) and any free writing prospectus utilized in connection therewith;

 

(r)                                    cooperate with the Participating Holders and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement at least two (2) Business Days prior to any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in accordance with the instructions of the Participating Holders at least two (2) Business Days prior to any sale of Registrable Securities and instruct any transfer agent and registrar of Registrable Securities to release any stop transfer orders in respect thereof (and, in the case of Registrable Securities registered on a Shelf Registration Statement, at the request of any Holder, prepare and deliver certificates representing such Registrable Securities not bearing any restrictive legends and deliver or cause to be

 

20

 

delivered an opinion or instructions to the transfer agent in order to allow such Registrable Securities to be sold from time to time);

 

(s)                                   include in any prospectus or prospectus supplement if requested by any managing underwriter 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;

 

(t)                                    take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Company, the Company will use its reasonable best efforts to make any such prohibition inapplicable;

 

(u)                                 use its reasonable best efforts to cause the Registrable Securities covered by the applicable registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Participating Holders or the underwriters, if any, to consummate the disposition of such Registrable Securities in accordance with the intended methods thereof;

 

(v)                                 take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities;

 

(w)                               take all reasonable action to ensure that any free writing prospectus utilized in connection with any registration covered by Section 2.1 or 2.2 complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby 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 the light of the circumstances under which they were made, not misleading;

 

(x)                                 in connection with any underwritten offering, if at any time the information conveyed to a purchaser at the time of sale includes any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, promptly file with the SEC such amendments or supplements to such information as may be necessary so that the statements as so amended or supplemented will not, in the light of the circumstances, be misleading;

 

(y)                                 to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter; and

 

(z)                                  use reasonable best efforts to cooperate with the managing underwriters, Participating Holders, any indemnitee of the Company and their respective counsel in connection with the preparation and filing of any applications, notices, registrations and responses to requests for additional information with FINRA, the New York Stock Exchange, Nasdaq, or any other national securities exchange on which the shares of Common Stock are or are to be listed.

 

To the extent the Company is a WKSI at the time any Demand Registration Request is submitted to the Company, and such Demand Registration Request requests that the

 

21

 

Company file an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “automatic shelf registration statement”) on Form S-3, the Company shall file an automatic shelf registration statement which covers those Registrable Securities which are requested to be registered.  The Company shall use its reasonable 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.  If the Company does not pay the filing fee covering the Registrable Securities at the time the automatic shelf registration statement is filed, the Company agrees to pay such fee at such time or times as the Registrable Securities are to be sold in compliance with the SEC rules.  If the automatic shelf registration statement has been outstanding for at least three (3) years, at or prior to the end of the third year the Company shall upon request refile a new automatic shelf registration statement covering the Registrable Securities.  If at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use its reasonable 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.

 

If the Company files any shelf registration statement for the benefit of the holders of any of its securities other than the Holders, and the Holders do not request that their Registrable Securities be included in such Shelf Registration Statement, the Company agrees that it shall include in such registration statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders 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.

 

The Company may require that each Participating Holder as to which any registration is being effected (i) furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request, provided that such information is necessary for the Company to consummate such registration and shall be used only in connection with such registration and (ii) provide any underwriters participating in the distribution of such securities such information as the underwriters may request and execute and deliver any agreements, certificates or other documents as the underwriters may request.

 

Each Holder of Registrable Securities agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue such Holder’s disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.4 and, if so directed by the Company, will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice.  In the event the Company shall give any such notice, the applicable period mentioned in paragraph (b) of this Section 2.4 shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each Participating Holder covered by such registration statement shall have received

 

22

 

the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.4.

 

The Company agrees not to file or make any amendment to any registration statement with respect to any Registrable Securities, or any amendment of or supplement to the prospectus, or any free writing prospectus, that refers to any Investor Holder covered thereby by name, or otherwise identifies such Investor Holder, without the consent of such Investor Holder, such consent not to be unreasonably withheld or delayed, unless such disclosure is required by law, in which case the Company shall provide written notice to such Investor Holders no less than five (5) Business Days prior to the filing.  If any such registration statement or comparable statement under state “blue sky” laws refers to any Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall have the right to require the insertion therein of language, in form and substance reasonably satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company.

 

To the extent that any of the AEA Investors or the Additional Investors is or may be deemed to be an “underwriter” of Registrable Securities pursuant to any SEC comments or policies, the Company agrees that (1) the indemnification and contribution provisions contained in Section 2.9 shall be applicable to the benefit of the AEA Investors and the Additional Investors, as applicable, in their role as an underwriter or deemed underwriter in addition to their capacity as a Holder and (2) the AEA Investors and any Additional Investors, as applicable, shall be entitled to conduct the due diligence which they would normally conduct in connection with an offering of securities registered under the Securities Act, including without limitation receipt of customary opinions and comfort letters addressed to the AEA Investors and the Additional Investors, as applicable.

 

2.5.                            Registration Expenses.

 

(a)                                 The Company shall pay all Expenses with respect to any registration or offering of Registrable Securities pursuant to Section 2, whether or not a registration statement becomes effective or the offering is consummated.

 

(b)                                 Notwithstanding the foregoing, (x) the provisions of this Section 2.5 shall be deemed amended to the extent necessary to cause these expense provisions to comply with state “blue sky” laws of each state in which the offering is made and (y) in connection with any underwritten offering hereunder, each Participating Holder shall pay all underwriting discounts and commissions and any transfer taxes, if any, attributable to the sale of such Registrable Securities, pro rata with respect to payments of discounts and commissions in accordance with the number of shares sold in the offering by such Holder.

 

2.6.                            Certain Limitations on Registration Rights.  In the case of any registration under Section 2.1 involving an underwritten offering, or, in the case of a registration under Section 2.2, if the Company has determined to enter into an underwriting agreement in connection therewith, all securities to be included in such underwritten offering shall be subject to such underwriting

 

23

 

agreement and no Person may participate in such underwritten offering unless such Person (i) agrees to sell such Person’s securities on the basis provided therein and completes and executes all reasonable questionnaires, and other documents (including custody agreements and powers of attorney) which must be executed in connection therewith; provided, however, that all such documents shall be consistent with the provisions hereof and (ii) provides such other information to the Company or the underwriter as may be necessary to register such Person’s securities.

 

2.7.                            Limitations on Sale or Distribution of Other Securities.

 

(a)                                 Each Holder agrees (whether or not such Holder can participate in any such offering), (i) to the extent requested by a managing underwriter, if any, of any underwritten public offering pursuant to a registration or offering effected pursuant to Section 2.1 (including any Shelf Underwriting pursuant to Section 2.1(e)), or of the Company’s IPO, not to sell, transfer or otherwise dispose of, including any sale pursuant to Rule 144, any Common Stock or Common Stock Equivalent (other than as part of such underwritten public offering) during the time period reasonably requested by the managing underwriter, not to exceed ninety (90) days from the pricing date of such offering (plus customary lockup extension periods as reasonably determined by the managing underwriter, not to exceed thirty-five (35) days) or such shorter period as the managing underwriter, the Company or any executive officer or director of the Company shall agree to (other than in the case of the IPO, which time period shall be one hundred eighty (180) days from the pricing date of such offering (plus customary lockup extension periods as reasonably determined by the managing underwriter, not to exceed thirty-five (35) days)) (and the Company hereby also so agrees (except that the Company may effect any sale or distribution of any such securities pursuant to a registration on Form S-4 or Form S-8, or any successor or similar form which (x) is then in effect or (y) shall become effective upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent), to use its reasonable best efforts to cause each holder of any equity security or any security convertible into or exchangeable or exercisable for any equity security of the Company purchased from the Company at any time other than in a public offering so to agree), and (ii) to the extent requested by a managing underwriter of any underwritten public offering effected by the Company for its own account (including without limitation any offering in which one or more Holders is selling Common Stock pursuant to the exercise of piggyback rights under Section 2.2 hereof), or of the Company’s IPO, not to sell, transfer or otherwise dispose of, including any sale pursuant to Rule 144, any Common Stock or Common Stock Equivalent (other than as part of such underwritten public offering) during the time period reasonably requested by the managing underwriter, which period shall not exceed ninety (90) days from the pricing date of such offering (plus customary lockup extension periods as reasonably determined by the managing underwriter, not to exceed thirty-five (35) days) or such shorter period as the managing underwriter, the Company or any executive officer or director of the Company shall agree to (other than in the case of the IPO, which time period shall be one hundred eighty days (180) days from the pricing date of such offering (plus customary lockup extension periods as reasonably determined by the managing underwriter, not to exceed thirty-five (35) days)).  Each Holder agrees to execute and deliver customary lock-up agreements for the benefit of the underwriters with such form and substance as the managing underwriter shall reasonably determine provided that (1) the lock-up agreement of each Additional Investor shall be on substantially the same terms as that of each other Additional Investor and (2) any waivers from any obligations in

 

24

 

relation to any lock-up agreement granted to one Additional Investor shall likewise be granted to each other Additional Investor on substantially the same terms.

 

(b)                                 The Company hereby agrees that, in connection with an offering pursuant to Section 2.1 (including any Shelf Underwriting pursuant to Section 2.1(e)) or 2.2, the Company shall not sell, transfer, or otherwise dispose of, any Common Stock or Common Stock Equivalent (other than as part of such underwritten public offering, a registration on Form S-4 or Form S-8 or any successor or similar form which is (x) then in effect or (y) shall become effective upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent), until a period of ninety (90) days (or such shorter period to which the managing underwriter shall agree, but one hundred eighty days (180) days in the case of the IPO) shall have elapsed from the pricing date of such offering (in each case plus customary lockup extension periods as determined by the managing underwriter); and the Company shall (i) so provide in any registration rights agreements hereafter entered into with respect to any of its securities and (ii) use its reasonable best efforts to cause each holder of any equity security or any security convertible into or exchangeable or exercisable for any equity security of the Company purchased from the Company at any time other than in a public offering to so agree.

 

(c)                                  Notwithstanding anything contained in this Agreement to the contrary, each of the Minority Investors agrees not to sell, transfer or otherwise dispose of any Common Stock or Common Stock Equivalent pursuant to Rule 144 or other private placement for a period of two (2) years following the Company’s IPO (the “Restricted Period”) except (i) for the avoidance of doubt, pursuant to a registered offering in accordance with the terms of this Agreement, (ii) if consented to in writing by the Board in its sole discretion, which consent may be provided on an individual basis with respect to any particular Holder or (iii) to a Permitted Transferee. In the event the Restricted Period shall be shortened in respect of any Minority Investor, the Restricted Period for each other Minority Investor shall likewise be shortened.

 

(d)                                 Notwithstanding anything contained in this Agreement to the contrary, each of the Investor Holders agrees not to sell, transfer or otherwise dispose of any Common Stock or Common Stock Equivalent pursuant to Rule 144 or other private placement or in any other transaction not otherwise subject to the terms of this Agreement during the Restricted Period except (i) if AEA grants a waiver to the Restricted Period provided in Section 2.7(c) with respect to the Additional Investors and permits the Additional Investors to participate on a pro rata basis in such sale, transfer, disposition or similar transaction or (ii) to a Permitted Transferee.

 

2.8.                            No Required Sale.  Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement.  A Holder is not required to include any of its Registrable Securities in any registration statement, is not required to sell any of its Registrable Securities which are included in any effective registration statement, and may sell any of its Registrable Securities in any manner in compliance with applicable law (including pursuant to Rule 144) even if such shares are already included on an effective registration statement.

 

25

 

2.9.                            Indemnification.

 

(a)                                 In the event of any registration or offer and sale of any securities of the Company under the Securities Act pursuant to this Section 2, the Company will (without limitation as to time), and hereby agrees to, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Participating Holder, its directors, officers, fiduciaries, employees, stockholders, members or general and limited partners (and the directors, officers, fiduciaries, employees, stockholders, members or general and limited partners thereof), each other Person who participates as a seller (and its directors, officers, fiduciaries, employees, stockholders, members or general and limited partners), underwriter or Qualified Independent Underwriter, if any, in the offering or sale of such securities, each officer, director, employee, stockholder, fiduciary, managing director, agent, affiliate, consultant, representative, successor, assign or partner of such underwriter or Qualified Independent Underwriter, and each other Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such seller or any such underwriter or Qualified Independent Underwriter and each director, officer, employee, stockholder, fiduciary, managing director, agent, affiliate, consultant, representative, successor, assign or partner of such controlling Person, from and against any and all losses, claims, damages or liabilities, joint or several, actions or proceedings (whether commenced or threatened) and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company’s consent, which consent shall not be unreasonably withheld or delayed) to which each such indemnified party may become subject under the Securities Act or otherwise in respect thereof (collectively, “Claims”), insofar as such Claims arise out of, are based upon, relate to or are in connection with (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such securities were registered under the Securities Act or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any untrue statement or alleged untrue statement of a material fact in the information conveyed by the Company or any underwriter to any purchaser at the time of the sale to such purchaser, or the omission or alleged omission to state therein a material fact required to be stated therein, or (iv) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to any action required of or inaction by the Company in connection with any such offering of Registrable Securities, and the Company will reimburse any such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such indemnified party in any such case to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in such registration statement or amendment thereof or supplement thereto or in any such prospectus or any preliminary, final or summary prospectus or free writing prospectus in reliance upon and in strict conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use therein.  Such indemnity and reimbursement of

 

26

 

expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such seller.

 

(b)                                 Each Participating Holder (and, if the Company requires as a condition to including any Registrable Securities in any registration statement filed in accordance with Section 2.1 or 2.2, any underwriter and Qualified Independent Underwriter, if any) shall, severally and not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in paragraph (a) of this Section 2.9) to the extent permitted by law the Company, its officers who signed the applicable registration statement and its directors, each Person controlling the Company within the meaning of the Securities Act and all other prospective sellers and their directors, officers, stockholders, fiduciaries, managing directors, agents, affiliates, consultants, representatives, successors, assigns or general and limited partners and respective controlling Persons with respect to any untrue statement or alleged untrue statement of any material fact in, or omission or alleged omission of any material fact from, such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or any free writing prospectus utilized in connection therewith, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in strict conformity with written information furnished to the Company or its representatives by or on behalf of such Participating Holder or underwriter or Qualified Independent Underwriter, if any, specifically for use therein, and each such Participating Holder, underwriter or Qualified Independent Underwriter, if any, shall reimburse such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the aggregate amount which any such Participating Holder shall be required to pay pursuant to this Section 2.9 (including pursuant to indemnity, contribution or otherwise) shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of the Registrable Securities pursuant to the registration statement giving rise to such Claim; provided, further, that such Participating Holder shall not be liable in any such case to the extent that prior to the filing of any such registration statement or prospectus or amendment thereof or supplement thereto, or any free writing prospectus utilized in connection therewith, such Participating Holder has furnished in writing to the Company information expressly for use in such registration statement or prospectus or any amendment thereof or supplement thereto or free writing prospectus which corrected or made not misleading information previously furnished to the Company.  The Company and each Participating Holder hereby acknowledge and agree that, unless otherwise expressly agreed to in writing by such Participating Holders to the contrary, for all purposes of this Agreement, the only information furnished or to be furnished to the Company for use in any such registration statement, preliminary, final or summary prospectus or amendment or supplement thereto, or any free writing prospectus, are statements specifically relating to (i) the beneficial ownership of shares of Common Stock by such Participating Holder and its Affiliates as disclosed in the section of such document entitled “Selling Stockholders” or “Principal and Selling Stockholders” or other documents thereof and (ii) the name and address of such Participating Holder.  If any additional information about such Holder or the plan of distribution (other than for an underwritten offering) is required by law to be disclosed in any such document, then such Holder shall not unreasonably withhold its agreement referred to in the immediately preceding sentence.  Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any

 

27

 

investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder.

 

(c)                                  Indemnification similar to that specified in the preceding paragraphs (a) and (b) of this Section 2.9 (with appropriate modifications) shall be given by the Company and each Participating Holder with respect to any required registration or other qualification of securities under any applicable securities and state “blue sky” laws.

 

(d)                                 Any Person entitled to indemnification under this Agreement shall notify promptly the indemnifying party in writing of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 2.9, but the failure of any indemnified party to provide such notice shall not relieve the indemnifying party of its obligations under the preceding paragraphs of this Section 2.9, except to the extent the indemnifying party is materially and actually prejudiced thereby and shall not relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than under this Section 2.  In case any action or proceeding is brought against an indemnified party and such indemnified party shall have notified the indemnifying party of the commencement thereof (as required above), the indemnifying party shall be entitled to participate therein and, unless in the reasonable opinion of outside counsel to the indemnified party a conflict of interest between such indemnified and indemnifying parties may exist in respect of such Claim, to assume the defense thereof jointly with any other indemnifying party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party that it so chooses, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the action or proceeding within twenty (20) days after receiving notice from such indemnified party that the indemnified party believes it has failed to do so; or (ii) if such indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there may be one or more legal or equitable defenses available to such indemnified party which are not available to the indemnifying party or which may conflict with or be different from those available to another indemnified party with respect to such Claim; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have made a conclusion described in clause (ii) or (iii) above) and the indemnifying party shall be liable for any expenses therefor.  No indemnifying party shall be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled with such consent or if there be a final judgment for the plaintiff, such indemnifying party agrees to indemnify each indemnified party from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to

 

28

 

such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

(e)                                  If for any reason the foregoing indemnity is unavailable, unenforceable or is insufficient to hold harmless an indemnified party under Sections 2.9(a), (b) or (c), then each applicable indemnifying party shall contribute to the amount paid or payable to such indemnified party as a result of any Claim in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to such Claim.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  If, however, the allocation provided in the second preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the indemnifying party and the indemnified party as well as any other relevant equitable considerations.  The parties hereto agree that it would not be just and equitable if any contribution pursuant to this Section 2.9(e) were to be 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 preceding sentences of this Section 2.9(e).  The amount paid or payable in respect of any Claim shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  Notwithstanding anything in this Section 2.9(e) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to this Section 2.9(e) to contribute any amount greater than the amount of the net proceeds received by such indemnifying party from the sale of Registrable Securities pursuant to the registration statement giving rise to such Claim, less the amount of any indemnification payment made by such indemnifying party pursuant to Sections 2.9(b) and (c).  In addition, no Holder of Registrable Securities or any Affiliate thereof shall be required to pay any amount under this Section 2.9(e) unless such Person or entity would have been required to pay an amount pursuant to Section 2.9(b) if it had been applicable in accordance with its terms.

 

(f)                                   The indemnity and contribution agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Securities by any such party.

 

(g)                                  The indemnification and contribution required by this Section 2.9 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.

 

29

 

2.10.                     Limitations on Registration of Other Securities; Representation.  From and after the date of this Agreement, the Company shall not, without the prior written consent of Holders holding more than 50% of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are (i) more favorable taken as a whole than the registration rights granted to the Holders hereunder unless the Company shall also give such rights to such Holders or (ii) on parity with the registration rights granted to the Holders hereunder; provided, however, the prior written consent of an Investor Holder will be required prior to the Company entering into any such agreement with any such holder or prospective holder of any securities of the Company to the extent such agreement disproportionately adversely affects any such Investor Holder relative to the other Holders of Registrable Securities.

 

2.11.                     No Inconsistent Agreements.  The Company shall not hereafter enter into any agreement with respect to its securities that is inconsistent in any material respects with the rights granted to the Holders in this Agreement.

 

Section 3.                                           Underwritten Offerings.

 

3.1.                            Requested Underwritten Offerings.  If requested by the underwriters for any underwritten offering pursuant to a registration requested under Section 2.1, the Company shall enter into a customary underwriting agreement with the underwriters.  Such underwriting agreement shall (i) be satisfactory in form and substance to the Initiating Holders and the Majority Participating Holders, (ii) contain terms not inconsistent with the provisions of this Agreement and (iii) contain such representations and warranties by, and such other agreements on the part of, the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities and contribution agreements.  Any Participating Holder shall be a party to such underwriting agreement.  Unless otherwise agreed by the respective Participating Holders and the underwriters, each such Participating Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Participating Holder, its ownership of and title to the Registrable Securities, any written information specifically provided by such Participating Holder for inclusion in the registration statement and its intended method of distribution; and any liability of such Participating Holder to any underwriter or other Person under such underwriting agreement for indemnity, contribution or otherwise shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of Registrable Securities pursuant to such registration statement and in no event shall relate to anything other than information about such Holder specifically provided by such Holder for use in the registration statement and prospectus.

 

3.2.                            Piggyback Underwritten Offerings.  In the case of a registration pursuant to Section 2.2, if the Company shall have determined to enter into an underwriting agreement in connection therewith, all of the Participating Holders’ Registrable Securities to be included in such registration shall be subject to such underwriting agreement.  Unless otherwise agreed by the respective Participating Holders and the underwriters, each such Participating Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Participating Holder, its ownership of and title to the Registrable Securities, any written

 

30

 

information specifically provided by such Participating Holder for inclusion in the registration statement and its intended method of distribution; and any liability of such Participating Holder to any underwriter or other Person under such underwriting agreement shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of Registrable Securities pursuant to such registration statement and in no event shall relate to anything other than information about such Holder specifically provided by such Holder for use in the registration statement and prospectus.

 

Section 4.                                           General.

 

4.1.                            Adjustments Affecting Registrable Securities.  The Company agrees that it shall not effect or permit to occur any combination or subdivision of shares of Common Stock which would adversely affect the ability of any Holder of any Registrable Securities to include such Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration.  The Company agrees that it will take all reasonable steps necessary to effect a subdivision of shares of Common Stock if in the reasonable judgment of (a) the Majority Participating Holders or (b) the managing underwriter for the offering in respect of such Demand Registration Request, such subdivision would enhance the marketability of the Registrable Securities.  Subject to the Second A&R Stockholders Agreement (if in effect at the time), each Holder agrees to vote all of its shares of capital stock in a manner, and to take all other actions reasonably necessary, to permit the Company to carry out the intent of the preceding sentence including, without limitation, voting in favor of an amendment to the Company’s organizational documents in order to increase the number of authorized shares of capital stock of the Company.  In any event, the provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Registrable Securities, to any and all shares of capital stock of the Company, any successor or assign of the Company (whether by merger, share exchange, consolidation, sale of assets or otherwise) or any Subsidiary or parent company of the Company which may be issued in respect of, in exchange for or in substitution of, Registrable Securities and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.

 

4.2.                            Rule 144 and Rule 144A.  If the Company shall have filed a registration statement pursuant to the requirements of Section 12 of the Exchange Act or a registration statement pursuant to the requirements of the Securities Act in respect of the Common Stock or Common Stock Equivalents, the Company covenants that (i) so long as it remains subject to the reporting provisions of the Exchange Act, it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1)(i) of Rule 144 under the Securities Act, as such Rule may be amended (“Rule 144”)) or, if the Company is not required to file such reports, it will, upon the request of any Holder, make publicly available other information so long as necessary to permit sales by such Holder under Rule 144, Rule 144A under the Securities Act, as such Rule may be amended (“Rule 144A”), or any similar rules or regulations hereafter adopted by the SEC, and (ii) it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (A) Rule 144, (B) Rule 144A or (C) any similar rule or regulation

 

31

 

hereafter adopted by the SEC.  Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

 

4.3.                            Nominees for Beneficial Owners.  If Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the Holder of such Registrable Securities for purposes of any request or other action by any Holder or Holders of Registrable Securities pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Securities held by any Holder or Holders of Registrable Securities contemplated by this Agreement); provided, however, that the Company shall have received assurances reasonably satisfactory to it of such beneficial ownership.

 

4.4.                            Amendments and Waivers.  Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or any Holder unless (i) such modification, amendment or waiver is approved in writing by the Company and the Holders holding a majority of the Registrable Securities then held by all Holders and (ii) each Additional Investor receives prior written notice prior to the effective date of such modification, amendment or waiver; provided, however, that any amendment, supplement or modification of this Agreement that shall adversely and disproportionately affect the rights, interests, privileges or obligations of any Additional Investor shall require the prior written approval of such Additional Investor.  No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar).  No failure or delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof or of any other or future exercise of any such right, power or privilege.

 

4.5.                            Notices.  All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) if personally delivered, on the date of delivery, (ii) if delivered by express courier service of national standing (with charges prepaid), on the Business Day following the date of delivery to such courier service, (iii) if deposited in the United States mail, first-class postage prepaid, on the fifth (5th) Business Day following the date of such deposit, (iv) if delivered by facsimile transmission, upon confirmation of successful transmission, (x) on the date of such transmission, if such transmission is completed at or prior to 5:00 p.m., local time of the recipient party on a Business Day, on the date of such transmission, and (y) on the next Business Day following the date of transmission, if such transmission is completed after 5:00 p.m., local time of the recipient party, on the date of such transmission or is transmitted on a day that is not a Business Day, or (v) if via e-mail communication, on the date of delivery.  All notices, demands and other communications hereunder shall be delivered as set forth below and to any other recipient at the address indicated on Schedule I hereto and to any other holder of Stock subject to this Agreement at such address as indicated by the Company’s records, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

32

 

if to the Company, to:

 

Evoqua Water Technologies Corp.
 c/o AEA Investors L.P.

666 Fifth Avenue, 36th Floor

New York, NY 10103

Attention:                                         Barbara L. Burns

Fax:                                                                       (212) 702-0518

 

with a copy (which shall not constitute notice) to:

 

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Telephone:                                   (212) 859-8000

Fax:                                                                       (212) 859-4000

Attention:                                         Christopher Ewan, Esq.

 

if to the AEA Investors, to:

 

AEA Investors L.P.

666 Fifth Avenue, 36th Floor

New York, NY 10103

Attention:                                         Barbara L. Burns

Fax:                                                                       (212) 702-0518

Email:             bburns@aeainvestors.com

 

with a copy (which shall not constitute notice) to:

 

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Telephone:                                   (212) 859-8000

Fax:                                                                       (212) 859-4000

Attention:                                         Christopher Ewan, Esq.

Email:                                                            christopher.ewan@friedfrank.com

 

if to the Additional Investors, the Management Investors or the Relationship Investors, to the address set forth opposite the name of such Additional Investor, Management Investor or Relationship Investor on Schedule I or such other address indicated in the records of the Company.

 

4.6.                            Successors and Assigns.  Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors, permitted assigns, heirs and personal representatives of the parties hereto, whether so expressed or not.  This Agreement may not be assigned by the Company without the prior written consent of the AEA Investors.  Each Holder shall have the right to assign all or part

 

33

 

of its or his rights and obligations under this Agreement only in accordance with transfers of Common Stock prior to an IPO and permitted under, and made in compliance with, the Second A&R Stockholders Agreement to Permitted Transferees (as defined in the Second A&R Stockholders Agreement).  Upon any such assignment, such assignee shall have and be able to exercise and enforce all rights of the assigning Holder which are assigned to it and, to the extent such rights are assigned, any reference to the assigning Holder shall be treated as a reference to the assignee.  If any Holder shall acquire additional Registrable Securities, such Registrable Securities shall be subject to all of the terms, and entitled to all the benefits, of this Agreement.  The parties hereto and their respective successors may assign their rights under this Agreement, in whole or in part, to any purchaser of shares of Registrable Securities held by them.

 

4.7.                            Entire Agreement.  This Agreement, the Second A&R Stockholders Agreement and the other documents referred to herein or delivered pursuant hereto which form part hereof constitute the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.

 

4.8.                            Governing Law; Arbitration.

 

(a)                                 This Agreement will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof.

 

(b)                                 Except as otherwise provided in this Agreement, any controversy or dispute arising out of this Agreement, the interpretation of any of the provisions hereof or the action or inaction of any Person hereunder shall be submitted to arbitration in New York, New York, before the American Arbitration Association under the commercial arbitration rules of such Association.  Any award or decision obtained from any such arbitration proceeding shall be final and binding on the parties, and judgment upon any award so obtained may be entered in any court having jurisdiction thereof.  To the fullest extent permitted by law, no action at law or in equity based upon any claim arising out of or related to this Agreement shall be instituted in any court by any party except:  (i) an action to compel arbitration pursuant to this Section 4.8(b), (ii) an action to enforce an award obtained in an arbitration proceeding in accordance with this Section 4.8(b), or (iii) an action for injunctive relief when and if such relief is appropriate under the terms of this Agreement.

 

4.9.                            Interpretation; Construction.

 

(a)                                 The table of contents and headings in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.  Where a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

 

34

 

(b)                                 The parties have participated jointly in negotiating and drafting this Agreement.  In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

4.10.                     Counterparts.  This Agreement may be executed and delivered in any number of separate counterparts (including by facsimile or electronic mail), each of which shall be an original, but all of which together shall constitute one and the same agreement.

 

4.11.                     Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

4.12.                     Remedies.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that each party hereto 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, without the posting of any bond, and, if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.  All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.

 

4.13.                     Further Assurances.  Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

4.14.                     Confidentiality.

 

(a)                                 Each Holder agrees that any non-public information which they may receive relating to the Company and its Subsidiaries (the “Confidential Information”) will be held strictly confidential and will not be disclosed by it to any Person without the express written permission of the Company; provided, however, that the Confidential Information may be disclosed (i) in the event of any compulsory legal process or compliance with any applicable law, subpoena or other legal process or in connection with any filings that the Holder may be required to make with any regulatory authority; provided, however, that in the event of compulsory legal process, unless prohibited by applicable law or that process, each Holder agrees (A) to give the

 

35

 

AEA Investors and the Company prompt notice thereof and to cooperate with the Company and the AEA Investors in securing a protective order in the event of compulsory disclosure and (B) that any disclosure made pursuant to public filings will be subject to the prior reasonable review of the Company and the AEA Investors, (ii) to any foreign or domestic governmental or quasi-governmental regulatory authority, including without limitation, any stock exchange or other self-regulatory organization having jurisdiction over such party, (iii) to each Holder’s or its Affiliate’s, officers, directors, employees, partners, accountants, lawyers and other professional advisors for use relating solely to management of the investment or administrative purposes with respect to such Holder and (iv) to a proposed transferee of securities of the Company held by a Holder; provided, however, that the Holder informs the proposed transferee of the confidential nature of the information and the proposed transferee agrees in writing to comply with the restrictions in this Section 4.14 and delivers a copy of such writing to the Company.

 

(b)                                 bcIMC Private Placement (2013) Investment Corporation and bcIMC (WCBAF) Private Placement (2013) Investment Corporation (collectively, “bcIMC Investor”) hereby represents and warrants that it is subject to the Freedom of Information and Protection of Privacy Act (British Columbia) (the “BC Act”) and that it is contractually obligated to disclose certain information to its investors and prospective investors.  Based solely on the foregoing representations in the immediately preceding sentence, the Company agrees that, notwithstanding anything to the contrary in Section 4.14(a), the bcIMC Investor may disclose to its ultimate equity holders and to any other Person to which it is required to disclose pursuant to the BC Act the following information about the Company: (i) the name and address of the Company and the fact that such bcIMC Investor has made an investment in the Company, (ii) a brief description of the business of the Company, (iii) the amount and currency of bcIMC Investor’s investment in the Company, (iv) the internal rate of return of the bcIMC Investor’s investment in the Company with respect the Company’s performance as a whole as prepared by the bcIMC Investor, (v) the amount of any distributions received by the bcIMC investor in connection with its investment in the Company, and (vi) that AEA is the financial sponsor of the Company; provided that in each case (x) such bcIMC Investor shall clearly indicate that any such disclosure made pursuant to clause (iv) was not prepared, reviewed, or approved by the Company, AEA or any of their respective affiliates and (y) such bcIMC Investor agrees that none of the Company, AEA or any of their respective affiliates shall have any responsibility or liability in connection with any disclosure made pursuant to this Section 4.14(b).

 

4.15.                     IPO.  To the extent that the Board elects to effect an initial public offering of the Company or substantially all of the business of the Company through a Subsidiary or parent company of Evoqua Water Technologies Corp., the provisions of this Agreement shall be appropriately adjusted, and the Holders and the Company shall enter into such further agreements and arrangements as shall be reasonably necessary or appropriate to provide the Holders with substantially the same registration rights as they would have under this Agreement, giving due consideration to the nature of the entity going public and tax and other relevant considerations.

 

4.16.                     MFN.  None of the Company or any of its Subsidiaries has granted any registration rights or shall grant any registration rights to any Additional Investor that has the effect of establishing registration rights or otherwise benefits such Additional Investor (other than as set forth herein) in a manner more favorable in any material respect than the rights and

 

36

 

benefits established in favor of any other Additional Investor pursuant hereto unless, in any such case, each other Additional Investor shall be offered in writing the opportunity to receive all such rights and benefits of such grants reasonably applicable to such other Additional Investor.

 

[Remainder of Page Intentionally Left Blank]

 

37

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

 

 

	
 
    	
THE   COMPANY:
    
	
 
    	
 
    
	
 
    	
EVOQUA   WATER TECHNOLOGIES CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Vincent Grieco
    
	
 
    	
 
    	
Name:   Vincent Grieco
    
	
 
    	
 
    	
Title:   Authorized Officer
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
AEA   INVESTORS:
    
	
 
    	
 
    
	
 
    	
AEA   INVESTORS FUND V LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
AEA   Investors Partners V LP,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
AEA   Management (Cayman) Ltd.,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara L. Burns
    
	
 
    	
 
    	
Name:   Barbara L. Burns
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AEA   INVESTORS FUND V-A LP
    
	
 
    	
 
    
	
 
    	
By:
    	
AEA   Investors Partners V LP,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
AEA   Management (Cayman) Ltd.,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara L. Burns
    
	
 
    	
 
    	
Name:   Barbara L. Burns
    
	
 
    	
 
    	
Title:   Vice President
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
AEA   INVESTORS FUND V-B LP
    
	
 
    	
 
    
	
 
    	
By:
    	
AEA   Investors Partners V LP,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
AEA   Management (Cayman) Ltd.,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara L. Burns
    
	
 
    	
 
    	
Name:   Barbara L. Burns
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AEA   INVESTORS PARTICIPANT FUND V LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
AEA   Investors PF V LLC,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara L. Burns
    
	
 
    	
 
    	
Name:   Barbara L. Burns
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AEA   INVESTORS QP PARTICIPANT FUND V LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
AEA   Investors PF V LLC,
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara L. Burns
    
	
 
    	
 
    	
Name:   Barbara L. Burns
    
	
 
    	
 
    	
Title:   Vice President
    

 

[Signature Page to Registration Rights Agreement]

 

 

SCHEDULE I

 

Notices

 

	
 
    	
 
    	
Name
    	
 
    	
Address
    
	
AEA   INVESTORS
    
	
1.
    	
 
    	
AEA Investors Fund V LP
    	
 
    	
[REDACTED]
    
	
2.
    	
 
    	
AEA Investors Fund V-A LP
    	
 
    	
[REDACTED]
    
	
3.
    	
 
    	
AEA Investors Fund V-B LP
    	
 
    	
[REDACTED]
    
	
4.
    	
 
    	
AEA Investors Participant Fund V LP
    	
 
    	
[REDACTED]
    
	
5.
    	
 
    	
AEA Investors QP Participant Fund V LP
    	
 
    	
[REDACTED]
    
	
ADDITIONAL   INVESTORS
    
	
1.
    	
 
    	
Jungfrau SICAV-SIF
    	
 
    	
[REDACTED]
    
	
2.
    	
 
    	
Pictet Private Equity Investors SA
    	
 
    	
[REDACTED]
    
	
3.
    	
 
    	
Monte Rosa Opportunities SICAV-SIF
    	
 
    	
[REDACTED]
    
	
4.
    	
 
    	
Monte Rosa Funds SICAV-SIF
    	
 
    	
[REDACTED]
    
	
5.
    	
 
    	
bcIMC Private Placement (2013) Investment   Corporation
    	
 
    	
[REDACTED]
    
	
6.
    	
 
    	
bcIMC (WCBAF) Private Placement (2013) Investment   Corporation
    	
 
    	
[REDACTED]
    
	
7.
    	
 
    	
Havelock Fund Investments Pte Ltd
    	
 
    	
[REDACTED]
    
	
8.
    	
 
    	
FW RMB Nansemond Investors, LLC
    	
 
    	
[REDACTED]
    
	
9.
    	
 
    	
2014 Water LLC
    	
 
    	
[REDACTED]
    
	
10.
    	
 
    	
Partners Group U.S. Private Equity 2011, L.P. Inc.
    	
 
    	
[REDACTED]
    
	
11.
    	
 
    	
Xyris Inc.
    	
 
    	
[REDACTED]
    
	
12.
    	
 
    	
LCY Investments Corp.
    	
 
    	
[REDACTED]
    
	
13.
    	
 
    	
NB PEP Holdings Limited
    	
 
    	
[REDACTED]
    
	
14.
    	
 
    	
Randal S. Neuman
    	
 
    	
[REDACTED]
    
	
15.
    	
 
    	
Ken Rodi
    	
 
    	
[REDACTED]
    
	
16.
    	
 
    	
Jon McClean
    	
 
    	
[REDACTED]
    
	
17.
    	
 
    	
Charles M. Neuman
    	
 
    	
[REDACTED]
    
	
18.
    	
 
    	
Neuman 2015 Family Trust
    	
 
    	
[REDACTED]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]